Statement of Accounts 2017-18

Cheshire West & Chester Council Statement of Accounts 2017-18 Visit: cheshirewestandchester.gov.uk 2017-18 Statement of Accounts Contents Page Narrative Report 3 Statement of Responsibilities for the Statement of Accounts 16 Annual Governance Statement 17 Independent auditor’s report 34 Core financial statements • Comprehensive Income and Expenditure Statement 38 • Movement in Reserves Statement 39 • Balance Sheet 41 • Cash Flow Statement 42 Notes to the core financial statements 1. Significant accounting policies 43 2. Expenditure and Funding Analysis 62 3. Accounting Standards 68 4. Critical judgements 69 5. Assumptions made about the future and other major sources 73 of estimation uncertainty 6. Material items of income and expense 74 7. Events after the Balance Sheet date 75 8. Adjustments between accounting basis and funding basis 76 under regulations 9. Transfers to/from Earmarked Reserves 78 10. Other operating income and expenditure 79 11. Financing and investment income and expenditure 79 12. Taxation and non-specific grant income 80 13. Other comprehensive income and expenditure 80 14. Property, plant and equipment 81 15. Heritage assets 85 16. Investment properties 86 17. Intangible Assets 88 18. Asset held for sale 89 19. Financial Instruments 90 20. Debtors 95 21. Cash and cash equivalents 96 22. Creditors 97 23. Provisions 98 24. Usable reserves 100 25. Unusable reserves 102 26. Cash Flow Statement - Operating activities 107 27. Cash Flow Statement - Investing activities 108 28. Cash Flow Statement - Financing activities 108 29. Trading operations 109 30. Agency services 109 31. Members' allowances 110 32. Officers remuneration 111 33. Audit costs 114 1 2017-18 Statement of Accounts 34. Dedicated Schools Grant 115 35. Grant income 117 36. Related party transactions and Interest in Companies 118 37. Better Care Fund 127 38. Capital Expenditure and Financing 129 39. Leases 130 40. Private Financing Initiative (PFI) 132 41. Impairment loss 136 42. Capitalisation of borrowing costs 136 43. Pension schemes (Defined Contribution Scheme) 136 44. Defined schemes (Benefit Pension Scheme) 137 45. Contingent Liabilities 142 46. Contingent Assets 142 47. Risk arising from financial instruments 143 48. Trust funds 148 49. Comparative information 149 The Housing Revenue Account 150 Collection Fund 155 Pension Fund accounts 158 Group Accounts 214 Glossary of terms 229 2 2017-18 Statement of Accounts Narrative Report The Statement of Accounts is produced annually to give electors, local taxpayers, Members of the Council, employees and other interested parties clear information about the Council’s finances. The narrative report is designed to provide an explanation of the Council’s financial position and to assist in the interpretation of the financial statements. It also contains additional information about the Council in general and the main influences on the financial statements to provide a link between the Councils activities and challenges and how these impact on its financial resources. The narrative report is structured as follows: 1. About Cheshire West and Chester 2. Strategic principles and priorities 3.Key achievements 4.Summary of financial performance 5. Main issues impacting the 2017-18 accounts 6.Explanation of the financial statements 1. About Cheshire West and Chester Cheshire West and Chester is a unitary authority with a population of 333,900 and covers 350 square miles. The borough is located in the North West of England and includes the historic city of Chester and the industrial and market towns of Ellesmere Port, Frodsham, Helsby, Malpas, Neston, Northwich and Winsford. About a third of the population lives in rural areas. The Council is responsible for ensuring a wide range of services are provided to the residents, businesses and visitors to the Borough. These include education, safeguarding vulnerable children and adults, social care, public health, highways, leisure, culture, waste collection and disposal, planning, housing benefits, regeneration and community engagement. In addition to providing or commissioning services the Council is also responsible for the collection of local taxation in the form of Council Tax and Non Domestic Rates on behalf of itself and local agencies such as Police and Fire authorities. The Council is a politically-led organisation and has adopted a Leader and Cabinet model. It has 75 elected members representing 50 wards across the Borough. The current political make-up of the Council is shown below. The vacant Councillor position was filled in May 2018 through a local by-election and won by Labour. 3 2017-18 Statement of Accounts 2.Strategic Principles and Priorities Cheshire West and Chester Council is an innovative organisation that seeks to pioneer new and improved ways of delivering services. As an ambitious Council we are determined to deliver the best possible services, improve the quality of life for all residents and help to tackle disadvantage. Cheshire West and Chester Council has developed and launched a plan for 2016-2020 called ‘Helping the Borough Thrive’. The Council Plan sets out the Council's vision, what it wants to achieve, and the way its staff will work. The plan is structured through ten outcomes across the three key focus areas of Residents, Communities and Economy. Thriving Residents • All of our families, children and young people are supported to get the best start in life • Vulnerable adults and children feel safe and are protected • Older people and vulnerable adults are compassionately supported to lead fulfilled and independent lives Thriving Communities • Cleanest, safest and most sustainable neighbourhoods in the country • Good quality and affordable housing that meets the needs of our diverse communities • Vibrant and healthy communities with inclusive leisure, heritage and culture opportunities • Our resources are well managed and reflect the priorities of our residents Thriving Economy • People are well educated, skilled and earn a decent living • A great place to do business • A well connected and accessible borough The Council Plan is fully joined-up with other key plans and strategies across the borough. The plan was developed alongside a four year budget plan to ensure that resources are in place to deliver the ten outcomes. 4 2017-18 Statement of Accounts Financial Scenario In common with all Local Authorities, Cheshire West and Chester needs to manage a situation where the costs and demands of services are growing but the amount of funding available is reducing. Since the Comprehensive Spending Review of 2010 Central Government funding to the Council has significantly reduced and it is expected that by 2020 all discretionary spend by the sector will be 100% reliant on locally generated income. Against this backdrop the Council needs to manage growing demand for services, inflationary pressures, a need to invest in the local economy to promote growth and a desire to continually improve services. The gap resulting from reduced government funding and increasing expenditure is expected to be around £33.3m for the period 2018 to 2021. A three year plan to bridge the £33.3m funding gap has been produced but with careful consideration of the impact of any decisions on the ten priorities outlined in the Council Plan. The key areas that have been considered are: • Reviewing future service provision within the context of the impact the service makes to the Council’s stated outcomes and the optimum delivery mechanism to secure savings and continue to have a positive impact on the outcome; • Opportunities for delivering savings by sharing with others and working across partner boundaries; • Identifying the growth opportunities that exist within the Borough; • Identifying the opportunities available to the Council owned Companies; • Striving to reduce inefficiency and duplication • Opportunity for reducing inequality across the Borough. 5 2017-18 Statement of Accounts 3. Key achievements The following table highlights the key areas of Council performance: Thriving Residents • All of our families, • Continued take up of free early education for eligible 2 year olds in the top 30% children and young of deprived areas has been averaging 97% in 2017-18. people are supported to • 950 complex families achieved significant and sustained positive outcomes, get the best start in life with 119 families achieving sustained employment outcomes within this. • The latest survey information indicates over 98% of parents and carers are satisfied with the final Special Educational Needs & Disabilities Education, Health & Care Plan. • A reduction in child poverty for under-16 year olds, as measured by the proportion in low income families. The proportion has fallen from 15.9% to 13.1% against a target of 15%. • Vulnerable adults and • At the end of March, the Council was looking after 493 children in care. The children feel safe and expanded Edge of Care service supporting more young people to prevent them are protected from becoming looked after. • The number of Care Leavers living in suitable accommodation reported at 94.5% against the target of 90% and against the latest national average of 81%. • Placement stability continues to improve, at 76.6%. • Proportion of repeat Domestic Abuse cases has fallen from 20.2% to 17%. • Older people and • Performance regarding the proportion of adults with a learning disability who vulnerable adults are live in their own home or with their family has improved compared to last year, compassionately now reaching 88.2%

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