STATEMENT OF ACCOUNTS 2020/2021 (Draft) As Certified by the Executive Director of Corporate Resources and Customer Services on 31st July 2021 Note that the accounts of Sefton New Directions and Sandway Homes had not been finalised at the time these draft Statement of Accounts were published. The final audited Statement of Accounts will include the financial performance of both companies. At the time of publication of the draft Statement of Accounts the valuations undertaken by the Council’s in-house valuers have yet to be completed. However, external valuations have been completed. Once all in-house valuations have been finalised the Statement of Accounts will be updated with the impact of all valuations. Contents Section Page 1. Narrative Report 1 2. Statement of Responsibilities for the Statement of Accounts 25 3. Comprehensive Income and Expenditure Statement 27 4. Movement in Reserves Statement 29 5. Balance Sheet 31 6. Cash Flow Statement 33 7. Notes to the Financial Statements - Expenditure and Funding 35 Analysis 8. Other Notes to the Financial Statements 37 9. Collection Fund 111 10. Group Accounts 115 11. Annual Governance Statement 129 12. Independent Auditors’ Report to the Members of Sefton 161 Council 13. Glossary 165 14. Abbreviations 173 15. Useful Addresses 175 Sefton MBC Statement of Accounts 2020/21 Narrative 1 NARRATIVE REPORT Introduction Sefton is a Metropolitan Borough Council, providing the full range of local authority services to the residents of Sefton. These services include planning, licensing, street cleansing, highways maintenance, and refuse collection, as well as safeguarding vulnerable children and helping older people retain their independence. Located on the west coast of England between Liverpool in the south and Lancashire in the north / northwest, the Council covers the area from Bootle in the South, through Seaforth, Waterloo, Crosby, Thornton, Altcar, Ince Blundell, Lunt, Freshfield and Formby, up to and including Birkdale, Ainsdale, Southport and Crossens in the North. It also includes the areas of Maghull, Lydiate and parts of Melling and Aintree. It is responsible for providing services to approximately 276,000 residents, local businesses and industry. As a local authority, Sefton is accountable to Central Government and the electorate. It is responsible for continuously looking to improve its services to ensure that it meets the needs of the local community. Each service must ensure that the local taxpayers are receiving "value for money" by delivering high quality outcomes. The Council has continued to face significant financial challenges in 2020/2021. As a result of the Government’s austerity program, the Council’s core grant funding was reduced every year over a ten- year period between 2010/2011 and 2019/20. By 2019/2020 core Government grant funding had reduced by more than 50%. As a result of the cuts in grant funding, local authorities are now more reliant on local sources of income such as Council Tax and Business Rates. During this period the Council has also seen a rise in demand for statutory services, most notably social care services provided to vulnerable adults and children. For 2020/21, the Government announced an £8.0 million (8.3%) increase in the Sefton Council’s core grant funding, which included a £6.7 million increase in Social Care Grant in recognition of the social care pressures faced by local authorities. This was a welcome increase in core grant funding, the first seen since 2010/11, however, core grant funding remained lower than it was in 2015/16 in cash terms and lower than it was in 2017/18 in real terms (based on movements in the CPI Index). As a result of the previous funding cuts and the increase in demand for statutory services, the Council has needed to identify and agree savings of £233 million within its financial plans between 2010/11 and 2019/20. The impact of these savings has required a radical change to the way that the Council operates and provides services. To facilitate this change, the Council undertook a major consultation exercise in 2016 to identify the areas that local residents thought the Council should prioritise for use of its resources (Sefton 2030 Vision and Council Core Purpose). The outcome of this consultation is summarised later in this document. The Council also invited the LGA to undertake a peer group review which was undertaken in September 2018, the recommendations of this review are being implemented over a number of years. In order to facilitate the changes required to meet the Council’s future priorities, we have developed a Framework for Change program. This program covers three main strands, Economic Growth and Strategic Investment, Council of 2023 and Demand Management An overview of Framework for Change is also provided later in this document. The challenges faced by the Council in 2020/21 have been compounded as a result of the Coronavirus (COVID-19) pandemic, with an exponential increase in demand for services, loss of income from fees and charges and significant reductions from business rates and council tax receipts also being experienced. It has also introduced a great deal of uncertainty about the level of funding the Council will be able to raise from these sources in 2021/22 and future years. Coronavirus (COVID‑19) The coronavirus pandemic has affected all our lives over the past 12 months resulting in a most complex set of circumstances. Protecting the health of our staff, members of our community, and visitors to our area, whilst continuing to provide vital services to the most vulnerable has been our priority during this crisis. We have done this in partnership with the Government, other local councils, partner agencies and businesses. We have also provided extensive communications to help our community deal with the effects of the pandemic and are planning for the recovery phase. Sefton MBC Statement of Accounts 2020/2021 Page 1 Narrative Response Structures In the first stages of response, the Council established a Strategic Coordination Group (SCG), chaired by the Chief Executive and comprising the Executive Leadership Team, Heads of Service, key specialists, representatives from each Council service area, and partner organisations such as the police and Clinical Commissioning Group (CCG). The SCG coordinated the Council’s response in alignment with the Merseyside Local Resilience Forum (MRF), which has implemented established and well-rehearsed emergency planning governance arrangements to coordinate a multiagency response. How the Council has responded Since the lockdown was announced on 23 March 2020, the council has: • Maintained core services e.g. social care, refuse collection, highways maintenance, public health, registrar services, planning, economic development and business support. • Closed some services e.g. Libraries, Leisure Centres, Atkinson (Arts Centre and Theatre) during periods of lockdown, with our libraries and the Atkinson continuing to offer online services. • Offered support to more than 24,000 people identified as clinically extremely vulnerable, including emergency food support, basic care needs and delivery of medicines. • Opened a virtual contact centre - available 7 days a week, taking more than 9,000 calls regarding access to testing facilities, supermarket referrals, Test & Trace Self-Isolation payments and sent over 50,000 text messages to clinically vulnerable people to direct them to support • Supported more than 100 care homes. Ensuring that vulnerable adults are safe. Including an immediate resource injection, daily calls to care homes, addressing concerns about future viability. Providing an integrated social work response to vulnerable residents. • Ordered more than 2 million items of personal protective equipment. • Supported schools and nurseries that have remained open during lockdown to educate the children of key workers. As well as sourcing over 1,100 laptops to ensure that children and young people could continue to access education and training opportunities • Arranged temporary accommodation for 140 homeless households. • Responded quickly to the need to deliver a Free School Meals scheme in place in October, issuing over 5,000 vouchers to eligible families. • Transitioned staff to home working were possible. • Redeployed over 500 staff. • Registered over 1,000 Sefton residents as volunteers, who along with Sefton Councillors have been actively involved in making over 32,000 with those that needed continued welfare support during the lock down periods. • Delivered in partnership the first mobile covid-19 testing centre in Cheshire and Merseyside, delivered SMART coronavirus testing for people with no symptoms, and co-ordinated asurge testing operation to understand the spread of a South African variant of Covid-19 in three wards in Southport. • Assisted businesses to operate safely, paid around £68 million of business support grants, and reissued more than 1,500 business rate bills to ensure local businesses benefited from additional new business rate reliefs. • Awarded more than £2.6 million of COVID-19 council tax hardship discounts to over 15,000 low income households. Economic Impact The economic impacts on Sefton has been immediate and severe during the first lock-down, with 27,700 jobs furloughed in the borough, and support being provided to 8,500 self-employed individuals, a substantial increase in those claiming Universal Credit (in excess of the Liverpool City Region average), with a disproportionate impact on the young. The true impact of the pandemic will not be known for several years, however, it is clear that the impact will be felt beyond the medium term and the demand for council services will increase while the council is aiming to support economic recovery. Sefton MBC Statement of Accounts 2020/2021 Page 2 Narrative Impact on Council finances Covid-19 has had a significant impact on both demand for existing services as well as demand for new services. Adult social care has been disproportionately affected by COVID-19, particularly in relation to the impact on care homes.