Professor StevenDiana Broomhead Terris To: All Members of the Audit and Corporate ChiefC hiefExecutive Executive Governance Committee TownTown HallHal lHall Councillors: SankeySankey Street Street WarringtonWarrington

WA1WA1 1UH 1UH Chair: C Fitzsimmons P Bretherton, G Friend, J Joyce, J Kerr-Brown, L Morgan, S Parish, M Smith, B Axcell, I Marks and P Kennedy

17 September 2014

Audit and Corporate Governance Committee Thursday, 25 September 2014 6.00pm Informal meeting with the External and Internal Auditors – Room 1 6.30 pm – Council Chamber Town Hall, Sankey Street, Warrington. WA1 1UH

Agenda prepared by Louise Murtagh, Democratic Services Officer – Telephone: (01925) 442111, Fax: (01925) 656278, Email: [email protected]

AGENDA

Part 1

Items during the consideration of which the meeting is expected to be open to members of the public (including the press) subject to any statutory right of exclusion.

Page Number 1. Apologies

To record any apologies received.

2. Code of Conduct – Declaration of Interests

Members are reminded of their responsibility to declare any disclosable pecuniary or non-pecuniary interest which they have in any item of business on the agenda no later than when the item is reached.

3. Minutes

To confirm the Minutes of the meeting of 23 June 2014 as a correct record.

4. Review of the May 2014 Elections

Report of the Returning Officer

5. Review of the Annual Risk Management Report

Report of the Deputy Chief Executive

6. Annual Ombudsman Letter 2013/2014

Report of the Solicitor to the Council and Assistant Director Corporate Governance 7. Academy School Liabilities

Report of the Director of Finance and Information Services

8. Response to Grant Thornton’s Letter - Response to Grant Thornton Questions on Processes to Prevent and Detect Fraud and to Ensure Compliance with Laws and Regulations

Report of the Director of Finance and Information Services

9. Response to Grant Thornton’s Letter - Understanding how the Audit and Corporate Governance Committee gains assurance from management

Report of the Chair of the Audit and Corporate Governance Committee

10. Annual Findings Report To follow

Report of Grant Thornton, External Auditor

11. Annual Governance Statement 2013/2014

Report of the Director of Finance and Information Services

12. Statement of Accounts 2013/2014 & Letter of Representation To follow

Report of the Director of Finance and Information Services

13. Local Authority response to Grant Thornton Challenge Questions

Report of the Director of Finance and Information Services

14. Treasury management quarterly monitoring report

Report of the Director of Finance and Information Services

15. Southern Gateway Regeneration Scheme To Follow Report of the Director of Finance and Information Services

16. Internal Audit Monitoring Reports including Monitoring of Implementation of Recommendations

Report of the Chief Internal Auditor

17. Produce annual report of the Audit and Corporate Governance Committee (to Full Council)

Report of the Chairman of the Audit and Corporate Governance Committee

18. Work Programme 2014/2015

Report of the Audit and Corporate Governance Committee

Part 2

Items of a “confidential or other special nature” during which it is likely that the meeting will not be open to the public and press as there would be a disclosure of exempt information as defined in Section 100I of the Local Government Act 1972.

If you would like this information provided in another language or format, including large print, Braille, audio or British Sign Language, please call 01925 443322 or ask at the reception desk in Contact Warrington, Horsemarket Street, Warrington Agenda Item 3

AUDIT & CORPORATE GOVERNANCE COMMITTEE 23 JUNE 2014

Present: Councillor Fitzsimmons (Chairman) Councillors Axcell, Bretherton, Friend, Joyce, Kennedy, Marks, Morgan and Smith

AG1 Apologies for Absence

Apologies for absence were received from Councillors Parish and Kerr-Brown.

AG2 Code of Conduct

There were no declarations of interest made by Councillors.

AG3 Minutes

Decision -

That the minutes of the meeting held on 24 April 2014 be approved as a correct record and signed by the Chair.

AG4 Audit and Corporate Governance Committee Self-Assessment

The Committee considered a report of the Solicitor to the Council and Assistant Director Corporate Governance which presented the completed self-assessment document and the evaluation of the effectiveness of the Committee to the Audit and Corporate Governance Committee for review and approval. Nominated members Councillors Fitzsimmons, Kennedy, Axcell and Parish had completed the self- assessment and evaluation at a workshop on 30 April 2014. The Solicitor to the Council and the Chief Internal Auditor assisted with the interpretation of the questions and provided advice on best practice.

The checklist and the evaluation document were taken from the Chartered Institute of Public Finance and Accountancy (CIPFA) Practical Guidance for Audit Committees December 2013. These provided the Committee with an opportunity to assess the performance and effectiveness of the Committee and to identify any areas where development was needed.

Decision – That the Audit and Corporate Governance Committee reviewed and approved the completed self-assessment document and the evaluation of the effectiveness of the Committee and the action points noted:

• Amend the Terms of Reference of the Committee to refer to the CIPFA guidance • To discuss with the External Auditors their work to support their Value for Money (VFM) opinion. Include assurance on VFM in the Committee’s workplan – need to receive assurance from the organisation and from partners organisations. The VFM report of the external auditor would be presented at the next Audit and Corporate Governance Committee meeting.

Agenda Item 3

AG5 Annual Report of the Officers’ Governance Group and Implementation of AGS Action Plan (2013/2014) Items

The Committee considered a report of the Deputy Chief Executive which briefed Members on the work undertaken by the Officer Governance Group in relation to corporate governance for the year 2013/14. The report also provided details of the progress against the actions from the 2012/13 Annual Governance Statement.

The report also provided information that allowed members: • To receive assurance that the governance group provided adequate and effective challenge and scrutiny to the Strategic Management Team (SMT) in respect of the governance and risk management arrangements of the Council; • To consider and approve the Council’s Annual Governance Statement with a full understanding of the risk the Council faced and what it was doing to reduce these risks; and • To demonstrate that those charged with governance had a full understanding of management’s processes with regard to governance and risk management arrangements and internal control.

During the ensuing conversation members requested that details relating to complaints and comments from customers be included in the information that they receive.

Decision – That the Audit and Corporate Governance Committee consider and note the report as part of its monitoring role.

AG6 Strategic Risk Report – Quarter 4 2013/2014

The Committee considered the report of Councillor Hitesh Patel, Executive Board Member Personnel and Communications which provided a high level summary of the Council’s strategic risk environment as at the end of quarter 4, 2013/2014. It outlined activity undertaken during the period to manage strategic risks and detailed amendments to the register. This provided Members with an opportunity to review and comment on the Council’s current evaluation of its strategic risks and to suggest new risks to be considered for the inclusion in the register.

Risks had been continually reviewed and refocused during 2013/14 and specifically related to the ability to deliver the Council pledges.

Decision – That the Audit and Corporate Governance Committee reviewed and commented on the Council’s Strategic Risk Register Q4 (2013/2014) monitoring report as part of its monitoring role.

AG7 Anti-Fraud, Bribery and Corruption Annual Report: 2013/2014

The Committee considered the report of the Director of Finance and Information Services which presented the work carried out during the past year to minimise the risk of fraud, bribery and corruption occurring in the Council. This supported the requirements of the Accounts and Audit regulations (England) 2011, which stated that the Council must have measures in place “to enable the prevention and detection off inaccuracies and fraud” (including bribery and corruption). Agenda Item 3

The report also set out planned work for 2014-15, highlighted some of the current areas of fraud risk and provided a conclusion on the effectiveness of controls in place to minimise the risk of fraud occurring in the Council.

Members discussed the annual policy and made the following observations –

• That the benefit fraud team had identified that £477,791 had been fraudulently overpaid. This represented 0.68% of overall Council funding • That data matching and analysis had identified 3 contracts had not been subject to competition as they should have been. Details relating to these contracts would be brought to a future committee meeting • The potential for fraud within academies in the borough. Academies were responsible for their own budgets but their accounts were public documents. As such the headline figures could be presented to the committee for scrutiny

Decision – That the Audit and Corporate Governance Committee considered and comments upon the annual fraud report as part of its monitoring role.

AG8 Annual Report and Head of Internal Audit Opinion on the System of Internal Control

The Committee considered a report of the Chief Internal Auditor which presented the annual report on the work performed by Internal Audit during 2013/2014. In accordance with the Public Sector Internal Audit Standards (PSIAS) the Chief Internal Auditor was required to provide an opinion based on the work performed, on the overall adequacy and effectiveness of the organisation’s governance, risk management, and control processes.

The Chief Internal Auditor reported that:

‘Substantial assurance can be given that there is a generally sound system of internal control, designed to meet the Council’s objectives, and that controls are generally being applied consistently. However, some weakness in the design and/or inconsistent application of controls, put the achievement of particular objectives at risk. In particular work underway to improve governance and risk management arrangements for the major capital schemes should continue to be developed to provide robust control’.

Members were provided with detailed information relating to the number of audits that the team had completed and the level of assurance each of these carried. Internal Audit had also been involved with consultancy and other additional work; and follow-up to work to previous audits that had been undertaken.

The department continued to set ambitious and challenging targets and information relating to its performance against these were provided.

It was noted that the intention this year was also to include an audit of the Council’s External Auditors.

Decision – That the Audit and Corporate Governance Committee considered and commented upon the internal audit annual report as part of its monitoring role. Agenda Item 3

AG9 Draft Annual Governance Statement 2013/2014

The Committee considered a report of the Director of Finance and Information Services which presented the draft Annual Governance Statement (AGS) for 2013/4. The AGS supported the Council’s Statement of Accounts and outlined how it managed its affairs to deliver high quality services and ensure that public money was spent effectively.

In producing the AGS officers, through the Council’s Governance Group, had reviewed the Council’s governance arrangements. The review highlighted a number of governance issues that required attention and a comprehensive improvement plan had been written. It was noted that some actions had already been undertaken.

Members were pleased that the draft report contained a section on Significant Governance Development Areas as the Council had a number of large scale schemes under way or due to start and the governance arrangements for these needed to be robust.

With the exception of the internal control issues that had been outlined, the review confirmed that the Council had a generally sound system of internal controls that supported the achievement of its policies, aims and objectives and that those control issues had been or were being addressed

Decision – That the Audit and Corporate Governance Committee reviewed and approved the Council’s Annual Governance Statement for 2013-14.

AG10 Draft Final Statement of Accounts 2013/14

The Committee considered the report of Director of Finance and Information Services which presented the Council's draft Statement of Accounts for 2013/14.

The draft statement would be submitted to the Council’s External Auditors before the final accounts were then considered for approval by the Audit and Corporate Governance Committee on 25 September 2015. In drafting the accounts officers had taken into consideration the views of the Committee on the format of the statement and this had hopefully led to a document that was easier for residents to read.

The Statement of Accounts summarised the financial performance of the Council for the year ended 31 March 2014. The report provided details of the Council’s overall financial results for 2013/14, the type of expenditure incurred and the funds used to pay for it.

Also highlighted were the key points that had affected the accounts. These included the continued delivery of the actions included in the Corporate Plan 2012/2013. There were a number of areas where targets had not been met but there were clear indications that the remedial action would impact positively in 2013/14. Financial information contained within the Statement included movement in reserves, income and expenditure, the balance sheet, cash flow, the collection fund, and the group accounts.

Agenda Item 3

Members were advised of an amendment to the statement circulated in so far as The Chief Executive is a Director of the Warrington Wolves Rugby Club but not the associated charitable foundation.

Decision – That the Committee noted the 2013/14 draft Statement of Accounts.

AG11 2013/14 Treasury Management Outturn Report

The Committee considered a report of the Director of Finance and Information Services that provided details of the outturn position for treasury activities for 2013/2014.

The Council was required through regulations issued under the Local Government Act 2003, to produce an annual treasury report reviewing treasury management activities and the actual prudential and treasury indicators for 2013/14. This report meets the requirements of both the CIPFA Code of Practice on Treasury Management (the Code) and the CIPFA Prudential Code for Capital Finance in Local Authorities (the Prudential Code).

Contained within the report was information relating to Warrington’s treasury position as at 31 March 2014; the strategy for 2013/14; the economy and interest rates in 2013/14; the borrowing outturn for 2013/14; investment outturn for 2013/14; total treasury outturn 2013/14; performance measurement; treasury management developments; temporary borrowing; and control assurance.

All investment and borrowing activity had been taken in full compliance with the Council’s approved Treasury Management Policy and Treasury Management Strategy. The return on Council investments continued to out-perform industry benchmarks.

Decision – That Members noted the report.

AG12 External Audit Update

The Committee considered the report of the External Auditor, Grant Thornton which provided the Committee with details of the progress made in delivering their responsibilities to the Council as their External Auditors. The paper included a summary of emerging national issues and developments that may have been relevant to Members and a number of ‘challenge’ questions that the Committee may wish to consider.

Robin Baker, Associate Director, Grant Thornton advised Members of the following-

• That the Audit Plan was progressing as planned. They continued to hold regular meetings with Council officers and this liaison would continue over the summer months. • The external audit Value for Money report would be brought the Audit and Corporate Governance Committee meeting of 25 September 2014 for consideration. • The large scale regeneration schemes, in particular, the governance arrangement for these were the main focus for the external auditors Agenda Item 3

Decision – That Members noted the report

AG13 Audit and Corporate Governance Draft Committee Work Programme 2014/15

The Committee considered a report of the Chair of the Audit and Corporate Governance Committee which set out the work programme for the Audit and Corporate Governance Committee. This was scheduled into a timetable of meetings to be held on 25 September 2014, 27 November 2014, 15 January 2015, 12 February 2015, 19 March 2015 and 30 April 2015.

In order to fulfil its Terms of Reference (Appendix 2 of the report), the Committee was required to agree what assurances were required and a clear view of its programme across the year.

Members discussed the items as detailed in the report and requested that an additional item of Academy School Accounts be added to the programme.

It was noted that reports could be added to the programme by the Committee or officers throughout the year.

Decision – That the Work Programme 2014/2015 be approved subject to the addition of the scrutiny of Academy School Accounts.

AG14 Exclusion of the Public (Including the Press)

Resolved,

That, members of the public (including the Press) be excluded from the meeting by reason of exempt information considered in the course of the following item of business being within Category 3 of Schedule 12A to the Local Government Act 1972.

AG15 Treasury Management Update

The Committee considered a report of the Director of Finance and Information Services which presented an update on Treasury Management issues, specifically relating to shares held by Warrington Borough Council.

Decision – That the matter be referred to the Treasury Management Board for further consideration

Signed………………………

Dated .. …………………… Item 4 Appendix A

Candidates and Agents were surveyed to ascertain key areas of the Election process that worked well and those that require improvement, the following are a summary of their comments

Election Arrangements

• Everyone appeared to be working exceptionally well as a team and were very supportive with questions/assistance • As a “rookie” agent , I found the briefing session informative and well presented • I would like to see clearer guidance for candidates on what we can/can’t do, including publicity and campaigning rules

Polling Places

• We were consulted prior re locations and all were suitable • Several voters complained to me that the polling booth should be in a more central location used by many local people – i.e. the Asda complex • No problems with any of the venues • I am happy with polling places and feel they are situated within easy reach of residents voting

Postal Vote Opening

• Very good and transparent • All fine and worked well as in previous years

The Count

• After verification of the votes, count could have taken place instead of wait until other verifications are done • The count was fine and I would not like to change anything • I was concerned with Agents and Candidates getting too close to the tables during counting • Relationship across the table seems a bit slack – agents should not be leaning on the tables and chatting to staff

Agenda Item 4

WARRINGTON BOROUGH COUNCIL AUDIT AND CORPORATE GOVERNANCE COMMITTEE – 25th September 2014

Report of the: Returning Officer Report Author: Alison McCormick, Electoral Services Manager Contact Details: Email: Tele: 01925 442041 [email protected]. uk

Ward Members: All

TITLE OF REPORT: Combined European and Local Elections 2014

1. PURPOSE OF THE REPORT

1.1 The purpose of the report is to provide a summary of the combined European and Local Elections held on the 22 May 2014 in Warrington for consideration by the Committee. .

2. CONDUCT OF THE COMBINED ELECTIONS IN WARRINGTON

2.1 This report aims to provide feedback on the conduct of the combined European and Local Elections held on 22nd May 2014 in relation to Warrington. The report focuses on the main aspects surrounding the election process.

2.2 The Electoral Commission (EC) have produced a report on the administration of the 22nd May elections. This concluded that although there were isolated incidents with the elections, voters were largely satisfied with the way in which elections were run. This reinforces the importance of the work of Returning Officers and their staff in delivering a high quality service to voters generally. The high levels of satisfaction provide a good foundation for delivery of next year’s elections which will present much greater challenges for all those involved in the delivery of elections and electoral administration.

2.3 Planning & Risk Management

2.3.1 Warrington Borough Council’s elections process was once again closely managed via the Elections Project Board which brought together expertise from a range of officers across the council and was chaired by the Returning Officer (Chief Executive). The Elections Project Board met initially on a monthly basis from December 2013, and more frequently during the months of March to May 2014.

2.3.2 Two parish council by elections were also delivered in addition to the

Agenda Item 4

scheduled combined Local and European elections in Warrington.

2.3.3 In addition Warrington has continued to build on relations with sub regional groups such as Merseyside Electoral Administrators Team (MEAT) and Cheshire authorities. The Electoral Services Manager is also Vice-Chair of the North West Branch of the Association of Electoral Administrators and meets regularly with other sub regional leads to consider key electoral issues.

2.4 Postal Votes

2.4.1 The number of people wishing to vote by post reduced slightly this year following the recent postal vote refresh. For the elections held on 22 May 2014 a total of 26,491 combined postal vote packs were issued to voters which is 16.6% of the electorate. This is comparative to the national average. Warrington achieved an average return of 68.7% which amounts to an increase of 6% on the 2012 local elections.

2.4.2 The number of packs received from polling stations at the close of poll was 275 and the delivery of the Royal Mail sweep resulted in 204 postal packs being received. This represents a significant increase on previous years for the final opening session which was at the close of poll and concluded at 1.30 a.m.

2.4.3 Legislation changed this year to allow the Electoral Registration Officer to write to those postal voters whose vote was rejected to ensure that electors can participate successfully in future years. The rejections were due to the mis-match of the date of birth or signature against the master document held on the system. A total of 285 rejection notices were issued to voters as a result of the change in legislation.

2.4.4 There were some issues with political parties nationally running large scale postal vote application campaigns with completed application forms being returned to central clearing houses rather than direct to local councils, which highlighted concerns that the security of the postal voting process could be compromised. In some cases the application forms received in the electoral services office were dated several months previous. The office received numerous telephone complaints from electors who were not aware that they had applied for a postal vote. This practice is contrary to the Code of Conduct for Campaigners issued by the Electoral Commission (EC) which was developed in consultation with political parties. The EC intend to consult on changes to the Code of Conduct to allow sufficient time for any changes to be discussed and agreed in time for the May 2015 UK Parliamentary election.

2.5 Staffing

2.5.1 Polling Stations There were 120 stations across the Borough this year, 110 of these stations had combined elections covering the European and Local elections. 6 stations also had an additional election for the parish held

Agenda Item 4

on the same day. There were no Borough elections in the wards of Burtonwood & Winwick, Hatton, Stretton & Walton and Stockton Heath. All stations opened on time with the exception of Winwick were issues with access to the building were experienced. Contingency measures were put in place to address this so voters were able to cast their vote. The arrangements with the councils Highways section worked well in relation to the delivery of the temporary ramps and the setup of the two mobile units.

2.5.2 Details of turnout are included in the table below.

ELECTION TURNOUT (%)

North West European Parliamentary 32.6

Appleton 40.8 Bewsey and Whitecross 22.6 Grappenhall and Thelwall 41.7 Great Sankey North 34.4 Great Sankey South 30.2 Latchford East 27.0 Latchford West 32.5 Lymm 40.6 Penketh and Cuerdley 37.9 Whittle Hall 31.6

Birchwood 31.6 Culcheth,Glazebury and Croft 42.6 Fairfield and Howley 23.1 Orford 25.5 Poplars and Hulme 25.9 Poulton North 30.7 Poulton South 35.1 Rixton and Woolston 31.2 Westbrook 31.2

Birchwood Town Council – Locking 34.2 Stumps Woolston Parish Council – East Ward 30.0%

2.6 Polling Buildings

2.6.1 A full review of polling places and polling districts was undertaken prior to these elections and the final report was approved at full council on 24th March 2014. However following the elections and in preparation for the 2015 Parliamentary and Local elections a number of polling places have been identified for review. A cross party working group will again be established to work alongside officers from Electoral Services in order to make recommendations to full Council..

2.6.2 At the time of writing the following buildings have been identified for

Agenda Item 4

review:

• St Phillips Primary School (Westbrook) • Evelyn Street Primary School ( Bewsey) • Cygnets Childrens Centre (Appleton) • Longshaw Street Community Centre (Bewsey) • Callands Childrens Centre (Westbrook)

2.7 The Count

2.7.1 For the second year the Verification and Counts took place on a Friday. The verification of all votes took place on the morning of Friday 23rd May and this was followed by the Local election count. The Parish Count took place at this time. The European Count took place on Sunday 25th May 2014. The planning of such complex arrangements was critical in ensuring that the Count ran smoothly.

2.7.2 The Birchwood venue was once again deemed a success for all involved in the Count with excellent parking and very good facilities. The Management at Birchwood responded to the issues identified in 2012 and the refreshments and café was well resourced throughout the whole period.

2.7.3. The ballot box receipting was a smooth operation with all ballot boxes being received and sealed away by 11.45 p.m. on Election Day

2.7.4 Feedback on the Friday count has been generally positive with comments such as the process felt more controlled and efficient. There were some negative comments regarding the delay of some wards moving to the Count stage however legislation prevents the Count of any area commencing until Verification of all papers has been concluded.

2.8 Costs

2.8.1 Members will recall that the Elections team had savings identified in their budget due to the shared costs of the combined Local Elections and European Elections.

2.8.2 In order to meet the savings target for the delivery of the local election, reductions in payments were made to the core elections team and the Returning Officer and two of the Deputy Returning Officers with full powers did not receive fees for the local elections. In addition the payments made to other key officers involved in assisting with the delivery of the elections project were reduced and the fees paid to the Deputy Returning Officers (limited powers) for Postal Voting and Count were reduced from 20% to 10% of the recommended RO fee.

2.8.3 The savings target for electoral services in relation to delivery of the local election has been achieved with election costs of approximately £95,000. Each year the elections budget is reviewed to reflect the elections being delivered in any financial year. The costs of delivery

Agenda Item 4

will vary dependant on the type of elections to be delivered.

2.9 Conclusion

2.9.1 Performance monitoring in respect of the elections was undertaken on a real time basis at key stages of the election. The real time assessment was required in order to provide the Electoral Commission with the assurance that the Returning Officer was administering the poll in accordance with legislation.

2.9.2 Warrington met and achieved all the deadlines imposed and submitted the real time assessments on time. The Electoral Commission has confirmed that Warrington achieved the standard of performance in relation to the delivery of elections.

2.9.3 Whilst the election was delivered successfully the Project Board have recognised that there is always room for improvement and in preparation for the 2015 combined UK Parliamentary and local elections have prepared an action plan of improvements to administrative processes.

3. CONFIDENTIAL OR EXEMPT

3.1 Not confidential.

4. FINANCIAL CONSIDERATIONS

4.1 Funding of £101,336 is provided for the delivery of the Local Elections within the Councils budget.

4.2 When there are combined elections (e.g. a general election or European Elections) as in 2014 the Returning Officer is allocated funding to recover the costs associated with delivery of the European Parliamentary election. The claim for the European Election costs of £148,051.38 has been submitted and approved by the Election Claims Unit.

4.3 Parish Councils will be responsible for the costs associated with delivery of their elections. Each of the two parish councils have been advised of their costs - £8105.18 and have been offered payment terms of up to four years.

5. RISK ASSESSMENT

5.1 A full detailed risk assessment and business continuity plan is undertaken prior to all elections to ensure that they are effectively managed. All plans were also required to be submitted to the Electoral Commission as part of the performance monitoring process. The Elections Project is monitored on a regular basis by the Elections Project Board which is chaired by the Returning Officer (Chief Executive) and involves senior council officers and officers from the wider elections team.

Agenda Item 4

6. EQUALITY AND DIVERSITY/EQUALITY IMPACT ASSESSMENT

6.1 A full equality impact assessment has been completed for Electoral Services and work is currently being undertaken on implementation of the identified improvements.

7. CONSULTATION

7.1 Formal Feedback on the election process has been obtained from candidates, agents, all staff and the suppliers involved in the election process. Informal feedback was also received on the day of the count and subsequently. The overall feedback on the elections process has been very positive and the Electoral Services Manager is keen to continue to build on the success of previous elections. A summary of the feedback responses is attached at appendix A.

8. REASONS FOR RECOMMENDATIONS

8.1 To keep members informed of progress with the Electoral Services process, in relation to the management of the 2014 elections.

9. RECOMMENDATION

9.1 That the report be noted

10. BACKGROUND PAPERS

Report on fees and charges dated April 2014.

Report by the Electoral Commission – The European Parliamentary elections and the local government elections in England and Northern Ireland – May 2014 published July 2014

Contacts for Background Papers:

Name E-mail Telephone Alison McCormick [email protected]. 01925 442041 uk

Agenda Item 5

WARRINGTON BOROUGH COUNCIL AUDIT AND CORPORATE GOVERNANCE COMMITTEE 25 September 2014

Report of: Kathryn Griffiths, Assistant Director – Partnerships & Performance Report Author: Theresa Whitfield, Risk & Resilience Manager Contact Details: Email Address: Telephone: [email protected] 01925 442657 Ward Members: All

TITLE OF REPORT: REVIEW OF THE ANNUAL RISK MANAGEMENT REPORT 1 APRIL 2013 TO 31 MARCH 2014

1. PURPOSE

1.1 To provide Audit & Corporate Governance Committee with an overview of the Risk Management arrangements within Warrington Borough Council and to demonstrate that robust systems are in place to identify, assess, manage and monitor risks at Strategic and Directorate level. The report summarises the risk management activities from 1 April 2013 to 31 March 2014.

2. CONFIDENTIAL OR EXEMPT

2.1 Not confidential.

3. RISK MANAGEMENT ARRANGEMENTS

Background

3.1 To ensure there are effective corporate governance arrangements in place it is essential that risk management continues to be embedded into the culture of the organisation and is considered to be an integral part of the business planning and performance management process to ensure the delivery of the Council’s objectives.

3.2 Risk Management is undertaken at a corporate level, with the Risk & Resilience Manager having the responsibility to monitor and maintain the Strategic Risk Register which captures the key corporate risks identified at Directorate level and approved for inclusion on the register at SMT.

3.3 At a Directorate level, risk registers are in place and maintained by Risk and Business Continuity lead officers who work in collaboration with risk owners and lead officer’s to co-ordinate the monitoring, maintenance and reporting of risks and the registers.

4. DEVELOPMENTS

Agenda Item 5

4.1 Risk Management Strategy & Policy Statement

4.2 The Policy and Strategy documents were originally approved by SMT in 2012- 13. They have been refreshed annually and due to the fact there have been no significant changes, have been approved by Kathryn Griffiths, Assistant Director Partnerships & Performance in accordance with the policy review process. Further revision has taken place for 2014-15 to include greater focus and requirements around project risk management.

4.3 The risk threshold at which SMT have agreed to focus their attention remains at 12 (maximum score of 25). All risks scored 12 or above and considered to have a strategic impact are monitored and reported through to SMT on a quarterly basis. Risks below this threshold are monitored and managed at a Directorate level on the basis that they will be escalated for SMT attention if circumstances require.

5. RISK MANAGEMENT ARRANGEMENTS

5.1 Risk management continues to form part of the Council’s key business processes during 2013-14 including: • Performance Management and Business Planning • Financial Management • Project Management • Development of Policies and Strategies • Partnership Working

5.2 Risk recording and monitoring arrangements have been strengthened. In relation to the major regeneration projects, arrangements will further develop in 2014-2015 around the identification, mitigation and monitoring of key risks and for regular reporting through the relevant project boards to provide assurance that the risks are being managed effectively.

5.3 Common templates and reporting arrangements are in use for Directorate Risk Registers. Both Directorate and Strategic Registers are monitored and maintained on a quarterly basis, this includes a review of scoring, control strategies, risk movement and the overall direction of travel. Supporting commentary is provided by the risk owner and lead officers to inform DMT / SMT of the latest risk position.

6. RISK REPORTING

6.1 At a Directorate level, quarterly meetings aligned with the performance reporting timeframes are scheduled to review the risk registers. Consideration is given to the revision of existing risks to ensure they are still valid, they reflect the risk to the Council accurately. Horizon scanning is also an important element to determine whether any emerging risks require inclusion at Directorate or Strategic level.

6.2 SMT receives quarterly reports on the strategic risk register. The register is supported by commentary to inform SMT on the latest risk position, and Agenda Item 5

determine any necessary actions. Horizon Scanning remains an important element of the risk management process and has been effective over the past year in informing SMT discussions and decisions around the strategic risk register.

6.3 SMT has given consideration to internal and external factors in determining risks for inclusion on the strategic risk register. These include: • Ongoing service re-design to meet Medium Term Financial Plan requirements; • Ongoing reduction in the work force leading to a loss of skills, knowledge and capacity; • Major regeneration schemes • Reduction in Government funding; • Loss of income and impact on Council services due to increased potential for alternative service delivery models 6.4 Reports were submitted to the Executive Board and Audit & Corporate Governance Committee in line with the arrangements set out in the Risk Management Policy for quarters 2 and quarter 4.

6.5 The Corporate and individual Directorate Risk & Business Continuity groups meet quarterly to review arrangements and progress matters relating to risk registers and general risk management across the Directorates.

7. ANALYSIS OF THE OVERALL STRATEGIC RISK ENVIRONMENT 2013-14

7.1 Appendix 1 provides information in relation to the risk matrix and summary of the risk position and direction of travel at quarters 1 and 4.

7.2 Over 2013/14 the strategic risks faced by the Council have broadened; with an additional three strategic risks identified over the period. The level of risk has also increased over the year with more high risks emerging towards the end of quarter 4. It is considered that the risk level is reflective of the evolving environment in which the Council has to operate. Risk management and mitigation strategies are in place or in development for all strategic risks.

7.3 The movement of risks and fluctuation in scoring further demonstrates that risk management and the maintenance of the registers is becoming embedded within our overall business management processes. Overall the strategic risks scored above threshold (12 and above) increased throughout the year requiring monitoring and reporting through to SMT each quarter.

7.4 9 of the current 16 strategic risks have remained static throughout each reporting cycle. Risk lead officers have monitored the risks each quarter and have provided assurance that control strategies are in place. Nevertheless the risk score is accurate and reflects the current risk position.

Agenda Item 5

8. EMBEDDING & DEVELOPING A RISK AWARENESS CULTURE

8.1 Risk management training has been provided at each of the New to Management programmes throughout 2013/14 and continues raise awareness of the importance of risk management to the organisation.

8.2 Risk workshops continue to be an integral part of planning in relation to the Council’s major projects which also have their own registers and reporting / assurance gathering arrangements attached to the project.

8.3 A greater range of risk management information, including access to registers will be available to coincide with the new Council’s intranet site to further promote and raise awareness of the Council’s Risk Management arrangements.

9. FUTURE CONSIDERATIONS – RISK MANAGEMENT & BUSINESS CONTINUITY 2014-15

Risk Management 9.1 Moving into a new risk management year provides an opportunity for renewing and further developing the Council’s risk management arrangements. An area of focus during 2014-2015 will be strengthening assurances that business continuity plans are in place and fit for purpose to ensure the continuity of critical services.

9.2 During 2013 the Council participated in the CIPFA Risk Management benchmarking club. The subsequent report concentrated around enablers, 5 strands including; • Leadership & management • Policy & Strategy • People, Partnership & Resources, Processes

And results strands including; • Risk handling and assurance • Outcomes & Delivery

9.3 Overall it was a very positive picture for the organisation’s risk management arrangements, particularly in relation to; • The policy, the fact the organisation has identified a level of risk appetite and encourages managed risk taking within organisation. • The policy supports the aims and objectives of the organisation • The Policy clearly defines roles, responsibilities and monitoring arrangements and is and supported and approved by Officers and Elected Members. • Links to business processes, the fact that risk consideration and reporting is an integral part of the business plan and performance reporting framework Agenda Item 5

• Risk identification & analysis, the Councils process meet recognised risk management standards and processes • Risk Reporting and Review, the Councils reporting arrangements meet the recognised standards in terms of reporting to senior level officers and Members to ensure they are sighted on the strategic risks to the organisation and utilise this information to inform key decisions

9.4 Areas identified for further development in 2014-2015 to be informed by further exploration to identify existing arrangements are;

• Partnership & Resources focussing on how the organisation ensures its partnership & shared work is undertaken with appropriate consideration of risk, with formal risk management arrangements in place • Risk Handling & Assurance focussing on exploring arrangements in place for organisation to gain assurance risks are managed effectively; this is something that is built into internal audit processes which takes risk based approach • Leading Risk Management Implementation explores the extent to which senior management are proactive in supporting / encouraging Risk Management and well managed risk taking. During quarter 4, a new strategic risk was identified around ensuring risk was effectively analysed and considered with appropriate audit trails in place to demonstrate outcomes in relation to all key decisions • Culture examines risk management culture of the organisation, how risk issues are raised, appetite for change and response / learning from incidents. This continues to be an area of focus through training and review of risk management arrangements undertaken quarterly through the Directorate and Corporate risk and business continuity groups.

Business Continuity 9.5 A corporate Business Continuity strategy to support the Councils risk management arrangements has been developed, supported by refreshed corporate templates and guidance for completion. This will enable service managers to fully consider the business impact of a disruption to critical services and introduce appropriate consequence management arrangements to mitigate the effects both on the business and the most vulnerable members of our community / service users.

9.6 Business Continuity, at a Directorate level continues to be monitored and co- ordinated by Directorate Risk and Business Continuity lead officers who report on a quarterly basis to the Corporate Risk & Business Continuity group. Greater focus around the identification of critical services, agreed at DMTs will be needed in order to inform the priority services which would require focus above all other services in the event of a disruption.

Agenda Item 5

9.7 Internal Audit have included testing for Business Continuity compliance within their 2014-15 audit programme to seek the necessary assurances that the Council has appropriate arrangements in place to sustain critical service

10. CONCLUSION

10.1 The on-going work across the Directorates during 2013-14 demonstrates that risk management is becoming further embedded within the culture and day to day business thinking of the organisation. Work will continue in 2014-15 to further raise awareness and promote ongoing integration into everyday business activity.

10.2 The strong links in place across the Directorate Risk leads ensures that there are robust communication channels in place to raise awareness / highlight risks which may require attention at both Directorate and Corporate level.

10.3 There is evidence to demonstrate that risk identification, assessment and monitoring is being embedded within the key organisational projects that are on-going which will no doubt influence decision making and innovative thinking as the shape of the organisation changes.

10.4 Risk management within the organisation is at a good level, focus areas identified in section 9 during 2014-15 will assist to further embed within the organisation.

11. FINANCIAL CONSIDERATIONS

11.1 Appendix 2 highlights the associated risk with this paper.

12. RISK ASSESSMENT

12.1 The Council must ensure that it has appropriate risk management arrangements in place in order to manage its risks and maintain a sound system of internal control.

12.2 The annual audit letter from the Councils external auditor emphasised; “It remains important that the Council's governance and risk management arrangements support effective decision making processes that deliver clear and transparent decisions subject to appropriate challenge and review”.

13. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT

13.1 There are no specific equalities issues in relation to the content of this report.

14. CONSULTATION

14.1 N/A.

15. REASONS FOR RECOMMENDATION

Agenda Item 5

15.1 To ensure that the Council maintains an effective framework of internal control, and manages its key risks; and to ensure the continued review of the Council’s strategic risks.

16. RECOMMENDATIONS

16.1 The Audit & Corporate Governance Committee reviews and comments on the Council’s Strategic Risk Management arrangements 2013/14 as part of its monitoring role.

17. BACKGROUND PAPERS

Strategic Risk Register Directorate Risk Register

Contacts for Background Papers:

Name E-mail Telephone Theresa Whitfield [email protected] 01925 442657

Agenda Item 5

APPENDIX 1

RISK MATRIX FOR SCORING IMPACT & LIKELIHOOD

Impact

Very Low (1) Low Medium (3) High Very High (5) (2) (4) Very High 5 10 15 20 25 (5) Very low impact Low impact but Medium impact High impact and Very high but very high very high but very high very high impact and very likelihood likelihood likelihood likelihood high likelihood

High 4 8 12 16 20 (4) Very low impact Low impact but Medium impact High impact and Very high but high high likelihood but high high likelihood impact and high likelihood likelihood likelihood Likelihood

Medium (3) 3 6 9 12 15 Very low impact Low impact and Medium impact High impact but Very high and medium medium and medium medium impact and likelihood likelihood likelihood likelihood medium likelihood Low 2 4 6 8 10 (2) Very low impact Low impact and Medium impact High impact but Very high and low low likelihood and low low likelihood impact but low likelihood likelihood likelihood

Very Low (1) 1 2 3 4 5 Very low impact Low impact and Medium impact High impact but Very high and very low very low and very low very low impact but very likelihood likelihood likelihood likelihood low likelihood

Agenda Item 5

APPENDIX 1(cont)

Strategic Risks 2013/14 – Summary Strategic Risk Position at Q1 and Q4

Risk Risk description Q1 Score Q4 Score DOT No PROTECTING THE MOST VULNERABLE 1 The Council's ability to afford to meet the costs of care in line with increasing demands from a growing Identified 20 (High) N/A aging population who can no longer live at Q3 independently and require accommodation 2 Failure to transform current provision of social care Identified so as to manage demand through innovative and 20 (High) N/A at Q3 whole system change. 3 Description at quarter 1 – Reduced focus on prevention leads to poorer performance in terms of national adoption scorecard, OFSTED inspections and outcomes for children and young people 15 (High) 15 (High) Description at quarter 4 –  Reduced focus on prevention leads to poorer performance across the directorate in terms of outcomes for vulnerable people and inspection and regulatory frameworks. 4 Potential impact of reduction of breadth and quality of children's services is to increase the number of 15 (High) 15 (High) 'critical' interventions for child protection and a  consequent rise in costs. 5 Description at quarter 4 Changes in national policy and legislation (eg Identified children and families act, better care, care bill) lead 15 (High) N/A at Q2 to increasing demands for services and increased statutory requirements 6 Impact of forthcoming Welfare Reforms: (as at 1. Will lead to a fall in household incomes Qtr 1) 2. Overall - potential for loss of revenue which would 12 Removed have a detrimental impact on the Council's finances N/A (Medium) at Qtr 2 3. Increased demands on council and other services & staff as a result of the impact of welfare reform

10 Increasing Demands on Social Care; Potential 16 (Very Removed (as at instability/collapse of external provider market N/A High) at Qtr 2 Qtr 2) compromising capacity to provide essential services 7 Ability of the council to meet statutory duties and Inc into (as at ensure best outcomes for children and young people 12 Risk 5 N/A Qtr 2) in view of the autonomy and accountability (Medium) (q4) arrangements of academies and free schools Agenda Item 5

Risk Risk description Q1 Score Q4 Score DOT No SUPPORTING THE LOCAL ECONOMY 6 Description at quarter 4 – Inability to deliver effective governance in all of our Identified 12 N/A major regeneration projects including "Warrington at Qtr 2 (Medium) Means Business" 8 Inability to successfully deliver within timescale and 12 (as at within budget, major local regeneration schemes - Identified (Medium) Qtr 3) linked to sustainability of schemes/capacity of To be N/A at Qtr 2 removed at providers/effectiveness of governance arrangements Q1 to DRR 9 Risks relating to the delay of key regeneration 12 (as at projects (Bridge St., Omega, Stadium Qtr) Identified (Medium) Qtr 3) To be N/A at Qtr 2 removed at Q1 to DRR BUILDING STRONG AND ACTIVE COMMUNITIES 7 Description at quarter 1, – Failure to reduce community level inequalities in quality of life through the Closing the Gap ambition and 'Delivering Wellbeing in Bewsey and Dallam' 16 (High) 16 (High) Project.  Description at quarter 4 – Failure to reduce community level inequalities in quality of life through the Closing the Gap ambition ORGANISATION DEVELOPMENT AND IMPROVEMENT 8 Unstable financial position in the medium to long 20 (High) 20 (High) term.  9 Description at quarter 1, – Risk of reduction in CYPS & council funding for key services as schools convert to academy status Description at quarter 4 – 12 15 (High) Exploration / Introduction of alternative service (Medium)  delivery models increases market competition resulting in potential income reduction if internal services are not considered the provider of choice 10 The Council will incur a failure of its Information 16 (High) 16 (High) assurance.  11 Description at quarter 1, – ICT infrastructure unable to support effective, timely service delivery Description at quarter 4 – In the event of a major incident resulting in loss of 8 (Low) 8 (Low)  access to ICT systems or data, the lack of clear recovery priorities, documented procedures, technical capability, capacity and resilience would hinder the timely recovery of those ICT systems. Agenda Item 5

Risk Risk description Q1 Score Q4 Score DOT No 12 Description at quarter 4 – Impact on the Organisation to comply with Cabinet Office Requirements to allow continued access to Identified 12 the Government's PSN Network. Impact on the N/A at Qtr 3 (Medium) Organisation should the Council not comply and lose access to systems and data required to deliver statutory services 13 Lack of organisational capacity to deliver Council 12 12 pledges (Medium) (Medium)  14 Ability to effectively deliver integrated health and social care services within a rapidly changing health 16 (High) 16 (High)  economy. 15 Ability to effectively commission/ manage a range of service providers to ensure VFM and achievement of outcomes; and ensure sustainability/ 16 (High) 16 (High)  capacity/quality of provider sufficient to deliver services/outcomes on our behalf 16 Strategic decisions are not taken on the best information available. An absence of full risk Identified 16 (High) N/A appraisal in relevant reports particularly to at Qtr 4 Executive.

No of risks scored 12 (high) and above 8 13 

No of risks scored 12 (medium) 4 2 

7 July 2014

By email

Mr Steven Broomhead Interim Chief Executive Warrington Borough Council

Dear Mr Steven Broomhead

Annual Review Letter 2014

I am writing with our annual summary of statistics on the complaints made to the Local Government Ombudsman (LGO) about your authority for the year ended 31 March 2014. This is the first full year of recording complaints under our new business model so the figures will not be directly comparable to previous years. This year’s statistics can be found in the table attached.

A summary of complaint statistics for every local authority in England will also be included in a new yearly report on local government complaint handling. This will be published alongside our annual review letters on 15 July. This approach is in response to feedback from councils who told us that they want to be able to compare their performance on complaints against their peers.

For the first time this year we are also sending a copy of each annual review letter to the leader of the council as well as to the chief executive. We hope this will help to support greater democratic scrutiny of local complaint handling and ensure effective local accountability of public services. In the future we will also send a copy of any published Ombudsman report to the leader of the council as well as the chief executive.

During 2013-14 we published two reports about Warrington Council, one of which was a joint report with the Parliamentary and Health Service Ombudsman. Both were about children with special needs and specifically about the lack of speech and language therapy provision. There was considerable fault found over three years which affected a further 15 teenagers, all of whom were not provided with speech and language therapy contrary to a statutory duty. I welcome the Council’s constructive response to our investigation and agreement to a suitable remedy.

Developments at the Local Government Ombudsman

At the end of March Anne Seex retired as my fellow Local Government Ombudsman. Following an independent review of the governance of the LGO last year the Government has committed to formalising a single ombudsman structure at LGO, and to strengthen our governance, when parliamentary time allows. I welcome these changes and have begun the process of strengthening our governance by inviting the independent Chairs of our Audit and Remuneration Committees to join our board, the Commission for Administration in England. We have also recruited a further independent advisory member. Future for local accountability

There has been much discussion in Parliament and elsewhere about the effectiveness of complaints handling in the public sector and the role of ombudsmen. I have supported the creation of a single ombudsman for all public services in England. I consider this is the best way to deliver a system of redress that is accessible for users; provides an effective and comprehensive service; and ensures that services are accountable locally.

To contribute to that debate we held a roundtable discussion with senior leaders from across the local government landscape including the Local Government Association, Care Quality Commission and SOLACE. The purpose of this forum was to discuss the challenges and opportunities that exist to strengthen local accountability of public services, particularly in an environment where those services are delivered by many different providers.

Over the summer we will be developing our corporate strategy for the next three years and considering how we can best play our part in enhancing the local accountability of public services. We will be listening to the views of a wide range of stakeholders from across local government and social care and would be pleased to hear your comments.

Yours sincerely

Dr Jane Martin Local Government Ombudsman Chair, Commission for Local Administration in England Local authority report – Warrington Council

For the period ending – 31/03/2014

For further information on interpretation of statistics click on this link to go to http://www.lgo.org.uk/publications/annual-report/note-interpretation-statistics/

Complaints and enquiries received

Local authority Adult care Benefits and Corporate Education Environmental Highways Housing Planning and Total services tax and other and services and and transport development services children’s public services protection and regulation

Warrington C 14 9 2 13 5 3 4 8 58

Decisions made

Detailed investigations carried out

Local authority Upheld Not upheld Advice given Closed after initial Incomplete/Invalid Referred back for Total enquiries local resolution

Warrington C 12 8 0 19 4 22 65 Agenda Item 6 Appendix 2

How complaints and enquiries were dealt with is explained below:

• Upheld: These are complaints where we have decided that an authority has been at fault in how it acted and that this fault may or may not have caused an injustice to the complainant, or where an authority has accepted that it needs to remedy the complaint before we make a finding on fault. If we have decided there was fault and it caused an injustice to the complainant, usually we will have recommended the authority take some action to address it.

• Not upheld: Where we have investigated a complaint and decided that a council has not acted with fault, we classify these complaints as not upheld.

• Advice given: These are cases where we give advice about why LGO would not look at a complaint because the body complained about was not within the LGO’s scope or we had previously looked at the same complaint from the complainant, or another complaints handling organisation or advice agency was best placed to help them.

• Closed after initial enquiries: These complaints are where we have made an early decision that we could not or should not investigate the complaint, usually because the complaint is outside LGO’s jurisdiction and we either cannot lawfully investigate it or we decide that it would not be appropriate in the circumstances of the case to do so. Our early assessment of a complaint may also show there was little injustice to a complainant that would need an LGO investigation of the matter, or that an investigation could not achieve anything, either because the evidence we see shows at an early stage there was no fault, or the outcome a complainant wants is not one we could achieve, for example overturning a court order.

• Incomplete/invalid: These are complaints where the complainant has not provided us with enough information to be able to decide what should happen with their complaint, or where the complainant tells us at a very early stage that they no longer wish to pursue their complaint.

• Referred back for local resolution: We work on the principle that it is always best for complaints to be resolved by the service provider wherever possible. Furthermore, the Local Government Act 1974 requires LGO to give authorities an opportunity to try and resolve a complaint before we will get involved. In many instances, authorities are successful in doing this.

Extract from LGO website: http://www.lgo.org.uk/publications/annual-report/note-interpretation-statistics/ Review of Local Government Complaints 2013-14

Contents

Introduction 2

Complaint numbers and trends 2013-14 3

The complainant’s journey 7

Better services for people: sharing the lessons from complaints 9 Making complaints count 9 Driving service improvement 10 Putting things right 11 Supporting local complaints procedures 11

Local scrutiny & accountability: a key role for councillors 12

About the ombudsman 13

Data annex 14 Complaints and enquiries received by category 14 Decisions made (by local authority) 29

Local Government Ombudsman

The Oaks, No 2 Westwood Way Westwood Business Park Coventry CV4 8JB

Phone: 0300 061 0614 Web: www.lgo.org.uk Twitter: @LGOmbudsman

It is important that the LGO is an of the local complaints system, we open and transparent organisation want to continue to work with and provides assurance to the local authorities in support of public about the work we do and excellent local complaint handling how we spend public money. Local to put things right as soon as authority complaints make up the possible. We also want to ensure bulk of our work. Our unique role is that the journey for complainants to remedy personal injustice caused through local procedures to the by maladministration or service LGO is as effective as possible. In failure by conducting independent an increasingly complex delivery and impartial investigations. The environment where the council is recommendations we make affect more likely to commission than many more people because we provide a service, we know that often ask for changes to policy journey can be complicated and and practice which improve confusing. To prompt our thinking on At a time of local complaint handling, public this we have included some results administration and service from our customer satisfaction even greater choice delivery. We regard this as an research carried out recently, which and diversity in important part of our role to raises questions about where enhance local accountability to improvements can be made. local public service people who use services, many of provision, public whom rely on them for their day to The report includes examples from day well-being. some of our cases. They are only information is illustrative of the many matters we “ At a time of even greater choice deal with, but they give a flavour of essential to support and diversity in local public service how we can help individuals who provision, public information is have experienced problems, and the decisions people essential to support the decisions indicate the sort of changes and make. people make. Since April 2013 improvements we can bring about. we have published the decision statements for all our cases on I hope this report will help officers our website. For the first time, this and councillors, as well as all those report brings together in one place who provide public services locally, a summary of data we provide to reflect on how they handle and to each council in England in an learn from complaints. I hope it will annual review of complaints in also help all those who use local their area. It supplements the LGO public services understand better Annual Report and Accounts which how to raise concerns to good gives more information about effect. ” our performance, and follows the first annual review of social care complaints published in May this year. Dr Jane Martin Complaints processes should Local Government Ombudsman be responsive to the public. It is important that people know where to complain, how to complain and are satisfied with remedies proposed. Positioned at the apex

Page 1 Introduction

The data within this report refers to the complaints and enquiries we received, and the decisions we made, about English local authorities in the business year April 2013 – March 2014. This is the first time we have combined our usual practice of writing to councils to report back the annual complaint statistics for their authority, with a report that looks at the state of local government complaints as a whole. This report will become an annual publication, intended to be a tool for those involved in complaint handling, policy making and local scrutiny to analyse trends in complaints about local public services. We want to give open and transparent access to our data on complaints. We also want to help councils to view their statistics in the context of other local authorities. This is a common request we receive, so with this report we are publishing all of the data in one place. We know that councils have their own unique demographic make- up, so for those wanting to identify similar comparable authorities, we would refer them to the CIPFA Nearest Neighbour model. In the final section, we provide questions for local councillors to help them assess how their authority responds to, and learns from, complaints.

Page 2

Complaint numbers & trends 2013-14

In 2013-14 the LGO registered a total of 20,306 new complaints and enquiries, an increase from 20,186 in the previous year. While the bulk of our work is about councils, our jurisdiction includes all registered social care providers. For complaints and enquiries solely about local authorities1 we registered 18,436 new cases, which is a similar level to the previous year’s total of 18,940. However, the broadly static total number of complaints this year accommodated a 39% decrease in housing complaints – meaning that, in real terms, complaints and enquiries about other council services increased. The expected reduction in housing complaints was because all new complaints about councils’ role as social landlords became the responsibility of the Housing Ombudsman Service in April 2013. Complaints about benefits and tax, and adult social care, were the two areas of work that saw the biggest percentage increase on last year. They were also the two areas in which we are more likely to find fault in a detailed investigation. The graphics below show the breakdown of complaints and enquiries received in the different areas of our work over the last two years.

8% 17% 9% Education & children’s services Benefits & tax

11% 2013-14 Planning & development 16% Housing

Adult care services

12% Highways & transport 14% Environmental, public protection & regulation 13% Corporate & other services

8% 21% 10%

10% 2012-13 1 Complaints about local authorities constitute 15% those relating to any council statutory duty or service they provide, including any provision 10% by private, independent and third sector bodies on behalf of the council.

12% 14% Page 2 Page 3

Complaint numbers & trends 2013-14

Benefits & tax Council tax discretion Complaints and enquiries about The nature of complaints about Bernard bought an empty benefits and tax increased by benefits and tax means that a property and was renovating 26% on the previous year, and had remedy will usually include a it. He originally received an our highest uphold rate of 49%. recommendation for a financial exemption covering empty homes payment, which could include the undergoing renovation, and did We recognise that there have been waiving of debts or a refund. If we not pay council tax. changes to legislation affecting find a systemic problem we will benefits and tax during the year suggest the council reviews its The Local Government Finance but we have no evidence to procedures to ensure others are not Act then allowed the council to indicate whether or not there is a adversely affected. impose a premium on owners of link between these changes and properties empty for more than the increase in complaints. two years. Bernard later became We help people get redress on a liable for 150 per cent council tax. range of areas but one of the most Bernard contacted the council to common types of complaint we ask if it could reduce the amount receive is around council tax. We he was paying because of his also look at issues with housing personal circumstances, but benefit, council tax support and officers wrongly told him that that debt recovery, including the the council had no discretion to actions of bailiffs. reduce it on an individual basis. Some people who complain to During our investigation the us about benefits and tax rely on council told us that it does in these council services for their fact have a scheme offering everyday wellbeing, therefore discretionary reductions, but said failures to administer properly can that Bernard would not qualify. have an acute impact on their The council decided in advance lives. Some of these services that it would automatically refuse comprise of ‘crisis funds’ designed an individual application where to support those in particular need. they do not fall into a set class of A common fault we see from criteria, thereby fettering its own councils is a failure to consider discretion. whether the person complaining may be in a vulnerable situation. The council has agreed to invite Bernard to make an application Some of the other regular issues for a discretionary reduction in we find are: his council tax bill and consider >> not notifying people of their it from the date at which he first appeal rights asked the council for help. >> administrative errors around We have asked the council payments to make a decision within two months and provide Bernard with >> not exercising discretion or the reasons for its decision in taking a fixed view writing, so that he has the option to appeal to the Valuation Tribunal >> a failure to follow policies. if his application is unsuccessful.

Page 4

Complaint numbers & trends 2013-14

Social care Ignoring the evidence Complaints and enquiries about It is difficult to put a price on the adult social care increased cost of missed or inadequate care, Peter has autism, epilepsy and by 16% and we upheld 48% but in remedying a situation we can moderate learning disabilities. of complaints after detailed recommend a financial payment. He lives at home with his mother. investigations. As the Social Care After his NHS funding was Ombudsman we provide a route This can be an amount to recognise withdrawn the council assessed for redress for all care complaints – how the injustice has affected the his needs but failed to comply both publicly and privately funded person, or when somebody has lost with its legal duty to agree an – and our recently published review out financially we can recommend that aftercare plan. of social care complaints for 20132 costs are waived or refunded. Where Care professionals raised highlighted it as one of our fastest poor planning and care assessments concerns that the care package growing areas of our work. have taken place we will usually recommend a fresh assessment is offered would not meet Peter’s The three areas most complained carried out. We will always seek to needs but our investigation about last year were assessment ensure that the same mistakes do not showed that the council failed to and care planning; fees, grants and happen again, and where appropriate take into account all the relevant payments; and residential care. we will recommend councils carry out evidence. As a result Peter and reviews of policies and procedures, his mother were left without the Assessing and planning for care is and undertake staff training. support they needed and Peter one of the most fundamental local was unable to access respite. authority duties. Often we find fault Their frustration was further within the assessment process increased when the council’s when all the facts have not been response to the complaint taken into account, or a person’s contained inaccurate information. individual needs are not placed at the heart of the process, resulting We recommended that the in care packages that do not meet council reassess and expedite people’s needs. the process of identifying Peter’s needs so a care People not being given clear and package could be agreed. comprehensive information is a We also recommended that common fault around the charging they apologise for the way of care, as well as so called ‘top- they carried out the original up fees’ being sought when the assessment and for how they person’s care should be fully responded to the complaint. We covered by public funding. also recommended a financial remedy. Complaints about residential care often come from family members because the person receiving care is unable to complain. A common issue is the failure to monitor properly and record the condition of people, and the care provided, 2 Our Review of Adult Social Care Complaints which leaves family members covered the 2013 calendar year and published uncertain that loved ones are for the first time our statistics for social care properly cared for in their absence. complaints about private care providers as well as local authorities.

Page 4 Page 5

Complaint numbers & trends 2013-14

18,436 registered local authority complaints & enquiries

Housing Adult care services Benefits & tax down 39% up 16% up 26%

Complaints upheld For the first time this year we have started to record complaint outcomes in a simpler way to show whether or not we have upheld a complaint. This year we upheld 46% of all complaints we investigated in detail. Below are the percentages by complaint type.

100 Benefits & tax

Adult care services* 80 Housing Education & children’s services 60 Environmental, public protection & regulation Planning & development

49% 48% 47% Highways & transport 40 Corporate & other services 38% 32% 27% 26% 20 23% *does not include complaints about private providers 0

Page 6

The complainant’s journey

The people in the best position to Accessibility hold service providers to account are those who use the service. We know that the complaint system can feel more like a maze for people Complainants tell us they want their seeking to raise a complaint. Our research focused on the key access complaints considered as quickly points when complainants navigate their way through local procedures to as possible by somebody who has the Ombudsman. The figures below indicate where improvements could be the authority to put things right, made. and they want authorities to take People were asked to say, on a scale of 1 to 5, how easy it was to find responsibility when things have information on how to make a complaint about their authority. It is gone wrong. This demonstrates positive that over 50% of people rated it near the easy end of the scale. the need for councils to have an However, a quarter of people also rated it as difficult. The system should effective complaint handling service work as effectively as possible so that people can easily raise complaints – one which is simple to access and locally and embark on a simple route to redress as soon as possible. Clear provides a timely and consistent information about local procedures will also help to avoid people coming to service. the Ombudsman only to be referred back to the council.

Our role is to offer the assurance How easy was it to find information on how to make a complaint of an independent and consistent about your authority? view when complaints cannot be resolved locally, and use our powers to ensure injustices are remedied. Don’t know - 2% But referral to the ombudsman should be the last resort, once local routes to redress have been 1 - 15% exhausted. We want to support councils to have the best possible front-line complaints service, which 5 - 34% we do by sharing information and 2 - 10% best practice. During the year we carried out 3 independent customer satisfaction 3 - 17% research about our service. The Environmental, public protection & regulation results also provided insight into the 4 - 21% local authority complaints system as a whole, which may help councils better understand the customer experience of the system. They 5 - very easy pose some questions about whether 4 the local government complaints system is operating as effectively as 3 it could be. 2 1 - very difficult

3 Our research involved an independent research company carrying out more than 800 telephone interviews with people who had ongoing cases with us. The aim was to gain a better understanding of the customer satisfaction of our service, independent of the complaint outcome. Those surveyed were a random selection from our whole caseload, so will include a small percentage Page 6 of people who had a non-local authority related complaint, for example regarding a private care home. The research in full will Page 7 be available on our website.

The complainant’s journey

56% of people did not recall Were you advised that you could The research showed that 62% of being made aware of their local refer your complaint to the Local people had been trying to resolve authority’s complaint handling Government Ombudsman? their problem locally for at least procedures. All councils have six months, including more than a published complaints procedures, but third (36%) who had been trying for this would indicate that the majority 3% over a year. The average time that of people who complain do not feel somebody tried to resolve their engaged with them. Councils may complaint before approaching us want to reflect on whether there are was nine months. better ways to ensure complainants 43% We recognise that some complaints understand what they can expect from 54% can be complex and require detailed their local complaints service. investigation locally, and we know Were you made aware of the local there are some statutory processes, authority’s complaint handling such as for children’s social care, procedures? which require a longer timescale, but we advise that most complaints should take no longer than 12 weeks to be resolved. This is a reasonable 4% Yes time for a council to consider a No complaint and come to a final response. It is also good practice to Don’t know have published complaint procedures that include time targets for specific 56% 40% Councils increasingly deliver their stages, which are well publicised. In services through a mix of public, the rare cases that warrant further private and third-sector parties, and time, this should be communicated personal choice is increasingly part to the complainant as soon as it is of the mix for consumers. Whilst known. councils have a good track record Sometimes people complain to us historically of signposting people before they’ve given the council the to the ombudsman, the companies Yes full opportunity to resolve the matter. who work for them may be less When this happens, we refer people No familiar with the LGO, and not as back to the council and advise how effective in providing an accessible we can help if, after exhausting Don’t know complaints service. In this multi- the local process, they remain agency environment, councils may dissatisfied. If a complaint comes want to ask whether their contracted back to us following this scenario we 43% of people were not advised companies are responding to class it as a re-submitted complaint. that they could refer their complaints effectively, and whether complaint to the Local Government they ensure that accountability is This year we made decisions on Ombudsman. It is not a statutory retained through the commissioning 1,387 cases that were re-submitted requirement for councils to signpost and contracting process. to us. We found some form of fault in to the ombudsman. These results 292 of these, which is more than a indicate that many councils do follow Timeliness fifth (21%) of the total amount of re- this good practice, but despite this, not submitted cases. In these instances, enough people are being advised of The research also indicates that some it could indicate a missed opportunity their right to access redress. complaints are taking a long time to for local authorities to resolve the be resolved locally before people complaint before they were referred come to us for an independent view. to us. Page 8 Better services for people: sharing the lessons from complaints

The thousands of complaints and Making complaints count enquiries we deal with each year place us in a unique position to As well as helping individuals achieve redress, our investigations can have draw on these experiences to shape a wider outcome for the public. Sometimes we uncover systemic fault, and wider service improvements. a single investigation can recommend remedies that right the wrongs for many people in similar situations to the person complaining. In April 2013 we started to publish all of our decision statements, unless where to do so would have Justice for hundreds of foster carers compromised the anonymity of the person complaining. This More than 340 foster carers were given the right brings greater transparency to our support that they had been denied, following a single decision making, whilst providing an investigation. important resource to inform local scrutiny and service improvement. Fiona was asked by the council, and agreed to care for her nephew after his parents became unable to For some complaints we highlight care for him. Left struggling to cope, she complained a wider public interest by releasing to us that she was not receiving the correct amount a detailed investigation report. We of financial support from the council. published 58 of these this year. Upon investigation, it was discovered that a council- We also published new Guidance wide approach meant that more than 340 other on Remedies. Produced primarily ‘family and friends’ carers were also missing out on for our own staff, we also made payments to which they were entitled. A whole group this publicly available so complaint of people who provide such a critical support system handlers can understand our for children who can no longer live with their parents approach to remedies, and use it were being mistreated. as a resource when suggesting The council not only agreed to increase Fiona’s suitable remedies locally. payments, and backdate that which she had missed out, but it also agreed to pay all those carers receiving special guardianship allowance the correct rate, and to pay all its foster carers at least the Government’s national minimum fostering allowance rate. The case led to us producing an in-depth report calling for equality for carers who look after the children of family and close friends. It encouraged other authorities to look again at their own processes and procedures to ensure that other carers across the country were not being disadvantaged in the same way.

Page 8 Page 9 Better services for people: sharing the lessons from complaints

Driving service improvement Elderly tenants reimbursed Many people say to us that a major motivation for Trudie lives in council-managed sheltered complaining is for somebody to take responsibility accommodation for people over the age of for what has happened and to ensure that 60 and was worried that she was paying mistakes that have afflicted them do not happen too much for her water. Her bill was nearly to others. We will often ask for an apology and double the local water authority’s Assessed our investigations always seek to inform and drive Household Charge of £175. service improvement, with councils agreeing to The council said it had charged her for carry out reviews, policy changes or training to water use in accordance with its policy. ensure faults are not repeated. But, during our investigation, the council identified that it had been charging all the residents far more than it had paid the water company, which was not in Care charging policy revoked accordance with the Water Resale Order. Jenny agreed to have home care after a stay In total, the council had overcharged in hospital and for the first six weeks this was tenants by more than £38,000 over the free. space of five years. A review of Jenny’s care was carried out The council has since written to Trudie to and her social worker recommended that apologise and tell her and nearly 60 elderly she needed a long-term care package. The neighbours that that they are owed money county council then applied a weekly charge and that they will be reimbursed that which before completing its financial assessment. they had been overcharged. It also agreed Guidance from the Department of Health to carry out a review of how it charges says that councils should not apply charges tenants for water across the authority. retrospectively, and should not charge before a financial assessment is carried out and the customer informed. Our investigation found that the council’s provisional charging policy, which had been in effect for 18 months, did not comply with statutory guidance. We recommended that the council reconsider the policy, waive Jenny’s provisional charge and make a payment of £200 to her son for the time and trouble in having to bring the complaint to us. With other older people potentially affected by the policy, we recommended, and the council agreed, to identify who they were and make arrangements to repay any charges due to them.

Page 10 Better services for people: sharing the lessons from complaints

Putting things right Supporting local complaints procedures

In deciding upon remedial action or a payment Sharing the learning from complaints is an to acknowledge an injustice, we will take into important part of encouraging good local account the unique circumstances of each case. complaints handling and service improvement. We can suggest remedies that are a creative Using our experience of complaint handling, we way of replacing something that was missed as offer advice and training to councils to help them a result of the fault – for example a contribution deal with complaints more effectively. towards a child’s education fund – or takes into account other people that were affected. This year we provided 45 training courses to more than 750 council staff involved in complaint handling. The feedback from attendees after the courses showed that: Village gets respite from noise >> 45% more people know how to use complaints An investigation helped a village community to drive service level improvements get respite from years of excessive noise, and the community centre receive support. >> 89% more people feel confident about dealing A group of residents complained about the with complaints noise from a nearby racetrack, and said that their local council had not been enforcing the historic restrictions that were part of its planning approval. The villagers had been affected for a number of years and said that the council was slow to act in enforcing the issues. It left them feeling like they were trapped in their homes, unable to spend time in their gardens. As part of the remedy, the council instructed a barrister to provide legal advice on the contents of a new notice to be served on the new track operators. The LGO also recommended that the council consider outstanding queries about the impact alterations to the track had made on noise levels. One couple received £2,500 and the council paid £5,000 to a second couple as a contribution towards legal fees they had incurred. The council also made a £1,000 donation to the village schoolroom committee for the benefit of other residents who were also involved in the complaint.

Page 10 Page 11 Local scrutiny & accountability: a key role for councillors

During 2013 the Local Government Information Unit (LGiU) published Questions for elected members and scrutiny committees a report, following a survey of over Members may wish to consider the following questions to assess 400 local government senior officers whether their council is responding to and learning from complaints. and elected members, into how we could use our complaints data Does your council: to enhance local accountability. It found that more than 75% of >> regularly report its experience and learning from complaints to elected respondents wanted us to provide members? more access to detailed information about local government complaints. >> provide open access to complaints data for councillors and the public? We are fully committed to support >> actively seek feedback from service users on its complaints handling? local scrutiny and the representative role of councillors. They have a >> clearly display information about its complaints process online and in democratic mandate to scrutinise all service delivery settings? the way services are delivered and >> advise complainants of their right to access the ombudsman, and hold those services to account, and provide the correct contact information? we believe they can use complaints as an important tool to support that >> ensure providers of services also respond to complaints raised and process. learn from them through commissioning and contracting? We started publishing all of our decision statements online on new complaints after 1 April 2013 – becoming the first UK public sector ombudsman to do so. This year we have also sent to every council leader a copy of the annual letter we present to council chief executives. These letters provide our complaint statistics about their authority and feed back any particular issues of concern.

Page 12

About the ombudsman Contents

Since 1974 the Local Government Ombudsman has independently and impartially investigated complaints about councils and other bodies within our jurisdiction. Our services are free of charge. If we find something wrong, we can ask the council to take action to put it right. What we ask the council to do will depend on the particular complaint, how serious the fault was and how the complainant was affected. We have no legal power to force councils to follow our recommendations, but they almost always do. Some of the things we might ask a council to do are: >>apologise for the fault and the injustice caused >>take action to put things right as soon as possible >>pay a financial remedy to acknowledge the impact of the injustice caused, such as distress >>improve procedures so similar problems do not happen again

Page 12 Page 13 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Adur 1 0 0 0 1 1 6 2 11 Allerdale 0 3 1 0 0 0 1 9 14 Amber Valley 0 2 2 0 2 1 3 12 22 Arun 0 3 7 0 3 0 4 9 26 Ashfield 0 2 2 0 7 0 3 2 16 Ashford 0 7 3 1 3 1 3 9 27 Aylesbury Vale 0 11 2 0 1 1 4 13 32 Babergh 0 0 2 0 1 0 2 8 13 Barking & Dagenham 13 22 8 25 6 23 21 2 120 Barnet 15 31 14 24 17 39 25 26 191 Barnsley 4 11 6 10 12 5 9 8 65 Barrow 0 5 4 1 2 0 1 4 17 Basildon 0 10 7 0 7 2 12 5 43 Basingstoke & Deane 0 6 2 0 2 0 3 5 18 Bassetlaw 0 6 2 0 2 1 5 6 22 Bath & NE Somerset 4 3 2 4 3 7 1 15 39 Bedford 3 12 1 10 4 0 4 9 43 Bexley 5 20 4 13 5 21 9 8 85 Birmingham 56 209 45 69 37 25 78 22 541 Blaby 0 0 2 0 3 1 0 3 9 Blackburn w/Darwen 6 13 6 7 6 4 0 1 43 Blackpool 14 6 3 8 9 4 11 3 58 Bolsover 0 9 3 0 1 0 1 4 18 Bolton 8 20 9 9 12 9 5 16 88 Boston 0 3 0 1 3 0 0 0 7 Bournemouth 9 8 1 11 9 8 9 8 63 page 14 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Bracknell Forest 2 3 3 7 0 4 7 2 28 Braintree 0 4 2 0 3 0 3 7 19 Breckland 0 2 0 0 1 0 3 6 12 Brent 21 30 11 17 11 25 49 15 179 Brentwood 0 6 2 0 0 0 6 6 20 Brighton & Hove 10 13 10 16 21 8 19 15 112 Bristol 10 39 18 19 15 17 16 16 150 Broadland 0 3 1 0 2 0 3 12 21 Broads Authority 0 0 0 0 0 2 0 1 3 Bromley 30 40 5 23 11 14 19 15 157 Bromsgrove 0 3 0 0 1 0 3 11 18 Broxbourne 1 1 0 0 3 0 4 3 12 Broxtowe 0 5 2 0 4 1 3 4 19 Buckinghamshire 17 0 5 27 1 49 0 1 100 Burnley 0 7 2 0 4 0 1 5 19 Bury 9 7 1 9 7 4 1 6 44 Calderdale 11 6 2 11 4 11 1 12 58 Cambridge 0 1 2 0 3 1 5 4 16 Cambridgeshire 18 1 3 42 1 8 0 2 75 Camden 11 7 11 19 9 31 45 9 142 Cannock Chase 0 2 1 0 1 1 3 2 10 Canterbury 0 4 1 0 2 3 11 11 32 Carlisle City 0 0 0 0 1 1 0 0 2 Castle Point 0 1 2 0 2 0 4 4 13 Central Bedfordshire 15 5 7 12 4 11 7 9 70 Charnwood 0 7 2 0 2 0 4 5 20 page 15 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Chelmsford 0 3 1 0 4 1 4 8 21 Cheltenham 0 2 2 0 2 0 1 10 17 Cherwell 1 6 1 0 2 2 1 9 22 Cheshire East 15 15 5 29 20 15 0 38 137 Cheshire W & Chester 16 10 21 17 15 8 3 25 115 Chesterfield 0 2 2 0 2 2 4 4 16 Chichester 0 3 0 0 1 2 3 7 16 Chiltern 0 0 0 0 3 0 1 4 8 Chorley 0 1 1 0 0 1 0 4 7 Christchurch 1 3 1 0 1 1 0 2 9 City of Bradford 15 25 16 34 19 7 5 24 145 City of London 0 1 1 1 0 3 3 0 9 Colchester 0 4 3 0 2 5 5 3 22 Copeland 0 6 0 0 5 1 1 4 17 Corby 1 6 0 0 4 0 2 1 14 Cornwall 25 34 17 28 21 19 12 59 215 Cotswold 0 1 1 0 2 0 0 7 11 County Durham 16 32 19 29 24 13 10 22 165 Coventry 13 26 5 25 14 11 8 6 108 Craven 0 1 2 0 2 0 3 8 16 Crawley 1 7 2 0 2 1 5 2 20 Croydon 28 47 10 44 16 29 64 16 254 Cumbria 17 0 1 23 1 5 1 0 48 Dacorum 0 8 1 0 6 0 5 5 25 Darlington 3 2 3 5 7 0 1 1 22 Dartford 0 6 2 0 2 1 2 4 17 page 16 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Dartmoor National Parks Authority 0 0 0 0 0 0 0 4 4 Daventry 0 1 2 0 4 0 3 6 16 Derby 13 14 4 23 8 7 4 3 76 Derbyshire 17 3 5 33 4 13 0 2 77 Derbyshire Dales 0 1 0 0 2 1 4 3 11 Devon 42 0 3 44 8 31 1 8 137 Doncaster 30 7 5 19 7 7 10 10 95 Dorset 10 0 2 27 2 9 0 0 50 Dover 1 5 0 0 3 2 5 13 29 Dudley 4 7 5 25 15 6 13 5 80 Ealing 24 28 13 19 11 36 55 16 202 East Cambs 0 3 1 0 2 0 1 10 17 East Devon 0 2 7 0 7 0 1 16 33 East Dorset 0 5 0 0 5 0 0 3 13 East Hampshire 0 0 0 0 2 0 0 12 14 East Herts 0 5 0 0 1 0 2 5 13 East Lindsey 2 7 4 0 7 3 0 17 40 East Northants 0 2 2 0 3 1 0 6 14 East Riding of Yorks 11 5 10 23 7 12 4 18 90 East Staffs 0 1 2 0 1 0 0 9 13 East Sussex 60 2 2 25 5 13 0 2 109 Eastbourne 1 7 0 0 3 1 4 4 20 Eastleigh 0 1 2 0 2 2 4 4 15 Eden 0 2 0 0 1 0 0 5 8 Elmbridge 1 4 4 0 1 3 8 11 32 Enfield 14 23 5 27 7 15 44 15 150 page 17 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Epping Forest 0 5 4 0 1 0 12 4 26 Epsom & Ewell 1 2 4 0 1 1 1 10 20 Erewash 0 3 0 0 1 0 0 6 10 Essex 41 1 5 74 4 36 0 5 166 Exeter 0 0 4 0 0 3 11 4 22 Exmoor National Park Authority 0 0 0 0 0 0 0 0 0 Fareham 0 2 0 0 2 2 2 3 11 Fenland 0 2 5 0 4 0 1 8 20 Forest Heath 0 0 0 0 3 0 2 1 6 Forest of Dean 1 1 0 0 4 1 1 3 11 Fylde 0 6 1 0 0 1 0 6 14 Gateshead 8 6 4 12 7 4 16 7 64 Gedling 0 9 2 0 4 0 1 1 17 Gloucester 1 4 1 0 1 1 0 0 8 Gloucestershire 16 0 2 30 3 19 0 2 72 Gosport 0 7 0 0 2 2 2 0 13 Gravesham 0 12 0 1 2 1 6 2 24 Great Yarmouth 0 1 3 0 4 1 3 3 15 Greenwich 7 21 9 17 6 12 30 8 110 Guildford 0 4 3 0 4 0 5 4 20 Hackney 7 35 9 15 8 31 53 8 166 Halton 6 3 3 6 4 0 1 5 28 Hambleton 0 0 0 0 2 0 1 9 12 Hammersmith & Fulham 8 29 9 10 3 26 36 9 130 Hampshire 21 1 7 36 4 19 0 2 90 Harborough 0 1 1 0 3 0 1 14 20 page 18 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Haringey 12 63 14 15 22 26 48 23 223 Harlow 1 5 4 0 2 0 2 0 14 Harrogate 0 1 1 1 2 1 6 7 19 Harrow 17 29 6 19 14 46 17 13 161 Hart 0 0 2 0 2 0 0 1 5 Hartlepool 3 2 5 1 3 2 1 7 24 Hastings 0 7 3 1 1 1 3 4 20 Havant 0 1 1 0 1 0 0 3 6 Havering 12 22 9 5 4 16 32 19 119 Herefordshire 6 7 8 16 4 13 0 14 68 Hertfordshire 16 0 5 59 4 16 0 1 101 Hertsmere 0 3 2 0 1 4 4 14 28 High Peak 0 2 3 0 3 0 3 9 20 Hillingdon 13 26 6 10 6 3 21 8 93 Hinckley & Bosworth 0 3 1 0 2 0 0 5 11 Horsham 0 4 1 0 3 0 2 10 20 Hounslow 19 54 9 11 10 28 35 11 177 Huntingdonshire 0 2 1 0 2 0 2 4 11 Hyndburn 0 3 3 0 0 0 0 5 11 Ipswich 0 5 3 1 2 1 4 0 16 Isle of Wight 9 7 3 10 5 4 3 14 55 Isles of Scilly 1 0 0 0 1 0 0 0 2 Islington 13 19 14 14 8 21 33 7 129 Kensington & Chelsea 7 9 2 12 7 9 16 7 69 Kent 47 1 6 102 10 23 1 4 194 Kettering 0 6 2 0 4 0 4 3 19 page 19 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Kings Lynn & West Norfolk 0 4 0 0 2 1 1 6 14 Kingston upon Hull 4 16 7 17 12 11 8 6 81 Kingston upon Thames 7 9 2 11 1 18 13 4 65 Kirklees 11 15 15 26 9 10 7 17 110 Knowsley 6 7 3 6 6 2 1 0 31 Lake District National Park Authority 0 0 0 0 0 0 0 6 6 Lambeth 24 68 15 43 24 46 79 9 308 Lancashire 48 1 9 65 2 16 0 22 163 Lancaster 1 2 2 1 5 0 4 4 19 Leeds 31 23 16 42 34 8 38 26 218 Leicester 13 16 11 19 11 15 15 9 109 Leicestershire 27 0 2 32 3 13 1 2 80 Lewes 0 2 1 0 1 1 7 4 16 Lewisham 12 35 9 20 10 10 27 4 127 Lichfield 0 2 3 0 1 0 1 1 8 Lincoln 1 5 2 0 1 0 3 0 12 Lincolnshire 30 0 8 28 4 15 0 2 87 Liverpool 32 47 9 36 22 11 5 7 169 Luton 7 26 7 15 6 4 11 8 84 Maidstone 0 3 2 0 2 1 2 9 19 Maldon 0 4 1 0 4 1 0 3 13 Malvern Hills 0 2 2 0 2 0 1 4 11 Manchester 38 50 15 29 22 33 11 18 216 Mansfield 2 6 3 0 2 0 2 4 19 Medway 16 21 9 23 8 9 11 13 110 Melton 0 1 1 0 1 0 0 2 5 page 20 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Mendip 0 10 5 0 1 1 3 27 47 Merton 10 23 5 9 9 28 9 14 107 Mid Devon 0 3 3 0 3 1 3 6 19 Mid Suffolk 0 5 4 0 2 0 2 6 19 Mid Sussex 0 7 0 0 4 0 1 7 19 Middlesborough 4 12 2 9 4 0 2 6 39 Milton Keynes 11 9 6 14 10 5 12 11 78 Mole Valley 0 3 2 0 1 2 2 5 15 NE Derbyshire 0 1 3 0 2 0 2 5 13 New Forest 1 1 1 0 7 0 5 4 19 New Forest National Parks Authority 0 0 1 0 0 0 0 7 8 Newark & Sherwood 0 5 2 0 2 1 1 8 19 Newcastle 11 5 8 11 9 8 5 1 58 Newcastle-under-Lyme 1 6 6 0 3 1 3 7 27 Newham 13 36 15 27 15 79 103 9 297 Norfolk 24 0 4 33 4 11 0 0 76 North Devon 0 0 2 0 7 2 2 10 23 North Dorset 0 4 0 0 3 0 1 9 17 North East Lincs 3 12 3 6 7 3 6 8 48 North Herts 0 4 2 0 6 3 2 8 25 North Kesteven 0 2 1 0 4 0 2 5 14 North Lincolnshire 7 4 4 7 5 4 1 6 38 North Norfolk 1 3 1 0 0 1 2 11 19 North Somerset 7 26 5 7 1 8 3 8 65 North Tyneside 5 7 6 4 5 10 10 9 56 North Warwicks 0 4 0 1 1 0 1 0 7 page 21 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

North York Moors National Park Authority 0 0 0 0 0 0 0 2 2 North Yorks 25 0 2 38 1 15 0 5 86 Northampton 0 9 7 1 6 0 15 8 46 Northants 15 1 8 51 2 9 2 1 89 Northumberland 5 3 8 16 4 2 5 12 55 Northumberland National Park Authority 0 0 0 0 0 0 0 1 1 Norwich 0 8 9 3 3 3 15 5 46 Nottingham 11 15 13 31 11 9 18 7 115 Notts 33 0 2 40 4 16 2 1 98 Nuneaton & Bedworth 1 7 2 0 2 1 6 3 22 NW Leics 0 3 5 0 3 0 2 11 24 Oadby & Wigston 0 2 1 0 0 0 2 1 6 Oldham 9 12 8 15 8 8 2 11 73 Oxford 1 7 2 0 5 2 11 2 30 Oxfordshire 15 0 5 15 1 11 1 2 50 Peak District National Park Authority 0 0 2 0 0 0 0 7 9 Pendle 0 10 2 0 3 3 3 3 24 Peterborough 5 9 2 15 5 0 8 6 50 Plymouth 10 10 4 13 12 13 10 5 77 Poole 6 5 5 6 5 5 6 15 53 Portsmouth 11 11 10 6 6 9 9 5 67 Preston 0 4 5 0 2 1 1 4 17 Purbeck 0 1 0 0 0 0 0 4 5 Reading 4 8 3 4 2 17 6 0 44 Redbridge 27 30 6 19 7 37 27 21 174 Redcar & Cleveland 3 10 4 6 8 3 0 0 34 page 22 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Redditch 1 2 2 0 5 1 5 2 18 Reigate & Banstead 2 6 1 0 3 1 5 12 30 Ribble Valley 0 0 0 0 2 0 0 11 13 Richmond upon Thames 12 3 1 13 5 7 9 12 62 Richmondshire 0 0 0 0 2 0 0 1 3 Rochdale 11 14 4 11 6 1 5 3 55 Rochford 0 3 0 0 4 1 4 10 22 Rossendale 0 5 2 0 1 0 1 9 18 Rother 0 5 1 0 1 0 1 8 16 Rotherham 6 8 8 10 11 6 4 10 63 Rugby 0 0 0 0 1 1 4 8 14 Runnymeade 0 1 2 0 0 0 6 2 11 Rushcliffe 0 0 1 0 1 0 0 4 6 Rushmoor 0 2 0 0 1 5 4 1 13 Rutland 0 2 5 4 1 1 0 1 14 Ryedale 0 1 1 0 1 0 0 3 6 Salford 14 11 0 12 7 4 8 4 60 Sandwell 16 31 11 26 13 6 22 6 131 Scarborough 1 1 3 0 7 4 2 4 22 Sedgemoor 0 4 1 0 1 1 5 9 21 Sefton 11 11 5 21 9 10 1 8 76 Selby 0 4 2 0 3 0 0 6 15 Sevonoaks 0 5 0 0 1 0 2 10 18 Sheffield 26 34 9 35 15 25 14 8 166 Shepway 0 8 0 0 3 0 3 10 24 Shropshire 21 8 7 12 15 5 4 35 107 page 23 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Slough 2 14 5 13 3 3 12 0 52 Solihull 11 2 2 14 5 5 6 8 53 Somerset 14 0 1 28 2 14 0 4 63 South Bucks 0 1 1 0 1 0 1 5 9 South Cambs 0 4 0 1 0 0 2 4 11 South Derbyshire 0 0 1 0 0 0 3 3 7 South Downs National Park Authority 0 0 0 0 0 0 0 1 1 South Glos 10 7 6 10 5 6 4 8 56 South Hams 0 3 2 0 4 1 0 18 28 South Holland 0 1 1 0 1 0 1 3 7 South Kesteven 0 3 1 0 0 1 4 6 15 South Lakeland 0 2 6 0 2 2 1 2 15 South Norfolk 0 1 2 1 0 0 0 9 13 South Northants 0 1 0 0 4 0 1 5 11 South Oxfordshire 0 3 0 0 0 0 1 3 7 South Ribble 1 1 2 1 4 1 1 2 13 South Somerset 0 6 3 1 3 2 1 8 24 South Staffs 0 1 1 0 2 0 0 6 10 South Tyneside 11 3 5 11 6 4 4 5 49 Southampton 15 4 4 5 5 5 6 4 48 Southend-on-Sea 8 7 4 6 3 10 4 6 48 Southwark 10 28 14 22 12 11 76 21 194 Spelthorne 0 3 2 0 3 0 1 2 11 St Albans 0 1 2 0 2 3 3 17 28 St Edmundsbury 0 2 1 1 0 1 3 8 16 St Helens 10 6 1 15 4 1 1 3 41 page 24 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Stafford 0 3 1 0 0 2 1 5 12 Staffordshire 43 1 5 37 5 22 0 3 116 Staffs Moorlands 0 1 1 0 1 1 0 8 12 Stevange 1 4 2 0 1 0 3 3 14 Stockport 11 4 0 20 7 10 3 11 66 Stockton-on-Tees 4 10 1 9 5 2 0 12 43 Stoke-on-Trent 15 14 8 14 6 8 11 7 83 Stratford-on-Avon 0 3 3 0 2 0 0 6 14 Stroud 0 2 3 0 0 0 3 8 16 Suffolk 20 0 8 38 2 12 0 2 82 Suffolk Coastal 0 3 2 0 0 0 2 9 16 Sunderland 8 11 6 12 7 4 2 9 59 Surrey 35 1 8 58 2 23 0 4 131 Surrey Heath 0 4 2 0 1 3 0 6 16 Sutton 9 12 1 8 6 8 13 9 66 Swale 0 3 2 0 2 4 1 10 22 Swindon 6 19 4 9 9 6 5 7 65 Tameside 14 14 3 13 15 2 2 10 73 Tamworth 0 4 5 0 3 1 13 0 26 Tandridge 1 3 0 0 1 0 3 7 15 Taunton Deane 0 2 0 0 1 0 7 6 16 Teignbridge 1 7 4 0 0 2 0 16 30 Telford & Wrekin 12 5 3 6 5 5 2 6 44 Tendring 0 10 6 0 4 1 5 8 34 Test Valley 1 3 2 0 1 2 1 1 11 Tewkesbury 0 3 1 0 0 0 1 8 13 page 25 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

Thanet 0 1 6 0 5 1 3 9 25 Three Rivers 0 6 0 0 5 0 5 7 23 Thurrock 9 29 6 11 6 3 22 3 89 Tonbridge & Malling 0 2 1 0 1 0 3 1 8 Torbay 7 8 4 14 7 5 2 17 64 Torridge 0 4 4 0 1 4 3 17 33 Tower Hamlets 6 23 10 6 6 24 30 6 111 Trafford 8 24 5 12 9 5 3 18 84 Tunbridge Wells 0 4 0 0 2 1 2 7 16 Uttlesford 0 3 1 0 2 1 3 8 18 Vale of White Horse 0 5 3 0 0 0 0 5 13 Wakefield 4 11 12 15 8 7 2 14 73 Walsall 20 4 4 25 9 1 1 5 69 Waltham Forest 16 29 13 23 12 24 34 11 162 Wandsworth 5 25 5 12 6 13 25 7 98 Warrington 14 9 2 13 5 3 4 8 58 Warwick 0 8 6 0 2 2 2 5 25 Warwickshire 37 0 2 26 4 8 2 0 79 Watford 0 6 1 0 0 1 8 3 19 Waveney 0 6 1 0 5 2 5 3 22 Waverley 0 4 6 0 2 0 2 9 23 Wealden 0 6 1 0 10 2 4 11 34 Wellingborough 0 2 0 0 2 1 1 3 9 Welwyn Hatfield 0 8 2 1 5 2 9 5 32 West Berkshire 5 12 4 6 9 4 2 7 49 West Devon 0 0 2 0 3 0 2 9 16 page 26 Data annex: complaints and enquiries received by category

Environmental Corporate Education services, public Adult care Benefits & other & children’s protection & Highways & Planning & services & tax services services regulation transport Housing development Total

West Dorset 0 0 2 0 3 0 2 9 16 West Lancs 0 3 3 0 0 0 3 9 18 West Lindsey 0 5 4 0 1 0 2 10 22 West Oxfordshire 0 1 1 0 2 0 3 6 13 West Somerset 0 1 0 0 1 0 0 6 8 West Sussex 59 0 2 34 6 22 1 2 126 Westminster 11 55 6 8 12 25 87 4 208 Weymouth & Portland 0 3 2 0 3 0 1 4 13 Wigan 14 26 8 16 8 8 5 8 93 Wiltshire 19 9 5 28 6 6 7 36 116 Winchester 0 1 1 0 1 2 1 7 13 Windsor & Maidenhead 2 6 3 5 3 5 0 13 37 Wirral 28 12 9 15 10 8 7 12 101 Woking 0 2 2 0 1 2 3 4 14 Wokingham 5 8 5 14 5 2 4 2 45 Wolverhampton 5 11 6 36 9 3 13 2 85 Worcester 0 0 2 1 0 2 3 2 10 Worcestershire 19 0 4 30 0 5 0 3 61 Worthing 1 4 2 1 2 3 1 4 18 Wychavon 0 2 0 0 3 0 2 8 15 Wycombe 0 12 2 0 4 1 11 10 40 Wyre 0 5 3 0 2 0 2 3 15 Wyre Forest 2 1 0 0 0 0 0 3 6 York 9 8 5 9 13 9 9 10 72 Yorkshire Dales National Park Authority 0 0 0 0 0 0 0 1 1

page 27 Data annex: complaints and enquiries received by category

Notes

The statistics include all the complaints and enquiries received in 2013/14.

Number of complaints and enquiries received: a number of cases will have been received and decided in different business years, this means the number of complaints and enquiries received will not always match the number of decisions made.

For further information on interpreting the statistics click here.

page 28 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Adur 0 4 0 5 6 0 100.0% 15 Allerdale 0 3 1 5 1 5 16.7% 15 Amber Valley 0 6 3 7 3 7 30.0% 26 Arun 0 10 2 9 2 2 50.0% 25 Ashfield 3 10 1 4 3 4 42.9% 25 Ashford 1 12 1 7 3 3 50.0% 27 Aylesbury Vale 0 13 1 13 0 8 0.0% 35 Babergh 1 2 0 3 0 5 0.0% 11 Barking & Dagenham 14 36 3 48 11 9 55.0% 121 Barnet 14 67 3 79 14 10 58.3% 187 Barnsley 2 18 6 29 5 14 26.3% 74 Barrow 3 6 0 5 2 2 50.0% 18 Basildon 7 8 1 21 1 6 14.3% 44 Basingstoke & Deane 1 6 2 5 0 2 0.0% 16 Bassetlaw 2 8 0 6 3 4 42.9% 23 Bath & NE Somerset 2 12 1 14 1 10 9.1% 40 Bedford 1 10 4 18 6 4 60.0% 43 Bexley 0 28 2 38 10 12 45.5% 90 Birmingham 52 131 22 254 82 43 65.6% 584 Blaby 0 8 0 1 1 0 100% 10 Blackburn w/Darwen 2 11 0 21 4 4 50.0% 42 Blackpool 4 11 2 25 11 5 68.8% 58 Bolsover 2 6 1 9 1 1 50.0% 20 Bolton 2 28 4 36 9 12 42.9% 91 Boston 0 4 0 4 0 1 0.0% 9 Bournemouth 4 10 3 29 6 12 33.3% 64

page 29 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Bracknell Forest 2 9 1 10 0 2 0.0% 24 Braintree 0 5 1 7 2 4 33.3% 19 Breckland 1 4 0 7 3 2 60.0% 17 Brent 10 48 6 77 11 15 42.3% 167 Brentwood 2 2 1 10 2 3 40.0% 20 Brighton & Hove 4 33 4 53 12 17 41.4% 123 Bristol 15 55 4 46 24 16 60.0% 160 Broadland 0 7 0 6 4 5 44.4% 22 Broads Authority 0 3 0 0 0 0 3 Bromley 2 42 3 74 14 20 41.2% 155 Bromsgrove 0 8 0 7 1 4 20.0% 20 Broxbourne 0 3 0 7 3 0 100.0% 13 Broxtowe 1 6 1 6 4 2 66.7% 20 Buckinghamshire 2 56 11 22 7 6 53.8% 104 Burnley 0 7 0 8 0 2 0.0% 17 Bury 0 16 1 16 8 7 53.3% 48 Calderdale 3 19 3 19 8 8 50.0% 60 Cambridge 2 3 1 5 2 2 50.0% 15 Cambridgeshire 1 15 5 24 9 20 31.0% 74 Camden 24 66 2 37 20 16 55.6% 165 Cannock Chase 0 2 0 8 0 1 0.0% 11 Canterbury 2 6 0 22 1 4 20.0% 35 Carlisle 0 2 0 0 0 0 2 Castle Point 1 2 0 3 4 5 44.4% 15 Central Bedfordshire 2 23 3 28 4 13 23.5% 73 Charnwood 2 11 0 9 2 2 50.0% 26

page 30 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Chelmsford 0 6 1 7 1 4 20.0% 19 Cheltenham 1 8 0 6 4 5 44.4% 24 Cherwell 0 7 0 8 2 4 33.3% 21 Cheshire East 3 37 3 50 17 21 44.7% 131 Cheshire W & Chester 1 34 2 39 13 17 43.3% 106 Chesterfield 0 7 0 7 0 3 0.0% 17 Chichester 0 8 0 6 1 1 50.0% 16 Chiltern 0 4 0 5 0 1 0.0% 10 Chorley 0 2 0 3 1 2 33.3% 8 Christchurch 0 3 0 6 0 1 0.0% 10 City of Bradford 7 37 8 62 14 22 38.9% 150 City of London 2 2 0 1 0 1 0.0% 6 Colchester 4 6 1 8 2 2 50.0% 23 Copeland 1 7 0 5 1 6 14.3% 20 Corby 1 2 0 10 4 0 100.0% 17 Cornwall 3 70 14 67 36 32 52.9% 222 Cotswold 0 5 0 3 0 4 0.0% 12 County Durham 6 69 3 48 25 26 49.0% 177 Coventry 1 25 9 56 10 9 52.6% 110 Craven 1 3 0 10 0 2 0.0% 16 Crawley 1 6 1 8 2 4 33.3% 22 Croydon 10 71 6 121 37 23 61.7% 268 Cumbria 0 13 3 21 6 5 54.5% 48 Dacorum 1 4 3 12 1 4 20.0% 25 Darlington 0 6 2 7 3 5 37.5% 23 Dartford 0 10 1 7 2 1 66.7% 21

page 31 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Dartmoor National Park Authority 1 2 0 0 0 4 0.0% 7 Daventry 2 2 0 7 3 4 42.9% 18 Derby 2 34 1 25 9 10 47.4% 81 Derbyshire 0 26 2 36 11 8 57.9% 83 Derbyshire Dales 1 3 1 4 0 1 0.0% 10 Devon 4 36 4 30 27 40 40.3% 141 Doncaster 5 33 1 33 12 10 54.5% 94 Dorset 1 17 2 19 5 12 29.4% 56 Dover 2 9 0 11 3 5 37.5% 30 Dudley 4 25 1 38 3 16 15.8% 87 Ealing 12 63 6 86 39 21 65.0% 227 East Cambs 1 3 0 8 0 2 0.0% 14 East Devon 0 15 0 11 4 11 26.7% 41 East Dorset 0 5 1 6 3 1 75.0% 16 East Hampshire 0 7 0 0 1 3 25.0% 11 East Herts 0 4 0 6 0 1 0.0% 11 East Lindsey 0 11 0 14 1 10 9.1% 36 East Northants 1 7 1 3 1 2 33.3% 15 East Riding of Yorks 3 29 1 40 10 15 40.0% 98 East Staffs 0 5 1 3 0 3 0.0% 12 East Sussex 1 33 6 31 19 21 47.5% 111 Eastbourne 1 7 1 12 0 0 21 Eastleigh 0 4 2 6 2 2 50.0% 16 Eden 0 4 0 2 2 0 100.0% 8 Elmbridge 0 7 1 17 2 3 40.0% 30 Enfield 7 36 5 66 23 16 59.0% 153

page 32 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Epping Forest 4 5 2 10 0 1 0.0% 22 Epsom & Ewell 0 8 1 6 3 3 50.0% 21 Erewash 1 1 0 5 3 2 60.0% 12 Essex 1 53 7 60 30 16 65.2% 167 Exeter 3 6 1 8 3 3 50.0% 24 Exmoor National Park Authority 0 0 0 0 0 0 0 Fareham 0 6 0 4 0 3 0.0% 13 Fenland 1 7 1 7 4 1 80.0% 21 Forest Heath 0 2 0 1 1 1 50.0% 5 Forest of Dean 0 2 0 8 0 2 0.0% 12 Fylde 0 6 1 6 0 2 0.0% 15 Gateshead 10 14 3 24 9 9 50.0% 69 Gedling 0 11 1 5 0 2 0.0% 19 Gloucester 0 1 0 4 0 0 5 Gloucestershire 0 18 0 30 7 15 31.8% 70 Gosport 0 4 0 8 0 1 0.0% 13 Gravesham 3 4 1 12 1 1 50.0% 22 Great Yarmouth 2 1 0 9 1 1 50.0% 14 Greenwich 16 33 6 45 14 11 56.0% 125 Guildford 3 7 0 8 2 2 50.0% 22 Hackney 24 47 9 67 31 6 83.8% 184 Halton 0 10 0 10 3 6 33.3% 29 Hambleton 1 5 0 7 1 1 50.0% 15 Hammersmith & Fulham 11 57 4 40 11 12 47.8% 135 Hampshire 3 32 3 27 10 15 40.0% 90 Harborough 0 4 0 5 4 5 44.4% 18

page 33 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Haringey 17 72 3 83 32 23 58.2% 230 Harlow 2 4 0 7 1 2 33.3% 16 Harrogate 1 6 0 8 3 0 100.0% 18 Harrow 5 56 4 61 21 17 55.3% 164 Hart 0 1 1 3 0 0 5 Hartlepool 0 10 2 9 1 3 25.0% 25 Hastings 0 9 1 8 1 2 33.3% 21 Havant 0 2 0 5 1 1 50.0% 9 Havering 6 30 4 60 11 10 52.4% 121 Herefordshire 0 33 3 25 13 9 59.1% 83 Hertfordshire 1 42 5 44 11 5 68.8% 108 Hertsmere 1 6 1 13 0 4 0.0% 25 High Peak 2 5 0 7 2 3 40.0% 19 Hillingdon 4 26 2 44 5 4 55.6% 85 Hinckley & Bosworth 0 3 1 5 4 2 66.7% 15 Horsham 0 7 1 8 5 1 83.3% 22 Hounslow 8 48 3 100 19 15 55.9% 193 Huntingdonshire 2 2 0 4 3 4 42.9% 15 Hyndburn 0 3 0 5 0 8 0.0% 16 Ipswich 2 7 1 7 0 0 17 Isle of Wight 0 25 1 22 8 5 61.5% 61 Isles of Scilly 0 1 0 2 0 0 3 Islington 24 41 4 39 18 20 47.3% 146 Kensington & Chelsea 1 18 4 33 4 14 22.2% 74 Kent 1 57 12 44 36 41 46.8% 191 Kettering 2 6 1 8 3 1 75.0% 21

page 34 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

King’s Lynn & West Norfolk 1 4 0 6 1 0 100.0% 12 Kingston upon Hull 3 29 2 36 7 11 38.9% 88 Kingston upon Thames 5 21 2 26 8 6 57.1% 68 Kirklees 2 41 9 37 13 23 36.1% 125 Knowsley 1 12 0 10 4 5 44.4% 32 Lake District National Park Authority 0 3 0 2 5 3 62.5% 13 Lambeth 41 95 13 104 51 34 60.0% 338 Lancashire 1 31 8 63 19 41 31.7% 163 Lancaster 1 9 0 7 3 3 50.0% 23 Leeds 21 65 5 70 29 42 40.8% 232 Leicester 6 49 8 25 15 15 50.0% 118 Leicestershire 1 19 3 36 10 11 47.6% 80 Lewes 1 3 0 9 1 0 100.0% 14 Lewisham 8 32 7 62 15 10 60.0% 134 Lichfield 1 2 1 4 0 2 0.0% 10 Lincoln 2 5 1 4 2 1 66.7% 15 Lincolnshire 1 31 3 28 11 18 37.9% 92 Liverpool 2 50 4 92 21 13 61.8% 182 Luton 2 31 5 32 6 3 66.7% 79 Maidstone 0 10 1 5 3 0 100.0% 19 Maldon 0 6 0 5 2 1 66.7% 14 Malvern Hills 0 4 0 4 2 2 50.0% 12 Manchester 8 83 11 78 16 23 41.0% 219 Mansfield 3 8 0 6 0 3 0.0% 20 Medway 2 44 7 31 6 20 23.1% 110 Melton 0 2 1 0 0 1 0.0% 4

page 35 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Mendip 0 11 4 27 4 3 57.1% 49 Merton 1 27 4 49 18 11 62.1% 110 Mid Devon 2 9 1 8 1 2 33.3% 23 Mid Suffolk 3 5 1 9 1 4 20.0% 23 Mid Sussex 0 7 0 11 3 1 75.0% 22 Middlesborough 0 8 0 18 1 6 14.3% 33 Milton Keynes 5 19 3 32 6 6 50.0% 71 Mole Valley 0 4 0 5 1 7 12.5% 17 NE Derbyshire 0 7 0 5 1 3 25.0% 16 New Forest 2 10 0 6 2 1 66.7% 21 New Forest National Park Authority 0 1 1 0 1 5 16.7% 8 Newark & Sherwood 1 11 0 9 3 0 100.0% 24 Newcastle 4 28 4 13 3 10 23.1% 62 Newcastle-under-Lyme 2 8 1 5 5 3 62.5% 24 Newham 19 90 8 133 28 21 57.1% 299 Norfolk 1 29 2 23 6 10 37.5% 71 North Devon 0 11 0 7 2 5 28.6% 25 North Dorset 0 4 0 8 0 2 0.0% 14 North East Lincs 1 15 1 24 2 8 20.0% 51 North Herts 0 8 1 11 2 1 66.7% 23 North Kesteven 0 5 0 9 1 0 100.0% 15 North Lincolnshire 1 11 3 17 5 4 55.6% 41 North Norfolk 0 8 2 5 3 2 60.0% 20 North Somerset 0 23 2 16 9 13 40.9% 63 North Tyneside 6 21 1 23 3 6 33.3% 60 North Warwicks 0 3 1 4 0 2 0.0% 10

page 36 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

North Yorks National Park Authority 0 0 0 1 0 1 0.0% 2 North Yorks 0 24 4 24 22 13 62.9% 87 Northampton 6 13 3 18 5 8 38.5% 53 Northants 1 22 5 40 12 11 52.2% 91 Northumberland 2 20 0 25 8 8 50.0% 63 Northumberland National Park Authority 0 1 0 0 0 0 1 Norwich 11 11 0 15 2 10 16.7% 49 Nottingham 7 29 4 40 14 30 31.8% 124 Notts 0 33 2 33 15 15 50.0% 98 Nuneaton & Bedworth 5 9 0 6 1 4 20.0% 25 NE Leics 2 7 0 9 3 5 37.5% 26 Oadby & Wigston 1 2 0 1 1 0 100.0% 5 Oldham 3 24 2 29 7 12 36.8% 77 Oxford 3 9 2 8 1 4 20.0% 27 Oxfordshire 2 22 1 14 7 14 33.3% 60 Peak District National Park Authority 0 3 1 2 2 1 66.7% 9 Pendle 1 10 1 13 1 2 33.3% 28 Peterborough 0 16 1 20 10 4 71.4% 51 Plymouth 2 25 1 33 10 11 47.6% 82 Poole 1 20 5 14 4 10 28.6% 54 Portsmouth 7 20 1 24 3 12 20.0% 67 Preston 2 6 0 6 1 1 50.0% 16 Purbeck 0 1 0 2 0 2 0.0% 5 Reading 2 18 0 17 6 6 50.0% 49 Redbridge 5 52 7 63 30 25 54.5% 182 Redcar & Cleveland 1 9 1 22 1 4 20.0% 38

page 37 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Redditch 2 3 2 11 0 1 0.0% 19 Reigate & Banstead 0 11 0 13 3 6 33.3% 33 Ribble Valley 0 2 1 5 4 3 57.1% 15 Richmond upon Thames 0 21 3 21 11 10 52.4% 66 Richmondshire 0 1 0 3 0 0 4 Rochdale 1 16 5 26 5 4 55.6% 57 Rochford 1 6 0 13 0 3 0.0% 23 Rossendale 0 5 0 8 1 4 20.0% 18 Rother 0 8 1 5 0 4 0.0% 18 Rotherham 1 18 3 28 5 13 27.8% 68 Rugby 0 3 0 7 2 1 66.7% 13 Runnymeade 3 1 1 5 1 1 50.0% 12 Rushcliffe 0 4 0 1 3 0 100.0% 8 Rushmoor 0 3 0 9 0 0 12 Rutland 0 9 1 6 1 1 50.0% 18 Ryedale 0 4 0 1 1 1 50.0% 7 Salford 3 11 1 25 13 10 56.5% 63 Sandwell 12 32 3 61 20 10 66.7% 138 Scarborough 0 7 0 11 1 6 14.3% 25 Sedgemoor 2 7 0 7 2 6 25.0% 24 Sefton 1 24 2 26 6 15 28.6% 74 Selby 0 3 0 5 5 5 50.0% 18 Sevenoaks 0 8 1 8 0 3 0.0% 20 Sheffield 9 48 6 69 16 26 38.1% 174 Shepway 1 5 1 10 3 4 42.9% 24 Shropshire 0 28 2 44 19 12 61.3% 105

page 38 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Slough 2 12 3 26 4 9 30.8% 56 Solihull 3 16 1 25 6 5 54.5% 56 Somerset 2 12 3 26 6 9 40.0% 58 South Bucks 0 4 1 4 1 1 50.0% 11 South Cambs 2 6 1 4 2 2 50.0% 17 South Derbyshire 1 4 0 2 1 0 100.0% 8 South Downs National Park Authority 0 0 0 1 0 0 1 South Glos 5 15 3 23 7 7 50.0% 60 South Hams 0 11 2 6 15 10 60.0% 44 South Holland 0 4 2 2 0 1 0.0% 9 South Kesteven 1 4 1 7 0 3 0.0% 16 South Lakeland 0 9 1 2 0 2 0.0% 14 South Norfolk 1 5 0 2 0 1 0.0% 9 South Northants 0 3 0 5 2 5 28.6% 15 South Oxfordshire 1 2 0 4 0 4 0.0% 11 South Ribble 0 5 1 6 0 2 0.0% 14 South Somerset 0 13 3 4 2 3 40.0% 25 South Staffs 1 3 0 4 0 1 0.0% 9 South Tyneside 5 23 0 10 1 15 6.3% 54 Southampton 2 11 1 13 8 10 44.4% 45 Southend-on-Sea 2 16 1 19 1 7 12.5% 46 Southwark 47 57 7 69 44 18 71.0% 242 Spelthorne 1 1 0 7 0 1 0.0% 10 St Albans 1 11 2 9 3 5 37.5% 31 St Edmundsbury 1 9 1 4 0 4 0.0% 19 St Helens 0 11 0 18 5 8 38.5% 42

page 39 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Stafford 0 5 1 6 3 3 50.0% 18 Staffordshire 1 35 7 35 21 15 58.3% 114 Staffs Moorlands 1 4 0 2 2 4 33.3% 13 Stevenage 3 4 1 6 1 3 25.0% 18 Stockport 1 20 2 25 3 20 13.0% 71 Stockton-on-Tees 1 10 1 23 5 5 50.0% 45 Stoke-on-Trent 2 34 6 25 17 11 60.7% 95 Stratford-on-Avon 1 4 2 1 4 2 66.7% 14 Stroud 2 7 1 6 0 0 16 Suffolk 7 25 3 29 14 11 56.0% 89 Suffolk Coastal 1 4 2 5 1 3 25.0% 16 Sunderland 2 22 4 20 9 10 47.4% 67 Surrey 0 45 6 52 17 13 56.7% 133 Surrey Heath 0 8 0 7 2 0 100.0% 17 Sutton 3 19 4 30 4 6 40.0% 66 Swale 0 11 0 10 2 2 50.0% 25 Swindon 3 21 4 28 2 9 18.2% 67 Tameside 1 17 2 33 13 12 52.0% 78 Tamworth 7 3 2 11 3 2 60.0% 28 Tandridge 0 6 2 4 2 4 33.3% 18 Taunton Deane 2 4 0 6 5 7 41.7% 24 Teignbridge 1 10 1 11 4 7 36.4% 34 Telford & Wrekin 3 11 4 14 3 7 30.0% 42 Tendring 0 8 2 20 0 5 0.0% 35 Test Valley 0 4 3 4 0 0 11 Tewkesbury 0 2 1 8 1 1 50.0% 13 page 40 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

Thanet 3 3 0 13 0 3 0.0% 22 Three Rivers 1 9 0 7 2 3 40.0% 22 Thurrock 15 21 3 40 18 10 64.3% 107 Tonbridge & Malling 0 1 0 6 0 1 0.0% 8 Torbay 0 17 3 26 11 12 47.8% 69 Torridge 0 14 2 10 9 6 60.0% 41 Tower Hamlets 11 40 3 51 10 3 76.9% 118 Trafford 3 25 1 34 11 16 40.7% 90 Tunbridge Wells 1 5 1 5 4 4 50.0% 20 Uttlesford 1 7 1 6 4 3 57.1% 22 Vale of White Horse 2 4 0 7 2 2 50.0% 17 Wakefield 2 40 5 18 7 7 50.0% 79 Walsall 2 14 3 28 9 17 34.6% 73 Waltham Forest 7 52 4 62 27 20 57.4% 172 Wandsworth 9 37 2 37 6 13 31.6% 104 Warrington 0 19 4 22 12 8 60.0% 65 Warwick 0 13 1 11 4 2 66.7% 31 Warwickshire 2 9 3 26 19 13 59.4% 72 Watford 0 11 1 7 1 0 100.0% 20 Waveney 3 5 0 14 1 3 25.0% 26 Waverley 0 11 1 4 1 4 20.0% 21 Wealden 3 7 1 16 1 6 14.3% 34 Wellingborough 0 6 0 3 1 1 50.0% 11 Welwyn Hatfield 2 8 2 15 2 2 50.0% 31 West Berkshire 0 26 1 15 3 8 27.3% 53 West Devon 0 4 0 4 0 3 0.0% 11

page 41 Data annex: decisions made (by local authority)

Referred Detailed investigations Closed after Incomplete back for local Advice given initial enquiries /invalid resolution Upheld Not upheld % upheld* Total

West Dorset 0 16 0 4 1 3 25.0% 24 West Lancs 2 5 0 6 0 6 0.0% 19 West Lindsey 0 8 1 3 2 4 33.3% 18 West Oxfordshire 0 4 0 6 1 3 25.0% 14 West Somerset 0 0 0 3 0 2 0.0% 5 West Sussex 3 43 4 38 17 25 40.5% 130 Westminster 9 53 7 77 18 57 24.0% 221 Weymouth & Portland 0 2 1 9 2 1 66.7% 15 Wigan 5 30 2 37 15 11 57.7% 100 Wiltshire 3 29 6 40 17 16 51.5% 111 Winchester 0 6 1 6 1 2 33.3% 16 Windsor & Maidenhead 1 8 2 14 8 5 61.5% 38 Wirral 2 22 4 41 8 14 36.4% 91 Woking 0 7 0 6 0 3 0.0% 16 Wokingham 2 14 4 21 3 5 37.5% 49 Wolverhampton 8 27 1 32 5 23 17.9% 96 Worcester 1 2 1 3 1 0 100.0% 8 Worcestershire 0 17 2 18 14 13 51.9% 64 Worthing 0 9 0 8 0 1 0.0% 18 Wychavon 1 6 1 5 2 1 66.7% 16 Wycombe 0 11 2 19 3 8 27.3% 43 Wyre 0 3 0 10 3 0 100.0% 16 Wyre Forest 0 1 0 3 0 1 0.0% 5 York 4 23 3 19 6 14 30.0% 69 Yorkshire Dales National Park Authority 0 1 0 0 0 0 0

page 42 Data annex: decisions made (by local authority)

Notes

Number of complaints and enquiries received: a number of cases will have been received and decided in different business years, this means the number of complaints and enquiries received will not always match the number of decisions made.

* Percentage of complaints that are investigated in more detail.

For further information on interpreting the statistics click here.

page 43 Agenda Item 6

WARRINGTON BOROUGH COUNCIL

AUDIT AND CORPORATE GOVERNANCE COMMITTEE – 25 September 2014

Report of: Timothy Date, Solicitor to the Council and Head of Corporate Governance

Report Author: Julian Joinson, Principal Democratic Services Officer Contact Details: Email Address: Telephone: [email protected] 01925 442112

Ward Members: All

TITLE OF REPORT: OMBUDSMAN COMPLAINTS ANNUAL REVIEW LETTER 2013/14 AND ANNUAL REVIEW REPORT OF LOCAL GOVERNMENT COMPLAINTS 2013/14

1. PURPOSE OF REPORT

1.1 To provide information in respect of the Ombudsman’s Annual Review Letter 2013/14 for Warrington and contextual information from the Annual Review Report 2013/14.

2. CONFIDENTIAL OR EXEMPT

2.1 The report does not contain information which is either confidential or exempt.

3. INTRODUCTION

3.1 The Local Government Ombudsman (LGO) may investigate complaints against local authorities in England. Where the Ombudsman finds that a council investigated has done something wrong (“maladministration”) it may make recommendations to as to how it should be put right.

4. ANNUAL REVIEW LETTER 2013/14

4.1 The Ombudsman provides an annual report to each local authority, which summarises the statistics on the complaints made about that council. Attached at Appendix 1 is a copy of the Annual Review Letter for Warrington for the year ending 31 March 2014. The letter includes details of:-

• the numbers of complaints and enquiries lodged for each type of service; and • the totals for each category of decision reached by the Ombudsman.

4.2 Members may recall that in 2012/13 the Ombudsman did not provide a detailed breakdown of those figures, due to a change in its business processes during the Agenda Item 6

course of that year which would have led to inconsistent data being provided. 2013/14 is the first full year of recording complaints under the new business model. The figures, therefore, will not be directly comparable to previous years.

5. COMPLAINTS AND ENQUIRIES RECEIVED AND DECISIONS MADE

5.1 In 2013/14 the Ombudsman received 58 complaints and enquiries about Warrington Borough Council. The Schedule to Appendix 1 shows how these were split across each service area, with the highest numbers falling within adult care services (14) and education and children’s services (13).

5.2 The total number of decisions made by the Ombudsman in 2013/14 regarding Warrington was 65. The Schedule to Appendix 1 shows that of those, 20 decisions were the subject of detailed investigations, with 12 complaints being upheld and 8 not upheld. A note on the interpretation of the decision categories is attached at Appendix 2.

5.3 Members will note that the totals for numbers of complaints received and decisions made do not tally. Guidance notes available on the Ombudsman’s website about the interpretation of the statistics indicate that a number of cases will have been received and decided in different business years, which means the number of complaints and enquiries received will not always match the number of decisions made.

5.4 Unlike in previous years, in 2013/14 the Ombudsman has not provided details of average figures across all or similar authorities nationally. It is suggested that care should be taken when attempting to make direct comparisons. The Guidance notes on interpretation provided on the Ombudsman’s website indicate that the Ombudsman is mindful that there are considerable population variations between authorities. The Ombudsman considers that the larger the population an authority serves, the more likely the Ombudsman is to receive complaints about it. Furthermore, the Ombudsman acknowledges that the bare numbers of complaints against an authority do not prove that it is a ‘bad’ or ‘good’ council.

6. FORMAL REPORTS ISSUED

6.1 During 2013-14 the Ombudsman published two reports about Warrington Borough Council, one of which was a joint report with the Parliamentary and Health Service Ombudsman. Both were about children with special needs and specifically about the lack of speech and language therapy (SALT) provision. There was considerable fault found over three years which affected a further 15 teenagers, all of whom were not provided with speech and language therapy contrary to a statutory duty.

6.2 The Council and its health sector partners took action to remedy the situation to ensure there could be no repeat of the situation in the future. Robust monitoring arrangements are in place between the authority and Bridgewater Community Heathcare NHS Trust to ensure that all young people who need this service are receiving it. An apology and suitable compensation was offered to those families affected by the situation. A presentation on the matter was considered by the Protecting the Most Vulnerable Committee at its meeting on 11 March 2014. The Agenda Item 6

Committee noted the situation and endorsed the improved arrangements now in place for the delivery and monitoring of SALT provision.

6.3 The Ombudsman’s office has confirmed that it welcomes the Council’s constructive response to the investigation and agreement to a suitable remedy.

7. ADDITIONAL INFORMATION

7.1 The Annual Review Letter also provides information about a number of developments within the Ombudsman service and complaints sector. It is noted that, at the end of March 2014, Anne Seex retired as the other Local Government Ombudsman. Following an independent review of the governance of the LGO last year, the Government has committed to formalising a single ombudsman structure at LGO, and to strengthen its governance, when parliamentary time allows.

7.2 There have been wider discussions about the effectiveness of complaints handling in the public sector and the role of ombudsmen. The Local Government Ombudsman supports the creation of a single ombudsman for all public services in England. It is considered that this is the best way to deliver a system of redress that is accessible for users; provides an effective and comprehensive service; and ensures that services are accountable locally.

7.3 The Ombudsman has also indicated that over the summer the service will be developing its corporate strategy for the next three years and considering how it can best play its part in enhancing the local accountability of public services.

8. ANNUAL REVIEW OF LOCAL GOVERNMENT COMPLAINTS 2013/14

8.1 For the first time the Ombudsman has produced a separate report, the Annual Review of Local Government Complaints 2013/14, which provides complaints statistics for each English local authority all in one place and gives some information about trends, the complainant’s journey and learning lessons from others. A copy of the report is attached at Appendix 3.

8.2 The report indicates that, in 2013/14, the LGO registered 18,436 new complaints and enquiries specifically about local authorities in England. This was broadly similar to the number received in 2012/13, but when account is taken of changes to the recording of housing complaints (see Paragraph 8.5 below), it means that in real terms complaints and enquiries about other council services has increased.

8.3 Some notable figures in comparison to the previous year are as follows:- • complaints about benefits and tax increased by 26%

• complaints about local authority adult social care increased by 16% 8.4 The two areas where the LGO was more likely to uphold complaints in detailed investigations were also in benefits and tax (49%), and adult social care (48%). Overall, the LGO upheld 46% of all complaints investigated in detail in England. The figure for Warrington is 60%, although direct statistical comparisons should be treated with some caution. Agenda Item 6

8.5 Housing complaints to the LGO also decreased by 39%, although this was an expected result of all new complaints about councils’ role as social landlords becoming the responsibility of the Housing Ombudsman Service in April 2013. 8.6 The report also underlines the Ombudsman’s commitment to supporting the local scrutiny, accountability and the representative role of councillors. The Ombudsman acknowledges the democratic mandate of elected members to scrutinise the way services are delivered and hold those services to account. The LGO considers that the use of complaints information is an important tool to support that process. To facilitate this the LGO started to publish online all decision statements on new complaints after 1 April 2013.

9. FINANCIAL CONSIDERATIONS

9.1 There are no financial implications in connection with this report.

10. RISK ASSESSMENT

10.1 Failure to monitor feedback from the Ombudsman and to consider any emerging trends about complaints or systemic issues identified may lead to reputational risk to the Council.

11. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT

11.1 Analysis of future annual information may help to identify any trends relating equalities issues.

12. CONSULTATION

12.1 None for the purposes of this report.

13. REASONS FOR RECOMMENDATION

13.1 To inform Members about the Council’s performance in relation to complaints made.

14. RECOMMENDATION

14.1 To note Ombudsman’s Annual Review Letter 2013/14 for Warrington and the Annual Review Report of Local Government Complaints 2013/14. Agenda Item 7 WARRINGTON BOROUGH COUNCIL AUDIT AND CORPORATE GOVERNANCE COMMITTEE 25 SEPTEMBER 2014

Report of the: Director of Finance and Information Services Report Author: Jean Gleave, Chief Internal Auditor Contact Details: Email Address: Telephone: [email protected] 01925 442354 Ward Members: All

TITLE OF REPORT: FINANCIAL MANAGEMENT, CONTROL AND REPORTING REQUIREMENTS FOR ACADEMY TRUSTS

1. PURPOSE OF THE REPORT

1.1 The purpose of the report is to brief the Audit and Corporate Governance Committee on the financial duties and responsibilities of academy schools.

2. CONFIDENTIAL OR EXEMPT

Not confidential.

3. FUNDING AGREEMENTS AND THE ACADEMIES FINANCIAL HANDBOOK

3.1 The relationship between the academy trust and the Secretary of State is set out in a legal document known as a funding agreement. The Academies Financial Handbook (‘the Handbook’) is issued by the Education Funding Agency (EFA) on behalf of the Secretary of State, and compliance with the Handbook is a condition of the funding agreements. The EFA requires academy trusts to take full control of their financial affairs and the Handbook contains information on the duties and obligations of academy trusts arising from their funding agreements. It sets out the basic financial management, control and reporting requirements to which academy trusts must work, and sets out responsibilities and requirements relating to their financial governance and management.

3.2 The Handbook describes a financial framework for academy trusts that reflects their accountability to Parliament and the public, and the freedoms that they need over their day to day business. Ultimate responsibility and accountability for the financial framework for academy trusts is retained by the Department for Education (DfE). It also describes the delegated financial authority levels that the Secretary of State has given to academy trusts. Major revisions were made to the handbook in 2012 to reflect the evolving nature of academies and to introduce both revised approaches to accountability (in particular a regularity audit) and some additional freedoms. The handbook was then re-issued in September 2013 with extension of

Agenda Item 6

these themes. For example the 2013 handbook noted the expectations that would be placed on academies that need to recover from financial weakness, as set out in a Financial Notice to Improve. The handbook applies to all types of academy including single-academy trusts, multi- academy trusts, traditional sponsored academies, converter academies, free schools studio schools, university technical colleges and special school academies.

4. ROLES AND RESPONSIBILITIES

The Department for Education

4.1 The Department for Education (DfE) has ultimate responsibility and accountability for the effectiveness of the financial system for academies. In particular, the DfE is responsible for ensuring there is an adequate framework in place to provide assurance that all resources are managed in an effective and proper manner and that value for money is secured. There is a clear chain of accountability from each academy trust, which has its own accounting officer, through the EFA’s accounting officer, to the Department’s principal accounting officer.

The Education Funding Agency

4.2 The Education Funding agency (EFA) acts as the agent of the Secretary of State and the Chief Executive of the EFA has been designated as its accounting officer. The EFA’s accounting officer is responsible and accountable to Parliament for how the EFA uses its funds. The EFA’s accounting officer is also personally responsible for the regularity and propriety of all expenditure of its funds and for ensuring value for money in how they are used. The accounting officer must be satisfied that an academy trust has appropriate arrangements for sound governance, financial management, securing value for money and accounting, and that the way the trust uses public funds is consistent with the purposes for which the funds were voted by Parliament. Where the EFA has concerns about financial management and/or governance in an academy trust, including a multi-academy trust or school(s) within a multi-academy trust, the EFA may issue a Financial Notice to Improve.

4.3 In order to gain assurance over the adequacy of financial arrangements governing the use of public funds by academies, the EFA may conduct financial management reviews. The reviews examine whether the systems and control mechanisms that exist in the trust meet the requirements set out in the Handbook. The trust must provide the EFA with access to all books, records, information, explanations, assets and premises.

Trustees of the Academy Trust

Agenda Item 6

4.4 Academy trusts are companies limited by guarantee and, under the terms of the Academies Act 2010, exempt charities. The board of trustees of the academy trust has wide responsibilities under statute, regulations and the funding agreement and is specifically responsible for ensuring that the trust’s funds are used only in accordance with the law. Academy governors are subject to the duties and responsibilities of charitable trustees and company directors as well as any other conditions that the Secretary of State agrees with them.

4.5 Academy trusts are required by law to produce audited accounts, the members of the trust (or the board of trustees as company directors, to the extent permitted under the Companies Act) must appoint statutory auditors who are registered under the requirements of the Companies Act, to conduct an audit (which is in compliance with the requirements of the Companies Act) and certify whether the accounts are “true and fair”.

4.6 Academy trusts are required to have in place a programme of risk review and checking of financial controls. Options include:

• the work of an internal audit service (either in-house, bought-in or provided by a sponsor); • the performance of a supplementary programme of work by the trust’s external auditor; • the work of a ‘responsible officer’ who will be a non-employed trustee with an appropriate level of qualifications and/or experience, and who neither charges nor is paid by the trust for their work. The appointment of a responsible officer is not mandatory but is one of the options that trusts can use to conduct their internal checks; • completing the work by peer review (i.e. the work being performed by the PFO, or a suitably qualified or experienced member of the finance team, from another academy trust, as an independent reviewer).

5. ACCOUNTS AND THE ROLE OF THE ACADEMY ACCOUNTING OFFICERS

5.1 Accounting officers need to follow the requirements set out in the Handbook and are personally responsible for ensuring regularity, propriety and value for money in the use of the academy trust’s funds. The accounting officer must take personal responsibility for assuring the board that there is compliance with the Handbook, the funding agreement and all relevant aspects of company and charitable law. There is a clear chain of accountability from each academy trust’s accounting officer, through the EFA’s accounting officer, to the DFE’s principal accounting officer.

5.2 All academy trusts as charities must maintain accounting records and provide publicly accessible accounts in line with the Statement of Recommended Practice (SORP) for Charities. This is a statutory

Agenda Item 6

requirement and a condition of funding agreements. It is a condition of academy trusts’ company status that they must publish their accounts and provide a copy to anyone who requests it. The academy trust’s accounting officer is also required to complete and sign a statement on regularity, propriety and compliance each year which must be included in the trust’s annual report and be submitted to the EFA at the same time as the annual accounts

6. FINANCIAL CONSIDERATIONS

6.1 There is no specific cost associated with this report

7. RISK ASSESSMENT

7.1 The Council’s strategic risk register includes the risk around the ability of the council to meet statutory duties and ensure best outcomes for children and young people in view of the autonomy and accountability arrangements of academies and free schools. The risk is scored as a medium level 12

8. EQUALITY AND DIVERSITY/EQUALITY IMPACT ASSESSMENT

8.1 There are no specific Equality and Diversity Impact Issues as a result of this report.

9. CONSULTATION

N/A

10. REASONS FOR RECOMMENDATIONS

10.1 To provide information to Members of the Committee of the assurances and framework of internal control that has been designed for academy schools.

11. RECOMMENDATION

11.1 That the Audit and Corporate Governance Committee considers, comments on and notes this report as part of its monitoring role.

Agenda Item 6

12. BACKGROUND PAPERS

Education Funding Agency Academies Financial Handbook 2013

CONTACTS FOR BACKGROUND PAPERS:

Name E-mail Telephone Jean Gleave [email protected] 01925 442354 Chief Internal Auditor

13. Clearance Details Name Consulted Date Yes No Consulted Relevant Executive Board Cllr Bowden  Sent for Member information 17/9/14

SMT  Deputy Chief Executive Katherine  15/9/14 Fairclough Director of Finance and Lynton Green  15/9/14 Information Services Solicitor to the Council Timothy Date  15/9/14

Agenda Item 8

WARRINGTON BOROUGH COUNCIL

AUDIT AND CORPORATE GOVERNANCE COMMITTEE - Date 25 September 2014

Report of the: Lynton Green, Director of Finance and Information Services Report Author: Shaer Halewood, Chief Accountant Contact Details: [email protected] Telephone: 01925 443925

Ward Members: All

TITLE OF REPORT: RESPONSE TO GRANT THORNTON QUESTIONS ON PROCESSES TO PREVENT AND DETECT FRAUD AND TO ENSURE COMPIANCE WITH LAWS AND REGULATIONS

1. PURPOSE

1.1 To provide Members with the assurance that the Council has effective actions in place in response to Grant Thornton’s (GT) letter relating to the processes and controls in place to prevent and detect fraud and that the Authority is compliant with applicable laws and regulations.

2. CONFIDENTIAL OR EXEMPT

2.1 The report is not confidential or exempt.

3. INTRODUCTION AND BACKGROUND

3.1 Each year to comply with International Accounting Standards, the Council’s external auditors, Grant Thornton, make enquires to ensure the Council has relevant procedures and accounting treatment in place relating to fraud, the law and key financial areas impacting on the accounts.

3.2 Grant Thornton wrote to the Director of Finance and Information Services on 30 April 2014 posing a series of questions to determine whether the assurance can be provided to satisfy 3.1 above.

3.3 Although not required to do so, the Council has published its responses in the interest of openness and transparency. The responses are included at Appendix A.

Agenda Item 8

4. OVERALL CONCLUSION

4.1 After considering the questions raised by Grant Thornton, the Council is satisfied that it can provide the assurance that it has:

• Effective processes and controls in place to prevent and detect fraud • Demonstrated that it is compliant with appropriate lows and regulations • Knowledge of and where relevant has disclosed any actual, alleged or suspected fraud • Provided its views on any key areas affecting the statements

5. FINANCIAL CONSIDERATIONS

5.1 There is no specific cost associated with the report, although areas for consideration highlighted in the responses have had and will continue to have an impact on funding.

6. RISK ASSESSMENT

6.1 New developments and emerging issues always carry an element of risk and where these are significant they have been included on the Strategic Risk Register. Where the risk is Directorate specific, this will have been included within the individual Directorate risk register.

7. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT

7.1 There are no specific Equality and Diversity Impact Issues as a result of the report. Where relevant the implementation of new developments include Equality Impact Assessments as part of the normal process.

8. CONSULTATION

8.1 None

9. REASONS FOR RECOMMENDATION

9.1 To provide assurance to Members of the Committee that appropriate assurance can be given in response to the questions raised by Grant Thornton to the points raised in 4.1 following their letter dated 30 April 2014.

10. RECOMMENDATION

10.1 That the Audit and Corporate Governance Committee note the content of the report.

Agenda Item 8

13. BACKGROUND PAPERS

(a) Grant Thornton letter dated 30 April 2014

Contacts for Background Papers:

Name E-mail Telephone Shaer Halewood [email protected] 01925 442766

Agenda Item 8 APPENDIX A

RESPONSE FROM MANAGEMENT TO GRANT THORNTON QUESTIONS ON PROCESSES TO PREVENT AND DETECT FRAUD AND TO ENSURE COMPIANCE WITH LAWS AND REGULATIONS

Auditor question Response 1. What do you regard as the key There are no significant events that have an impact on events or issues that will have a the accounts this year. The localisation of business significant impact on the financial rates and establishment of a JVC had an impact on the statements for 2013/14? accounts but not significantly. 2. Have you considered the Yes, we have made revisions to our polices as appropriateness of the accounting appropriate. There are no material events or policies adopted by the Authority. transactions that have caused us to change our Have there been any events or policies significantly. The policies were approved by transactions that may cause you to A&CG Committee in April 2014, in advance of the draft change or adopt new accounting accounts being produced policies?

3. Are you aware of any changes to No, there are no changes that we are aware of that the Authority's regulatory have a significant impact on the accounts for 2013/14. environment that may have a significant impact on the Authority's financial statements? 4. How would you assess the quality The Annual Governance Statement sets out the of the Authority's internal control Council’s review of the effectiveness of its governance processes? framework including the system of internal control. The review of effectiveness is informed by the work of the managers within the Council, the Chief Internal Auditor’s annual report, and also by reports and comments made by the external auditors and other review agencies and inspectorates. The Head of Internal Audit opinion for 2013/14 provided substantial assurance that there is a generally sound system of internal control, designed to meet the Council’s objectives, and that controls are generally being applied consistently.

The External Audit annual findings report for 2012/13 noted that the Council’s arrangements for securing financial resilience are good.

The governance structures in place and the Audit and Corporate Governance Committee review of the governance arrangements and the strategic risk register provide a robust governance framework. 5. How would you assess the There is a comprehensive programme of work reliability and thoroughness of the undertaken by internal audit to support an opinion on process by which the Authority internal control at the end of the financial year. Reports reviews the effectiveness of its from internal audit are presented to meetings of the system of internal control? Audit & Corporate Governance Committee and any critical or high priority recommendations that have not been implemented are included in the progress reports.

The officer Governance Group and Resources and Strategic Commissioning Directorate oversee an annual review of the Code of Corporate Governance and the processes in place to support the production of the Annual Governance Statement. This includes a self assessment undertaken by each directorate management team (DMT). Each DMT completes and scores the assessment and returns to the Chief Internal Auditor for review and collation. Internal Audit assess the returns and provided challenge, as necessary, to the scoring in the returns.

Internal Audit have reviewed the revised code of corporate governance 2014 and have included in the annual report that design of controls was satisfactory and that there is a comprehensive action plan in place, maintained by the officer Governance Group, to address required action to improve governance processes. Any areas highlighted for action in the 2013/14 AGS will be included in this action plan for 2014/15.

6. How do the Authority's risk The Authority monitors the strategic risk register (SRR) management processes relate and and Directorate risk registers quarterly. Any change in link to financial reporting? the risk appetite or assumptions is assessed for financial impact as part of this quarterly reporting. The quarterly financial monitoring is risk assessed and mitigating actions taken to ensure an adverse position is avoided. The Council’s SRR includes a corporate financial risk 7. How would you assess the The Council has an Anti-Fraud and Corruption reliability and thoroughness of the Statement and Policy which was updated in 2013/14 to Authority's arrangements for emphasise management responsibility for putting in identifying and responding to the place controls to minimise the risk of fraud and to risk of fraud? encourage staff to report concerns at the earliest opportunity, using the whistleblowing reporting procedure if necessary. The Council also has a Corporate Fraud Response Plan that sets out the procedures to be followed when fraud matters first come to light.

The Internal Audit planning process includes a specific fraud risk assessment to ensure that all relevant risks are identified and to support the development of a

2 programme of proactive anti-fraud work that minimises the risk of loss to the Council. Internal Audit liaise closely with the Corporate, and Directorate, Risk and Business Continuity Groups to ensure that managers give proper consideration to identifying fraud risks and include them on risk registers if they deem them to be significant.

Fraud update reports are produced by internal audit, with support from the benefits fraud investigation team and the financial investigator, and are presented to meetings of the Audit & Corporate Governance Committee.

The Council subscribes to the National Anti-Fraud Network (NAFN), which promotes the sharing of information between Authorities and publishes regular bulletins on fraud cases and attempted scams.

8. What has been the outcome of The annual fraud report contains details of three these arrangements so far this investigations which were carried out during the year year? following the formal process set out in the Fraud Response Plan. One significant investigation is underway by the police assisted by officers.

In 2013-14 the Benefit Fraud Team investigated 256 suspected fraudulent benefit claims. Of these, 30 prosecutions were made with a successful outcome in 29 cases. In total, Housing Benefit and Council Tax Benefit of £477,791was fraudulently overpaid; this compares with a total figure of £345,080 for 2012-13. Fraudulent claims for Council Tax Support worth £16,630 were also identified. Magistrate’s approval was sought for 18 RIPA authorisations in relation to the investigation of benefit claims

The conclusion in the annual fraud report was that the Council had effective measures in place during 2013- 14 to enable the prevention and detection of inaccuracies and fraud. Work will continue in 2014-15 to ensure that the Council has all the necessary policies and procedures in place to create and promote an environment where fraud, bribery and corruption are not tolerated.

During 2013-14, 6 NAFN bulletins were issued and distributed to relevant staff and appropriate measures were taken to address the identified risks. The high level of awareness of these cases has prevented a number of attempts to defraud the Council and schools, who continue regularly to be targeted.

3 9. What have you determined to be Proactive counter fraud work undertaken by internal the classes of accounts, audit in 2013/14 included reviews of client finances; transactions and disclosures most local welfare support; and related party transactions. at risk to fraud? Work around use of procurement cards was also undertaken. Internal Audit’s data analysis software (IDEA) is used to provide information to managers on potential data quality or fraud issues; in 2013-14, this focused on payments to providers, to ensure compliance with Contract Procedure Rules.

The Audit Commission’s annual “Protecting the Public Purse” report identifies new and emerging fraud risks nationally for local authorities. The annual fraud report highlights the following areas: • Business rates fraud • Social care, including Direct Payments • Blue badges • Procurement • Economic and Third Sector, including grants and contracts Work has been undertaken in these areas in 2013-14 or is planned for 2014-15, either by the services involved or through Internal Audit reviews, to assess fraud risks and ensure that appropriate controls are in place.

An emerging issue in 2013/14 relates to the increased risk of fraud and error arising from the reduced funding available to the Council. This manifests itself in lower staffing levels, increased management spans of control, out of date procedures and a reduction in investigative capacity. The finance team are working together with internal audit to provide support with documented procedures and training.

10. Are you aware of any whistle The annual fraud report noted a number of blowing potential or complaints by investigations that were carried out in 2013/14 as a potential whistle blowers? If so, result of whistleblowing allegations. These were all what has been your response? initially reported through the Council’s whistleblowing procedure; none of these led to full disciplinary outcomes or prosecutions. 11. Have any reports been made No under the Bribery Act? 12. As a management team, how do The Audit & Corporate Governance Committee you communicate risk issues receives the strategic risk register twice a year for (including fraud) to those charged comment and consideration. The committee review with governance? changes and updates to the risk management policy and strategy and also receive the annual risk management report . The Committee sometimes request further work as a result of the information received

4 13. As a management team, how do All Council policies and procedures including the Code you communicate to staff and of Conduct are available on the intranet and when employees your views on business refreshed are communicated via the internal practices and ethical behaviour? publications e.g. your voice or inside track. Communications also happen via cascading in team meetings and when specific projects occur e.g. the acceptable use policy when windows 7 was rolled out 14. What are your policies and Litigation claims are identified reactively and are dealt procedures for identifying, with on an ad hoc basis, usually having been passed assessing and accounting for through Finance Managers from DMT’s. Each claim is litigation and claims? assessed separately and the outcome will determine the accounting treatment 15. Is there any use of financial No. instruments, including derivatives? 16. Are you aware of any significant No transaction outside the normal course of business? 17. Are you aware of any changes in None other than we have already accounted for and circumstances that would lead to included within the financial statements impairment of non-current assets? 18. Are you aware of any guarantee No. contracts? 19. Are you aware of allegations of A comprehensive programme of work is undertaken by fraud, errors, or other irregularities internal audit on the Council’s fundamental financial during the period? systems. There is an element of anti-fraud work in these reviews; in 2014-15 reviews included council tax support, electoral registration, client finances. Actions are agreed to any findings from the reviews and are implemented to improve controls.

20. Are you aware of any instances of No. In terms of formal action by S151/Monitoring non-compliance with laws or officer no action has been taken or reports filed. regulations or is the Authority on Specifically, the Regeneration Board was established notice of any such possible during 2013/14 to improve the governance instances of non-compliance? arrangements and therefore minimise the risk around major capital schemes.

21. Have there been any No examinations, investigations or inquiries by any licensing or authorising bodies or the tax and customs authorities? 22. Are you aware of any transactions, No events and conditions (or changes in these) that may give rise to recognition or disclosure of significant accounting estimates that require significant judgement? 23. Where the financial statements There are no amounts based on significant estimates in include amounts based on the accounts

5 significant estimates, how have the accounting estimates been made, what is the nature of the data used, and the degree of estimate uncertainty inherent in the estimate? 24. Are you aware of the existence of No loss contingencies and/or un- asserted claims that may affect the financial statements?

25. Has the management team carried Yes, the liquidity ratio has been included within the out an assessment of the going foreword. Each month the MTFP savings are concern basis for preparing the monitored to ensure they are on track to mitigate a risk financial statements? What was to the Councils financial position the outcome of that assessment? 26. Has management undertaken an Yes, this is monitored quarterly in the Strategic Risk assessment of whether there are Register under risk 12 and as a result is reviewed on any uncertainties that might an ongoing basis. present a risk to the going concern assumption? Have arrangements been made to revisit this assessment before the financial statements are approved? 27. Can you provide details of those A list of solicitors used by the Authority during the year solicitors utilised by the Authority is included below. Much of the work provided by during the year. Please indicate externals Solicitors is large complex matters of and whether they are working on open usually spans more than one financial year. litigation or contingencies Avery Naylor from prior years? Beachcroft Berryman Lace Mawer Bevan Brittan Davitt Jones FDR Fiona Bruce & Co Ltd George Davies Glaisyers Stephensons Weightmans

28. Can you provide details of other CIPFA were commissioned to carry out their ‘dealing advisors consulted during the year with the cuts’ project which looked at scope for future and the issue on which they were savings. The recommendations were considered and consulted? will form part of the future financial sustainability plan. 29. Have any of the Authority's service No. providers reported any items of fraud, non-compliance with laws and regulations or uncorrected misstatements which would affect the financial statements?

6

Councillor C Fitzsimmons Chair of the Audit and Corporate Governance Committee Warrington Borough Council

Town Hall Grant Thornton UK LLP Warrington Royal Liver Building Liverpool L3 1PS WA1 1UHL T +44 161 214 6361 F +44 151 224 7201 15 April 2014 www.grant-thornton.co.uk

Dear Councillor Fitzsimmons

Warrington Borough Council Financial Statements for the year end 31 March 2014

Understanding how the Audit and Corporate Governance Committee gains assurance from management

To comply with International Auditing Standards, each year we need to refresh our understanding of how the Audit and Corporate Governance Committee gains assurance over management's processes and arrangements.

I would be grateful, therefore, if you could write to me with your responses to the following questions.

1 How does the Audit and Corporate Governance Committee oversee management's processes in relation to:  carrying out an assessment of the risk the financial statements may be materially misstated due to fraud or error  identifying and responding to the risk of breaches of internal control  identifying and responding to risks of fraud in the organisation ( including any specific risks of fraud which management have identified or that have been brought to its attention, or classes of transactions, account balances, or disclosure for which a risk of fraud is likely to exist)  communicating to employees its views on appropriate business practice and ethical behavior (for example by updating, communicating and monitoring against the codes of conduct)?

2 Do you have knowledge of any actual, suspected or alleged frauds? If so, please provide details.

3 How does the Audit and Corporate Governance Committee gain assurance that all relevant laws and regulations have been complied with?

4 Are you aware of any actual or potential litigation or claims that would affect the financial statements?

5 How has the Audit and Corporate Governance Committee satisfied itself that it is appropriate to adopt the going concern basis in preparing the financial statements?

Chartered Accountants Member firm within Grant Thornton International Ltd Grant Thornton UK LLP is a limited liability partnership registered in England and Wales: No.OC307742. Registered office: Grant Thornton House, Melton Street, Euston Square, London NW1 2EP A list of members is available from our registered office.

Grant Thornton UK LLP is authorised and regulated by the Financial Services Authority for investment business. I have also written to the Council's Director of Finance and Information Services, Lynton Green and requested an overview of the arrangements put in place by management.

Please could you provide a response by your earliest convenience and please contact me if you wish to discuss anything in relation to this request.

Yours sincerely

Jo Whittingham For Grant Thornton UK LLP

T 0161 214 6361 E [email protected]

2 Agenda Item 9

WARRINGTON BOROUGH COUNCIL

AUDIT AND CORPORATE GOVERNANCE COMMITTEE - 25 September 2014

Report of the: Chair of the Audit and Corporate Governance Committee Report Author: Chris Fitzsimmons Contact Details: [email protected] Ward Members: All

Response to Grant Thornton’s request regarding understanding how the Audit and Corporate Governance Committee gains assurance from management

1. PURPOSE

1.1 To provide Members of the Committee with the assurance that the Committee is able to gain assurance from management on items relating to the Committees functions as requested by Grant Thornton in their letter dated 30 April 2014.

2. CONFIDENTIAL OR EXEMPT

2.1 The report is not confidential or exempt.

3. INTRODUCTION AND BACKGROUND

3.1 To comply with International Accounting Standards, the Council’s external auditors, Grant Thornton raised a series of questions for the Committee to identify how they are able to gain assurance from management in order to deliver its functions effectively.

3.2 Although not a requirement, the Committee has published the response to Grant Thornton’s questions in the interest of openness and transparency. The response is included within Appendix A.

4. OVERALL CONCLUSION

4.1 Having considered the questions raised by Grant Thornton the Committee are satisfied that management do provide the assurance to enable the Committee to discharge its functions relating to governance effectively.

4.2 Regular reports are provided to the committee on relevant matters and any ad hoc requests from the committee are responded to and reported within the required timescale. The Committee also holds private meetings with the Council’s External and Agenda Item 9

Internal auditors to allow any questions to be raised on both sides without prejudice and in a safe environment.

5. FINANCIAL CONSIDERATIONS

5.1 There is no specific cost associated with the report, although areas for consideration highlighted in the report have had and will continue to have an impact on funding.

6. RISK ASSESSMENT

6.1 There are no specific risks associated with the report, although areas for consideration highlighted in the appendix report have had and will continue to have an impact on the risk appetite of the Council. Any areas for significant concern are included within the Strategic Risk Register and Directorate Risk Registers to a lesser extent and quarterly reports on these are received by the Committee.

7. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT

7.1 There are no specific Equality and Diversity Impact Issues as a result of the report. Where relevant the implementation of new developments includes Equality Impact Assessments as part of the normal process.

8. CONSULTATION

8.1 None

9. REASONS FOR RECOMMENDATION

9.1 To provide Members of the Committee that appropriate assurance can be given by management in response to the questions raised by Grant Thornton in the letter to the Audit and Corporate Governance Chair dated 30 April 2014.

10. RECOMMENDATION

10.1 That the Audit and Corporate Governance Committee note the content of the report.

11. BACKGROUND PAPERS

(a) Grant Thornton letter dated 30 April 2014

Contacts for Background Papers:

Name E-mail Telephone Jean Gleave [email protected] 01925 442354

Item 9 APPENDIX A

Warrington Borough Council Financial Statements for the year end 31 March 2014

Response to Grant Thornton’s request to Audit and Corporate Governance Committee Chair regarding understanding how the Audit and Corporate Governance Committee gains assurance from management

Question Response

How does the Audit and Corporate Governance Committee oversee management's processes in relation to:

• carrying out an assessment of The Committee receives reports from internal the risk the financial audit on individual financial systems, that statements may be materially provide an opinion on the controls in place. misstated due to fraud or error Reports are received from external audit on the accounts process and financial resilience that highlight matters and risks arising. Private meetings are held with both internal and external audit where matters can be raised without officers present. Regular reports are provided by the accounts team for members of the committee in relation to financial systems and processes such as treasury management, in addition to briefings on the accounts closure process. Draft accounts are presented to the Committee with the opportunity for questions and challenge from members. Reports from the officer Governance Group highlighting financial updates. Regular reports on the Council’s counter fraud arrangements presented to the committee along with training provision.

• identifying and responding to Committee receives regular reports from the risk of breaches of internal internal audit that highlight implementation of control recommendations and any outstanding high priority actions. Reports to committee from the officer Governance Group include improvement actions from the AGS and other sources. Reports to committee from external audit. Review of the strategic risk register highlights areas where the likelihood of the risk materialising is high therefore internal control could be weak.

• identifying and responding to Anti fraud bribery and corruption statement and risks of fraud in the policy approved by the Committee. organisation ( including any Progress on the separate counter fraud specific risks of fraud which workplan reported to Committee as part of the management have identified or regular internal audit fraud report updates. that have been brought to its Regular fraud reports provided to Committee. attention, or classes of Internal audit and external audit reports transactions, account highlight risks of fraud to the Committee. balances, or disclosure for which a risk of fraud is likely to exist)

• communicating to employees Annual review of the Constitution by Full its views on appropriate Council. business practice and ethical Reports to committee from the Solicitor to the behaviour (for example by Council include reports of complaints for updating, communicating and example Ombudsman’s report. monitoring against the codes of Standards Committee in place and links conduct)? between the 2 committees.

Do you have knowledge of any Twice yearly reports received by the Committee actual, suspected or alleged on counter fraud activity across the Council. frauds? If so, please provide Reports include updates on investigations details. undertaken. Committee made aware of investigations of suspected or alleged frauds as part of the regular reports. Chair of the Committee informed of suspected high value frauds as appropriate. Details provided in the reports to committee or are provided in a general update if still under investigation.

How does the Audit and Corporate Committee receives professional internal Governance Committee gain advice from statutory officers. assurance that all relevant laws External professional advice received as and regulations have been appropriate eg. barrister’s report re planning complied with? services. AGS process - draft AGS and Code of Corporate Governance detail assurances on compliance. Reports to committee from internal audit and external audit highlight any issues arising from the reviews in relation to compliance and also any gaps in policies and procedures.

Are you aware of any actual or No – none known. potential litigation or claims that would affect the financial statements?

How has the Audit and Corporate Assurance provided from the Director of Governance Committee satisfied Finance and the accounts process. itself that it is appropriate to adopt External Audit sign off of the accounts. the going concern basis in Review of treasury management policies and preparing the financial monitoring reports. statements?

Cover page

The Audit Findings Report . for Warrington Borough Council

Year ended 31 March 2014 18 September 2014

Robin Baker Engagement Lead T 0161 214 6399 E [email protected]

Jo-Ann Whittingham Manager T 07880 456175 E [email protected]

Neil Krajewski Executive T 0161 234 6371 E [email protected]

© 2014 Grant Thornton UK LLP | | 18 September 2014 Disclaimer

The contents of this report relate only to those matters which came to our attention during the conduct of our normal audit procedures which are designed primarily for the purpose of expressing our opinion on the financial statements. Our audit is not designed to test all internal controls or identify all areas of control weakness. However, where, as part of our testing, we identify any control weaknesses, we will report these to you. In consequence, our work cannot be relied upon to disclose defalcations or other irregularities, or to include all possible improvements in internal control that a more extensive special examination might identify.

We do not accept any responsibility for any loss occasioned to any third party acting, or refraining from acting on the basis of the content of this report, as this report was not prepared for, nor intended for, any other purpose.

© 2014 Grant Thornton UK LLP | | 18 September 2014 2 Contents

Contents

Section Page 1. Executive summary 4 2. Audit findings 7 3. Value for Money 23 4. Fees, non audit services and independence 27 5. Communication of audit matters 29

© 2014 Grant Thornton UK LLP | | 18 September 2014 3 Section 1: Executive summary

01. Executive summary We anticipate providing an unqualified opinion on the financial 02. Audit findings statements, and an unqualified value for money conclusion.

03. Value for Money

04. Fees, non audit services and independence

05. Communication of audit matters

© 2014 Grant Thornton UK LLP | | 18 September 2014 Overall review of financial statements Executive summary Executive summary

Purpose of this report Key issues arising from our audit This report highlights the key matters arising from our audit of Warrington As at 18 September 2014, and subject to the completion of the outstanding Borough Council's ('the Council') financial statements for the year ended 31 March work described above, we expect to issue an unqualified opinion on the 2014. It is also used to report our audit findings to management and those charged Council's financial statements. with governance in accordance with the requirements of International Standard on Auditing (ISA) 260. The financial statements show gross expenditure of £476m, gross income £317m; total net comprehensive income of £32m and net assets of £241m. We Under the Audit Commission's Code of Audit Practice we are required to report have not identified any adjustments affecting the Council's reported financial whether, in our opinion, the Council's financial statements present a true and fair position. view of the financial position, its expenditure and income for the year and whether they have been properly prepared in accordance with the CIPFA Code of Practice There have been five material amendments to the accounts and officers have on Local Authority Accounting 2013/14. We are also required to reach a formal agreed a number of other adjustments to improve the presentation of the conclusion on whether the Council has put in place proper arrangements to secure financial statements. Officers will present a full list of amendments to the economy, efficiency and effectiveness in its use of resources (the Value for Money accounts to the Audit and Corporate Governance Committee on the 25 conclusion). September 2014.

Introduction The key messages arising from our audit are: In the conduct of our audit we have not had to alter or change our planned audit • the Council continues to improve its arrangements for closedown and approach, which we communicated to you in our Audit Plan dated 20 March compilation of the draft statements; 2014. • the Council provided good quality working papers at the start of the audit; Our audit is substantially complete, although we are finalising our testing in the and additional working papers were produced as required; following areas: • finance staff were available during the majority of the audit to answer our • Whole of Government Accounts (WGA) questions promptly and provided additional information in a timely manner. • housing and Council Tax benefits • obtaining external assurances over the group Warrington Borough Transport Further details are set out in section 2 of this report. (WBT) statements • obtaining and reviewing the final management letter of representation; • updating post-balance sheet events review, to the date of signing the opinion, and • reviewing the final and published version of the financial statements.

© 2014 Grant Thornton UK LLP | | 18 September 2014 5 Overall review of financial statements Executive summary

Value for Money conclusion Controls Based on our review of the Council's arrangements to secure economy, efficiency The Council's management is responsible for the identification, assessment, and effectiveness in its use of resources, we propose to give an unqualified VFM management and monitoring of risk, and for developing, operating and conclusion. Overall our work highlighted that the Council has satisfactory monitoring the system of internal control. arrangements in place to secure financial resilience, and proper arrangements in place for challenging how it secures economy, efficiency and effectiveness. Our audit is not designed to test all internal controls or identify all areas of control weakness. However, where, as part of our testing, we identify any The Council continues to demonstrate good financial resilience and strong control weaknesses, we report these to the Council. financial planning and management. The medium-term financial plan (MTFP) identifies a budget gap of £50m over the period to 2017/18. Having already Our work has not identified any significant control weaknesses which we wish delivered substantial financial savings, the scale of the future challenge is to highlight for your attention. Further details are provided within section 2 of significant. As part of its response to this challenge, the Council has embraced new this report. ways of working and is investing in the regeneration of the area to encourage and support continued growth. Whilst this is undoubtedly an appropriate response the The way forward challenges faced, it is important that you continue to identify and manage the risks Matters arising from the financial statements audit and review of the Council's associated with these developments. arrangements for securing economy, efficiency and effectiveness in its use of resources have been discussed with the Director of Finance and Information Further detail of our work on Value for Money is set out in section 3 and in Services. greater detail in our Value for Money report. We have made a number of recommendations, which are set out in the action plan at Appendix A. Our recommendations have also been agreed with the Whole of Government Accounts (WGA) Director of Finance and Information Services. We will complete our work in respect of the Whole of Government Accounts in accordance with the national timetable. If any significant issues should arise during Acknowledgment this audit we will bring such matters to the attention of the Audit and Corporate We would like to take this opportunity to record our appreciation for the Governance committee. assistance provided by the finance team and other staff during our audit.

Grant Thornton UK LLP 15 September 2014

© 2014 Grant Thornton UK LLP | | 18 September 2014 6 Section 2: Audit findings

01. Executive summary We have not identified any adjustments affecting the Council's 02. Audit findings financial position and we are expecting to issue an unmodified

03. Value for Money opinion on the financial statements.

04. Fees, non audit services and independence

05. Communication of audit matters

© 2014 Grant Thornton UK LLP | | 18 September 2014 Overview of audit findings Audit findings Audit findings

In this section we present our findings in respect of matters and risks identified at The officers have been helpful and co-operative during the audit. We would like to the planning stage of the audit and additional matters that arose during the course record our thanks for their professional approach and timely responses to audit of our work. We set out on the following pages the work we have performed and queries and to our requests for additional information. findings arising from our work in respect of the audit risks we identified in our audit plan, presented to the Audit and Corporate Governance Committee on 20

March 2014. We also set out the adjustments to the financial statements arising from our audit work and our findings in respect of internal controls. Property, Plant and Equipment (PPE) - IAS 16 The Council re-values its property portfolio on a rolling five year basis with 20 per

cent re-valued each year. For those assets not formally re-valued in the year, Changes to the Audit Plan officers undertake a formal review to ensure the carrying value does not differ We have not made any changes to our Audit Plan as previously communicated to materially from the value included in the accounts. Through this process, the you on 20 March 2014. Council has demonstrated that the of other assets not re-valued in year, has not

materially changed. Audit opinion

We anticipate that we will provide the Council with an unqualified opinion. Our We are satisfied that the outcome of this process is reasonable in line with IAS 16. draft audit opinion is set out at Appendix B.

Depreciation Key findings During our 2012/13 audit we identified that the Asset Register had under-charged The Authority submitted its financial statements for audit ahead of the statutory depreciation as a result of an error that arose following the migration of data from deadline of 30 June 2014. The draft accounts were prepared to a good standard an old asset register to the new system. Following our audit, the finance team and were supported by high quality working papers. We recommend the Council undertook a detailed review to assess whether any amendment would be required reviews its approach to drafting its explanatory foreword to further improve the to the accumulated depreciation balance. We have considered the findings from quality of the financial statements. (R1) that review and, after noting that the depreciation balances on many assets have Our audit work identified a number of disclosure and misclassification been written-off following the revaluations undertaken this year, we are satisfied amendments . By improving the internal quality review arrangements in place the that no amendment is required. (R2) Council would reduce the number of matters arising. (R1)

All of our proposed amendments have been accepted and processed by management . These amendments do not affect the Council's reported financial position or available reserves.

© 2014 Grant Thornton UK LLP | | 18 September 2014 8

Overview of audit findings Audit findings Audit findings

Loans to Registered Providers and other third parties The Council has made loan facilities available to a number of organisations as part of its Invest to Save programme. When we presented our audit plan in March 2014, we had anticipated that material amounts would have been advanced to these organisations before 31 March 2014. In fact the majority of the loan facilities were not drawn down until the 2014/15 financial year. We have agreed with management that the amounts made available so far should be disclosed as a post- balance sheet event in accordance with accounting standards and that the financial instruments disclosure should be expanded to include reference to the loan facilities granted. (R3)

In addition to the accounting issues associated with these loans we have worked closely with officers and members during the year to understand the steps taken to ensure that the Council's actions are reasonable and lawful. Officers have spent considerable time developing the proposals and sought specific advice on the legality of the arrangements from leading Counsel. We have carefully considered the Council's plans and the legal advice and also obtained our own legal advice. The aspect of local government law that is at issue here is relatively untested and ultimately it is a matter for the courts to determine legality. However based on the advice we have seen, and our current understanding of the position, we have no plans to challenge the Council's actions. We will continue to liaise with officers on this key area. We will be looking for evidence that the loans continue to support the delivery of the Council's key strategic priorities. We will also consider your arrangements for managing and mitigating the risks associated with these loans. (R4)

© 2014 Grant Thornton UK LLP | | 18 September 2014 9 Significant findings

Audit findings Audit findings against significant risks "Significant risks often relate to significant non-routine transactions and judgmental matters. Non-routine transactions are transactions that are unusual, either due to size or nature, and that therefore occur infrequently. Judgmental matters may include the development of accounting estimates for which there is significant measurement uncertainty" (ISA 315). In this section we detail our response to the significant risks of material misstatement which we identified in the Audit Plan. As we noted in our plan, there are two presumed significant risks which are applicable to all audits under auditing standards and one area – accounting for material loans that is applicable to the Council.

Risks identified in our audit plan Work completed Assurance gained and issues arising

1. Improper revenue recognition  review and testing of revenue recognition policies Our audit work has not identified any issues in Under ISA 240 there is a presumed risk that revenue  testing of material revenue streams respect of revenue recognition. may be misstated due to improper recognition  review of unusual significant transactions

2. Management override of controls  review of accounting estimates, judgements and Our audit work has not identified any evidence of Under ISA 240 there is a presumed risk of decisions made by management management override of controls. In particular the management over-ride of controls  testing of journal entries findings of our review of journal controls and testing of journal entries has not identified any significant  review of unusual significant transactions issues. We set out later in this section of the report our work and findings on key accounting estimates and judgments.

3 Accounting for material loans to third parties Prior to reviewing the accounting treatment of borrowing The legal advice obtained was in this instance the The Authority has agreed to advance material loans to lend we have undertaken specific work to ensure that loans were capable of being lawful . We did not to a number of third parties. These loans fall outside the loans were capable of being lawful. We reviewed identify any issues with the loans made in the year the Council's ordinary course of business and as the Council's governance arrangements and the legal but we agreed with the Council that the loans made such increases the risk of non compliance with of the advice obtained from leading Counsel. We also since 31 March 2014 should be disclosed as a post- CIPFA Code of Practice ('the Code) and obtained our own legal advice. balance sheet event. The Financial Instruments International Financial Reporting Standards (IFRS). As noted above, the loan facilities the Council had disclosure has been expanded to include made available were only drawn upon after 31 March information about the loan facilities granted and their 2014. We will undertake out detailed testing on the impact on the risk profile of the Council. (R4) accounting entries posted in respect of those loans as part of our 2014/15 audit.

© 2014 Grant Thornton UK LLP | | 18 September 2014 10 Significant findings (continued) Audit findings Audit findings against other risks In this section we detail our response to the other risks of material misstatement which we identified in the Audit Plan. Recommendations, together with management responses, are attached at Appendix A.

Transaction cycle Description of risk Work completed Assurance gained & issues arising

Operating expenses Creditors understated or not We have undertaken the following work in relation to Our audit work has not identified any significant issues in recorded in the correct period this risk: relation to the risk identified.  Documented our understanding of processes and key controls over the transaction cycle.  Undertaken walkthrough of the key controls to assess the whether those controls are designed effectively.  Testing of a sample of expenditure items and year end creditor balances.  Review for unrecorded liabilities.  Cut-off testing of the expenditure stream.  Assessment of the robustness of assumptions and estimates underlying accruals.

© 2014 Grant Thornton UK LLP | | 18 September 2014 11 Significant findings (continued) Audit findings Audit findings against other risks continued

Transaction cycle Description of risk Work completed Assurance gained & issues arising

Employee remuneration Employee remuneration We have undertaken the following work in relation to Our audit work has not identified any significant issues accrual understated this risk: relating to this risk.  Documented our understanding of processes and Internal Audit have reported to management the findings key controls over the transaction cycle. from their work. We considered Internal Audit's findings  Walkthrough of the key controls to assess the and the recommendations made to management. We are whether those controls are designed effectively. satisfied that the deficiencies highlighted by Internal Audit do not materially affect payroll expenditure, as reported in  Substantive testing of employee remuneration the financial statements. including:

i. analytical procedure by month and directorate to determine whether movements in salaries and other pay related costs are reasonable and materially correct. ii. re -performance of Internal Audit's substantive sample of payroll records to confirm the existence of employees and the accuracy of pay. iii. independent sample of payroll records to confirm the existence of employees and the accuracy of pay and iv. agreement of related disclosures to the payroll system or other appropriate source document.

© 2014 Grant Thornton UK LLP | | 18 September 2014 12 Significant findings (continued) Audit findings Audit findings against other risks continued

Transaction cycle Description of risk Work completed Assurance gained & issues arising

Property, plant & PPE activity not valid We have undertaken the following work in relation to Our audit work has not identified any significant issues in equipment this risk: relation to the risk identified. Revaluation measurement not  Documented our understanding of processes and correct key controls over the transaction cycle.

Property, Plant and Equipment  Undertaken walkthrough of the key controls to are Impaired assess the whether those controls are designed effectively.  Substantive testing of property, plant and equipment valuation.  Review of the valuer used by the Council as an expert.  Review of accounting estimates, including depreciation charge, judgements and decisions made by management.  Confirmation of asset existence.

Welfare expenditure Welfare benefit expenditure We have undertaken the following work in relation to Our audit work has not identified any significant issues in improperly computed this risk: relation to the risk identified.  Documentation of processes and key controls over the transaction cycle.  Substantive testing of individual claims for housing and council tax benefit.  Housing benefit subsidy claim testing using Audit Commission HBCOUNT approach.  Reconciliation between the housing benefits system and the general ledger.

© 2014 Grant Thornton UK LLP | | 18 September 2014 13 Group audit scope and risk assessment

ISA 600 requires that as Group auditors we obtain sufficient appropriate audit evidence regarding the financial information of the components and the consolidation process to express an opinion on whether the group financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework.

Level of response required under ISA Component Significant? 600 Risks identified Work completed Assurance gained & issues raised

Warrington Yes Comprehensive None Full scope UK statutory audit performed by TBC. Borough KPMG. Transport We are awaiting assurances from KPMG which we expect to receive after they have completed their audit. We are informed the outstanding issues relate to tax liability and going concern.

© 2014 Grant Thornton UK LLP | | 18 September 2014 14 Significant findings – accounting policies# Audit findings Accounting policies, estimates & judgements

In this section we report on our consideration of accounting policies, in particular revenue recognition policies, and key estimates and judgements made and included with the Council's financial statements.

Accounting area Summary of policy Comments Assessment

Revenue recognition  Income is accounted for in the year the We have reviewed the accounting policies against the requirements activity it relates to takes place, i.e. on an of the Code of Practice on Local Authority Accounting 2013/14.  accruals basis. • The approach to accounting for income is robust and in (Green)  Income is recorded when it is earned and accordance with current guidance. not received. • Disclosure of the revenue recognition policy is adequate. • The revenue recognition policies of the Council are appropriate to the accounting framework and are adequately disclosed. Our audit testing has not identified any areas of concerns in respect of revenue recognition.

Other accounting policies  We have reviewed the Authority's policies  Our review of accounting policies has not highlighted any issues against the requirements of the CIPFA which we wish to bring to your attention.  Code and accounting standards. (Green)

Judgements and estimates - Other  Key estimates and judgements include We have reviewed the judgements and estimates against the  Provisions and contingent liabilities. requirements of the Code of Practice on Local Authority  Accounting.  Pension liabilities. (Green) • Where the Council has made judgements or estimates in the financial statements these have been supported with robust methodologies and clear explanation of the assumptions applied. • Disclosure of judgements and estimates is considered appropriate.

Assessment  (Red) Marginal accounting policy which could potentially attract attention from regulators  (Amber) Accounting policy appropriate but scope for improved disclosure  (Green) Accounting policy appropriate and disclosures sufficient

© 2014 Grant Thornton UK LLP | | 18 September 2014 15 Significant findings – accounting policies# Audit findings Accounting policies, estimates & judgements continued

Accounting area Summary of policy Comments Assessment

Judgements and estimates - PPE  Page 127 of the accounts sets out the We have reviewed the judgements and estimates against the Council's accounting policy for asset requirements of the Code of Practice on Local Authority Accounting. valuations. Page 63 of the accounts sets • Where the Council has made judgements or estimates in the out the rolling programme of revaluations financial statements these have been supported with appropriate  over the 5 year period between 2009/10 methodologies and clear explanation of the assumptions applied. and 2013/14. We are satisfied that the (Green) Council has demonstrated the carrying • Disclosure of judgements and estimates is considered amount of Property, Plant and Equipment appropriate. (based on these valuations) does not differ materially from the fair value at 31

March 2014.  In our view this in accordance with the Code’s requirement in paragraph 4.1.2.35 (to value items within a class of property, plant and equipment simultaneously).

© 2014 Grant Thornton UK LLP | | 18 September 2014 16 Adjusted misstatements Audit findings Guidance note The table is available in the ‘Audit Findings template’ on the Mercury tab in Excel. Changes which impact on the Primary Statements Tab: Adjusted misstatements

Five material adjustments to the draft financial statements have been identified during the audit process. We are required to report all material misstatements to those charged with governance, whether or not the financial statements have been adjusted by management. The table below summarises the adjustments arising from the audit which have been accepted the Director of Finance and Information Services.

Impact of adjusted misstatements All adjusted misstatements are set out below along with the impact on the primary statements and the reported financial position.

Detail Comprehensive Income Balance Sheet Impact on total net and Expenditure £'000 expenditure Account £000 £'000 No audit adjustments impact on the primary statements

Overall impact Nil Nil Nil

© 2014 Grant Thornton UK LLP | | 18 September 2014 17 Adjusted misstatements Audit findings Guidance note The table is available in the ‘Audit Findings template’ on the Mercury tab in Excel. Material misclassifications & disclosure changes Tab: Adjusted misstatements

Material adjustments to the draft financial statements have been identified during the audit process. We are required to report all material misstatements to those charged with governance, whether or not the financial statements have been adjusted by management. There are no uncorrected errors for you to consider as part of your governance role. The finance team are presenting details of all corrected errors and disclosure changes to Audit and Corporate governance committee on 25 September. The table below provides details of the more significant misclassification and disclosure changes identified during the audit which have been made in the final set of financial statements which we ask you to consider before approving the accounts.

Adjustment type Account balance Impact on the financial statements

1 Error CIES Gross Income and Gross Expenditure misstated due to error in the approach adopted to exclude recharges from the CIES. No overall impact on net expenditure. Circa £35m.

2 Disclosure Operational leases Detailed work on the disclosure of leases in the accounts resulted in two amendments to the disclosure note: (i) expenditure on minimum lease payments in 2013/14 was understated by £1,872K; and (ii) the amount due to be paid by the Council under the terms of operating leases at 31 March 2013 was overstated by £17,751K due to inclusion of two finance leases in error. Additionally, management agreed to expand its disclosure to include details of the value of assets leased out to third parties under the terms of finance leases as required by accounting standards.

3 Misclassification Collection Fund Council Tax Support Scheme expenditure of £12,877,954 re-classified from expenditure in the CIES to reduced income from Council Tax

4 Disclosure Financial Instruments (Note We agreed with management that additional disclosures should be added to Note 38 to reflect 38) the fact the Council has made significant loan facilities available to third parties. Debtors- long term loans and receivables changed from £31,986 to £43,287.

5 Disclosure Post-balance sheet event We agreed that the loans advanced under the terms of these facilities (£27m) in the early part disclosure of the 2014/15 financial year should be disclosed as a post-balance sheet event.

© 2014 Grant Thornton UK LLP | | 18 September 2014 18 Adjusted misstatements Audit findings Guidance note The table is available in the ‘Audit Findings template’ on the Mercury tab in Excel. Other misclassifications & disclosure changes Tab: Adjusted misstatements

There are no uncorrected errors for you to consider as part of your governance role. The finance team are presenting details of all corrected errors and disclosure changes to Audit and Corporate governance committee on 25 September. The table below provides details of the more significant misclassification and disclosure changes identified during the audit which have been made in the final set of financial statements which we ask you to consider before approving the accounts.

Adjustment type Account balance Impact on the financial statements

1 Disclosure Amounts Reported for The Council implemented a new directorate structure during 2013/14 whereby the four Resource Allocation Decisions directorates were reduced to three. Note 19 analyses the Council's income and expenditure by (Note 19) Directorate. We agreed with management that the 2012/13 disclosure should be restated to disclose the previous year financial performance according to the new Directorate structure. This ensures that performance in 2013/14 can be compared against the previous year. 2 Disclosure Property, Plant and Equipment The presentation of the note was amended so that impairments recognised in 2013/14 and (PPE) (Note 22) prior financial years were included as part of the disclosure of 'Accumulated and Depreciation' balances and not as a reduction to the Gross Carrying Value of PPE held by the Council. This change does not affect any of the primary statements but makes the note easier to follow for users of the accounts. 3 Misclassification Debtors (Note 30) In the draft accounts overpayments due to be recovered from housing benefit claimants had been classified as amounts due from central government bodies. We agreed that as these amounts are due from existing or former benefit claimants the amount due should be classified as a debtor from 'Other Entities and Individuals' within the note. 4 Disclosure Collection Fund Management advised during the audit that the accounts understated transitional protection payments due to business rate payers by £1304K. The Collection Fund was amended to correct this error and this reduced the balance on the Collection Fund by £1304K

5 Disclosure Pensions Prior Year restatement of Balance Sheet agreed to reclassify actuarial gains/losses of £2,888K in 2012/13 as net interest on the defined benefit pension liability in line with revisions to IAS 19

© 2014 Grant Thornton UK LLP | | 18 September 2014 19 Adjusted misstatements Audit findings Guidance note The table is available in the ‘Audit Findings template’ on the Mercury tab in Excel. Other misclassifications & disclosure changes (continued) Tab: Adjusted misstatements

Adjustment type Account balance Impact on the financial statements

6 Disclosure Financial Instruments (Note We agreed with management that additional disclosures should be added to Note 38 to reflect 38) the fact the Council has made significant loan facilities available to third parties. We also agreed that the loans advanced under the terms of these facilities in the early part of the 2014/15 financial year should be disclosed as a post-balance sheet event.

© 2014 Grant Thornton UK LLP | | 18 September 2014 20 Internal controls

Audit findings Guidance note Issue and risk must include a description of the deficiency and an explanation of its potential Internal controls effect. In explaining the potential effect it is not necessary to quantify.

The purpose of an audit is to express an opinion on the financial statements. Red text is generic and should be updated specifically for your client. Our audit included consideration of internal controls relevant to the preparation of the financial statements in order to design audit procedures that are appropriate in Once updated, change text the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. The matters reported here are limited to those colour back to black. deficiencies that we have identified during the course of our audit and that we have concluded are of sufficient importance to merit being reported to you in accordance with auditing standards.

Accounting for Recharges Local Authorities are required to exclude internal recharges between departments from the Gross Income and Gross Expenditure reported in the Comprehensive Income and Expenditure Statement. This year the Authority revised its approach to making these adjustments. However, the approach adopted did not identify all recharges which led to Gross Income and Gross Expenditure being overstated by a material amount. We understand that management are reviewing their approach so that they can identify all recharges in 2014/15.

IT Control Environment As part of our planned programme of work, our information system specialist team undertook a high level review of the general IT control environment at the Council. This was undertaken as part of the review of the internal controls system. We are pleased to report that no significant issue arose from our work, however we identified a small number of minor areas where the Council's existing IT arrangements can be developed further, including: • Management should consider removing processes that run on the DDIC account and ensure that the account is locked. • Management should ensure that access to customisable tables within SAP and the facility to run custom programs is appropriately restricted. SAP users with responsibilities for programming should also not have access to live data. • Managements should ensure an appropriate mechanism is in place to ensure that users accounts within the Academy system used by the Revenues and Benefits department are disabled after members of staff have left. • Management should review the number of staff using the Academy system who have privileged access and confirm that all staff assigned privileged access require this level of access to perform their role. .

© 2014 Grant Thornton UK LLP | | 18 September 2014 21 Other communication requirements# Audit findings Other communication requirements We set out below details of other matters which we are required by auditing standards to communicate to those charged with governance via the Audit and Corporate Governance Committee.

Issue Commentary

1. Matters in relation to fraud  We have previously discussed the risk of fraud with the Audit and Corporate Governance Committee.  We have not been made aware of any incidents in the period and no other issues have been identified during the course of our audit procedures.

2. Matters in relation to laws and  We are not aware of any significant incidences of non-compliance with relevant laws and regulations. regulations

3. Written representations  A standard letter of representation has been requested from the Council.

4. Disclosures  Our review found no material omissions in the financial statements.

5. Matters in relation to related  The Council has adopted a reasonable approach to identifying and disclosing transactions with related parties in the financial parties statements and we are not aware of any related party transactions which have not been disclosed.

6. Going concern  Our work has not identified any reason to challenge the Council's decision to prepare the financial statements on a going concern basis.

© 2014 Grant Thornton UK LLP | | 18 September 2014 22 Section 3: Value for Money

01. Executive summary We propose to give an unqualified VFM conclusion

02. Audit findings

03. Value for Money

04. Fees, non audit services and independence

05. Communication of audit matters

© 2014 Grant Thornton UK LLP | | 18 September 2014 Value for Money Value for Money

Value for money conclusion Key findings We are required under Section 5 of the Audit Commission Act 1998 to satisfy We have provided the Council with a more detailed value for money report. A ourselves that the Council has made proper arrangements for securing economy, brief summary as to how we have reached our VFM conclusion is summarised efficiency and effectiveness in its use of resources. We are also required by the below. Audit Commission’s Code of Audit Practice to report any matters that prevent us being satisfied that the audited bodies have put in place such arrangements. Securing financial resilience The Council has delivered some £46m of savings following the reduction in The VFM conclusion is based on the following two criteria specified by the Audit Government funding over the first two year period of the spending review. In Commission: February 2013 the Council approved a balanced budget identifying options that closed a £14.8m budget gap. The Medium Term financial Plan (MTFP) is updated • The Council has proper arrangements in place for securing financial annually to reflect the latest financial position and known funding changes and resilience. government announcements. The Council reported an overall underspend of £0.409m for 2013/14, after slightly increasing usable reserves. • The Council has proper arrangements for challenging how it secures The scale of the financial challenge remains significant at the Council over the economy, efficiency and effectiveness. period of the MTFP, with savings of £50m being identified as required in the period to 2017/18. Our audit approach involves the completion of an initial risk assessment against a series of key criteria. In undertaking this initial assessment we took account of the The Council has shown strong financial resilience and good financial planning and key issues facing the Council including the significant financial challenge of management since the Comprehensive Spending Review (CSR) 2010 and balancing service delivery against available resources at a time of reducing budgets. continues to do so. The challenge is however becoming increasingly difficult to meet and in order to achieve this, the Council will need to continue to focus on service redesign and alternative service delivery models whilst looking to strengthen its governance arrangements in support of these more complex arrangements.

© 2014 Grant Thornton UK LLP | | 18 September 2014 24 Value for Money Value for Money

Challenging economy, efficiency and effectiveness We have reviewed whether the Council has prioritised its resources to take account of the tighter constraints it is required to operate within and whether it has achieved cost reductions and improved productivity and efficiencies. The work has included: • review of the 2013/14 budget setting process and updates to the MTFP ; • review of the Council's budget monitoring arrangements, and • high level review of major projects and developments.

The Council has embraced new ways of working and is investing in the regeneration of the area to encourage and support continued growth. Whilst this is undoubtedly an appropriate response to the challenges it faces it is important that you continue to identify and manage the risks associated with these developments.

Overall VFM conclusion On the basis of our work, and having regard to the guidance on the specified criteria published by the Audit Commission, we are satisfied that in all significant respects the Council put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2014.

Future challenges for the Council include the scale of the financial savings, management of the number and scale of capital projects and addressing the high levels of sickness absence. See detailed VFM report for further information.

© 2014 Grant Thornton UK LLP | | 18 September 2014 25

Section 4: Fees, non audit services and independence

01. Executive summary There are no significant facts or matters that impact on our 02. Audit findings independence as auditors

03. Value for Money

04. Fees, non audit services and independence

05. Communication of audit matters

© 2014 Grant Thornton UK LLP | | 18 September 2014

Fees, non audit services and independence Guidance note 'Fees for other services' is to be used where we need to communicate agreed fees in Fees, non audit services and independence advance of the audit. At the time of preparation of the Audit We confirm below our final fees charged for the audit and provision of non-audit services Plan it is unlikely that full information as to all fees charged by GTI network firms will be available. Disclosure of these fees, threats to independence and safeguards Fees 13/14 Fees for other services will therefore be included in the Audit Findings report. Per Audit plan Actual fees Description Fees (£) £ £ Red text is generic and should Council audit 168,480 169,870 Annual compliance returns for NHSE 2,500* be updated specifically for your Grant certification 29,700 10,202 client. Total audit fees Once updated, change text colour back to black.

Revision to audit fees Fees for other services We have kept officers informed of the need for and the *Warrington received £2,948,293 from NHS England (NHSE) . They have recently confirmed that cost of our legal advice in relation to the Council's annual compliance returns, with accompanying audit certificates, will be required for all payments made loans. At this stage the likely cost is approximately by to local authorities under s256/257 of the NHS Act 2006 in both 2013/14 and 2014/15. The £12,000. deadline for completion of the 2013/14 work is 31/12/14 we will discuss this additional non-code work We wrote to the Director of Financial and Information and agree additional fee cover with officers. Services to inform him of an error in the certification fee reported in our Audit Plan dated 20 March 2014. Independence and ethics The fee chargeable in 2013/14 has reduced significantly We confirm that there are no significant facts or matters that impact on our independence as auditors from the £29,700 charged in 2012/13 following the that we are required or wish to draw to your attention. We have complied with the Auditing Practices abolition of Council Tax Benefit and the decision by Board's Ethical Standards and therefore we confirm that we are independent and are able to express an the Government not to seek independent auditor objective opinion on the financial statements. certification of the NNDR3 return. We confirm that we have implemented policies and procedures to meet the requirements of the The fee for the Council audit has increased by £1,470 Auditing Practices Board's Ethical Standards. to reflect the additional work we have had to undertake on business rates in order to provide our opinion on the financial statements. Previously, these audit procedures formed part of our work on the NNDR3 return.

© 2014 Grant Thornton UK LLP | | 18 September 2014 27 Section 5: Communication of audit matters

01. Executive summary We have delivered out audit in accordance with planned 02. Audit findings timescales and the requirements of Auditing Standards. 03. Value for Money We expect to give our opinions by the statutory deadlines.

04. Fees, non audit services and independence

05. Communication of audit matters

© 2014 Grant Thornton UK LLP | | 18 September 2014 Communication of audit matters Communication of audit matters to those charged with governance

International Standard on Auditing (ISA) 260, as well as other ISAs, prescribe matters Audit Audit which we are required to communicate with those charged with governance, and which Our communication plan Plan Findings we set out in the table opposite. Respective responsibilities of auditor and management/those  The Audit Plan outlined our audit strategy and plan to deliver the audit, while this Audit charged with governance Findings report presents the key issues and other matters arising from the audit, together with an explanation as to how these have been resolved. Overview of the planned scope and timing of the audit. Form, timing  and expected general content of communications Views about the qualitative aspects of the entity's accounting and  Respective responsibilities financial reporting practices, significant matters and issues arising The Audit Findings Report has been prepared in the context of the Statement of during the audit and written representations that have been sought Responsibilities of Auditors and Audited Bodies issued by the Audit Commission Confirmation of independence and objectivity   (www.audit-commission.gov.uk). We have been appointed as the Council's independent external auditors by the Audit A statement that we have complied with relevant ethical   Commission, the body responsible for appointing external auditors to local public bodies requirements regarding independence, relationships and other in England. As external auditors, we have a broad remit covering finance and matters which might be thought to bear on independence. governance matters. Details of non-audit work performed by Grant Thornton UK LLP and Our annual work programme is set in accordance with the Code of Audit Practice ('the network firms, together with fees charged Code') issued by the Audit Commission and includes nationally prescribed and locally Details of safeguards applied to threats to independence determined work. Our work considers the Council's key risks when reaching our conclusions under the Code. Material weaknesses in internal control identified during the audit  It is the responsibility of the Council to ensure that proper arrangements are in place for Identification or suspicion of fraud involving management and/or  the conduct of its business, and that public money is safeguarded and properly others which results in material misstatement of the financial accounted for. We have considered how the Council is fulfilling these responsibilities. statements Compliance with laws and regulations  Expected auditor's report  Uncorrected misstatements  Significant matters arising in connection with related parties  Significant matters in relation to going concern 

© 2014 Grant Thornton UK LLP | | 18 September 2014 29 Appendices

Appendices

© 2014 Grant Thornton UK LLP | | 18 September 2014 30 Appendices Appendix A: Action plan

Priority Significant deficiency – risk of significant misstatement Deficiency - risk of inconsequential misstatement

Rec Implementation date & No. Recommendation Priority Management response responsibility

1. The Council have continued to improve its Low arrangement for financial closedown and the compilation of draft financial statements. There is room to further improve with regard to • Explanatory foreword and • Strengthening the internal quality assurance arrangements to reduce the number of amendments required.

2. The Council should review their approach Medium to asset valuation to ensure that all classes of assets are materially correct. Especially if the market becomes more volatile.

3. Proactively review activities and disclose Medium any material post-balance sheet events.

4. Ensure governance arrangements with Medium regard to borrowing to lend remain fit for purpose.

5. Review controls in place for recording and High reporting recharges to directorates.

© 2014 Grant Thornton UK LLP | | 18 September 2014 31 Appendices Appendix A: Action plan - VFM

Rec Implementation date & No. Priority Management response responsibility

1. Ensure the Council has in place the high appropriate skills and capacity to deal effectively with the number, the scale and the complexity of the capital projects it has in place.

2. For each project ensure that the links to medium the Councils key priorities are explicit.

3. Continue to monitor and review the medium relatively high levels of absenteeism due to sickness

4. The Council should set its own clear key low performance indicators as a way of helping the review processes.

5. Continue to review the adequacy of the low usable reserves.

6 Improve the arrangements in place for Medium approving projects at the initiation phase

7. Review and agree the remit and terms of Medium reference for the regeneration board.

© 2014 Grant Thornton UK LLP | | 18 September 2014 32 Audit opinion – option 1 Appendices Guidance note Red text is generic and should be updated specifically for your Appendix B: Audit opinion – example only client. Once updated, change text colour back to black.

We anticipate we will provide the Council with an unmodified audit report – for illustration Please choose option 1, 2 or 3 and delete the slides that are not required.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF Warrington Borough Council In addition, we read all the financial and non-financial information in the explanatory foreword to identify material inconsistencies with the audited financial statements and to identify any information that is Opinion on the Authority financial statements apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or We have audited the financial statements of Warrington Borough Council for the year ended 31 March 2014 inconsistencies we consider the implications for our report. under the Audit Commission Act 1998. The financial statements comprise the Movement in Reserves Statement,, the Comprehensive Income and Expenditure Statement, the Balance Sheet, the Cash Flow Opinion on financial statements Statement, Collection Fund and the related notes. In our opinion the financial statements: The financial reporting framework that has been applied in their preparation is applicable law and the • give a true and fair view of the financial position of Warrington Borough Council as at 31 March 2014 CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2013/14. and of its expenditure and income for the year then ended; This report is made solely to the members of Warrington Borough Council in accordance with Part II of the • have been properly prepared in accordance with the CIPFA/LASAAC Code of Practice on Local Audit Commission Act 1998 and for no other purpose, as set out in paragraph 48 of the Statement of Authority Accounting in the United Kingdom 2013/14 and applicable law. Responsibilities of Auditors and Audited Bodies published by the Audit Commission in March 2010. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Council Opinion on other matters and the Council 's Members as a body, for our audit work, for this report, or for the opinions we have In our opinion, the information given in the explanatory foreword for the financial year for which the formed financial statements are prepared is consistent with the financial statements.

Respective responsibilities of the Director of finance and Information Services and auditor Matters on which we report by exception We report to you if: As explained more fully in the Statement of the Director of Resources Responsibilities, the Director of • in our opinion the annual governance statement does not reflect compliance with ‘Delivering Good Resources is responsible for the preparation of the Statement of Accounts, which includes the financial Governance in Local Government: a Framework’ published by CIPFA/SOLACE in June 2007; statements, in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on • we issue a report in the public interest under section 8 of the Audit Commission Act 1998; Local Authority Accounting in the United Kingdom, and for being satisfied that they give a true and fair • we designate under section 11 of the Audit Commission Act 1998 any recommendation as one that view. Our responsibility is to audit and express an opinion on the financial statements in accordance with requires the Authority to consider it at a public meeting and to decide what action to take in response; or applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to • we exercise any other special powers of the auditor under the Audit Commission Act 1998. comply with the Auditing Practices Board’s Ethical Standards for Auditors. We have nothing to report in these respects. Scope of the audit of the financial statements Conclusion on the Authority’s arrangements for securing economy, efficiency and effectiveness in An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient the use of resources to give reasonable assurance that the financial statements are free from material misstatement, whether Respective responsibilities of the Council and the auditor caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to The Council is responsible for putting in place proper arrangements to secure economy, efficiency and the Council circumstances and have been consistently applied and adequately disclosed; the reasonableness effectiveness in its use of resources, to ensure proper stewardship and governance, and to review regularly of significant accounting estimates made by the Director of Resources; and the overall presentation of the the adequacy and effectiveness of these arrangements. financial statements

© 2014 Grant Thornton UK LLP | | 18 September 2014 33 Audit opinion – option 1 Appendices Guidance note Red text is generic and should be updated specifically for your client. Once updated, change text colour back to black.

We anticipate we will provide the Council with an unmodified audit report – for illustration Please choose option 1, 2 or 3 and delete the slides that are not required.

We are required under Section 5 of the Audit Commission Act 1998 to satisfy ourselves that the Council has Certificate made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice issued by the Audit Commission requires us to report to you our conclusion relating We certify that we have completed the audit of the financial statements of Cheshire West and Chester to proper arrangements, having regard to relevant criteria specified by the Audit Commission. Council in accordance with the requirements of the Audit Commission Act 1998 and the Code of Audit Practice issued by the Audit Commission. We report if significant matters have come to our attention which prevent us from concluding that the Council has put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources. We are not required to consider, nor have we considered, whether all aspects of the Council's arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively.

Robin Baker Scope of the review of arrangements for securing economy, efficiency and effectiveness in the use of Engagement Lead resources We have undertaken our audit in accordance with the Code of Audit Practice, having regard to the guidance for and on behalf of Grant Thornton UK LLP, Appointed Auditor on the specified criteria, published by the Audit Commission in October 2013, as to whether the Council has Royal Liver Building proper arrangements for: Liverpool • securing financial resilience; and L3 1PS • challenging how it secures economy, efficiency and effectiveness.

The Audit Commission has determined these two criteria as those necessary for us to consider under the DATE Code of Audit Practice in satisfying ourselves whether the Council put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2014.

We planned our work in accordance with the Code of Audit Practice. Based on our risk assessment, we undertook such work as we considered necessary to form a view on whether, in all significant respects, the Council had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

Conclusion

On the basis of our work, having regard to the guidance on the specified criteria published by the Audit Commission in October 2013, we are satisfied that, in all significant respects, Warrington Borough Council put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2014.

© 2014 Grant Thornton UK LLP | | 18 September 2014 34 Audit opinion – option 1 Appendices Guidance note Red text is generic and should be updated specifically for your client. Once updated, change text colour back to black. Appendix C: Letter of Representation Please choose option 1, 2 or 3 and delete the slides that are not required.

Grant Thornton UK LLP Royal Liver Building Liverpool vii Except as stated in the financial statements: a. there are no unrecorded liabilities, actual or contingent L3 1PS b. none of the assets of the Council has been assigned, pledged or mortgaged c. there are no material prior year charges or credits, nor exceptional or non-recurring xx September 2014 items requiring separate disclosure. viii. We confirm that we are satisfied that the actuarial assumptions underlying the valuation of pension Dear Sirs scheme liabilities for IAS19 disclosures are consistent with our knowledge. We confirm that all Warrington Borough Council settlements and curtailments have been identified and properly accounted for. We also confirm that financial Statements for the year ended 31 March 2014 all significant retirement benefits have been identified and properly accounted for. This representation letter is provided in connection with the audit of the financial statements of Warrington ix. Related party relationships and transactions have been appropriately accounted for and disclosed in Borough Council for the year ended 31 March 2014 for the purpose of expressing an opinion as to whether accordance with the requirements of International financial Reporting Standards and the Code. the financial statements give a true and fair view in accordance with International financial Reporting x. All events subsequent to the date of the financial statements and for which International financial Standards. Reporting Standards and the Code require adjustment or disclosure have been adjusted or disclosed. We confirm that to the best of our knowledge and belief having made such inquiries as we considered xi. Actual or possible litigation and claims have been accounted for and disclosed in accordance with necessary for the purpose of appropriately informing ourselves: the requirements of International financial Reporting Standards. financial Statements xii. We have not adjusted the misstatements brought to our attention in the Audit Findings Report, as i. We have fulfilled our responsibilities for the preparation of the financial statements in accordance they are considered to be immaterial to the results of the Council and its financial position at the with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority year-end. The financial statements are free of material misstatements, including omissions. Accounting in Great Britain ("the Code") as adapted for International financialReporting Standards; xiii. We have no plans or intentions that may materially alter the carrying value or classification of assets in particular the financial statements give a true and fair view in accordance therewith. and liabilities reflected in the financial statements. ii. We have complied with the requirements of all statutory directions and these matters have been xiv. We believe that the Council’s financial statements should be prepared on a going concern basis on appropriately reflected and disclosed in the financial statements. the grounds that current and future sources of funding or support will be more than adequate for iii. The Council has complied with all aspects of contractual agreements that could have a material the Council’s needs. We believe that no further disclosures relating to the Council's ability to effect on the financial statements in the event of non-compliance. continue as a going concern need to be made in the financial statements. iv. We acknowledge our responsibility for the design, implementation and maintenance of internal Information Provided xv We have provided you with: control to prevent and detect fraud. a. access to all information of which we are aware that is relevant to the preparation of the financial v. Significant assumptions used by us in making accounting estimates, including those measured at fair statements such as records, documentation and other matters; value, are reasonable. b. additional information that you have requested from us for the purpose of your audit; and vi. We are satisfied that the material judgements used by us in the preparation of the financial c. unrestricted access to persons within the Council from whom you determined it necessary to statements are soundly based, in accordance with the Code, and adequately disclosed in the financial obtain audit evidence. statements. There are no further material judgements that need to be disclosed.

© 2014 Grant Thornton UK LLP | | 18 September 2014 35

Audit opinion – option 1 Appendices Guidance note Red text is generic and should be updated specifically for your client. Once updated, change text colour back to black. Appendix C: Letter of Representation Please choose option 1, 2 or 3 and delete the slides that are not required.

xvi We have communicated to you all deficiencies in internal control of which management is aware. Annual Governance Statement xvii All transactions have been recorded in the accounting records and are reflected in the financial We are satisfied that the Annual Governance Statement (AGS) fairly reflects the Council's risk assurance and statements. governance framework and we confirm that we are not aware of any significant risks that are not disclosed within the AGS xviii We have disclosed to you the results of our assessment of the risk that the financial statements may

be materially misstated as a result of fraud. Approval xix We have disclosed to you all information in relation to fraud or suspected fraud that we are aware of The approval of this letter of representation was minuted by the Council's Audit and Corporate and that affects the Council and involves: Governance Committee at its meeting on xx September a. management; Signed on behalf of the Council b. employees who have significant roles in internal control; or c. others where the fraud could have a material effect on the financial statements. Name……………………………

Position…………………………. xx. We have disclosed to you all information in relation to allegations of fraud, or suspected fraud, affecting the Council’s financial statements communicated by employees, former employees, Date……………………………. regulators or others. xxi. We have disclosed to you all known instances of non-compliance or suspected non-compliance with Name…………………………… laws and regulations whose effects should be considered when preparing financial statements. xxii. We have disclosed to you the entity of the Council's related parties and all the related party Position………………………….

relationships and transactions of which we are aware. Date……………………………. xxiii. We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements.

© 2014 Grant Thornton UK LLP | | 18 September 2014 36 Back page

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© 2014 Grant Thornton UK LLP | | 18 September 2014 Agenda Item 10

APPENDIX 3

Grant Thornton Annual Findings Report – Recommendations

Rec Recommendation Priority Management Response Implementation No date & responsibility

1 The Council have continued Low A workshop with Members was January 2015 to improve its arrangement held in 2013/14 to consider (the closure for financial closedown and changes to the foreword and programme the compilation of draft some were made. However commences in financial statements. There further improvements are January and runs is room to further improve intended for 2014/15. Internal continuously with regard to: quality assurance timescales throughout the - Explanatory foreword and slipped slightly in 2013/14 year) - Strengthening the internal resulting in the process not Chief Accountant quality assurance being as robust as required. arrangements to reduce the This will be a priority for number of amendments 2014/15 required 2 The Council should review Medium This has been added to the January 2015 their approach to asset closure of accounts programme Chief Accountant valuation to ensure that all for 2014/15 classes of assets are materially correct. Especially if the market becomes more volatile 3 Proactively review activities Medium Post balance sheet events are January 2015 and disclose any material already included on the closure Chief Accountant post balance sheet events programme but could not be reviewed until after the draft accounts had been presented. This will continue to feature on the programme in 2014/15 4 Ensure governance Medium A new member of staff has January 2015 arrangements with regard to been appointed to strengthen Chief Accountant borrowing to lend remain fit the team who manage this for purpose 5 Review controls in place for High A revised process was used this January 2015 recording and reporting year to report recharges that Chief Accountant recharges to directorates was not as effective as the previous one. The previous process will continue until a more effective and robust process can be implemented.

Agenda Item 11

ANNUAL GOVERNANCE STATEMENT FOR THE YEAR ENDED 31 MARCH 2014

SEPTEMBER 2014

Agenda Item 11

Warrington Council is committed to the highest standards of corporate governance.

Governance is about how bodies ensure that they do the right things, in the right way, for the right people in a timely, inclusive, open, honest and accountable manner.

It comprises the systems and processes, and culture and values, by which bodies are directed and controlled and through which they account to, engage with and, where appropriate, lead their communities.

A key aspect of governance is the requirement to put into place “effective risk management systems, including systems of internal control”.

This Annual Governance Statement supports the Council’s Statement of Accounts and outlines how it manages its affairs to deliver high quality services and ensure that public money is spent effectively.

Agenda Item 11 CONTENTS PAGE NO.

1. Scope of Responsibility 1

2. The Purpose of the Governance Framework 1

3. The Governance Framework 2

4. Review of Effectiveness 13

4.1 Assurance re 2012/13 improvement actions 15

4.2 Internal assurance and External Inspections of 16 Governance Arrangements

5. Significant Governance Development Areas 22

Conclusion 23

Appendix 1: Framework of Assurance Appendix 2: Action Plan

Annual Governance Statement for the year ended 31 March 2014

1. Scope of Responsibility

Warrington Borough Council is responsible for ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded, properly accounted for and used economically, efficiently and effectively. Warrington Borough Council also has a duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness. In discharging this overall responsibility, Warrington Borough Council is responsible for putting in place proper arrangements for the governance of its affairs and facilitating the effective exercise of its functions, which includes arrangements for the management of risk.

Warrington Borough Council approved and adopted a revised local Code of Corporate Governance on 24 April 2014 which is consistent with the principles of the Chartered Institute of Public Finance and Accountancy (CIPFA) and Society of Local Authority Chief Executives (SOLACE) Framework: Delivering Good Governance in Local Government. A copy of the Code is on our website at: http://www.warrington.gov.uk/info/200355/budget_and_ spending/35/governance statements_and_reports or can be obtained from: Democratic & Member Services, Warrington Borough Council, West Annexe, Town Hall, Sankey Street, Warrington, WA1 1UH. This statement explains how the Council has complied with the Code and also meets the requirements of the Accounts and Audit (England) Regulations 2011, regulation 4(3), which requires all relevant bodies to prepare an annual governance statement.

A description of the key elements of the Council’s assurance and internal control environment is detailed at Appendix 1.

2. The Purpose of the Governance Framework

The governance framework comprises the systems and processes, culture and values by which the Council is directed and controlled and its activities through which it accounts to, engages with and leads its communities. It enables Warrington Borough Council to monitor the achievement of its strategic objectives and to consider whether those objectives have led to the delivery of appropriate services and value for money.

The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve policies, aims and objectives and can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of Warrington Borough Council’s policies, aims and objectives; to evaluate the likelihood of those risks being realised and their

1 Annual Governance Statement for the year ended 31 March 2014 impact should they be realised; and to manage them efficiently, effectively and economically. It takes into account the increased difficulty in maintaining financial resilience as the Council continues to deliver efficiency savings, and the increased risk level which is reflective of the evolving environment in which the Council has to operate.

The governance framework has been in place at Warrington Borough Council for the year ended 31 March 2014 and up to the date of approval of the annual report and statement of accounts.

3. The Governance Framework

3.1 Vision and Aims for the Community

The Council strategy 2012-2015 sets out the vision and key priorities for the Council over a 3 year period.

The strategy is supported by an annual Corporate Plan which sets out the specific aims for each year to ensure that we deliver our vision and goals for the community. The Corporate Plan is linked to the Council’s Medium Term Financial Plan (MTFP); this ensures that our plans are realistic in the context of the continued funding constraints placed on the Council. The Council is in the process of developing a new corporate strategy 2015-18, informed by development of strategic commissioning intentions and associated plans.

The Council’s strategic plans are communicated to the community through a number of media events. Regular forms of communications such as briefings and reports are issued. All of the Council’s major plans and strategies are published and available for download on the website/intranet. In producing the initial 2012-15 Medium Term Financial Plan (MTFP) residents, businesses and specific stakeholders were consulted on the proposed savings initiatives by way of information on the Council’s website, post cards in all public buildings and targeted meetings. We now have a number of reports which form the MTFP including: Budget Reports; the Capital Programme; and Treasury Management Strategy. The MTFP is revisited on a regular basis, and is now embedded into almost everything the Council does.

Warrington’s Performance Management framework ensures that progress against key plans and strategies is monitored routinely in order that timely action

2 Annual Governance Statement for the year ended 31 March 2014 can be taken to address any performance issues. A Performance Management Framework is in place across the Council supported by a Corporate Information Assurance and Data Quality Strategy. Quarterly monitoring takes place at Directorate Performance Boards / Management Teams and formal performance reports are submitted on a quarterly basis to the Strategic Management Team (SMT); Executive Board; and Scrutiny Committee who use performance data to help determine their work programme and challenge performance. Quarterly performance reports are also available for the public to view on the Council’s website. Work continues to ensure that robust management information supports informed decision making.

3.2 Financial Management

The Council has a proven track record of financial management and robust monitoring arrangements in place to manage its finances in year. Revised financial procedure rules were approved by the Audit and Corporate Governance Committee in April 2014 and finalised versions were approved at full Council on 9 June 2014. Contract procedure rules will be subject to revision during 2014/15 to incorporate the new OJEU regulations.

For 2013-14 as part of the Service Challenge process, the Council agreed savings proposals of £13.9m to be delivered across all services. The main emphasis for the achievement of savings was via alternative methods for service delivery and efficiency projects where possible, including re-focusing of resources to the prevention agenda to avoid more costly reactive solutions. Despite the extent of the savings needed, focus was maintained on protecting front line delivery as much as possible.

The provisional outturn position for the year is an underspend of £0.203m. The underspend reflects much work undertaken during the year to reduce the anticipated overspend reported at Quarter 1. The Council has experienced significant pressures as a result of increasing demand for services and the cost of legacy decisions relating to the children and adult social care. These pressures have been partly offset by use of grant funding and reserves, however the main areas include holding vacancies in anticipation of 2014/15 savings proposals as a result of service redesign. Not all 2013/14 MTFP savings have been achieved via the original means in year, as delays for consultation and formal approval have resulted in other mitigating savings being required. A longer term view to the financial planning strategy is being taken for future years to ensure any further savings are robust and sustainable. The underspend will be taken into the MTFP reserve to support the future financial position of the Council. The underspend has been achieved despite Warrington receiving bottom-quartile government funding, bottom-quartile level of Council Tax funding, and being the fifth lowest funded Unitary/Metropolitan Authority within the UK.

3 Annual Governance Statement for the year ended 31 March 2014

3.3 The Constitution and Decision Making

The Council’s Constitution includes details of the role and responsibilities of the full Council; the Executive Board; Committees; Chief Officers; and the rules under which they operate. The Council’s Constitution provides the framework for the decision making process. Following the review of Committees in Autumn 2012 and establishment of Policy Committees, work programmes have been established with links from Scrutiny Committee to the Policy Committees and quarterly meetings with chairs of Committees. The current version of the Constitution is to be presented to full Council in June 2014. Work continues to ensure the upholding of standards of conduct and behaviour by elected members following the introduction of the Localism Act in 2011 and the changes to the standards regime and the statutory code of conduct. Local arrangements will ensure the continued statutory duty to promote and maintain high standards of conduct by members and co-opted members of the authority.

The Council’s political structure and roles and responsibilities of Executive Members are detailed on its website. There is an annual schedule of meetings for all committees agreed at the start of each municipal year. The Constitution defines the process for making key decisions. These are recorded on a corporate pro-forma and are subject to statutory call-in procedures. The Council’s scheme of delegation is included in its Constitution and the scheme of delegated decisions and financial delegation is embedded across the Council.

The full Council of democratically elected members approves all changes to the Council’s Constitution annually. The Council’s Constitution defines how the Council operates and takes decisions regarding, for example the: • Strategic aims and objectives of the Council • Political management organisational structure • Financial and other procedure rules • Scheme of delegation to members and senior officers

The Executive Board takes executive decisions jointly. The Executive Board receives regular reports on the overall performance of the Council. Executive members hold regular meetings with their respective portfolio Executive Director in order to ensure effective liaison on key issues and major projects and programmes.

The Council is responsible for a range of functions which cannot by law be dealt with by the Executive. These matters are broadly described as ‘regulatory’ and include functions relating to planning; licensing; (eg. alcohol licensing, gambling) and road traffic (eg. road closures, speed limits, traffic restrictions.) These functions are discharged through committees established for the purpose.

The Monitoring Officer and officers from Democratic and Member Services monitor reports to members to ensure: propriety of decision making; legal advice is included where necessary and appropriate; consideration has been given to

4 Annual Governance Statement for the year ended 31 March 2014 risk; and equality and diversity issues are addressed. Council lawyers are involved in policy development and scrutiny processes. There are regular meetings of officers with statutory responsibility for conduct and ethics issues.

The Council actively uses a wide range of mechanisms to promote consultation and engagement with local stakeholders i.e. residents, community groups, business etc. We use the Internet to promote our resources and have developed a dedicated web page for consultation (www.warrington.gov.uk/consultation) to raise awareness of what engagement and involvement activity is taking place. There are plans under the emerging Customer Strategy to develop an online community engagement portal for receiving information, being consulted or finding out about what is going on and getting involved in their local community. Particular effort is made to reach the views of those who tend to be excluded from the decision making process or who have very specific needs. This is particularly relevant in terms of consultation and engagement activity which underpins service re-designs relating to vulnerable residents i.e. Big Care Debate. A random sample of the resident population is surveyed at least every 2-3 years in order to gauge levels of satisfaction with the local area, services and local priorities; the most recent Warrington Resident Survey was undertaken in 2012.

3.4 Interests in Companies

The Council has material interests in companies and other entities that have the nature of subsidiaries, associates and jointly controlled entities and require it to prepare group accounts. In the Authority’s own single-entity accounts, the interests in companies and other entities are recorded as financial assets at cost, less any provision for losses. The Council had interests in four companies during the financial year: • Warrington Borough Transport • LiveWire • Culture Warrington • Wire Regeneration Ltd

Warrington Borough Transport is wholly owned by Warrington Borough Council and is consolidated into the Group Accounts as a subsidiary. Wire Regeneration Ltd was established in March 2014 and is a Joint Venture Company for regeneration of the Southern Gateway.

3.5 Working with Key Partners

3.5.1 Warrington Borough Transport (WBT)

WBT was set up in accordance with the provision of the Transport Act 1985 to take over the Council's passenger transport undertaking. The Council wholly owns WBT but is not liable for any losses; WBT is a company limited by share capital, governed by the Companies Act, and subject to different statutory rules and accounting policies than the Council. The WBT Board includes 7 elected

5 Annual Governance Statement for the year ended 31 March 2014 members of the Council and the Council’s Director of Finance and Information Services attends board meetings. The Council has used its powers as shareholder to provide expert advice and support to the company in the form of Democratic and Member Services involvement; commercial loans; and administrative, secretarial/legal support.

3.5.2 Wire Regeneration Ltd

The Joint Venture Company is set up on a 50:50 shareholding basis between Warrington Borough Council and Langtree Land and Property PLC. Wire Regeneration Ltd is a company limited by share capital, governed by the Companies Act, and subject to different statutory rules and accounting policies than the Council. The Wire Regeneration Board comprises 2 elected members of the Council and the Council’s Chief Executive along with 3 members from Langtree Land and Property PLC.

3.5.3 LiveWire Community Interest Company / Culture Warrington

LiveWire is a not for profit distributing organisation which became operational in May 2012 reflecting the Council’s priorities in providing leisure, libraries, lifestyles and well-being services. Culture Warrington Trust was also formed in May 2012 to provide culture services previously provided by the Council, including the Parr Hall, Pyramid and museum. The company and the Trust operate under a shared management team.

3.5.4 Warrington Partnership

Warrington Partnership is the Local Strategic Partnership (LSP) for Warrington. The Partnership Agreement has been updated and approved by the Partnership Board. Warrington Partnership Board and the Health and Wellbeing Board jointly agreed the Warrington Strategy for Wellbeing; the strategy provides the overarching vision and priorities for Warrington and is used to direct strategic decisions across all partner organisations in the borough. Work is underway to review and update partnerships protocols and code of practice in light of evolving nature of partnership working and the wider integration agenda.

3.5.5 Warrington Clinical Commissioning Group / Health and Wellbeing Board / Integrated Commissioning Governance Board

Warrington Primary Care Trust was disestablished on 31 March 2013 and Warrington Clinical Commissioning Group (CCG) was formed. Work around collaboration for health and social care continues, supported by the post of Assistant Director for Integrated Commissioning which is jointly funded by WBC and NHS Warrington.

Warrington’s Health and Wellbeing Board (HWB) has overseen the development of the Warrington Strategy for Wellbeing for the town which forms the basis for revised integrated commissioning strategies to be developed between partner

6 Annual Governance Statement for the year ended 31 March 2014 agencies. The strategy coordinates intentions from the NHS, social care, public health, and other health determinants such as housing, and education. The Integrated Commissioning Governance Board met during 2013/14 and a set of guiding principles to underpin integrated or joint commissioning was agreed and approved. This Board act on authority from the Health and Wellbeing Board to develop specific integrated arrangements for commissioning or delivery of services including the monitoring of any Section 75 or Section 256 arrangements. Most recently, the Board have been responsible for overseeing the development of Warrington’s Better Care Fund plan which will see £28m of health and social care budget pooled in order to address the prevention of acute hospital provision by funding of preventative and community based alternatives to hospital and residential care.

The LSP and Health & Wellbeing Board have a programme of activity to support the delivery of the Wellbeing Strategy and associated integration looking at: barriers to integration; collaborative leadership; and trailblazers projects for integration.

3.5.6 Safeguarding Children’s Board

The Warrington Safeguarding Children Board (WSCB) is the key strategic partnership that coordinates and ensures the effectiveness of what is done for the purpose of safeguarding and promoting the welfare of children and young people in Warrington. It provides strong, forward thinking, outcome focused, visible leadership ensuring the delivery of continuous improvements in the care and protection of our children and young people. The Board publishes an annual report in September each year.

3.5.7 Safeguarding Adults Board

All statutory agencies in Warrington are signed up to the safeguarding adult board’s multi-agency policies, procedures and practice guidance in order to ensure consistency and quality. In addition, all commissioned health and social care providers, as part of their contractual arrangements, also ensure their processes and practices are concordant with the multi-agency policy.

3.5.8 Warrington Schools Forum

The schools forum is an independent statutory body whose main purpose is to be consulted by and advise the local authority on issues relating to the funding of schools. The Council has recognised the risks in the limited influence in respect of school improvement support for schools which have converted to academy status. The Council maintains oversight to ensure that governing bodies are effectively discharging their duties including their statutory responsibilities.

7 Annual Governance Statement for the year ended 31 March 2014

3.5.8 Warrington Sports Holdings Ltd

The Council holds a 15.7% shareholding in Warrington Sports Holdings Limited. An up to date valuation of the shares has been obtained during 2013/14 for the purpose of the accounts. The purpose of the shareholding in the company is intended as a long term investment to support a community asset, the rugby club, and as such is not held for income generation.

3.6 Public Health

The Health and Social Care Act 2012 gave responsibility for health improvement and some of the health protection functions to local authorities. The ring fenced public health grant to deliver the public health function was published in January 2013. On the 1st of April 2013, legal title transferred to the Council, and Strategic Health Authorities and Primary Care Trusts were abolished. The transfer of public health assets, liabilities and staff from Warrington Primary Care Trust to Warrington Borough Council was enacted by two Transfer Schemes agreed by the Secretary of State and the public health team is now an integral part of the Council.

One aspect of the transition work was to ensure that all public health commissioned services were reviewed for quality and value for money. This exercise has enabled the Council to be confident that the ring-fenced public health grant of £10m is being used in the most cost-effective way to deliver real improvements in health and wellbeing for our residents. In this first full year in the Council the public health team completed a major survey of lifestyles amongst adults in Warrington; 6,672 people in total returned the questionnaire and the information has helped build a comprehensive picture of health and wellbeing across Warrington. A similar survey of children and young people will be undertaken in 2014/15. The team has also delivered a comprehensive Public Health action plan in 2013/14. It has re-commissioned several services such as Sexual Health, Infection Control and library services.

3.7 Governance Arrangements

The Council maintains high standards of governance:

• The Solicitor to the Council & Assistant Director Corporate Governance is the appointed Monitoring Officer for the Council whose functions include maintenance of the Constitution, supporting the Standards Committee and ensuring lawfulness of decision making. The Council’s Standards Committee seeks to promote and maintain high standards of conduct of Council’s members.

• The Council has Codes of Conduct for both members and officers together with induction processes and a range of policies and procedures. These are supported by performance appraisal systems.

8 Annual Governance Statement for the year ended 31 March 2014

• The Legal Service is accredited and annually assessed against national governance and performance criteria as part of the Law Society ‘Lexcel’ standard. The standard gives assurance upon the Service’s procedures, standards of conduct, business planning and risk management procedures. The accreditation gives assurance on the Legal Service’s ability to support the governance of the authority.

• The Director of Finance & Information Services is the responsible officer to the Council for the proper management of its financial affairs in order to meet the statutory requirements of Section 151 of the Local Government Act 1972. The Director of Finance & Information Services complies with the governance requirements of the 2010 CIPFA statement on the: Role of the Chief Financial Officer in Local Government and, as required by the guidance, is a member of the senior management team and has access to the Chief Executive and to other executive directors.

• The Audit and Corporate Governance Committee is politically balanced and does not include any Executive Board members. The Committee has a dedicated programme of training; during 2013/14 this included financial management training and themed updates. A working group from the Committee completed a self assessment of the Committee’s effectiveness in April 2014 using revised CIPFA guidance for Audit Committees issued in 2013. The working group considered the role of the Committee and its effectiveness and agreed development actions. The Committee oversees the work of Internal and External Audit, and promotes and maintains high standards in relation to the operation of the Council’s Code of Corporate Governance, ensuring that an adequate risk management framework and associated control environment is in place and that the Council’s financial and non-financial performance is properly monitored. The Audit and Corporate Governance Committee, independent from Executive and Scrutiny functions, is required to gain and monitor the necessary assurances as to the Council’s internal control, governance, financial management and reporting framework. Support is provided through an officer Governance Group chaired by the Solicitor to the Council and Assistant Director Corporate Governance and attended by Director of Finance & Information Services and senior officers across Audit, Legal, Information Governance, Performance and other directorates as required for assurance purposes. The group maintains a clear improvement plan; this is regularly monitored and updated.

• A reminder to staff of their responsibilities to make a disclosure of related party transactions was issued in April 2014.

• A whistleblowing procedure is in place in the Council together with a separate schools’ procedure. The procedure supports the Council in its obligations in respect of the Bribery Act 2010. There is information on the Council’s website and the intranet and the procedures are supported by a dedicated reporting telephone line and on-line form, maintained by internal audit. Awareness

9 Annual Governance Statement for the year ended 31 March 2014

raising is undertaken on a regular basis with articles included in the staff magazine ‘Your Voice’ and fraud posters distributed referencing the reporting line. The Council took part in a whistleblowing pilot exercise carried out by Public Concern at Work (PCaW) and the National Fraud Authority during 2013/14. A questionnaire was completed as part of this exercise to gauge staff perception of the Council’s processes.

• The Council’s anti fraud, bribery and corruption statement and policy incorporates the requirements of the Bribery Act and was updated in 2013/14. Work has continued to investigate matches that are highlighted by the National Fraud Initiative. Regular reports are provided to the Audit and Corporate Governance committee on the work undertaken in the Council to combat fraud and corruption.

• The Council’s Complaints Policy has been reviewed and is available on the Council’s Internet site together with an overview of the complaints procedure. A leaflet has been produced to assist the public who want to make a complaint. Performance against elements of the complaints process was reviewed by the Partnerships and Performance team during 2013/14 and SMT approved recommendations to improve processes. An internal audit review of complaints during 2013/14 contained a ‘limited’ assurance opinion. Action was agreed to all the recommendations in the report and several of the recommendations linked to the work being undertaken as part of the Council wide Customer Project that has been initiated to further develop the Council’s customer service arrangements.

• Equality and Diversity continues to be a key priority for the Council. We have set out our commitment in our Equality and Diversity Policy 2012-2015. The policy is being implemented and monitored by an Equality and Diversity delivery plan. In accordance with the Equality Act 2010 we have also published equality monitoring information on our population, our services and who uses them, and our workforce.

• The people and workforce strategy 2011-2014 links directly to the corporate priorities. Work has been developed over 2013/14 to develop the staff appraisal process and new learning and development priorities have been set out. A comprehensive action plan is in place to address sickness absence, this is monitored by the officer Governance Group and by a working group from the Organisational Improvement and Development Policy Committee. Significant improvement was recorded by the end of 2013/14, suggesting that the actions taken by HR in liaison with managers are starting to take effect. Further improvement is still required and this will be monitored closely during 2014/15 with significant resource being targeted at achieving the targets set. An internal audit review of sickness absence at an operational level during 2013/14 provided a ‘limited’ assurance opinion on the arrangements. The actions agreed from the internal audit report have been incorporated into the overall action plan. A staff survey commenced in March 2014 results of which will be reported during 2014/15.

10 Annual Governance Statement for the year ended 31 March 2014

• The Council has an established joint consultation framework with its recognised Trade Unions and this provides a sound basis for effective debate, discussion and full consultation on the introduction of new operational policies and the review and refresh of existing policies. This framework exists not only to satisfy the Council's statutory requirements under collective bargaining and consultation, but also enables the benefits of full Trade Union engagement and involvement to be realised.

3.8 Risk Management / Resilience and Business Continuity / Emergency Planning

The Council has a comprehensive framework for the management of risk and a revised risk management strategy, policy and guidance document was developed during 2013/14. The refreshed 2013-14 policy was presented to the Audit & Corporate Governance Committee at their meeting in June 2013. Risk management training was delivered throughout 2013/14 as part of the New Managers training course.

The Risk Management and Business Continuity group meets twice yearly and reviews both the strategic and directorate risk registers. The group is supported by Directorate risk groups and receives updates from the Directorate leads on the risk registers and the business continuity plans. The group acts as a forum to facilitate discussion to monitor existing risks and the Council’s general risk environment, ensuring new risks are identified and considered as part of the horizon scanning process. The group also monitors incidents, and the response to incidents, to identify corporate learning and ensure business continuity and recovery plans are fit for purpose. The group provides assurance to the officer Governance Group that risk management processes are embedded and risks are regularly reviewed and updated.

A strategic risk register is in place and is updated quarterly. The strategic risk register identifies risks to the achievement of strategic priorities as set out in the corporate plan. The strategic risk register was presented to the Strategic Management Team on a quarterly basis during 2013/14 in addition to Executive Board at quarters 2 & 4. The strategic risk register was also presented to the Audit & Corporate Governance Committee in June 2013 and November 2013 for their assessment of required assurance on key risks. The annual risk management report for 2013/14 was presented to SMT, Executive Board and the Audit and Corporate Governance committee in June 2014.

A risk workshop was undertaken by the officer Governance Group in April 2013 to evaluate threats to the Council’s corporate objectives for 2013/14. The output from the workshop was used to refresh the risks in the strategic risk register for 2013/14. New risks added in 2013/14 included: impact of the Care bill; increased pressure on the care purchasing budget; capital loans to external organisations; major local regeneration schemes; and the impact of the public service network requirements.

11 Annual Governance Statement for the year ended 31 March 2014

Emergency Plans were continually updated throughout 2013 in line with plan anniversaries, statutory timeframes and to account for organisational changes, including consideration of Public Health responsibilities. SMT received a report in November 2013 which outlined a number of considerations and future work to increase organisational resilience in relation to emergency preparedness and response. Work is ongoing to address this area through 2014.

3.9 Information Governance

The Council has stated a commitment to high standards of governance, including information governance. Responsibility for the Council’s Senior Information Risk Owner (SIRO) was transferred to the Director of Finance & Information Services during 2013/14 and the Assistant Director Partnerships and Performance is deputy SIRO. The Information Governance Group (a collaborative group with representation across all directorates and key areas of WBC) monitors the required actions to address information governance risks, and the roll out of the required communication and training to all relevant officers. A review of the position with regard to Information Governance was undertaken by the SIRO during 2013/14 which highlighted a number of areas for improvement which have been included in the information governance action plan and associated risk register. Work has started to define information asset owners and develop an information asset register. A review of training and awareness raising is underway and a dedicated information governance manager has been appointed.

An internal audit report on data sharing contained a ‘limited’ assurance opinion. The report acknowledged the amount of work underway to review and improve arrangements around information governance and data sharing. Actions agreed have been included into the information governance action plan and progress will be monitored as part of the Chief Internal Auditor’s monthly meetings with the SIRO.

3.10 Projects and Programmes including Regeneration Schemes

Improvements continued to be made to the financial and project monitoring systems surrounding the whole capital programme during 2013/14 and no significant overspends occurred on any projects during 2013/14. The close scrutiny by the officer Capital Investment Planning Group has ensured that issues have been addressed early and no unexpected issues have arisen.

A number of major projects are underway, with project managers and project teams in place to lead the developments. Major projects during 2013/14 have included the following schemes: • Continued planning of development of the Bridge Street area which is a key component of the Warrington Regeneration Programme. This is a long term project which is expected to last between 10 and 15 years.

12 Annual Governance Statement for the year ended 31 March 2014

• Establishment of a Joint Venture Company for regeneration of the Southern Gateway, in accordance with the aspirations of the ‘Warrington Means Business’ framework for business growth and regeneration in the Borough. • Continued infrastructure developments on the Omega site which is a critical part of ‘Warrington Means Business.’ • Continued development of innovative invest to save schemes including investment schemes with social landlords and other corporate loans.

An internal audit review of the regeneration schemes during 2013/14 identified a number of areas where the Council could make improvements in the governance arrangements for the regeneration projects. Action was agreed to the recommendations in the report and a Regeneration Board was established in November 2013 with appropriate Member and officer representation to provide increased Member oversight of decisions taken as the schemes progress.

Warrington & Co brings together the private and public sector to promote economic development and physical regeneration in Warrington, under the guidance of a private sector-led board. The Managing Director is a Council officer and Warrington & Co’s main function is to steer and monitor the implementation of the regeneration framework, as well as providing a forum for all the key agencies involved in regeneration in the town, both public and private sector, to co-ordinate their activities. The Board includes 2 elected members of the Council; the Council’s Chief Executive is Chair of the Board in a personal capacity.

3.11 Freedom of Information and Transparency

The Council has a robust process for responding to Freedom of Information requests that are received. As part of the Open Data transparency agenda the Council has also published items of expenditure over £500 online.

4. Review of Effectiveness

The Council has responsibility for conducting, at least annually, a review of the effectiveness of its governance framework including the system of internal control. The review of effectiveness is informed by the work of the managers within the Council, the Chief Internal Auditor’s annual report, and also by reports and comments made by the external auditors and other review agencies and inspectorates. The Council is advised on the implications of the result of the review of the effectiveness of the governance framework by the Scrutiny committee; the Audit and Corporate Governance committee; the officer Governance Group; and the Corporate Risk and Business Continuity group. The officer Governance Group maintains a comprehensive action plan to ensure continuous improvement of the governance arrangements are in place. The Audit and Corporate Governance Committee review the governance arrangements as part of their Terms of Reference and review the strategic risk register twice a year.

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Executive Directors and Assistant Directors have responsibility for the development and maintenance of the governance environment and provide formal assurance to Directorate Management Teams by their responses to the assurance statement questionnaires. The process of self assessment for 2013/14 has been subject to review and challenge at Directorate Management Team meetings and evidence to support the assessment collated. Where gaps have been identified, action plans have been, or are in the process of being, prepared.

Internal Audit Services examine the effectiveness of the Council’s internal controls. Based on evidence from planned audits and any special investigations, the Chief Internal Auditor reports to each meeting of the Audit and Corporate Governance Committee on any major weaknesses that have been identified and highlights where improvements are considered necessary. Based upon the work undertaken during 2013/14 the Chief Internal Auditor provided the Council with an overall substantial assurance opinion on the arrangements for gaining assurance through the governance framework and on the controls reviewed as part of the internal audit work. The opinion reflected areas (as identified in this statement) where inadequate design and/or inconsistent application of controls put the achievement of particular objectives at risk, and action plans have been agreed to improve controls. In particular the opinion reflected the work that was undertaken by internal audit during 2013/14 on the regeneration schemes; the report contained a number of high priority recommendations to improve controls and action was agreed to the recommendations made. The actions put into place following the review and the work that has begun recently, to establish robust performance monitoring and reporting mechanisms for all major projects, will need to be developed during 2014/15 in order to provide robust control.

All eligible schools submitted full Schools Financial Value Standard (SFVS) returns. The completion of returns in line with the Standard allows the Director of Finance & Information Services to gain assurance on their financial management and the regularity and propriety of their spending.

Value for money is vitally important to the Council at a time of increasing financial pressures and uncertainty regarding future Central Government funding. We know that the majority of our services perform well and that in cost comparators many are (by way of need) in the lowest cost bracket. Value for money is an important component of the internal and external audit plans that provides assurance to the Council regarding processes that are in place to ensure effective use of resources. Internal audit reviews of key financial systems along with detailed substantive testing to support the annual accounts 2013/14 provided assurance that controls are in place and operating satisfactorily. A number of the areas reviewed, however, highlighted a need for further training and support for managers with financial duties. Internal Audit will work with the Finance team during 2014/15 to develop the supporting procedures.

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In May 2013 the Government introduced new legislation for local audit and published the Local Audit and Accountability Bill. The legislation came into force in January 2014 with the introduction of the Act. This legislation introduced a new regime for the auditing of public bodies, extended the provisions for council tax referendums and enshrined the legal status of the local authority publicity code. The Council’s appointed auditors Grant Thornton issued their Annual Findings Report 2012/13 in September 2013 which contained an unqualified opinion on the financial statements. The report noted that “the financial statements presented for audit were of a good standard, were supported by high quality working papers and no significant issues were identified.” The report also gave an unqualified value for money conclusion on the Council’s arrangements to secure economy efficiency and effectiveness in its use of resources and noted: “Our overall conclusion is that whilst the Council faces significant financial challenges, particularly from 2014/15 onwards, its current arrangements for securing financial resilience are good (green).” The report included recommendations around the major capital schemes: “The Council should review its minimum standards for project management and check that they are being met consistently across the organisation. There is scope to improve and standardise the quality of the project management arrangements in place, in particular the arrangements for evidencing the initiations of a project and the consideration of its associated risks.”

4.1 Assurance in relation to the improvement actions identified in the 2012/13 Annual Governance Statement

There were no specific improvement actions arising from the 2012/13 Annual Governance Statement, however the officer Governance Group has maintained an action plan for continual improvement of governance issues in the Council. These included the following:

Improvement Action Action undertaken Continued improvement in The officer Governance Group receives regular information governance updates around information governance at their processes meetings and has reviewed the information governance action plan in place. During 2012/13 one information data breach was reported to the Information Commissioner (ICO) for consideration and no action was taken by the ICO. No data breaches have been reported to the ICO in 2013/14. Elements of data breach reporting will be a key focus for the SIRO during 2014/15.

The self-assessment submitted against version 11 of the Information Governance Toolkit in 2013/14 noted satisfactory outcomes against 38 of 39 requirements, ie. ‘achieved attainment Level 2b or above on these requirements. One requirement (scored as not applicable in v10 assessment) was

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Improvement Action Action undertaken scored at level 2a; it is anticipated that level 2b will be reached for this requirement, providing a satisfactory level 2 response, in the v12 submission in 2014/15.

Ensure that the results of The ongoing work around the Planning department the barrister’s investigation continued following the barrister’s review. The into the Planning Planning Improvement Board met regularly department are acted upon throughout 2013 to monitor the provision of an and the Council takes the effective and efficient planning service that required action. provides confidence and transparency in the quality of decisions made by the Council. The Improvement Board was chaired by the portfolio holder and was responsible for driving the planning improvement plan forward and delivering outcomes and benefits in line with the operational plans and priorities of the organisation. Actions have been completed as appropriate and reported for clearance to the Board.

Ensure that the Continued improvements have been made to the recommendations in the Council’s arrangements for disaster recovery. Disaster Recovery report Significant improvements have been made to are implemented. address recovery and timely return to normal service, should a major adverse incident occur affecting the main data centre. ICT determined the recovery position for the Council’s top 11 systems and defined and costed a comprehensive improvement plan. Delivery of the improvement plan has progressed significantly during 2013/14. In particular, the ICT Service has progressed enhancements to the underpinning infrastructure (SQL databases, network and e-mail), enabling existing recovery times to be reduced. Furthermore the backup and recovery service was replaced during 2013/14 leading to further improved recovery times.

4.2 Internal Assurance and External Inspections of Governance Arrangements

4.2.1 SAP System and ICT Governance The Council’s key ICT system SAP underpins the Finance, Payroll, Procurement and Human Resources functions. Continued improvements have continued to be overseen by the SAP governance group in 2013/14. Further assurance was obtained during April 2014 from external auditors (Grant Thornton). The review

16 Annual Governance Statement for the year ended 31 March 2014 suggested a number of recommendations all of which were categorised as low risk, apart from 1 medium risk. The external auditors highlighted a concern also raised by internal audit previously in the use of SAP-ALL profile, this provides wide ranging access to the system. Management are currently considering options to remove the SAP-ALL profile from the eight active accounts. The recommendations in the report have been considered by the ICT Service and an implementation plan produced

During 2013/14 ICT Governance good practice has been sustained and weaker areas strengthened. The certification of conformance to the best practice ISO27001 information security management standard has been revalidated by external accreditation and the management of ICT risks and ICT security incidents continues to be robust and has been highlighted as good practice by external auditors.

The Council has been working to comply with increased compliance requirements, mandated by the Cabinet Office, in order to allow continued connection to the government’s Public Services Network (PSN). These enhanced requirements include the removal of all unsupported software, and software with any security vulnerabilities, from all machines that access the Council’s data network. A large number of staff use PSN (formerly known as the Government Connect Secure Extranet, GCSx) to access central government ICT systems and allow secure data sharing with partners.

4.2.2 Families and Wellbeing

The new directorate of Families and Wellbeing was formed in October 2013, bringing together the functions of the former children and young people’s services; adult services; housing; neighbourhoods; and public heath directorates. The role of Executive Director Families and Wellbeing encompasses both statutory roles of the Director of Children's Services (DCS) and Director of Adults’ Services (DASS). The roles of operational directors for DASS and DCS provide capacity to ensure all duties within the statutory roles are delivered, with Assistant Director roles in the Directorate also delivering some statutory duties. The Council has issued an assurance statement signed by the Chief Executive to demonstrate that all aspects of the combined post have been considered in combining the DCS role with the DASS and public health related services; the statutory guidance in relation to the DASS has also been considered. The assurance statement was prepared in line with requirements of the Department for Education (DFE) statutory guidance on the roles and responsibilities of the DCS and the Lead Member for Children's Services published in 2005, 2009 and revised in 2012.

In 2013/14 the total budget spend for the directorate was £98,228K – there was a slight overspend of £37K equating to around 0.038% of the overall budget. As part of the service challenge for MTFP more than £23.4 million efficiencies have been delivered over the past three years. Since 2011/12, children’s services

17 Annual Governance Statement for the year ended 31 March 2014 have achieved £8.6 million, adult services £14.8 million and neighbourhoods and housing £396k in savings.

4.2.3 Children and Young People’s Services

Children and Young People’s Services produce an annual report detailing the progress made against priorities. The report, covering the period 2013-14, was published in May 2014.

In July 2013 the Ofsted inspection of the Fostering Service found that across five of the six key judgments: overall effectiveness; quality of care; safeguarding children and young people; leadership; and management were all rated as ‘good’. Outcomes for children and young people, was found to be ‘outstanding’. Inspectors also reported that the service is well-run by managers who have a clear understanding of priorities and who put the children and young people at the centre of their work. The children, says the report, “make outstanding progress in achieving their potential in their educational aspirations” and “their life chances in future employment are significantly improved”. As a result of the inspection, recommendations were made relating to some aspects of the management and monitoring of records and practice and training, support and development standards portfolios.

The majority of regulated services in Warrington have ‘good’ or ‘outstanding’ judgements from Ofsted. Specific service or settings Ofsted judgements include: • 6 (100%) local authority children’s homes are rated ‘good’ or better. • 6 (75%) of the 8 children’s centres are rated ‘good’. • 24 primary schools were inspected in the period April 2013 to March 2014. Of these, 16 (67%) were ‘good’ or better. 1 school (4%) was judged ‘outstanding’; 15 schools (63%) were judged ‘good’; 7 schools were judged ‘requires improvement’ (29%) and 1 school (4%) was judged ‘inadequate’. • 58 (83%) of all primary schools across the Borough are rated ‘good’ or better. • 50% (6 out of 12) are rated ‘good’ or better and 1 has been judged as ‘inadequate’ (8%). • 2 (67%) of the 3 special schools are rated ‘outstanding’, 1 is rated as ‘Requires Improvement’. • 146 (74%) of the 198 childminders inspected were rated ‘good’ or better; 3 (4%) were rated ‘inadequate’. • 89 (77%) of 116 childcare non-domestic settings are rated as ‘good’ or better. 1 (1%) is rated ‘inadequate’.

Successes during 2013-14 include: • Shortlisted for three LGC awards in the categories of campaign of the year (WWiSH); innovation (WWiSH); and children’s services (children and young people’s services). • Best performer in terms of the least number of children and young people not in education, employment or training. • Accreditation for the Careers for Young People service.

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• There was a 40 percent increase in attendance in the annual jobs fair helping Warrington’s young people find a job, apprenticeship, college course or training course. • Following 12 months of building work, the staff and children of Woolston Community Primary have relocated to their new school located on Barnfield Road. • The Music Hub (on behalf of Warrington Council) has received a grant of 45,000 euros to fund a two year project of staff exchange with Hilden to design a town centre trail App which is hoped will enable them to identify very strongly with Warrington history and cultural heritage. • Phase one of the single gateway to services for children, young people and families has been established and the Families Information Service (FIS) has extended its role to manage calls from Duty and Assessment.

The directorate has recognised the ongoing risk of deteriorating relationships and limited influence of the local authority in respect of school improvement support for schools which have converted to academy status. In addition, reductions in funding direct to the local authority have limited the offer of non-statutory services to schools, although many schools have made the decision to buy these services from the local authority.

An internal audit of the systems of internal control in place in relation to the financial administration of children’s residential and short break homes contained a ‘minimal’ assurance opinion. The revised structure of the homes has improved the quality of service provision and outcomes for young people, however, our audit identified that the dispersal of key financial administrative procedures has had a detrimental impact upon financial processes and controls. Management responded positively to the recommendations in the report and the action agreed, once implemented, will improve the controls in place.

4.2.4 Adult Services

The fourth local account is being developed detailing progress made during 2013-14 against the priorities for adult social care and about the quality of its services. An important aspect is to demonstrate how citizens and consumers have influenced the development and quality of local services. Co-production is an integral part of developing our local account and service user and representative groups and partners all contribute to the final publication. Feedback from the previous year’s accounts will help inform this year’s report with the account reflecting a partnership approach to developing services. It raises awareness about adult social care in general and important areas such as safeguarding; hate crime; hidden carers; and self-funders. It highlights social care in the widest sense working in partnership across and beyond the council.

Key service risks regarding safeguarding and the delivery of residential and nursing care, due to the cost and volume pressures on this market and the Council's budget, are linked to the Strategic Risk Register to highlight their importance and ensure thorough monitoring. Risks for Adult Services also

19 Annual Governance Statement for the year ended 31 March 2014 include the impact of the Care Bill, and the take up of personalisation, not just for older people but for people with learning and physical disabilities.

Externally commissioned or internally provided Adult Social Care services are subject to a range of robust governance measures that focus on developing partnerships, monitoring and improving and ensuring value for money. This is underpinned by a range of formal operational activities and forums including: • Formal contract monitoring and compliance across all Adult Social Care services including scheduled, responsive and unannounced monitoring visits. • Regular performance monitoring reviews with provider agencies subject to service level agreements and contracts. • Formal individual service risk assessments for services commissioned under the Supporting People programme. • Performance reporting to the Supporting People commissioning body. • Peer review frameworks with Warrington Link/Local Healthwatch and Warrington Speak Up group. • Key performance indicators relating to residential and nursing care and supported accommodation for adults with a learning disability are incorporated in the directorate performance score card.

Financial governance of adult social care in regards to the cost of care and inflation is in the process of being looked at whilst working closely with service providers to deliver a more robust service with effective partnership working. In addition to our usual ways of engaging with local residents including the people who use our services and their carers, we undertook a number of public consultations including: • The Big Care Debate – re-tender of homecare services to ensure that people in Warrington have good access into domiciliary care services. • Review of adult social care in-house services - review of how our Adult Social Care in-house services are delivered to see if they can be redesigned to become more efficient, whilst maintain the quality standards service users expect. • Changes to non-residential charging policy – ensuring that all service users are charged fairly by assessing their ability to pay, in line with the government’s charging guidelines (included disposable income and disability related expenditure). • Residential and nursing fee review – renegotiating the fees paid to independent providers of residential and nursing home care in Warrington.

Successes for Adult Services during 2013-14 include: • Shortlisted for two LGC awards in the categories of community involvement (Safe Places) and innovation (Support 4 Change). • Adult social care services remain fully compliant with CQC standards following a number of inspections. • Plans to deliver service improvements at Gorse Covert day centre. • Planning is underway to deliver a new learning disability short breaks service at Woodleigh care home.

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• Shortlisted for a lottery bid to address older people’s social isolation. • Continued expansion of telecare and sensory services. • Support 4 Change project recognised by a national expert on diversion in mental health/criminal justice. • Ranked second in North West for carer reported quality of life, third for people with learning disabilities in employment, and third for reablement measure. • Rated best performer in terms of service users reporting services made them feel safe. • Delivery of focused improvement interventions with providers of residential, nursing and domiciliary care using multi-agency intelligence. • New contract for services for adults with a learning disability, valued at £5.5 million, delivering efficiencies and improved models of service.

An internal audit review of the Council’s arrangements for managing clients’ finances, issued in August 2013, contained a ‘limited’ assurance opinion. Corporate financial support was put into place to assist with implementation of key financial controls. Follow up work during 2013/14 has noted that a number of the recommendations and agreed action remain outstanding. Further detailed work by internal audit is underway currently to gain assurance that controls have been implemented.

4.2.5 External Inspection Regulation of Investigatory Powers Act 2000

An inspection was undertaken in January 2014 by an inspector from the Office of Surveillance Commissioner to review the Council’s management of covert activities. The report noted that the Council’s policy and guidance regime is of a very high standard. The inspector noted that the Council engages powers under RIPA for a limited range of investigations but does so on a relatively frequent basis. Two of the three recommendations made in the previous review undertaken in 2011 were noted as discharged by the inspector. The outstanding recommendation is in relation to applications and authorisation of directed surveillance. The report recommended improved day to day oversight of RIPA processes and recommendations were made covering Central Record and Oversight; Directed Surveillance; Internet and social networking sites; and Training. The recommendations have been accepted by management.

4.2.6 Data Quality and Management Information

Errors were discovered during 2013/14 in processing of 2012/2013 performance data for Children & Young People’s Service (CYPS). Upon discovery of the processing errors, Partnerships and Performance team carried out checks on all CYPS critical performance indicators, issued a report into the incident and reviewed the validation processes in place. A detailed action plan was prepared as part of the report by the Performance, Policy and Partnerships Manager to improve data quality procedures; this identified 7 specific actions to improve existing processes. An internal audit review into the processing errors obtained evidence to determine progress against these actions. The review obtained

21 Annual Governance Statement for the year ended 31 March 2014 assurance from the Partnerships and Performance team that action had been taken to address a number of areas including: more thorough staff induction processes; written guidelines and procedures; adoption of a risk based sampling process; and closer partnership working with CYPS management. The embedding of the actions contained in the Performance, Policy and Partnerships Manager’s report, together with actions in the internal audit report, will improve controls in processing performance data.

4.2.7 External Inspection Food Standards Agency

An audit was undertaken by the Food Standards Agency on the 16th May 2013 on the directorate’s arrangements on data management and intelligence. The audit reported only one minor recommendation. Items reported were actioned and a response to the auditors submitted; no follow up visit was deemed necessary following this response.

A Cheshire & Merseyside inter-authority peer review was carried out by Sefton & St Helens Councils on 26 June 2013, looking at the Authority's prioritisation in respect of health & safety interventions and how we determine our incident selection criteria against national guidance. Action was agreed to the areas raised in the report and no further visit was deemed necessary. A further inter- authority audit is due to be carried out on 9 & 11 July 2014, by officers from Sefton & St Helens Councils.

5. Significant Governance Development Areas

Major Capital Schemes The Council is committed to high standards of governance and has recognised during 2013/14 that as the Council enters into a number of schemes to deliver regeneration, along with innovative invest to save schemes, then the governance and risk management arrangements need to be robust. It has been recognised by officers that more robust programme management arrangements are needed and work is underway to develop improved programme governance and monitoring arrangements:

• A Regeneration Board was established in November 2013 with appropriate Member and officer representation to provide increased Member oversight of decisions taken as the regeneration schemes progress. Work is underway in the Economic Regeneration, Growth and Environment Directorate, supported by the Council’s business improvement team, to establish robust performance monitoring and reporting mechanisms for all major projects. • The Council has provided commercial loans to registered social landlords (RSLs) to stimulate housing development in Warrington in 2013/14. Loan facilities of £140m have been provided to 3 RSLs in order to help stimulate housing growth, support economic regeneration and help to provide local employment in the borough. Resources have been put into place in the Finance team to monitor the corporate loans.

22 Annual Governance Statement for the year ended 31 March 2014

Management and Monitoring of Contracts The Council continued to develop new partnership arrangements and complex contracts for delivery of services during 2013/14. It is recognised that, as such contracts are developed, robust management and monitoring of contracts needs to be undertaken. A fraud investigation underway into one of the Council’s contracts, led by the Police with support from Council staff, has highlighted the need for more robust processes. Police enquiries are ongoing and lessons learned from the investigation will be acted upon during 2014/15.

The areas noted above demonstrate that the Council continues to face a significant level of challenge given the requirement to deliver efficiency savings whilst maintaining services. Delivering the savings and maintaining financial resilience is becoming increasingly difficult for the Council and during 2013/14 the strategic risks faced by the Council broadened. It is considered that the increased risk level is reflective of this evolving environment in which the Council has to operate.

Conclusion

The review of the Council’s governance arrangements for 2013/14 has been undertaken in order to produce this statement. The review highlighted a number of governance issues that require attention and action is being planned and/or taken as noted in the statement. These actions have been combined with additional work being undertaken by the officer Governance Group to form a comprehensive improvement plan. With the exception of the internal control issues that we have outlined in this statement, our review confirms that the Council has a generally sound system of internal controls that supports the achievement of its policies, aims and objectives and that those control issues have been or are being addressed.

23 Annual Governance Statement for the year ended 31 March 2014

Signed: Signed:

……………………….. ………………………. Councillor Fitzsimmons Councillor O’Neill Chair of the Audit and Corporate Leader of the Council Governance Committee

Date:……………… Date:…………..

Signed: Signed:

……………………….. ………………………. Timothy Date Steven Broomhead Solicitor to the Council and Head of Chief Executive Corporate Governance

Date:……………… Date:…………..

24 Annual Governance Statement 2013/14 Assurance Framework Appendix 1

25 Annual Governance Statement 2013/14 Action Plan Appendix 2

PRIORITIES AGS Principle 4: Taking informed and transparent decisions which are subject to effective scrutiny and managing risk.

OBJECTIVE(s):

The organisation manages its risks and maintains a sound system of internal control The organisation has structured programme governance arrangements

LEAD TASKS Links to DATE PROGRESS % comp

Executive Improved programme governance Director arrangements for major Environment regeneration schemes and Regeneration

Director of Monitoring of loans to RSLs and Finance & other Corporate Loans Information Services

26 Annual Governance Statement 2013/14 Action Plan Appendix 2

PRIORITIES AGS Principle 4: Taking informed and transparent decisions which are subject to effective scrutiny and managing risk.

OBJECTIVE(s):

The organisation manages its risks and maintains a sound system of internal control The organisation has structured programme governance arrangements

LEAD TASKS Links to DATE PROGRESS % comp Robust contract management and Deputy CE monitoring of contracts

Improved Partnership working Deputy CE arrangements

27 Annual Governance Statement 2013/14 Action Plan Appendix 2

AGS Principle 5: Developing the capacity and capability of members and officers to be effective

OBJECTIVE(s):

Making sure that members and officers have the skills, knowledge, experience and resources they need to perform well in their roles.

LEAD TASKS Links to DATE PROGRESS % comp Developing standard documented Director of procedures and training to assist Finance & staff in financial controls Information Services Develop more robust controls over Director of the management of Client Finance & Finances Information Services

28 Agenda Item 11 WARRINGTON BOROUGH COUNCIL AUDIT AND CORPORATE GOVERNANCE COMMITTEE 25 SEPTEMBER 2014

Report of the: Director of Finance and Information Services Report Author: Jean Gleave, Chief Internal Auditor Contact Details: Email Address: Telephone: [email protected] 01925 442354

Ward Members: All

TITLE OF REPORT: ANNUAL GOVERNANCE STATEMENT 2013/14

1. PURPOSE OF THE REPORT

1.1 The purpose of the report attached at Appendix A is to present the final version of the Annual Governance Statement for 2013/2014. The Annual Governance Statement supports the Council’s Statement of Accounts and outlines how it manages its affairs to deliver high quality services and ensure that public money is effectively spent.

2. CONFIDENTIAL OR EXEMPT

2.1 Not confidential.

3. BACKGROUND

3.1 The requirement to produce an Annual Governance Statement is a statutory responsibility (Accounts and Audit Regulations 2003 and 2011). The draft version of the statement was presented to the Audit and Corporate Governance Committee at their meeting on 23 June 2014 and was subject to discussion at that meeting. This final version contains amendments to the draft statement at paragraph 4.2.2 which now includes reference to the Council’s assurance statement signed by the Chief Executive regarding combining the role of the Director of Children’s Services with the Director of Adult Services. Section 5 of the statement also contains an additional paragraph to reflect the significant level of challenge facing the Council given the ongoing requirement to deliver efficiency savings whilst maintaining services.

3.2 The Society of Local Authority Chief Executives (SOLACE) Framework: Delivering Good Governance in Local Government, urges local authorities to prepare a governance statement in order to report publicly on the extent to which they comply with their own code of governance on an annual basis, including how they have monitored the effectiveness of their governance arrangements in the year, and on any planned changes in the coming period. The process of preparing the governance statement should itself add value to the corporate governance and internal control framework of an organisation. Following approval, this final version of the Annual Governance statement accompanies the final accounts.

Agenda Item 11

4. APPROACH TAKEN TO PRODUCE THE 2013-14 ANNUAL GOVERNANCE STATEMENT

4.1 Each Directorate Management Team (DMT) completed and scored a self assessment and returned to the Chief Internal Auditor for review and collation. Internal Audit reviewed the self assessments and provided challenge as appropriate. Internal Audit also reviewed the revised code of corporate governance and were satisfied that the assessment process was robust and the Code sets out a reasonable position of the governance arrangements in place.

4.2 During 2013/14 the officer Governance Group used the map of sources of assurance to ensure that the Annual Governance Statement is fully supported. This is shown in a diagram at appendix 1 of the statement. The group maintains a comprehensive improvement action plan that incorporates any improvement actions identified.

4.3 The Strategic Management Team at their meeting on 10 June 2014 reviewed the draft Annual Governance Statement and considered any areas that should be classified as ‘significant governance issues.’ The discussions were documented as part of that meeting and summarised in section 5 of the attached statement.

5. FINANCIAL CONSIDERATIONS

5.1 There are no additional resource implications arising from this report. The Annual Governance Statement provides assurance that the Council is managing its financial risks effectively.

6. RISK ASSESSMENT

6.1 The Annual Governance Statement provides assurance that the Council is managing its risks effectively.

7. EQUALITY AND DIVERSITY/EQUALITY IMPACT ASSESSMENT

7.1 There are no specific equalities issues in relation to the content of this report.

8. CONSULTATION

N/A

9. REASONS FOR RECOMMENDATIONS

9.1 To ensure that the Council maintains an effective framework of corporate governance.

Agenda Item 11

9.2 To meet the Council’s statutory obligations under the Accounts and Audit Regulations (England) 2011.

10. RECOMMENDATION

10.1 That the Audit and Corporate Governance Committee reviews and approves the Council’s Annual Governance Statement for 2013-14, attached at Appendix A.

11. BACKGROUND PAPERS

• Delivering Good Governance in Local Government: Framework – issued by CIPFA / SOLACE 2007 • Delivering Good Governance in Local Government: Addendum and guidance note for English Authorities – issued by CIPFA / SOLACE 2012 • The Role of the Chief Finance Officer in Local Government – CIPFA 2010 • Internal Audit working papers • Directorate governance self assessments

CONTACTS FOR BACKGROUND PAPERS:

Name E-mail Telephone Jean Gleave [email protected] 01925 442354 Chief Internal Auditor

2013/14 Statement of Accounts

Page 1 Contents

Contents Page No Explanatory Foreword 4 Statement of Responsibilities 19

Principal Financial Statements of Single Entity Movement in Reserves Statement 20 Comprehensive Income and Expenditure Statement 21 Balance Sheet 22 Cash Flow Statement 23

Notes to the Single Entity Financial Statements Accounting Policies & Assumptions Note 1: Accounting Policies 24 Note 2: Accounting Standards Issued, Not Yet Adopted 25 Note 3: Critical Judgements in Applying Accounting Policies 26 Note 4: Assumptions Made About the Future and Other Major Sources of 28 Note 5: Events After the Reporting Period 31

Movements in Reserves Statement Note 6: Adjustments Between Accounting Basis and Funding Basis Under 31 Note 7: Transfers to/from Earmarked Reserves 33 Note 8: Usable Reserves 35

Comprehensive Income and Expenditure Statement Note 9: Other Operating Expenditure 36 Note 10: Financing and Investment Income and Expenditure 36 Note 11: Taxation and Non Specific Grant Income 37 Note 12: Material Items of Income and Expense 37 Note 13: Trading Operations 37 Note 14: Agency Services 38 Note 15: Members' Allowances 38 Note 16: Officers' Remuneration 38 Note 17: Termination Benefits 42 Note 18: External Audit Costs 42 Note 19: Amounts Reported for Resource Allocation Decisions 42 Note 20: Dedicated Schools Grant 44 Note 21: Grant Income 45

Page 2 Balance Sheet Note 22: Property, Plant and Equipment 47 Note 23: Heritage Assets 49 Note 24: Investment Properties 50 Note 25: Intangible Assets 51 Note 26: Impairment Losses 51 Note 27: Capital Expenditure and Capital Financing 51 Note 28: Long Term Debtors 52 Note 29: Assets Held for Sale 53 Note 30: Debtors 53 Note 31: Cash and Cash Equivalents 54 Note 32: Creditors 54 Note 33: Provisions 54 Note 34: PFI and Similar Contracts 55 Note 35: Leases 57 Note 36: Pension Schemes 60 Note 37: Unusable Reserves 68 Note 38: Financial Instruments, Risk & Collateral 72 Note 39: Contingent Assets & Liabilities 81

Cash Flow Statement Note 40: Operating Activities 83 Note 41: Investing Activities 84 Note 42: Financing Activities 84

Other Notes Note 43: Related Parties 84 Note 44: Trust Funds 88 Note 45: Prior Period Adjustment 88 Note 46: Acquired & Discontinued Operations 91

Collection Fund 92 Collection Fund Notes 93 Group Accounts 96 Glossary 104 Annexe A - Accounting Policies 113

Page 3 Explanatory Foreword

1. INTRODUCTION

This Statement of Accounts summarises the financial performance of the Council for the year ended 31 March 2014.

This foreword gives a brief summary of the Council’s overall financial results for 2013/14 and the Council’s financial strategy going forward as we continue to deal with a period of reduced government funding.

The Explanatory Foreword is structured as follows:

1. Background to the Council and Commentary for the Year 2. Explanation of the Financial Statements 3. A Summary of the 2013/14 Financial Performance of the Council 4. Receipt of Further Information

2. BACKGROUND TO THE COUNCIL AND COMMENTARY FOR THE YEAR

Warrington Context

The Borough of Warrington covers an area of 70 square miles (181.8 square kilometres) between Manchester and Liverpool at the centre of the North West region’s communications network. The M6, M56 and M62 motorways intersect within the borough, connecting it to all parts of the region and beyond. The borough also lays on the main north-south (West Coast Main Line) and east- west (Trans-Pennine) rail routes. It is close to both Manchester International and Liverpool John Lennon Airports.

The number of people living in Warrington is around 202,200 representing a 5.8% increase over the last 10 years. There are over 85,000 households and around 8,000 businesses employing over 115,000 people.

Warrington has a strong and growing business economy. The 2013/14 Centre for Cities annual health check of UK cities demonstrated that Warrington is one of only a few places that have continued to improve in recent years, outstripping most of the UK. In 2008 Warrington was ranked 54th of the 64 cities and major towns that are included in the report. It is now ranked tenth. This rating is based on how Warrington has performed in employment, wages, business growth and house prices. The borough has the fourth highest jobs growth rate in the UK at 4.5%, only bettered by Edinburgh, Brighton and London.

In terms of deprivation (based on the Index of Multiple Deprivation) Warrington ranks 153rd out of 326 local authorities.

Page 4 Medium Term Financial Plan (MTFP)

The 2013/14 revenue budget process was influenced and framed by the need to make a further £13.9m of reductions in expenditure in 2013/14. This was the impact of the Government’s Spending Review 2010 which set out its plans to reduce overall public spending by £81bn by 2014/15. As a consequence the Council’s funding has reduced by £22m during 2011/12 to 2013/14 and a further £20.3m of funding cuts are projected during 2014/15 to 2016/17. Funding cuts are now expected to continue until at least 2017/18.

The Council has a good track record of strong financial management. Service budget savings of £46.2m, to off-set both funding cuts and unavoidable budget pressures, have been achieved over the 2011/12 to 2013/14 period, and it is forecast that a further £41.6m of base budget savings will be required over the 2014/15 to 2016/17 period.

The Council set an ambitious three year capital programme for the period of 2013/14 – 2015/16 of £814m and this increases to £1.3b for the period 2014/15 – 2016/17. The major emphasis of this programme is on economic regeneration and Investment in schemes that will generate savings to the Council.

Updates on individual capital programme schemes including a detailed explanation of variances can be found in the Capital Outturn report which was reported to the Executive Board on 10 June 2014 at the following link or by Contacting the Director of Finance and Information Services: http://cmis.warrington.gov.uk/cmis5/Document.ashx?czJKcaeAi5tUFL1DTL2UE4 zNRBcoShgo=8ZUE%2fH5PzmtETdA2NsCVgCoSmk%2bE5HNi00qqfhWu929 %2fJ6JnZGcs%2bA%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6A GJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&m CTIbCubSFfXsDGW9IXnlg%3d%3d=hFflUdN3100%3d&kCx1AnS9%2fpWZQ40 DXFvdEw%3d%3d=hFflUdN3100%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d =ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d &d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR 9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMR KZMwaG1PaO=ctNJFf55vVA%3d

Council Tax

For 2013/14 the Council set a Band D Council tax of £1,159.14 (1.98% increase on 2012/13), rising to £1,380.10 when the precepts were added for the Police Service and Fire and Rescue Service. The level of band D Council Tax in Warrington is 8% below the average for other North West metropolitan and unitary authorities. During 2013/14 £72.8m of Council Tax was billed on behalf of Warrington Borough Council and 96.68% of Council Tax was collected.

Page 5 Performance Commentary for 2013/14

Protect the Most Vulnerable Over the past four years Warrington’s Children and Young People’s Services has undergone a radical transformation – from a notice to improve in 2009 to services which were rated as ‘Good’ in an Ofsted pilot inspection of ‘Safeguarding and Services for Looked After Children’ in January 2013. The Service has been widely praised for its innovative approaches and now plays a key role in regional sector led improvement initiatives. The Children and Young Peoples’ Service was recently shortlisted for an award in the prestigious Local Government Chronicle Awards.

A recent Ofsted inspection of Warrington’s Fostering Service found it to be ‘Good’. Ofsted rated five service areas: overall effectiveness, quality of care, safeguarding children and young people, leadership and management, which were all given a ‘Good’ rating, and lastly outcomes for children and young people, which was rated ‘Outstanding’. The Inspectors commented that the service is well-run by managers who have a clear understanding of priorities and who put the children and young people at the centre of their work.

The Council has continued to increase the number of adult users of social care services who receive self-directed support. This gives them greater choice and control over the services that they receive. 63% of adult social care service users are now in receipt of self-directed support.

The Council also provides re-ablement to people who are leaving hospital. These services are aimed at supporting people to regain their independence and continue to live an independent life, rather than being admitted into long term residential or nursing care. It also results in significant efficiency savings due to the reduction in care purchasing required. 90% of people who use the re- ablement service remain in their own homes 91 days after discharge from hospital.

There is robust monitoring of the residential, nursing, and domiciliary services that the council purchases or provides. The Care Quality Monitoring Team work closely with the Care Quality Commission (CQC) and key partners to respond to a broad range of intelligence and to target interventions where there are concerns. End of year statistics reinforce the Care Quality Team's impact on care quality and compare well with national benchmarks. 83% of care home providers and 84% of domiciliary providers are fully compliant with CQC standards. This work is underpinned by a strong and expanded dignity network which has shared and promoted good practice.

The Council took the responsibility for Public Health from the NHS during 2013/14. This was funded through the Public Health Grant of £10.052m (see note 21).

Page 6 Support the Local Economy The ‘Warrington Means Business’ programme is driving business growth and transformation across the Borough. The Borough’s economic growth partnership ‘Warrington & Co’ is actively progressing the ‘Warrington Means Business’ key development priorities. This includes development and regeneration programmes for the Southern Gateway, Bridge Street Quarter, Stadium Quarter, the Cabinet Works and Warrington Waterfront. Last year Warrington announced regeneration projects totalling a value of over £450 million of which £210 million is underway.

There has been considerable development on the Omega sites which have attracted £217m investment since February 2013 and safeguarded or created 1,850 jobs. The council recently approved the facility for a £7.5 million loan to Omega Warrington Limited to fund new road and infrastructure works on the Omega South Site. The loan will facilitate development and encourage further economic investment and growth for Omega and for Warrington’s economy as a whole. The loan is from the council’s capital budget and has been made on full commercial terms.

In November/December 2013 a £400,000 programme of improvements to revitalise the Bridge Street Area was completed in readiness for the delivery of a £52 million regeneration project. This included new footways and kerbs, enhanced street lighting and landscaping.

On 3 March 2014 the Council and Langtree Land and Property PLC entered into an agreement to create a joint venture company (JVC) “Wire Regeneration Limited”. The Council transferred land to the value of £2,401,114 and cash to the value of £1,302,756 for a total of £3,703,870, and was issued 3,703,870 £1 (A) Shares in the JVC. Langtree transferred land to the value of £3,703,870, and was issued 3,703,870 £1 (B) Shares in the JVC and any future profits will be shared equally. This investment is recorded as a long term investment on the Council’s Balance Sheet.

The Council secured £1.5 million funding from the European Regional Development Fund for a new 50,000sq ft. Business Incubator which will occupy the site of the former Dallam Centre in Dallam Lane. The site sits at the heart of the council’s ambitious £190 million Stadium Quarter project. A contractor has been appointed and work is expected to start in May 2014. This announcement follows the declaration made in January 2014 that a £10 million University Technical College will be built on the Stadium Quarter site.

The Council’s Planning Service has been successful in securing 647 new homes for Warrington in 2013. This is the highest level recorded since 2008. This included 227 affordable homes - the second highest figure in the last five years. There has also been a significant increase in the amount of commercial floor space constructed across Warrington which supports local employment and economic activity.

The Council has been providing commercial loans to registered providers (RPs) to stimulate housing development in Warrington following the withdrawal of long

Page 7 term finance by banks after the 2008 banking crisis. Loan facilities of £140m have been provided to 3 RSLs in 2013/14. These loans are designed to help stimulate housing growth and support economic regeneration in the borough. The investments by the RSLs will also help to provide local employment.

The council set itself a target to place 37% of its procurement spend with local suppliers, and a programme of support was put in place to develop awareness and help local businesses to participate in the council’s procurement processes. This target was met in 2013/14.

Figures released in November 2013 show that the number of 16-18 year olds not in education, employment or training (NEET) has reduced from 6.1% in March 2012 to 3.9% in October 2013. Warrington’s Careers for Young People Service has been a major contributor to this success, working with local employers to provide careers advice and events. They have also worked with the National Apprenticeship Service to host events aimed specifically at employers for them to receive information and support about taking on an apprentice. The Council itself has taken on 48 apprenticeships over the last two years.

Help Build Strong and Active Communities A project to improve educational facilities for children and young people with special educational needs achieved its first key milestone with the opening of Woolston Sixth Form College in February 2014. This is the first phase of the £8m Woolston Learning Village development and the project is on track to deliver new facilities for two local schools for September 2014.

Over the last three years the Council has pursued a programme of creating and developing community hubs. The new community hub at St. Werburgh’s is now fully operational. The centre is housing the South Area Team and a group of volunteers are managing a variety of activities within it; which includes Mums and Tots, a luncheon club, chair based exercise, a library, coffee morning and an event group. Progress is also being made on the development of Whitecross Community Centre where a friends group is delivering social meetings, regular internet and community café sessions. In the Orford community hub a local enterprise is developing home cooks to work with residents and community groups on healthy eating.

The latest smoking prevalence figures from the lifestyles survey show that adult smoking rates in Warrington have declined from 20.4% in 2006 to 13% in 2013, which is substantially less than the national average which stood at 20% in 2011/12.

The Council has worked with its partners to target services into the most deprived areas and the ‘Closing the Gap’ project has focussed this year on reducing the impact of welfare reform. A pilot project was set up in Bewsey and Dallam (one of the most deprived areas in the borough) and a master plan has been put in place to drive improvements in the area. A detailed plan entitled ‘Grey to Green’ has been developed that sets out ten key projects which will support the development of a built environment for wellbeing.

Page 8 The Council is successfully helping ‘troubled families’ to turn their lives around. This has involved working with partners to provide targeted whole-family support to get children out of trouble and into school, and unemployed parents into work. The government’s figures show that Warrington is working with more ‘troubled’ or ‘complex’ families than the national average and our success rate is almost one-third better than the national average.

Warrington Council’s mortgage scheme which was launched in 2011 was one of the first in the UK. It is aimed at supporting first time buyers who cannot afford high deposits required by commercial lenders. So far the scheme has helped 195 first-time buyers purchase properties in the borough of Warrington, with the Council underwriting up to £5.5m of the loans.

3. CORPORATE STRATEGY

The Council’s Corporate Strategy 2012-2015 sets out our values:

Closing the Gap  We are committed to closing the inequalities gap that exists in Warrington between the most deprived communities and other areas  We recognise that some areas and some individuals and families need more help than others  In tackling this we will put residents at the heart of decision making  We will work with partners to redesign services that are comprehensive and responsive to residents needs  We are committed to promoting equalty of opportunity and respect for the diversity of everyone; in relation to the services we provide, our employment practices and the arrangements we enter into with our partners

Making the Council more open and transparent  Being more proactive in telling you whats going on in your area  Making the Council more open and accessible  Making councillors more accountable to the people of Warrington all year round  Learning from complaints, compliments and feedback  Giving the people of Warrington more say about services and spend; and greater opportunity to influence council plans, policies and decisions  Encouraging local businesses, smaller enterprises and the third sector to engage with us and to compete for council contracts  Supporting people and communities to become more actively involved in the work of the Council

Living within our means  Providing value for money and business like services

Page 9  Setting sustainable budgets  Making tough but necessary budget decisions  Spending money where need is greatest: improving outcomes for the most vulnerable  Working with partners to understand the total cost of the services we provide to the people and communities of Warrington and reviewing the way we work to improve outcomes and deliver efficiencies  Actively pursuing opportunities to work with our partners, existing and new, to deliver the most cost effective, value for money quality services and where we cannot do so to look for alternative means of provision

Warrington Council’s Vision is to:

‘Put the people of Warrington first – enabling them to thrive now and in the future’

To enable us to deliver this we strive to make best use of resources and assets available to us on our local communities to improve quality of life for the people of Warrington. We have made three pledges to our residents;

To protect the most vulnerable:  By targeting our services to those at greatest risk  Enabling disabled children and adults to choose their own care and support services  Promoting better ways of working encouraging closer working between different professionals and across partner agencies

To support the local economy:  By actively promoting Warrington as destination of choice  By promoting Warrington as a place to invest  Working with partners to develop training and employment opportunities  Create employment opportunities for school leavers and promote apprenticeships  Create a strong and vibrant town centre  Increase the amount of money the Council spends with local businesses

To help build strong and active communities for all:  Focussing support on those communities in greatest need, helping individuals and families to live as successful lives as possible  Provide active leadership to all partners working towards good health and wellbeing for the people of Warrington  Work in partnership to reduce crime and anti-social behaviour

Page 10  Encourage educational achievement and promote access to learning skills and employment  Support an active voluntary sector and volunteering

4. EXPLANATION OF THE FINANCIAL STATEMENTS

The 2013/14 Statement of Accounts shows the core financial statements together with detailed disclosure notes followed by the supplementary statements. The core financial statements are:

The Movement in Reserves Statement (MIRS) This shows the movement in Council reserves during the year, split between those reserves which are available for the Council to spend (usable reserves) and those that have been created to reconcile the technical and statutory aspects of accounting (unusable reserves).

The Surplus or (Deficit) on the Provision of Services line shows the true economic cost of providing the Council’s services, more details of which are shown in the Comprehensive Income and Expenditure Statement. These are different from the statutory amounts required to be charged to the General Fund Balance for council tax setting purposes. The Net Increase / Decrease before Transfers to Earmarked Reserves line shows the statutory General Fund Balance before any discretionary transfers to or from earmarked reserves undertaken by the Council.

The Comprehensive Income and Expenditure Statement (CIES) Identifies the income and expenditure on all services the Council provides and brings together all the recognised gains and losses of the Council during the period 1 April 2013 to 31 March 2014.

This statement shows the accounting cost in the year of providing services in accordance with generally accepted accounting practices, rather than the performance against budget (outturn) which is monitored and managed all year (as detailed in Section 5 of the Foreword on pg. 12). The difference between the (Surplus) or Deficit on Provision of Services and the outturn is shown as the movement in the General Fund column on the Movement in Reserves Statement on the previous page.

The movement between the directorate outturn from the Foreword and the figures shown on the statement below are further detailed in Note 19 Amounts Reported for Resource Allocation Decisions.

The Balance Sheet The Balance Sheet shows the value of the Council’s assets and liabilities. The net assets of the Council are matched by the reserves (net worth) held by the Council. The Council’s net worth increased by £13.547m. This is predominantly due to a decrease in the pension liability of £20.437m. The pension liability

Page 11 decreased due to a change in long term pay growth assumption and strong asset returns. The net assets of the Council (assets less liabilities) are matched by the reserves (usable and unusable) held by the Council.

In year the Council’s usable (cash backed) reserves increased by £2.985m, and included a transfer to earmarked reserves of £4.236m.

The Cash Flow Statement The Cash Flow Statement shows the change in cash and cash equivalents of the Council during the reporting periods. The statement shows how the Council generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the Council are funded by way of taxation and grant income or from the recipients of services provided by the Council. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Council’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (i.e. borrowing) to the Council.

The Collection Fund The Collection Fund reflects the statutory obligation for billing authorities to maintain a separate Collection Fund. The statement shows the transactions of the billing authority in relation to the collection from taxpayers and distribution to local authorities and the Government of council tax and non-domestic rates.

The Group Accounts These consolidate the Council’s financial position with that of the various companies that it controls or has significant influence over, to provide an overall picture of the Council’s economic activity and exposure to risk.

The main accounting statements are inter-related. Total comprehensive income and expenditure is broken down in the movement in reserves statement between usable and non-usable reserves. These constitute the net worth of the Council in the balance sheet. The reasons for movements during the year in cash (and cash equivalent) balances held on the balance sheet are shown in the cashflow statement.

5. REVENUE EXPENDITURE

The CIES on page 21 sets out the cost of services that the Council provides in accordance with the requirements of published financial accounts. This does not completely align to the way in which financial information is provided for the internal management accounts. Set out below is the 2013/14 financial position in accordance with the Directorate management accounts structure, under which the Council operates, and the in-year financial monitoring information that is presented to officers and Members.

Page 12 Revised Actual Budget Spend Variance Variance Directorate £m £m £m % Resources & Strategic 12.338 11.632 (0.706) (5.7) Commissioning Families & Wellbeing: Children 36.510 37.503 0.993 2.7 Families & Wellbeing: Adults 55.989 55.050 (0.939) (1.7) Economic Regeneration, Growth 23.914 23.911 (0.003) (0.0) and Environment Corporate & Cross Cutting 15.102 15.348 0.246 1.6 Total 143.853 143.444 (0.409) (0.3) The revenue budget position for the year has presented a volatile picture this year with an original overspend of £5.5m forecast at Quarter 1. During the year the Council implemented many actions to mitigate an overspend and ensure a balanced budget could be reported. These included:

 Future years’ savings proposals brought forward for earlier implementation in 2013/14 where possible, pending formal approval.  Holding posts vacant throughout the year for services that are affected by savings in 2014/15.  Continuing service redesign and vacancy management to reduce in year expenditure, although this does have an impact on capacity and service delivery.  Ceasing or delaying non priority expenditure items in year.  Generating additional and new income where possible (however the economic climate prohibits this in some areas). Some services have been successful in trading additional services in year and generating new income.

In October 2013 the Council implemented a corporate restructure which resulted in a reduction of one Directorate and a movement of some services across Directorates. This achieved a saving of £0.2m senior management costs for the year.

The savings target for the year was £13.892m. At the end of the year the target had been met with 83% of savings being achieved via the original means. Some savings proposals were delayed as a result of formal consultation or approval and will be carried over into 2014/15. There has been much media speculation over the past 12 months about the extent of the cuts the public sector is facing and a risk that some Councils might go bankrupt as a result. The Council has robust monitoring systems in place to ensure it is able to offset its liabilities and maintain a sustainable financial position.

Much assurance is provided to Members and residents that the Council is a going concern through regular reporting at Scrutiny Committee and Executive Board. In terms of the Council’s ability to fund its liabilities the liquidity ratio at the end of the year is 1.2:1. This means that the Council has enough current

Page 13 assets to cover all its current liabilities (eg creditors) and also has 20% extra cover. This demonstrates that the Council is solvent and, therefore, is a going concern.

The Council has experienced significant pressures in year however and has worked to identify mitigating savings and cost reduction initiatives to offset these. Pressures encountered during the year include:

 Significant costs arising from children’s and adult’s social care legacy placements and decisions. The impact of such placements and decisions could not be anticipated on current budgets at the time as services provided as much as a decade ago have fundamentally changed from those provided within the current climate.  Impact on the generation and collection of income through rentals, fees and charges as a result of the current economic situation.  The continuing demand for services especially within high profile and media spotlight areas as a result of changes to legislation and inspection following previous failings across the country e.g. Baby Peter, Claire’s Law etc.

DIRECTORATE RESULTS

Resources and Strategic Commissioning

The Directorate is reporting an underspend of £0.706m. The Directorate has ambitious savings targets for 2014/15 relating to redesign and restructuring of services. As a result it has been holding vacancies during the year where staff have left in anticipation of next year’s savings targets. The Directorate has been quite successful in trading its services, especially Benefits and HR, and has generated external income as a result.

Families and Wellbeing - Children

The Directorate is reporting overspend of £0.993m. This is a net position and includes an overspend of £2.471m for the continuing number and value of external children’s agency placements being significantly above budget levels for a number of years. As a result a pressure of £2.5m was included in the 2014/15 budget to mitigate this, however the demand for new placements results in a very volatile budget to manage and this will be closely monitored in 2014/15 to ensure this can be contained. The overspend is almost all offset by underspends from staff savings within the Directorate, transport savings and savings relating to proposals included in the 2014/15 MTFP that are being planned in advance.

Schools

The Council’s expenditure on schools and education is predominantly funded by grant monies provided by the Government through the Dedicated Schools Grant (DSG). (Sixth form funding derives from a separate specific funding allocation).

Page 14 The DSG is ring-fenced and can only be used to cover either schools’ expenditure or specific central education services provided by the Council. The Council underspent on its DSG in 2013/14 by £1.441m, mainly as a result of reduced costs of Additional Educational Support (specialist provision outside the Authority, and local one-to-one support), reduced maternity costs and carried- over growth contingencies agreed locally. This underspend represented 0.92% of Warrington’s total DSG. Further details can be found in Note 20.

At the end of 2012/13 school balances for Warrington maintained schools totalled £6.513m, while at the end of 2013/14 the aggregate of balances totalled £5.851m.

During 2013/14 Penketh High School and Birchwood Community High School transferred to Academy status. This resulted in asset totalling £20.036m transferring from the Council’s Balance Sheet together with a reduction in DSG of £30.472m.

Families and Wellbeing - Adults

The Directorate is reporting an underspend of £0.939m. The out-turn is a net position and includes overspends of £1.763m, that relates to the high cost of transitional care of children becoming adults. This pressure is unable to be mitigated within the Directorate and is being funded through the MTFP in 2014/15. Within the Directorate extensive periods of consultation and lead-in time to achieve the 2013/14 MTFP savings target have been undertaken to ensure the proposals are legally and financially robust and this has resulted in delays in achieving full year targets. These pressures were offset via the use of underspends in other areas of the General Fund. The Public Health Service transferred into the Directorate from 1 April 2013 with a £10.052m budget.

Economic Regeneration, Growth and Environment

The Directorate is reporting a balanced outturn (£0.003m underspend). The Directorate continue to experience significant overspends on income targets as a result of the current economic climate, with a shortfall of around £1.125m for the year. This has been managed by reduced employee costs and vacancy savings across the Directorate, additional income in other areas and a reduction in contract payments following a robust review of contracts.

Corporate and Cross Cutting

The service is reporting an overspend of £0.246m. During the year an underspend has been forecast on the Housing Benefit subsidy paid to the Council by Government to fund Housing benefit payments made. This subsidy amounts to around £60m p.a. and is a very volatile and unpredictable budget to manage. At the end of the year the subsidy outturn is around £1.5m (2.5%) less than expected and as a result the service is reporting a provisional overspend.

Page 15

6. CAPITAL PROGRAMME

The Council manages its capital investment plans through its capital programme. For 2013/14 the Council, set an ambitious programme with a great emphasis being on regeneration. The approved budget and capital outturn position together with their funding can be seen in the tables below:

Page 16 2013/14 2013/14 2013/14 % Spent Revised Outturn Variance 2013/14 Capital Programme Budget £m £m £m Families & Wellbeing 16.887 16.686 (0.201) 99% Resources & Strategic Commissioning 6.045 3.614 (2.431) 60% Economic Regeneration, Growth & Environment 20.629 13.474 65% (7.155) 2013/14 Capital Programme (excluding Invest 43.561 33.775 78% to Save) (9.786) Invest to Save Programme 150.808 9.238 (141.570) 6% 2013/14 Invest to Save Programme 150.808 9.238 (141.570) 6% Total 2013/14 Capital Programme 194.369 43.013 (151.356) 22%

2013/14 Actual 2013/14 Capital Programme Funding Funding £m Unsupported Borrowing 20.024 Capital Grants and Reserves 15.980 Capital Receipts 4.742 Revenue Funding 2.059 External Funding 0.208

2013/14 Capital Programme Funding 43.013

The table above summarises the 2013/14 capital programme budget variances. The actual level of capital expenditure for 2013/14 was £43.013m which equates to 22% of the revised budget. The major variance is due to the Invest to Save schemes (schemes the Council invests in to generate a saving to the Council). If Invest to Save schemes are excluded, the programme spend was 78%. The financing of the capital programme shows the major funding source was Prudential Borrowing and Government grants and contributions.

The Invest to Save programme spent at 6% of budget. However, if committed spend is included this rises to 79%. The £140m of loans granted to Housing Registered Providers (RPs) in 2013/14 are committed spend as opposed to actual spend, as the facilities have yet to be drawn down.

As can be seen from above there was a variation between forecast capital programme and the final outturn. The majority of the expenditure will, however be reprofiled into 2014/15 together with the financing and does not therefore present any financial issues for the Council to address.

Capital expenditure of £43.013m was incurred in 2013/14 on a number of key capital projects. Some of the main highlights included:

 Primary Schools – Total Spend £9.166m  Secondary Schools – Total Spend £0.580m  Special Schools – Total Spend £3.801m  Other Schools -- Total Spend £0.231m  Social Care – Total Spend £0.473m

Page 17  Culture, Leisure & Community – Total Spend £1.664m  Transportation – Total Spend £8.292m  ICT – Total Spend £1.611m  Invest To Save – Total Spend £9.216m  Housing – Total Spend £2.027m  Environment & Regeneration – Total Spend £4.727m

Updates on individual capital programme schemes including a detailed explanation of variances can be found in the Capital Outturn report which was reported to the Executive Board on 10 June 2014 at the following link or by Contacting the Director of Finance and Information Services:

http://cmis.warrington.gov.uk/cmis5/Document.ashx?czJKcaeAi5tUFL1DTL2UE4 zNRBcoShgo=8ZUE%2fH5PzmtETdA2NsCVgCoSmk%2bE5HNi00qqfhWu929 %2fJ6JnZGcs%2bA%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6A GJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&m CTIbCubSFfXsDGW9IXnlg%3d%3d=hFflUdN3100%3d&kCx1AnS9%2fpWZQ40 DXFvdEw%3d%3d=hFflUdN3100%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d =ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d &d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR 9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMR KZMwaG1PaO=ctNJFf55vVA%3d

7. BALANCE SHEET

The Council’s net worth increased by £18.970m. This is predominantly due to a decrease in the pension liability of £20.437m.

8. RECEIPT OF FURTHER INFORMATION

If you would like to receive further information about these accounts, please do not hesitate to contact me at 5th Floor, Resources & Strategic Commissioning Directorate, New Town House/Quattro, Buttermarket Street, Warrington or e-mail me directly at [email protected].

------Lynton Green CPFA Director of Finance and Information Services

Page 18 Statement of Responsibilities

The Council’s Responsibilities

The Council is required to:

 Make arrangements for the proper administration of its financial affairs and to secure that one of its officers has the responsibility for the administration of those affairs. In this Council, that officer is the Chief Finance Officer  Manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets  Approve the Statement of Accounts

The Chief Finance Officer’s Responsibilities

The Chief Finance Officer is responsible for the preparation of the Council’s Statement of Accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Code).

In preparing this Statement of Accounts, the Chief Finance Officer has:

 Selected suitable accounting policies and then applied them consistently  Made judgements and estimates that were reasonable and prudent  Complied with the Local Authority Code

The Chief Finance Officer has also:

 Kept proper accounting records which were up to date  Taken reasonable steps for the prevention and detection of fraud and other irregularities

The Statement of Accounts gives a true and fair view of the financial position of the Council at 31 March 2014 and its income and expenditure for the year ended 31 March 2014.

Signed

Dated 30th September 2014

Lynton Green CPFA Director of Finance and Information Services

Page 19 Earmarked Total General General Capital Major Capital Total Total Reserves of Movement in Reserves Statement for the Year Fund Fund Receipts Repairs Grants Usable Unusable the Ended 31 March 2014 Balance Reserves Reserve Reserve Unapplied Reserves Reserves Authority Note(s) £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance as at 31 March 2012 1,282 32,534 - 2,021 11,392 47,229 275,660 322,889 Movement in Reserves during the year Restated Surplus or (deficit) on provision of services CIES (66,104) - - - - (66,104) - (66,104) Other Comprehensive Income and Expenditure Surplus or (deficit) on revaluation on non-current assets 37 ------1,117 1,117 Restated Actuarial gains or (losses) on pensions reserve 36 ------(35,773) (35,773) Total Comprehensive Income and Expenditure (66,104) - - - - (66,104) (34,656) (100,760) Restated Adjustments between accounting basis & funding 6 66,451 - - (2,021) 1,010 65,440 (65,440) - basis under regulations Net Increase or (Decrease) before Transfers to 347 - - (2,021) 1,010 (664) (100,096) (100,760) Earmarked Reserves Transfers (to) or from Earmarked Reserves 7 (336) 336 ------Increase or (Decrease) in Year 11 336 - (2,021) 1,010 (664) (100,096) (100,760) Balance as at 31 March 2013 1,293 32,870 - - 12,402 46,565 175,564 222,129 Movement in Reserves during the year Surplus or (deficit) on provision of services CIES (35,417) - - - - (35,417) - (35,417) Other Comprehensive Income and Expenditure - Surplus or (deficit) on revaluation of non-current assets 37 ------15,283 15,283 Surplus or (deficit) on revaluation of financial assets 37 ------4,873 4,873 Actuarial gains or (losses) on pensions reserve 36 ------28,808 28,808 Total Comprehensive Income and Expenditure (35,417) - - - - (35,417) 48,964 13,547 Adjustments between accounting basis & funding basis under 6 40,062 - 588 - (2,248) 38,402 (38,402) - regulations Net Increase or (Decrease) before Transfers to 4,645 - 588 - (2,248) 2,985 10,562 13,547 Earmarked Reserves Transfers (to) or from Earmarked Reserves 7 (4,236) 4,236 ------Increase or (Decrease) in Year 409 4,236 588 - (2,248) 2,985 10,562 13,547 Balance as at 31 March 2014 1,702 37,106 588 - 10,154 49,550 186,126 235,676

Page 20 Comprehensive Income and Expenditure Statement as at 31 March 2014

2012/13 2013/14 Gross Gross Net Gross Gross Net Expenditure Income Expenditure Expenditure Income Expenditure £'000 £'000 £'000 Note(s) £'000 £'000 £'000 88,524 (78,411) 10,113 Central Services to the Public 76,608 (69,687) 6,921 25,001 (3,669) 21,332 Cultural and Related Services 16,662 (3,011) 13,651 20,351 (5,277) 15,074 Enviornment and Regulatory Services 20,108 (5,178) 14,930 6,350 (3,502) 2,848 Planning Services 7,988 (4,776) 3,212 215,403 (170,497) 44,906 Childrens and Education Services 195,517 (148,322) 47,195 20,810 (3,462) 17,348 Highways, Roads and Transport Services 19,138 (3,324) 15,814 10,348 (2,427) 7,921 Other Housing Services 8,667 (1,825) 6,842 83,933 (31,715) 52,218 Adult Social Care 85,844 (32,674) 53,170 - - - Public Health 7,895 (8,911) (1,016) 4,648 (45) 4,603 Corporate and Democratic Core 4,163 (911) 3,252 (168) - (168) Non-Distributed Cost (1,664) - (1,664) 475,200 (299,005) 176,195 Cost of Services 440,926 (278,619) 162,307 53,012 Other Operating Expenditure 9 25,824 Restated Financing & Investment Income 10 9,998 & Expenditure 11,612 (173,101) Taxation and Non-Specific Grant Income 11 (164,326) (Surplus) or Deficit on Provision of 66,104 35,417 Services (Surplus) or Deficit on revaluation of non- (1,117) 37 (15,283) current assets (Surplus) or Deficit on revaluation of - 37 (4,873) financial assets Restated Remeasurement of the net 35,773 36 (28,808) defined benefit liability Other Comprehensive Income and 34,656 (48,964) Expenditure Total Comprehensive Income and 100,760 (13,547) Expenditure

Page 21 Balance Sheet as at 31 March 2014

31st 31st March March 2013 2014 Notes £000 £000 Property, Plant & Equipment 22 424,084 423,860 Heritage Assets 23 13,652 14,227 Investment Property 24 37,328 33,845 Intangible Assets 25 1,581 948 Long Term Investments 38 1,038 17,290 Long Term Debtors 28 43,067 45,217 Long Term Assets 520,750 535,387 Assets Held for Sale 29 1,669 - Short Term Investments 2,174 115 Inventories 771 940 Short Term Debtors 30 39,440 29,958 Cash and Cash Equivalents 31 8,336 32,668 Current Assets 52,390 63,681 Cash and Cash Equivalents 31 (6,674) (3,559) Short Term Borrowing 38 (2,365) (12,336) Short Term Creditors 32 (28,349) (33,551) Provisions 33 (1,187) (3,049) Current Liabilities (38,575) (52,495) Long Term Creditors 32 (5,012) (4,714) Grants Receipts in Advance - Capital (326) (352) Grants Receipts in Advance - Revenue (13,361) (12,971) Provisions 33 (934) (1,235) Long Term Borrowing 38 (122,961) (142,220) Other Long Term Liabilities 36 (169,842) (149,405) Long Term Liabilities (312,436) (310,897) Net Assets 222,129 235,676

Usable Reserves 8 46,565 49,550 Unusable Reserves 37 175,564 186,126 Total Reserves 222,129 235,676

Page 22 Cash Flow Statement as at 31 March 2014

2012/13 2013/14 £'000 Note(s) £'000 66,104 Net (surplus) or deficit on the provision of services 35,417 Adjustments to net surplus or deficit on the provision of services (79,972) 40 (75,558) for non-cash movements Adjust for items included in the net surplus or deficit on the 33,689 40 22,962 provision of services that are investing or financing activities 19,821 Net Cash Flows from Operating Activities (17,179) (5,304) Investing Activities 41 18,871 (3,026) Financing Activities 42 (29,139) 11,491 Net (increase) or decrease in cash and cash equivalents (27,447) (13,153) Cash and cash equivalents at the beginning of the reporting period (1,662)

(1,662) Cash and cash equivalents at the end of the reporting period 31 (29,109)

Page 23 Notes to the Single Entity Financial Statements

1 Statement of Accounting Policies

There has been one change of note to existing accounting policies following adoption by the 2013/14 Code of changes to IAS 19 Employee Benefits. The amendments include new classes of components of defined benefit cost to be recognised in the financial statements. These are re-measurements of the net defined benefit liability/ (asset) and net interest on the net defined benefit liability/(asset). There has also been an amendment to the recognition criteria for past service cost and termination benefits.

The adoption of the changes to IAS 19 have not had a material impact on the accounts and does not require the publication of a third Balance Sheet at the beginning of the earliest comparative period. Disclosure to this effect is included in the Changes to Accounting Policies (Accounting Policy II). However re-statement of the 2012/13 figures is required. The Council’s actuary Hymans Robertson has provided revised figures to enable restatement of the 2012/13 comparatives.

There have also been amendments to IAS 1 Presentation of Financial Statement which have been adopted by the Code. The amendments require separate disclosure of gains and losses reclassifiable into the Surplus or Deficit on the Provision of Services if there are any. This is only expected to affect gains and losses on Available for Sale assets. The gain or loss on this reserve will be entirely insignificant therefore this change to IAS 1 does not currently affect this Council.

The accounting policy on acquisitions has been expanded to document the statutory transfer of Public Health responsibilities from 1 April 2013. The transfer will be accounted for as an acquisition in accordance with section 2.5.2.1 of the Code.

The following accounting policies have been deleted from the 2012/13 accounting policies. This is due to either they are deemed to be immaterial or no longer applicable to the accounts (e.g. Landfill Allowances Trading Scheme ended on 31 March 2013):

 Intangible Assets  Inventories and Long Term Contracts  Minimum Revenue Provision  Landfill Allowances Trading Scheme (LATS)  Foreign Currency Transactions  Carbon Reduction Commitment Scheme  Warrington Sports Holdings Limited

1.1 New Accounting Policies

There are no new accounting policies adopted by the 2013/14 Code affecting the Council however there has been the following changes:

Page 24  To aid users understanding, an accounting policy has been included to describe the way the Council accounts for its share of Council Tax and Business Rates.

 A new paragraph has been added to General Principles (section 1.1) to highlight that materiality has been used to determine appropriate disclosures to be made. Work is progressing to remove non-material notes from the 2013/14 Statement of Accounts. As a consequence of this a number of accounting policies are proposed for removal.

The full list of Accounting Policies can be found at Annexe A

2 Accounting Standards that have been issued but have not yet been adopted

Accounting Standards that have been issued before 1 January 2014 but not yet adopted by the Code. If these had been adopted for the financial year 2013/14 there would be no material changes as detailed below:

IFRS 10 – Consolidated Financial Statements - This standard introduces a new definition of control, which is used to determine which entities are consolidated for the purposes of group accounts. No changes to current consolidation of Warrington Borough Transport are expected.

IFRS 11 – Joint Arrangements - This standard addresses the accounting for a ‘joint arrangement’, which is defined as a contractual arrangement over which two or more parties have joint control. These are classified as either a joint venture or a joint operation. In addition proportionate consolidation can no longer be used for jointly controlled entities. The Council have one Joint venture in Wire Regeneration Limited but this is not expected to be material.

IFRS 12 – Disclosures of Interests in Other Entities - This is a consolidated disclosure standard requiring a range of disclosures about an entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated ‘structured entities’. Further disclosure is required for Wire Regeneration Limited but this will not be material.

IAS 27 – Separate Financial Statements & IAS 28 – Investments in Associates and Joint Ventures - These statements have been amended to conform with the changes in IFRS 10, IFRS 11 and IFRS 12. Given that there would be no changes in the financial statements, except for disclosure, due to the changes to IFRS 10, IFRS 11 and IFRS 12, there is therefore also no impact as a result of changes in IAS 27 and IAS 28.

IAS 32 – Financial Instrument Presentation - The Code references to amended application guidance when offsetting a financial asset and a financial liability. The gains and losses are separately identified on the Comprehensive Income and Expenditure Statement and therefore no further disclosure is required.

Page 25 IAS 1 - Presentation of the Financial Statements - The changes clarifies the disclosure requirements in respect of comparative information of the preceding period. The Statement of Accounts fully discloses comparative information for the preceding period therefore these changes will not have a material impact on the Statement of Accounts.

3 Critical Judgements in Applying Accounting Policies

In applying the accounting policies set out in Note 1, the Council has made certain judgements about complex transactions or those involving uncertainty about future events. The critical judgements made in the Statement of Accounts are:

Leases. Based on IAS17 (Leases) and IFRIC 4 (determining whether an arrangement contains a lease) the Council has determined the treatment of its leases into operating and finance leases. These judgements have been decided on the professional opinion of the Council’s Valuers and Accountants and are approved by the Fixed Assets Sub Group. The relevant accounting policy is applied based on the outcome of the assessment. Details of judgement applied to leases can be found in note 36 to the accounts.

Private Finance Initiative. The Council is deemed to control the services provided under the Private Finance Initiative (PFI) agreement for 105 social houses in Anson & Blenheim Close and 38 self-contained flats at John Morris House. The accounting policies for PFI schemes and similar contracts have been applied to the arrangement and are recognised as Property, Plant and Equipment on the Council’s Balance Sheet. This judgement was made by Finance staff and Valuers and independently assured by PricewaterhouseCoopers. PFI assets are valued at £7.208m and are recognised as Property, Plant and Equipment on the Council’s Balance Sheet. Further details of how this judgement has been applied can be found in note 34 to the accounts.

Investment properties have been estimated using the identifiable criteria under IAS40 of being held for rental income or for capital appreciation. These properties have been assessed using these criteria, which is subject to interpretation.

Group Accounts boundaries have been determined in accordance with the Code and the Group Accounts in Local Authorities: Practitioners’ Workbook. In line with the Code, Warrington Borough Transport, Wire Regeneration Limited, LiveWire and Culture Warrington have been found to be immaterial to the single entity financial statements and can be excluded from the Group Accounts. However, Warrington Borough Transport is a wholly owned subsidiary for which the Council is the sole shareholder and as such has been consolidated into the Group Accounts. The Council does not have an investment in either LiveWire or Culture Warrington and these have therefore been excluded from the Group Accounts.

Contingent Assets and Liabilities. In deciding whether the Council’s exposure to possible losses is to be accounted for as a provision or a contingent liability, a contingent liability decision tree has been used by the Council’s professional Finance and Legal staff.

Page 26 Warrington Sports Holdings. The Council has an investment of 22,222 shares valued at £1.65m representing at 15.66% shareholding in Warrington Sports Holding Ltd (WSHL). It has been determined that the Council does not have control of the company and it is not a subsidiary of the Council. As the fair value of the shares cannot be easily determined due the shares having no quoted market price in an active market, the fair value of the investment has been taken from the net asset value of WSHL, which is £9.7m, plus the greatest value of the tax loss of £914k which totals a valuation of around £10.6m. Warrington has 15.66% of the shares so the Council's share of the value of £10.6m is £1.650m (as detailed in a report and correspondence of Capita Treasury Services).

Grants. The Council exercises judgement to determine whether the conditions of grant and contribution monies received have been met before recognising them as income in the Comprehensive Income and Expenditure Statement. Where conditions require specified expenditure to have taken place, the grant monies will not be recognised until this happens. Equally, where conditions specify that a grant or contribution must be repaid in the event of non-expenditure, the income is not recognised until the expenditure is incurred.

Property Assets. The Council has determined that there have been no material changes in the value of the Council’s property assets from the current carrying values on the Balance Sheet at 31 March 2014 other than those identified in the revaluations that have taken place during the year based on professional research and publication of index of yields. When such a review for impairment is conducted, the recoverable amount is determined based on value in use calculations prepared on the basis of the Valuers assumptions and estimates in accordance with the RICS Valuation Standards “The Red Book”.

Valuations. All valuations are undertaken by qualified members of the RICS who are also RICS Registered Valuers.

Componentisation. In determining the significant components of Property, Plant and Equipment assets and their related useful lives for depreciation purposes the Componentisation Policy contained with the Accounting Policies section of the accounts has been used.

Future financial climate. There is a high degree of uncertainty about future levels of funding for Local Government. The Council has determined that this uncertainty is not yet sufficient to provide an indication that the assets of the Council might be impaired as a result of a need to close facilities and reduce levels of service provision.

Schools. The accounting treatment for schools non-current assets is currently open to interpretation. CIPFA/LASAAC consulted on a proposed accounting treatment, however found the results to be inconclusive and the current guidance is to refer back to LAAP 88. LAAP 88 refers to the Code's definition of an asset and this is where the treatment becomes open to interpretation.

.

Page 27 The Council has 42 Community Schools. In accordance with the 2013/14 Code's definition of an asset the Council has determined that it would receive future economic benefit from these assets and therefore they have been included in the Council's Balance Sheet as part of Property, Plant and Equipment.

The Council has 35 Voluntary Aided (VA) Schools. The Council has determined that it would not receive future economic benefits from these assets and therefore these assets are not included in the Council's Balance Sheet. The Council carries all Non Voluntary Aided High Schools as Property, Plant and Equipment on its Balance Sheet at 31 March 2014.

When a school that is held on the Council’s balance sheet transfers to Academy status the Council accounts for this as a disposal for nil consideration, on the date that the school converts to Academy status, rather than as an impairment on the date that approval to transfer to Academy status is announced.

Termination Benefits. Provisions on termination benefits are consistent with current communicated plans.

Local Authority Mortgage Scheme. The Council has recorded Local Authority Mortgage Scheme expenditure as capital expenditure in the accounts. This is in accordance with regulation 25 of the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003. Section (1) (c) of the regulation defines that “the giving of a loan, grant or other financial assistance to any person, whether for use by that person or by a third party, towards expenditure which would, if incurred by the Council, be capital expenditure shall be treated as being capital expenditure.”

Minimum Revenue Provision (MRP) is not charged against the Golden Square lease. A long term debtor has been created with repayments charged against the debtor. The repayments are charged over the 200 year period of the lease, with the largest repayments occurring in the latter years. MRP is also not charged against the Local Authority Mortgage Scheme cash backed deposit. The future debt liability will be met from the capital receipt which will be released after a 5 year period when the deposit matures. Any repossession losses against the scheme will be charged to the LAMS reserve. MRP is also not charged on loans to Registered Providers. The debt liability is met from the yearly capital receipt generated.

4 Assumptions made about the future and other major sources of estimation uncertainty

The Statement of Accounts contains estimated figures that are based on assumptions made by the Council about the future or that are otherwise uncertain. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates.

The items in the Council’s Balance Sheet at 31 March 2014 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows:

Page 28 Pensions Liability Estimation of the net liability to pay pensions depends on a number of complex judgements relating to the discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality rates and expected returns on pension fund assets. Hymans Robertson actuaries are contracted to provide the Council with the estimate of the net liability.

During 2013/14 the Council’s actuaries advised that the net pension liability had decreased by £20.437m as a result of updating of the assumptions.

The pension liability and reserve will vary should any of the assumptions prove inaccurate. The table below gives examples of the impact on the Council from changing assumptions.

Approximate % Approximate increase to monetary Change in assumptions at year ended Employer amount 31 March 2014: Liability (£'000) 0.5% decrease in Real Discount Rate 10% 65,563 1 year increase in member life expectancy 3% 19,307 0.5% increase in the Salary Increase Rate 3% 21,196 0.5% increase in the Pension Increase Rate 7% 43,595

Accruals and provisions The accounts of the Council are prepared on an accruals basis meaning that the sums due to or from the Council during the year are included in the accounts, whether or not the cash has actually been received or paid in the year in question. Accruals may be made on exact amounts where invoices, although not received in time to be processed in the correct year, are received in time to inform the amount provided for. Where it is known that amounts are due to or from the Council relating to the current year, but no exact information is available to inform this, an estimate of the amounts has to be made.

If the amount estimated is different to the eventual invoice amount, the value of debtor and creditor balances included in the Balance Sheet will not have been correct and there will be a knock on effect of under or over provision in the following year’s Comprehensive Income and Expenditure Statement as the balances are written out. Many of the Council’s accruals are based on invoiced amounts, but some are based on estimated data.

A liability that becomes apparent in the financial year as a result of a past event and it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation, results in a provision being made rather than an accrual. Provisions are different to accruals in that they are of uncertain timing or amount as to when they will be discharged, but a charge is still made to the Comprehensive Income and Expenditure Statement in the year. Depending on the certainty of the amount provided for, there is a risk that it may be insufficient and further amounts may need to be charged when the actual payment is made.

Page 29 Conversely, if the actual payment is less, the over provided amount is credited back to the Comprehensive Income and Expenditure Statement in the year the liability is discharged.

Details of the provisions, totalling £4.284m at 31 March 2014 are given in Note 33. The best estimate amounts provided for are based on the professional opinion of the officer best placed to make it.

If the outflow of resources is only possible rather than probable, then no estimated charge is made to the accounts until the circumstances change, only narrative disclosure is made in the Contingent Liabilities note.

Valuations and depreciation charges Professional opinions of the values of land and buildings are made by the Estates Service and estimates of the useful lives of property, plant and equipment are made by the relevant officers who have knowledge of such issues based on their professional judgement e.g. useful lives of properties are provided by in-house RICS qualified valuers. If the useful life of assets is reduced, depreciation increases and the carrying amount of the assets falls.

The present pressure on public sector expenditure could potentially have implications for the useful economic lives of the Council's property due to reduced spending on repairs leading to a decline in the condition of its buildings. There is no evidence that the estimated economic lives are being materially affected at this time, but this issue will be monitored.

The Council revalues its assets on a five year rolling cycle. It is possible that property values could fluctuate considerably within this five year timeframe.

These values and the useful economic lives impact on the depreciation, impairment and revaluation charges that are made to services for usage of the assets in question as well as the carrying value of the assets. Depreciation and impairment charges totalled £10.561m and net revaluation losses charged were £9.698m in 2013/14. These charges do not, however, impact on the General Fund Balance as they are reversed out under the statutory mitigation provisions.

Debt Impairment Allowance At 31 March 2014 the Council had a balance of debtors of £87.480m. A review of significant balances suggested that an impairment of doubtful debts of £12.984m was appropriate. Net debtors balance at 31 March 2014 was £74.496m as shown in notes 28 & 30. If collection rates were to deteriorate an increase in the amount of the impairment of the doubtful debts would be required.

Insurance Reserve The insurance reserve holds funding set aside to meet the cost of future potential insurance claims. The amount set aside is based on an annual independent review. However, an increase in the anticipated level of insurance claims could result in insufficient funds being set aside to meet the cost of claims.

Private Finance Initiative (PFI)

Page 30 The Council’s two PFI schemes have been considered to have an implied finance lease within the agreements. In reassessing the leases the Council has estimated the implied interest rate within the leases to calculate interest and principal payments. In addition the future RPI increase within the contracts has been estimated as remaining constant throughout the remaining period of the contract.

Warrington Sports Holdings Ltd The Council’s shareholding in Warrington Sports Holding Ltd remains at 15.66% as at 31 March 2014. A firm of financial experts and valuers were engaged by the Council to provide an independent valuation. The valuation provided is based on estimations and assumptions and therefore should the Council sell its shareholding the value held in these statements may not be realised. These shares are carried in the accounts at £1.65m at 31 March 2014.

Business Rates Since the introduction of Business Rates Retention Scheme effective from 1 April 2013, Local Authorities are liable for successful appeals against business rates charged to businesses in 2012/13 earlier financial years in their proportionate share. Therefore, a provision has been recognised for the best estimate of the amount that businesses have been overcharged up to 31 March 2014. The estimate has been calculated using the Valuation Office (VAO) ratings list of appeals and the analysis of successful appeals to date when providing the estimate of total provision up to and including 31 March 2014.

5 Events After the Balance Sheet Date

During the period after the presentation of the June accounts to Members to the final sign off for the September Governance meeting, three registered providers have drawn down £27m from the loan facilities previously approved as part of the Council’s Capital Programme.

6 Adjustments Between Accounting Basis and Funding Basis Under Regulations

This note details the adjustments that are made to the total comprehensive income and expenditure recognised by the Council in the year in accordance with proper accounting practice to the resources that are specified by statutory provisions as being available to the Council to meet future capital and revenue expenditure.

Page 31 Usable Reserves

General Capital Major Capital Movement Fund Receipts Repairs Grants in Unusable Balance Reserve Reserve Unapplied Reserves 2013/14 Note(s) £'000 £'000 £'000 £'000 £'000

Adjustments involving the Capital Adjustment Account Reversal of items debited or credited to the CIES Charges for depreciation and impairment of non-current assets22(10,561)---10,561 Revaluation loss on PPE 22(9,698)---9,698 Amortisation of intangible assets 25(748)---748 Movements in the market value of investment properties24(1,573)---1,573 Revenue expenditure funded from capital under statute27(4,926)---4,926 22,24 Carrying amount of non-current assets sold (29,444)---29,444 &29

Insertion of items not debited or credited to the CIES Statutory provision for the financing of capital investment 27 4,381 - - - (4,381)

Adjustments primarily involving the Capital Grants Unapplied Account Capital grants and contributions unapplied credited to the CIES 8 13,302 - - (13,302) - Application of grants to capital financing transferred to the 8 2,698 - - 15,550 (18,248) Capital Adjustment Account

Adjustments involving the Capital Receipts Reserve Use of the Capital Receipts Reserve to finance new capital 27 - 4,740 - - (4,740) expenditure Proceeds from sale of non-current assets 85,293(5,293)--- Transfer from Deferred Capital Receipts Reserve upon receipt 8 -(35)--35 of cash

Adjustments involving the Financial Instruments Adjustment Account Amounts by which finance costs charged to the CIES are different from finance costs chargeable in the year in accordance 37(93)---93 with statutory requirements

Adjustments involving the Pensions Reserve Reversal of items relating to retirment benefits debited or 36(23,745)---23,745 credited to the CIES Employer's pensions contributions and direct payments to 36 15,374 - - - (15,374) pensioners payable in the year

Adjustments involving the Collection Fund Adjustment Account Amount by which council tax income credited to the CIES is different from council tax income calculated for the year in 37(914)---914 accordance with statutory requirements

Adjustments involving the Unequal Pay Back Pay Adjustment Account Amount by which amounts charged for Equal Pay claims to the CIES are different from the cost of settlements chargeable in the 37 197 - - - (197) year in accordance with statutory requirements

Adjustments involving the Accumulating Compensated Absences Adjustment Account Adjustments in relation to short-term compensated absences 37 395 - - - (395) Total Adjustments (40,062) (588) - 2,248 38,402

Page 32

Usable Reserves Restated Restated General Capital Major Capital Movement Fund Receipts Repairs Grants in Unusable Balance Reserve Reserve Unapplied Reserves 2012/13 Note(s) £'000 £'000 £'000 £'000 £'000

Adjustments involving the Capital Adjustment Account Reversal of items debited or credited to the CIES Charges for depreciation and impairment of non-current assets22(12,271)---12,271 Revaluation loss on PPE 22(12,745)---12,745 Amortisation of intangible assets 25(723)---723 Movements in the market value of investment properties24(542)---542 Revenue expenditure funded from capital under statute27(5,889)---5,889 22,24 Carrying amount of non-current assets sold (54,439)---54,439 &29

Insertion of items not debited or credited to the CIES Statutory provision for the financing of capital investment 27 2,969 - - - (2,969)

Adjustments primarily involving the Capital Grants Unapplied Account Capital grants and contributions unapplied credited to the CIES 8 16,608 - - (16,608) - Application of grants to capital financing transferred to the 8 4,052 - - 17,619 (21,671) Capital Adjustment Account

Adjustments involving the Capital Receipts Reserve Use of the Capital Receipts Reserve to finance new capital 27 - 3,252 - - (3,252) expenditure Proceeds from sale of non-current assets 83,080(3,080)--- Transfer from Deferred Capital Receipts Reserve upon receipt 8 - (172) - - 172 of cash

Adjustments involving the Financial Instruments Adjustment Account Amounts by which finance costs charged to the CIES are different from finance costs chargeable in the year in accordance 37(63)---63 with statutory requirements

Adjustments involving the Pensions Reserve Restated Reversal of items relating to retirment benefits debited 36(21,647)---21,647 or credited to the CIES Employer's pensions contributions and direct payments to 36 15,076 - - - (15,076) pensioners payable in the year

Adjustments involving the Collection Fund Adjustment Account Amount by which council tax income credited to the CIES is different from council tax income calculated for the year in 37(31)---31 accordance with statutory requirements

Adjustments involving the Unequal Pay Back Pay Adjustment Account Amount by which amounts charged for Equal Pay claims to the CIES are different from the cost of settlements chargeable in the 37----- year in accordance with statutory requirements

Adjustments involving the Accumulating Compensated Absences Adjustment Account Adjustments in relation to short-term compensated absences 37 114 - - - (114) Total Adjustments (66,451) - 2,021 (1,010) 65,440

7 Transfers To/From Earmarked Reserves

This note sets out the amounts set aside from the General Fund balance in earmarked reserves to provide financing for future expenditure and the amounts posted back from earmarked reserves to meet General Fund expenditure in 2013/14.

Page 33 Balance at Balance at Balance at 31 March Transfers Transfers 31 March Transfers Transfers 31 March 2012 out 2012/13 in 2012/13 2013 out 2013/14 in 2013/14 2014 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Purpose of Reserve Schools School Balances 5,080 (5,080) 6,513 6,513 (6,513) 5,851 5,851 School Loans Scheme (109) - 89 (20) - 20 - Schools Re-organisation To contribute to the school deficit upon 2,350 (1,080) - 1,270 - 1,449 2,719 Contingency closure Total Schools Reserves 7,321 (6,160) 6,602 7,763 (6,513) 7,320 8,570

Council To fund future expenditure in Assistant Assistant Chief Executives 188 (188) 1,030 1,030 (1,030) 2,591 2,591 Chief Excuitves Ring fenced for use by the Culture Arpley Street 41(41)----- Warrington Ring fence of PFI credits to mitigate any Anson & Blenheim PFI 1 - - 1 - - 1 future liabilities To fund future expenditure in Children's Children's Services 2,709 (2,709) 2,622 2,622 (2,622) 2,929 2,929 Services Held on behalf of children in care and not Children's Comfort Funds 7 - - 7 - - 7 available to the Council Ring fenced for use by Culture Colonel Edleston61(61)----- Warrington Community Drug & Alcohol To fund the Council's drug and alcohol -----433433 Misuse Service misuse strategy Community Investment Fund - - 91 91 - - 91 To fund Community Investment Schemes To fund any one off costs of future Coroners Judicial Review 10 - - 10 - 43 53 judicial reviews Criminal Injuries To provide for any criminal injury claims 12 - - 12 - - 12 Compensation from children in care Early Years 254 - - 254 - - 254 To fund early years provision To fund future expenditure in Environment Services 315 (84) 314 545 (455) 130 220 Environment Services To fund FWB(Adults) with specific FWB Adults -----2020 criteria Future potential home to school Home to School Transport - - 44 44 - - 44 transport claims Homelessness 47 - 9 56 - - 56 Closing the Gap proposals Third party Insurance Claim excesses Insurance Fund 3,220 - 312 3,532 (446) - 3,086 and self insure certain areas of risk Joint Funding Liability - - - - - 314 314 To fund liability for s.117 clients LAMS - 130 130 - 138 268 Potential future LAMS defaults Statutory fund to ring-fence Local Land Charges 57 (64) 20 13 - 7 20 surpluses/deficits over three year cycle for fee setting purposes Money's collected on behalf of the Mayor's Charity 3 - - 3 - - 3 mayoral supported charities To fund International Partnerships Members Voluntary Initiative 8 - - 8 - - 8 initiative MMI - - 381 381 - - 381 To fund future potential MMI clawback To ensure th council's future financial MTFP 6,023 (884) 1,804 6,943 (3,913) 5,865 8,895 sustainability To fund future museum exhibitions or art Museum Arts 93 - - 93 (80) - 13 acquisitions Neighbourhood & Community To fund future Neighbourhood & 10 (10) 2,746 2,746 (2,746) 456 456 Services Community expenditure Future environmental improvement Paddington Meadows 18 - - 18 (18) - - works Prison Substance Misuse To fund the Council's prison substance -----9898 Service misuse strategy Public Health Grant - - - - - 789 789 To fund public health expenditure Revenue Grants carried forward for Revenue Grants Unapplied4,121(4,121)----- earmarked schemes Potential future liability on salary Salary Sacrifice Car Lease - - 23 23 - - 23 sacrifice car leasing scheme SALIX Revolving Fund 33 (28) - 5 (172) 251 84 Energy efficiency schemes To contribute to any refurbishment or Sinking Fund -----7373enhancements of Alder Lodge Homeless Unit.

Page 34 Balance at Balance at Balance at 31 March Transfers Transfers 31 March Transfers Transfers 31 March 2012 out 2012/13 in 2012/13 2013 out 2013/14 in 2013/14 2014 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Purpose of Reserve Solar Panels Lifecycle Fund - - 43 43 - 123 166 Future replacement cost on solar panels To cover emergency events such as Strategic Reserve 4,760 - - 4,760 - - 4,760 unforeseen financial liabilities or natural disasters Future grant reductions on welfare Supporting People 1,588 (2,144) 556 ---- services Ringfenced account with Taxi Account 44 - 17 61 - - 61 surpluses/losses earmarked for use in respect of this service Regeneration of Time Square area in Time Square 629 (394) - 235 - 19 254 accordance with the Bridge Street Quarter plan Town Centre Sinking Fund 390 - - 390 - - 390 Potential future Town Centre overspends Monies set aside to increase Union Learner Reps 20 (20) 19 19 (19) - - participation in union training services Future variations on unitary charge on Unitary Charge - - 326 326 - 186 512 PFI schemes Part fund costs borne by the creation of Unitary Development 15 - - 15 (15) - - the new Unitary Development Plan Walton Hall 50 (4) - 46 (41) - 5 Walton Hall refurbishment To contribute to any refurbishment or Winwick Road - - - - - 111 111 enhancements of Alder Lodge Homeless Unit. 30 and 36/8 Winwick Street demolition Winwick Street 30 - - 30 (30) - - costs Warrington and Halton Council's joint 2 Way YOT 456 - 57 513 (80) - 433 provision of Youth Offending services Warrington, Halton and Cheshire West 3 Way YOT - - 102 102 - 520 622 Council's joint provision for the provision of Youth Offending services Total Council Reserves 25,213 (10,752) 10,646 25,107 (11,667) 15,096 28,536 Total Earmarked Reserves 32,534 (16,912) 17,248 32,870 (18,180) 22,416 37,106 Net Transfer to/(from) 336 4,236 Reserves

8 Usable Reserves

Movements in the Council’s usable reserves are detailed in the Movement in Reserves Statement and Note 7.

31/03/13 31/03/14 Note(s) £'000 £'000 Held for Revenue Purposes General Fund MiRS 1,293 1,702 Earmarked Reserves 7 32,870 37,106 34,163 38,808 Held for Capital Purposes Capital Receipts Reserve MiRS - 588 Capital Grants Unapplied Reserve MiRS 12,402 10,154 Total Usable Reserves 46,565 49,550

Capital Receipts Reserve The Capital Receipts Reserve contains cash receipts from the sale of Council assets, which have not yet been used to finance capital expenditure.

Page 35 31/03/13 31/03/14 Note(s) £'000 £'000 Balance as at 1 April - - Tfr from Deferred Capital Receipts 6 172 35 Capital receipts from year 6 3,080 5,293 3,252 5,328 Less: Capital receipts used for financing 6 (3,252) (4,740) Balance as at 31 March - 588

Capital Grants Unapplied

31/03/13 31/03/14 Note(s) £'000 £'000 Balance as at 1 April 11,392 12,402 Grants received in year 6 22,681 13,302 Tfr to Capital Adjustment Account in year 6 (21,671) (15,550) Balance as at 31 March 12,402 10,154

The following three notes detail amounts that are included in the (Surplus) or Deficit on Provision of Services on the CIES but are not included in the Cost of Services as these relate to items of Council wide income and expenditure that cannot be allocated to a specific service line.

9 Other Operating Expenditure

2012/13 2013/14 £'000 £'000 1,541 Parish council precepts 1,557 51,359 Gains/losses on the disposal of non-current assets 24,151 112 Levies 116 53,012 25,824

Gains/losses on the disposal of non-current assets include the disposal of Academies totalling £20.036m (Note 12).

10 Financing and Investment Income and Expenditure

Restated 2012/13 2013/14 £'000 £'000 5,549 Interest payable and similar charges 5,299 6,117 Pensions interest cost and expected return on pension assets 7,618 (2,467) Interest receivable and similar income (3,125) Income and expenditure in relation to investment properties and 799 1,820 changes in their fair value 9,998 11,612

Page 36

11 Taxation and Non Specific Grant Incomes

2012/13 2013/14 £'000 £'000 (81,922) Council Tax Income (72,828) (52,888) NDR Redistribution (26,759) (19,409) Non-ringfenced government grants (49,299) (18,882) Capital grants (15,440) (173,101) (164,326)

12 Material Items of Income and Expense

In the year the Comprehensive Income and Expenditure Statement was charged with the following items of material (greater than £5m) expenditure. This is included within the land and buildings disposals figures on Note 22 PPE.

2013/14 £’000 Loss on disposal (conversion) of Academies: Birchwood Community High School 13,207 Penketh High School 6,829 20,036

13 Trading Operations

A trading operation is a Council service provided to the public, but is treated as a separate business activity. The performance of the trading operations is included in the CIES within the Cost of Services with the exception of Commercial Properties and Industrial Estates which are shown in Financing and Investment Income and Expenditure (see note 10).

Page 37 2012/13 2013/14 Income £'000 Expenditure £'000 (Surplus)/ Deficit £'000 Income £'000 Expenditure £'000 (Surplus)/ Deficit £'000 Commercial Properties and Industrial Estates The Council manages the land and buildings owned for the purposes of a property investment portfolio. The tenants are predominantly (2,874) 796 (2,078) local business. All work is undertaken by the Council to ensure (2,838) 1,355 (1,483) professional guidelines are met. The majority of lettings are at Market Value, with a limited number granting concessions to Charitable or Community Groups. Retail Market The Council owns and operates Warrington Market. This includes the management, letting, cleaning, maintenance, security of over 200 (1,131) 1,395 264 (1,185) 1,438 253 market stalls and additional store rooms. We provide enterprise opportunities to the Market Traders and support to enable them to run their businesses. Car Parks This is the day to day management of the Warrington Borough Council parking contract which includes the operational activity of the (854) 1,033 179 council owned 'off street' car parks and the issuance of penalty (905) 1,013 108 charge notices both on and off street. The activity is not carried out on a commercial basis as under the Traffic Management Act the service is expected to be cost neutral. School Meals The service provides school meals to school children at 70 primary, 2 special and 2 high schools and aims to deliver a quality value for (3,801) 3,576 (225) (3,681) 3,958 277 money service which meets legislative standards. There is a commercially driven approach to the service and any deficit would need to be recharged to the Dedicated Schools Grant. (8,660) 6,800 (1,860) Total (8,609) 7,764 (845)

14 Agency Services

The Council is the lead authority for the Cheshire Coroner’s service and recharges these services to Cheshire East, Cheshire West and Chester and Halton Borough Council.

2012/13 2013/14 £'000 £'000 Recharge to Cheshire West & Chester 431 466 Recharge to Cheshire East 475 513 Recharge to Halton 157 170 Cost of service to Warrington Borough Council 293 327 Total Cost of Coroner's Service 1,356 1,476

15 Members’ Allowances

During the year allowances paid to Members were £0.677m (£0.667m in 2012/13) and expenses paid were £0.100m (£0.104m in 2012/13).

16 Officers’ Remuneration

The remuneration paid to the Council’s senior employees is included in the table below. The list contains the Chief Executive, Executive Directors and officers at Assistant Director level and equivalent. Positions held by agency staff are not included within this disclosure as it relates to employees only.

Page 38 Compensation Total Salary, Fees Expenses Taxable Other Non- for Loss of Pension Remuneratio & Allowances Allowances Benefits cash Benefits Office Contribution n £ £ £ £ £ £ £ Steven Broomhead 2013/14 123,300 1,239 - - - - 124,539 Chief Executive (Start Date : 25/06/12) 2012/13 94,530 1,824 - - - - 96,354 Deputy Chief Executive 2013/14 110,713 1,239 - 4,812 - 22,891 139,655 2012/13 110,619 870 770 2,406 - 22,275 136,940 Executive Director 2013/14 117,617 644 1,948 408 - 24,313 144,929 Families & Wellbeing 2012/13 112,821 240 4,030 204 - 22,718 140,013 Executive Director 2013/14 113,025 1,239 - - - 23,283 137,547 Economic Regeneration, Growth & Environment 2012/13 113,025 2,123 - - - 22,718 137,866 Director of Finance & Information Services 2013/14 80,370 1,239 - 10,799 - 16,670 109,078 2012/13 84,462 1,239 - 2,876 - 17,179 105,756 Director of Public Health (start date 01-04-13) 2013/14 112,411 - - - - 15,738 128,148 2012/13 ------Solicitor to the Council 2013/14 87,390 1,239 - - - 17,992 106,620 2012/13 85,682 1,033 - - - 17,555 104,270 Assistant Director 2013/14 92,338 1,239 - - - 19,022 112,599 Targeted Services 2012/13 92,298 1,239 - - - 18,552 112,089 Assistant Director 2013/14 87,338 1,239 - - - 17,992 106,569 Business Planning & Resources 2012/13 87,338 1,239 - - - 17,555 106,132 Assistant Director 2013/14 86,230 1,239 - 1,108 - 17,992 106,569 Transportation, Engineering & Operations 2012/13 87,338 1,066 389 - - 17,555 106,348 Assistant Director 2013/14 88,116 530 488 2,222 - 18,152 109,508 Integrated Adult Health & SCC 2012/13 87,338 - 934 - - 17,555 105,827 Assistant Director 2013/14 93,355 496 1,237 2,636 - - 97,724 Adult & Social Care 2012/13 88,809 - 2,267 204 - - 91,280 Assistant Director 2013/14 84,769 1,239 - - - 17,462 103,470 Partnerships & Performance 2012/13 79,632 1,239 - - - 16,006 96,877 Assistant Director 2013/14 73,714 1,239 - - - - 74,953 Human Resources (Start Date: 21/01/13) 2012/13 14,114 243 - - - - 14,357 Managing Director Warrington & Co 2013/14 31,720 413 - 136 - 5,821 38,090 (start date 01-12-13) 2012/13 ------Assistant Director, Regulatory and Public 2013/14 21,828 - 506 - - 4,813 27,147 Protection (start date 01-12-13) 2012/13 ------Chief Executive 2013/14 ------(End Date: 10/07/12) 2012/13 45,310 848 - - - 8,578 54,736 Executive Director 2013/14 ------Neighbourhood & Community 2012/13 109,917 2,123 - 3,108 - 22,134 137,282 Assistant Director 2013/14 ------Neighbourhood & Cultural Services (End Date:?) 2012/13 13,055 160 - - - 2,265 15,480 Assistant Director 2013/14 ------Regeneration, Development & Housing 2012/13 83,859 - 1,714 3,120 - 17,556 106,249 Chief Customer Access & Technology Officer 2013/14 54,943 826 - 272 - 11,374 67,416 2012/13 74,758 1,239 - 204 - 15,067 91,268 Assistant Director 2013/14 20,746 293 - 102 - 4,248 25,388 Universal Services 2012/13 87,134 1,239 - 204 - 17,555 106,132 Assistant Director 2013/14 ------Organisational Change (End Date: 02/09/12) 2012/13 31,323 523 - 1,215 48,905 6,540 88,506 Head of Strategic Communications (End Date:?) 2013/14 ------2012/13 21,953 413 - - 16,378 4,172 42,916 Assistant Director 2013/14 ------HR Advisory Service (End Date: 20/07/12) 2012/13 23,211 122 512 360 - 4,196 28,401

 Note 1: The table above excludes amounts paid to the Chief Executive for Returning Officer duties. Also the Chief Executive is 0.8 full time equivalent.  Note 2: The remuneration for Assistant Director Integrated Adult Health & SCC is 50% funded by Warrington PCT.

The number of Council employees including teachers and senior employees receiving more than £50,000 remuneration for the year is included in the following table. The numbers included within this table differ from the first table as employer’s pension contributions are excluded.

Page 39 2012/13 2013/14 No. of Non- of No. school Employees of No. School Employees of No. Agency Staff of No. Total Staff Bandings Non- of No. school Employees of No. School Employees of No. Agency Staff of No. Total Staff 27 41 1 69 £50,000 to £54,999 19 40 - 59 836145 £55,000 to £59,999 18 24 1 43 12 17 1 30 £60,000 to £64,999 19 17 2 38 63-9 £65,000 to £69,999 25 - 7 36110 £70,000 to £74,999 25 1 8 14-5 £75,000 to £79,999 11 - 2 3--3 £80,000 to £84,999 -1 - 1 82-10 £85,001 to £89,999 4- - 4 3--3 £90,000 to £94,999 3- - 3 12-3 £95,000 to £99,999 11 - 2 1--1 £100,000 to £104,999 -1 - 1 ---- £105,000 to £109,999 -- - - 2--2 £110,000 to £114,999 2- - 2 4--4 £115,000 to £119,999 1- - 1 ---- £120,000 to £124,999 2- - 2 79 111 4 194 74 95 4 173

Page 40 Exit Packages 2013/14

No. of Compulsory No. of Other Departures Total No. of Exit Packages Total Cost of Exit Packages Redundancies Agreed

Exit Package Cost Band (including special

payments) Schools Non-Schools Total Schools Non-Schools Total Schools Non-Schools Total Schools £ Non-Schools £ Total £ £0 - £20,000 4 5 9 19 24 43 23 29 52 150,372 287,352 437,724 £20,001 - £40,000 - 3 3 111121141524,745 366,255 391,000 £40,001 - £60,000 - 1 1 -4 4-55 - 227,549 227,549 £60,001 - £80,000 - - - -3 3-33 - 197,497 197,497 £80,001 - £100,000 - - - -1 1-11 - 84,998 84,998 Total 4 9 13 20 43 63 24 52 76 175,117 1,163,650 1,338,767

Exit Packages 2012/13

No. of Compulsory No. of Other Departures Total No. of Exit Packages Total Cost of Exit Packages Redundancies Agreed

Exit Package Cost Band (including special

payments) Schools Non-Schools Total Schools Non-Schools Total Schools Non-Schools Total Schools £ Non-Schools £ Total £ £0 - £20,000 21 12 33 34447 24 56 80 169,074 543,155 712,230 £20,001 - £40,000 6 2 8 1282973037172,850 844,791 1,017,641 £40,001 - £60,000 2 1 3 -9 9 2 10 12 97,617 487,633 585,251 £60,001 - £80,000 - - - -3 3-33 - 188,351 188,351 £80,001 - £100,000 - - - -1 1-11 - 81,046 81,046 Total 29 15 44 4 85 89 33 100 133 439,542 2,144,976 2,584,518

Page 41

17 Termination Benefits

The Council terminated the contracts of 76 employees in 2013/14, incurring redundancy liabilities of £933,364 (2012/13 £2,541,140) and pension fund liabilities of £405,403 (2012/13 £700,815) as part of the Council’s budget savings. In addition to these costs the Council has created a provision of £1,708,679.25 for potential future payments for redundancy and pension costs (see note 33).

18 External Audit Costs

The fee payable to Grant Thornton with regard to external audit services carried out for the year was £168,480 (no change to 2012/13). The fee payable to Grant Thornton for the certification of grant claims and returns for the year was £12,300 (£29,700 in 2012/13).

19 Amounts Reported for Resource Allocation Decisions

The analysis of income and expenditure by service in the CIES is that specified by the Service Reporting Code of Practice. However, decisions about resource allocation are taken by the Council’s Executive Board on the basis of budget reports analysed across directorates. These reports are prepared on a different basis from the accounting policies used in the financial statements, including:

 the cost of retirement benefits is based on cash flows (payment of employer’s pensions contributions) rather than current service cost of benefits accrued in the year  no Income or Expenditure relating to Revenue Expenditure Funded From Capital Under Statute (REFCUS) is included, however this is included on the CIES  no charges relating to the IFRS Employee Accrual have been included in the budget reports, however these do appear on the CIES

The income and expenditure of the Council’s directorates recorded in the budget reports for the year was as follows. The Directorates are not completely comparable across the years as a result of some service moving across Directorates in the October 2013 restructure.

Page 42 Environment, Net Regeneration Families & Resources & Corporate Expenditure/ & Economy Wellbeing Commissioning Financing (Income) 2013/14 £'000 £'000 £'000 £'000 £'000 Income Fees, charges & other service income (15,852) (57,961) (9,130) (2,462) (85,405) Government Grants (47) (130,983) (2,224) (72,028) (205,282) Interest and Investment Income - - - (1,309) (1,309) Income in relation to Investment Properties (2,820) - - - (2,820) Internal Recharges (20,672) (109,784) (18,152) (5) (148,613) (39,391) (298,728) (29,506) (75,804) (443,429) Expenditure Employee expenses 20,307 136,391 19,697 2,382 178,777 Other Service Expenditure 21,584 145,114 3,292 83,424 253,414 Depreciation, amortisation and impairment 5,552 11,674 3,259 (14,215) 6,270 Interest Payable - - - 5,299 5,299 Expenditure in relation to Investment Properties 1,198 - - - 1,198 Internal Recharges 20,672 109,784 18,152 5 148,613 69,313 402,963 44,400 76,895 593,571 Net 29,922 104,235 14,894 1,091 150,142

Environment, Net Regeneration Families & Resources & Corporate Expenditure/ & Economy Wellbeing Commissioning Financing (Income) 2012/13 £'000 £'000 £'000 £'000 £'000 Income Fees, charges & other service income (5,427) (50,512) (19,259) (857) (76,055) Government Grants (46) (153,513) (1,705) (71,240) (226,504) Interest and Investment Income - - - (648) (648) Income in relation to Investment Properties (2,929) - - - (2,929) Internal Recharges (33,254) (130,479) (14,400) - (178,133) (41,656) (334,504) (35,364) (72,745) (484,269) Expenditure Employee expenses 20,232 158,856 21,090 3,828 204,006 Other Service Expenditure 24,640 129,316 17,432 77,547 248,935 Depreciation, amortisation and impairment 4,446 5,916 10,831 (21,346) (153) Interest Payable - - - 5,108 5,108 Expenditure in relation to Investment Properties 602 - - - 602 Internal Recharges 21,244 145,363 8,826 2,700 178,133 71,164 439,451 58,179 67,837 636,631 Net 29,508 104,947 22,815 (4,908) 152,362

Reconciliation of Directorate Income and Expenditure to Cost of Services in the Comprehensive Income and Expenditure Statement

The reconciliation shows how the figures in the analysis of directorate income and expenditure (which are produced for management information purposes) relate to the amounts included in the Comprehensive Income and Expenditure Statement.

2012/13 2013/14 £'000 £'000 Net Expenditure in the Directorate Analysis 152,362 150,142 Net expenditure of services and support services not included in the Directorate 4,117 4,540 Analysis Amounts included in the Directorate Analysis bu 19,716 7,625 Cost of Services (as per CIES) 176,195 162,307

Page 43

Reconciliation to Subjective Analysis

This reconciliation shows how the figures in the analysis of directorate income and expenditure (which are produced for management information purposes) relate to the subjective analysis of the Surplus or Deficit on the Provision of Services included in the Comprehensive Income and Expenditure Statement.

Amounts not Amounts reported to reported but management not included in Directorate for decision Cost of Allocation of Cost of Corporate Analysis making Services Recharges Services Amounts Total 2013/14 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Income Fees, charges & other service income (85,405) (747) 187 - (85,965) (20,733) (106,698) Government Grants (205,282) - - - (205,282) (76,058) (281,340) Interest and Investment Income (1,309) - 1,309 - - (3,125) (3,125) Income in relation to Investment Properties (2,820) - 2,820 - - (1,004) (1,004) Internal Recharges (148,613) - - 148,613 - - - Income from Council Tax - - - - - (72,828) (72,828) (443,429) (747) 4,316 148,613 (291,247) (173,748) (464,995) Expenditure Employee expenses 178,777 358 - - 179,135 - 179,135 Other Service Expenditure 253,414 4,929 (4,409) - 253,934 - 253,934 Depreciation, amortisation and impairment 6,270 - 14,215 - 20,485 5,293 25,778 Interest Payable 5,299 - (5,299) - - 5,299 5,299 Expenditure in relation to Investment Properties 1,198 - (1,198) - - 2,824 2,824 Internal Recharges 148,613 - - (148,613) - - - Parish Precepts - - - - - 1,557 1,557 Precepts & Levies - - - - - 116 116 (Gains)/losses on the disposal of non-current assets - - - - - 24,151 24,151 Pensions interest cost and expected return on pension -- --- 7,618 7,618 593,571 5,287 3,309 (148,613) 453,554 46,858 500,412 Net 150,142 4,540 7,625 - 162,307 (126,890) 35,417

Amounts not Amounts reported to reported but Surplus or management not included in Restated (Deficit) on Directorate for decision Cost of Allocation of Cost of Corporate Provision of Analysis making Services recharges Services Amounts Services 2012/13 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Income Fees, charges and other service income (76,055) (682) - - (76,737) - (76,737) Government grants (226,504) (1,087) - - (227,591) (91,179) (318,770) Interest and investment income (648) - 648 - - (2,467) (2,467) Income in relation to investment properties (2,929) - 4,184 - 1,255 (2,493) (1,238) Internal recharges (178,133) - - 178,133 - - - Income from Council Tax - - - - - (81,922) (81,922) (484,269) (1,769) 4,832 178,133 (303,073) (178,061) (481,134) Expenditure Employee Expenses 204,006 340 - - 204,346 - 204,346 Other service expenditure 248,935 5,546 (3,308) - 251,173 - 251,173 Depreciation, amortisation and impairment (153) - 25,738 - 25,585 - 25,585 Interest payable 5,108 - (5,108) - - 5,549 5,549 Expenditure in relation to investment properties 602 - (2,438) - (1,836) 3,292 1,456 Internal recharges 178,133 - - (178,133) - - - Parish Precepts - - - - - 1,541 1,541 Precepts & levies - - - - - 112 112 Gain/ loss on disposal of non-current assets - - - - - 51,359 51,359 Restated Pension interest cost and return on assets - - - - - 6,117 6,117 636,631 5,886 14,884 (178,133) 479,268 67,970 547,238 Net Expenditure 152,362 4,117 19,716 - 176,195 (110,091) 66,104

20 Dedicated Schools Grant

The Council’s expenditure on schools and education is funded primarily by the Dedicated Schools Grant (DSG). An element of DSG is provided to fund academy schools within the Borough. DSG is ring-fenced and can only be applied to meet

Page 44 expenditure properly included in the Schools Budget, as defined in the School Finance (England) Regulations 2011. The Schools Budget includes elements for a range of educational services provided on authority-wide basis and for the Individual Schools Budget, which is divided into a budget share for each maintained school.

Details of the deployment of DSG receivable for 2013/14 are as follows:

Individual Central Schools Funding Expenditure Budget Issue Total Total £'000 £'000 £'000 £'000 Final DSG for 2013/14 before academy recoupment 146,400 Academies figure recouped for 2013/14 (30,472) Total DSG after academy recoupment for 2013/14 115,928 Plus: Brought forward from 2012/13 1,951 Less: Carry forward to 2014/15 Agreed initial budgeted distribution in 2013/14 14,332 110,402 124,735 In-year adjustments 1,855 (8,711) (6,856) Final budget distribution for 2013/14 16,187 101,691 117,879 117,879 Less: Actual Central Expenditure (14,746) (14,746) Less: Actual Individual Schools Budget deployed to schools (101,691) (101,691) Carry forward to 2014/15 1,441 - 1,441 -

21 Grant Income

The Council credited the following grants, contributions and donations to the Comprehensive Income and Expenditure Statement in 2013/14

The grants that are credited to Taxation and non-Specific Grant Income are shown in the following table. The revenue grants shown are the non-ringfenced Grants that, once combined with the Council Tax Income, form the Council’s Net Budget for the year.

2012/13 2013/14 Credited to Taxation and Non-specific Grant Income £'000 £'000 Revenue National Non Domestic Rates Redistribution 52,888 - Business Rates Retention Scheme Income - 27,412 Revenue Support Grant 1,025 41,140 Education Services Grant - 3,298 Early Intervention Grant 8,694 - New Homes Bonus 1,560 2,814 Council Tax Freeze Grant 2,004 - Learning Disability and Health Reform 4,912 - Other Grants credited to Taxation & Non Specific Grant Income 1,215 2,047 Total Revenue Grants 72,298 76,711 Capital Grants and Contributions 18,882 15,440 Total 91,180 92,151

In 2013/14, NNDR Redistribution was replaced by the Business Rates Retention Scheme allowing Councils to keep a portion of their Business Rates, whereas

Page 45 previously this was all reallocated from a national pool. The increase in the Revenue Support Grant (RSG) in 2013/14 has occurred due to a change in the underlying distribution model and is linked to the changes in Business Rates distribution. The grants and contributions shown below are specific to certain services and are therefore included on specific income lines in the Cost of Services.

2012/13 2013/14 Credited to Services £'000 £'000 Grants Dedicated Schools Grant 136,358 115,928 Rent Allowance Subsidy 55,062 55,962 Public Health Grant - 10,052 Council Tax Benefit 13,449 - Pupil Premium 3,285 4,195 Support for Social Care - 2,948 Admin Subsidy 1,374 1,308 Schools Sixth Form 4,942 1,255 Capital Grant Income to fund Revenue Expenditure 1,087 675 Other Grants 6,845 7,121 Total Grants 222,402 199,444

Contributions High Costs Care Packages Contributions 2,782 2,503 NHS England partner contributions - 1,236 Other Contributions 5,826 9,107 Total Contibutions 8,608 12,845 Total 231,010 212,289

The following grants have yet to be recognised as income in the CIES as they have grant conditions which have not yet been met and will be repayable if not used for the specified purpose.

2012/13 2013/14 Grants Receipts in Advance (Short and Long-term) £'000 £'000 Capital Grants 934 278

Revenue Grants Commuted Sums 8,724 8,283 S106 Agreements 4,638 4,669 Dedicated Schools Grant 1,713 1,441 Misc. Revenue Grants 932 222 Total Revenue Grants 16,007 14,615 Total 16,941 14,893

Page 46 22 Property, Plant and Equipment (PPE)

Movements on Balances

Movements in 2013/14: Vehicles, PFI Assets Council Land & Infrastructure Plant & Community Assets Under Surplus included in Dwellings Buildings Assets Equipment Assets Construction Assets Total PPE PPE £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Cost or Valuation Balance as at 1 April 2013 7,686 279,338 128,711 39,340 10,741 4,079 4,858 474,753 10,904 Additions (Note 36) - 2,908 7,390 3,653 442 16,682 3 31,078 Accumulated depreciation & impairment (2,828) (28,852) - - - - (78) (31,758) (5,950) written out to GCA Revaluation increases/(decreases) 2,135 12,040 - - - 176 378 14,729 2,807 recognised in the Revaluation Reserve Revaluation increases/(decreases) recognised in the Surplus/Deficit on the - (9,231) - - - (476) (14) (9,721) Provision of Services Derecognition - disposals (553) (24,770) - (1,778) - (134) - (27,235) (553) Reclassifcations & transfers - 3,464 761 5,369 - (9,965) 371 - Reclassified (to)/from Investment Properties - (1,232) - - - - - (1,232) Balance as at 31 March 2014 6,440 233,665 136,862 46,584 11,183 10,362 5,518 450,614 7,208

Depreciation and Impairment Balance as at 1 April 2013 2,797 30,209 11,221 6,346 6 - 90 50,669 5,899 Depreciation charge 31 4,052 3,150 3,204 - - 124 10,561 51 Accumulated depreciation written out to GCA (2,828) (28,852) - - - - (78) (31,758) (5,950) Depreciation - disposals - (2,354) - (336) - - - (2,690) Reclassifcations & transfers - (22) - - - - 22 -- Reclassified (to)/from Investment Properties -(28)-----(28) Balance as at 31 March 2014 - 3,005 14,371 9,214 6 - 158 26,754 -

Net Book Value Balance as at 31 March 2014 6,440 230,660 122,491 37,370 11,177 10,362 5,360 423,860 7,208 Balance as at 31 March 2013 4,889 249,129 117,490 32,994 10,735 4,079 4,768 424,084 5,005

PFI Assets are those relating to Private Finance Initiatives. The derecognition – disposals total includes schools that have transferred to Academies of £20.036m (Note 12).

Page 47 Comparative Movements in 2012/13:

Vehicles, PFI Assets Council Land & Infrastructure Plant & Community Assets Under Surplus included in Dwellings Buildings Assets Equipment Assets Construction Assets Total PPE PPE £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Cost or Valuation Balance as at 1 April 2012 7,832 320,270 122,590 43,341 10,434 26,137 - 530,604 10,904 Additions (Note 36) - 6,303 6,121 3,618 194 11,478 - 27,714 - Accumulated depreciation & impairment written out to - (4,422) - - - - (763) (5,185) - GCA Revaluation increases/(decreases) recognised in the - 647 - - - - 78 725 - Revaluation Reserve Revaluation increases/(decreases) recognised in the - (12,745) - - - - - (12,745) Surplus/Deficit on the Provision of Services Derecognition - disposals (146) (52,794) - (13,297) - - - (66,237) - Reclassifcations & transfers - 22,569 - 5,678 113 (33,536) 5,176 -- Reclassified (to)/from Investment Properties - (490) - - - - 367 (123) - Balance as at 31 March 2013 7,686 279,338 128,711 39,340 10,741 4,079 4,858 474,753 10,904

Depreciation and Impairment Balance as at 1 April 2012 2,766 40,385 8,056 5,107 - - - 56,314 5,860 Depreciation charge 31 5,158 3,165 3,917 - - - 12,271 39 Accumulated depreciation written out to GCA - (4,422) - - - - (763) (5,185) - Depreciation - disposals - (10,048) - (2,588) - - - (12,636) - Reclassifcations & transfers - (769) - (90) 6 - 853 -- Reclassified (to)/from Investment Properties -(95)- - - - -(95) - Balance as at 31 March 2013 2,797 30,209 11,221 6,346 6 - 90 50,669 5,899

Net Book Value Balance as at 31 March 2013 4,889 249,129 117,490 32,994 10,735 4,079 4,768 424,084 5,005 Balance as at 31 March 2012 5,066 279,885 114,534 38,234 10,434 26,137 - 474,290 5,044

Financed by Owned - 222,298 122,491 37,200 11,177 10,362 5,360 408,888 PFI 6,440 7,208 - - - - - 13,648 Lease -1,154- 170- - -1,324 Total 6,440 230,660 122,491 37,370 11,177 10,362 5,360 423,860

Page 48 Depreciation Depreciation is provided for on all Property, Plant and Equipment (PPE) assets by the allocating their depreciable amounts over their useful lives, however some exceptions apply. See Accounting Policy 1.22 in Annexe A. Depreciation is calculated on the following basis:

 Dwellings & other buildings and plant & services components from other buildings – straight line allocation over 5 to 60 years, dependant on the initial value of the asset  vehicles, plant, furniture and equipment – straight line allocation over 3 to 10 years, dependant on the initial value of the asset  infrastructure – straight line allocation over 40 years

Capital Commitments

The total capital commitments (excluding Invest to Save) as at 31 March 2014 were £10.228m. This includes the following major projects:

 SEN Review (relocation of Fox Wood and Green Lane) - £3.798m  Additional Highways Structural Maintenance - £1.038m

Similar commitments at 31 March 2013 were £8.138m relating to the Woolston Primary School Replacement and Bewsey Lodge Primary School Remodelling.

Revaluations

The Council carries out a rolling programme of revaluations in accordance with Accounting Policy 1.22 (Annexe A). The valuations were undertaken by the Estates Division of the Council in accordance with the Statements of Asset Valuation Practice and Guidance Notes of the Royal Institute of Chartered Surveyors. All assets were valued as at 31 March 2014.

Vehicles, Council Land & Infrastructure Plant & Community Assets Under Surplus Total Dwellings Buildings Assets Equipment Assets Construction Assets PPE £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Carried at historic cost - - 136,862 5,635 11,177 10,362 - 164,036 Valued at fair value as at: 31 March 2014 6,440 227,933 - 36,762 - 5,157 276,292 31 March 2013 - 189 - - - - - 189 31 March 2012 - 995 - 2,909 - - - 3,904 31 March 2011 - 1,233 - 815 - - 312 2,360 31 March 2010 - 3,316 - 463 6 - 49 3,834 Total Cost or Valuation 6,440 233,666 136,862 46,584 11,183 10,362 5,518 450,615

23 Heritage Assets

Reconciliation of the Carrying Value of Heritage Assets Held by the Council

The Council’s Heritage Assets held on the Balance Sheet at insurance valuation constitute:

 Museum Exhibits and Artworks  Civic Regalia  Ornamental Gates

Page 49  Statues and Town Centre Artwork

Insurance valuations increase annually by the increase in the rebuild annual index for estate items in the absence of any other relevant indices.

Statues & Museum Town Exhibits & Civic Ornamental Centre Artworks Regalia Gates Artwork Total Assets £'000 £'000 £'000 £'000 £'000 Cost or Valuation Balance as at 31 March 2012 8,052 255 2,211 2,742 13,260 Revaluations 293157113392 Balance as at 31 March 2013 8,345 270 2,282 2,755 13,652 Revaluations 364 - 53 158 575 Balance as at 31 March 2014 8,709 270 2,335 2,913 14,227

Additions, Disposals and Donations of Heritage Assets

There were no additions or disposals of Heritage Assets during 2013/14 or 2012/13 and there have been no movements in acquisitions, donations or disposals over the past five years.

24 Investment Properties

The following items of income and expenditure have been accounted for in the Financing and Investment Income line of the Comprehensive Income and Expenditure Statement

2012/13 2013/14 £'000 £'000 Rental income from investment property (4,312) (1,004) Net gains/(losses) from fair value adjustments 542 1,573 Direct operating expenses arising from investment property 2,315 1,251 Net (gain)/loss (1,455) 1,819

There are no restrictions on the Council’s ability to realise the value inherent in its investment property or the Council’s right to the remittance of income and the proceeds of disposal. The Council has no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance or enhancement of these assets.

The following table summarises the movement in the fair value of investment properties over the year:

Page 50 2012/13 2013/14 £'000 £'000 Balance as at the start of the year 38,439 37,328 Disposals (688) (3,230) Net gains/(losses) from fair value adjustments (542) (1,573) Additions - 116 Transfers (to)/ from Assets Held for Sale 91 - Transfers (to)/ from Property, Plant and Equipment 28 1,204 Balance as at end of the year 37,328 33,845

25 Intangible Assets

The Council accounts for its software as intangible assets. The intangible assets include both purchased licences and internally generated software.

All software is given a finite useful life, based on the period of its expected use. The useful lives assigned are 5 years straight line. The carrying amount of intangible assets is amortised on a straight line basis and absorbed as overhead across all the service headings in the Net Expenditure of Services.

The movement on Intangible Asset balances during the year is as follows:

2012/13 2013/14 £'000 £'000 Balance at the start of the year Gross carrying amount 3,632 3,755 Accumulated amortisation (1,451) (2,174) Net carrying amount at start of the year 2,181 1,581

Additions 123 115 Amortisation (723) (748)

Balance at the end of the year Gross carrying amount 3,755 3,870 Accumulated amortisation (2,174) (2,922) Net carrying amount at end of the year 1,581 948

26 Impairment Losses & Reversals

There were no impairments in financial year 2013/14.

27 Capital Expenditure and Capital Financing

Total capital expenditure incurred in the year is shown in the table below (including the value of assets acquired under finance leases and Public Finance Initiative (PFI) contracts), together with the relevant financing. Where capital expenditure is to be financed in future years by charges to revenue as assets are used by the Council, the expenditure results in an increase in the Capital Financing Requirement (CFR), a

Page 51 measure of the capital expenditure incurred historically by the Council that has yet to be financed.

2012/13 2013/14 Note(s) £'000 £'000 Opening Capital Financing Requirement 155,874 168,896

Capital Investment Property, Plant and Equipment 22 27,714 31,078 Investment Properties 24 - 116 Intangible Assets 25 123 115 Revenue Expenditure Funded by Capital Under Statute 5,889 4,926 Long Term Debtor - Warrington Housing Association 3,806 - Long Term Debtor - Golden Gates Housing 1,742 - Long Term Debtor - Local Authority Mortgage Schemes 1,500 2,000 Long Term Debtor - Warrington Borough Transport - 650 40,774 38,885

Sources of Finance Capital Receipts 8 (3,252) (4,740) Deferred Capital Receipts 139 - Government Grants & Other Contirbutions (20,082) (16,745) Payments Received for: Long Term Debtor - Warrington Housing Association - (96) Long Term Debtor - Golden Gates Housing - (41) Long Term Debtor - Warrington Borough Transport - (260) Sums set aisde from Revenue: General Fund (49) (252) Developers Contribution (S106) (1,539) (1,252) Minimum Revenue Provision (2,969) (4,381) (27,752) (27,767) Closing Capital Financing Requirment 168,896 180,014 Explanations of movements in year Increase in underlying need for borrowing 13,022 11,118

28 Long Term Debtors

The Council’s long term debtors (over 12 months) are as follows:

Page 52 31/03/13 31/03/14 £'000 £'000 Long-term Debtors Other entities and individuals - Staff Car Loans 21 3 - Deferred Car Charges 1,975 1,930 - Finance Leases (Where Council is Lessor) 32,022 31,983 - Local Authority Mortgage Schemes 3,500 5,500 - Warrington Housing Association 3,807 3,710 - Warrington Borough Transport - 390 - Golden Gates Housing 1,742 1,701 Total Long-term Debtors 43,067 45,217

29 Assets Held for Sale

Where the Council expects to sell assets within twelve months of the balance sheet date and is actively marketing their sale they are shown under Assets Held for Sale which is classified as a current asset.

As the true value of these assets to the Council will now be their disposal value they are held at Market Value less any costs of disposal rather than a value based on their continuing use by the Council.

2012/13 2013/14 Note(s) £'000 £'000 Balance Outstanding at Start of Year 1,909 1,669 Assets declassified as Held for Sale Tfr to Investment Properties 24 (91) -

Assets Sold (149) (1,669) Balance Outstanding at End of Year 1,669 -

30 Debtors

The Council’s short term debtors (under 12 months) are as follows:

31/03/13 31/03/14 £'000 £'000 Short-term Debtors Central Government Bodies 18,679 11,346 Other Local Authorities 2,663 2,038 NHS Bodies 1,943 881 Public Corporations and Trading Funds 2 242 Other Entities and Individuals 16,153 15,451 Total Short-term Debtors 39,440 29,958

Page 53 31 Cash and Cash Equivalents

The balance of Cash and Cash Equivalents is made up of the following elements:

31/03/13 31/03/14 £'000 £'000 Cash on hand and balances with banks 3,370 (968) Short-term Deposits 4,966 33,636 Total Cash and Cash Equivalents 8,336 32,668 Cash Overdrawn (6,674) (3,559) Net Cash and Cash Equivalents 1,662 29,109

32 Creditors

The Council’s creditors are as follows:

31/03/13 31/03/14 £'000 £'000 Short-term Creditors Central Government Bodies 4,467 6,972 Other Local Authorities 2,632 4,745 NHS Bodies 184 21 Public Corporations and Trading Funds 21 2 Other Entities and Individuals 21,045 21,811 Total Short-term Creditors 28,349 33,551 Long-term Creditors Other Entities and Individuals 5,012 4,714 Total Creditors 33,361 38,265

33 Provisions

Injury and Damage Compensation Other Claims Provisions Total £'000 £'000 £'000 Balance at 31 March 2012 1,287 1,889 3,176 Additional provisions made in year 2,716 61 2,777 Amounts used in year (2,292) - (2,292) Unused amounts reversed in year (828) (712) (1,540) Balance at 31 March 2013 883 1,238 2,121 Additional provisions made in year 316 2,659 2,975 Amounts used in year (12) (603) (615) Unused amounts reversed in year - (197) (197) Balance at 31 March 2014 1,187 3,097 4,284

Page 54

31/03/13 31/03/14 £'000 £'000 Short-term Provisions 1,187 3,049 Long-term Provisions 934 1,235 Total Provisions 2,121 4,284

The provision for Injury and Damage Compensation Claims was established to meet excesses insurance claims taken out with third party organisations and to self-insure and for certain areas of risk.

Other provisions relate to:

 Staff provisions for potential future payments for redundancy.  The Carbon Reduction Commitment (CRC) provision for future obligation to purchase and surrender CRC Allowances in relation to carbon dioxide emissions.  MMI provision for future obligation to pay insurance payment clawback arising from Municipal Mutual Insurance (MMI) Scheme of Arrangement. This is a long term provision.  NDR Appeals Provision - As from 1st April 2013 the Council has taken over the liability generated by any appeals against the valuation amount with regard to Business Rates. This provision is based on the Council’s best estimate of that liability.

34 Private Finance Initiatives

The Council has two PFI Schemes, both of which were in the 7th year of a 30 year contract in 2013/14. The Anson Close and Blenheim Close scheme is for the construction, maintenance and tenancy management of 105 social houses and the John Morris House scheme is for the construction, maintenance and tenancy management of 38 self-contained flats for social housing. This scheme focused on providing supported housing for 16 to 25 year olds with short to medium term housing needs.

The Council has nomination rights over all the social dwelling on both schemes and at the end of the term, has the following options:

 Purchase the dwellings at their open market value at existing use for social housing purposes (both schemes)  Retender the provision of the services (Anson Close and Blenheim Close)  Do neither of the above and walk away (Anson Close and Blenheim Close)  Return the dwellings to the Operator (John Morris House)

In return for these combined construction and operations contract, the Council will make quarterly unitary charge payments to the Operator. The payments may vary according to the quality/performance of the service and availability of dwellings, but in

Page 55 substance, it is not expected there would be any significant unavailability of the dwellings. This means that the Council is in substance committed to a fixed payment stream independent of the demand for the assets. The payments are not subject to any indexation. The Operator is also able to charge rents to the tenants. These are set in accordance with the Warrington Area Target Registered Providers rent.

Property, Plant and Equipment The assets used to provide services at both schemes are recognised on the Council’s Balance Sheet and movements in their value over the year are detailed in the analysis of the movement on the PPE balance in Note 22.

Payments Payments remaining to be made under the PFI contract at 31 March 2014 (excluding any estimation of inflation and availability/performance deductions) are as follows:

Anson & Blenheim Close

Reimbursement Total at Payment for of Capital Total at 31/03/2013 Services Expenditure Interest 31/03/2014 £'000 £'000 £'000 £'000 £'000 305 Payable in 2014/15 39 41 225 305 1,218 Payable within 2 to 5 years 159 202 857 1,218 1,523 Payable within 6 to 10 years 204 367 952 1,523 1,523 Payable within 11 to 15 years 211 557 755 1,523 1,522 Payable within 16 to 20 years 220 848 454 1,522 989 Payable within 21 to 25 years 84 532 68 684 - Payable within 26 to 30 years - - - - 7,080 917 2,547 3,311 6,775

John Morris House

Reimbursement Total at Payment for of Capital Total at 31/03/2013 Services Expenditure Interest 31/03/2014 £'000 £'000 £'000 £'000 £'000 187 Payable in 2014/15 34 43 110 187 750 Payable within 2 to 5 years 140 198 412 750 937 Payable within 6 to 10 years 179 313 445 937 937 Payable within 11 to 15 years 184 407 346 937 937 Payable within 16 to 20 years 191 530 216 937 843 Payable within 21 to 25 years 178 463 54 695 39 Payable within 26 to 30 years - - - - 4,630 906 1,954 1,583 4,443

The payments made to the Operator have been calculated to compensate the Operator for the fair value of the services they provide, the capital expenditure incurred and interest payable whilst the capital expenditure remains to be reimbursed. The liability outstanding to pay to the Operator for capital expenditure incurred is as follows:

Page 56 Anson & Blenheim Close

2012/13 2013/14 £'000 £'000 Balance outstanding at start of year (2,620) (2,585) Payments during the year 35 38 Balance outstanding at end of year (2,585) (2,547)

John Morris House

2012/13 2013/14 £'000 £'000 Balance outstanding at start of year (2,034) (1,995) Payments during the year 39 41 Balance outstanding at end of year (1,995) (1,954)

35 Leases

Council as Lessee

Finance Leases The Council has acquired various land and buildings under finance leases. The Council is committed to making minimum payments under these leases comprising settlement of the long-term liability for the interest in the property acquired by the Council and the finance costs that will be payable by the Council in future years while the liability remains outstanding. The minimum lease payments are made up of the following amounts:

31 March 2013 31 March 2014 £'000 £'000 Finance lease liabilities (net present value of minimum lease payments): Current 125 125 Non-current 904 778 Finance costs payable in future years 7,933 7,837 Minimum lease payments 8,962 8,740

The minimum lease payments will be payable over the following periods:

Minimum Lease Payments Finance Lease Liabilities 31 March 2013 31 March 2014 31 March 2013 31 March 2014 £'000 £'000 £'000 £'000 Not later than one year 222 222 125 125 Later than one year and not later than five years 599 474 213 88 Later than five years 8,141 8,045 690 690 8,962 8,740 1,029 904

Page 57 The minimum lease payments do not include rents that are contingent on events taking place after the lease was entered into, such as adjustments following rent reviews. In 2013/14 £102,975 contingent rents were payable by the Council (2012/13 £102,975).

The Council has sub-let some of the retail accommodation held under these finance leases. The above disclosure shows the net result of the lessee and lessor finance leases in relation to this accommodation. The Council currently incurs a rental charge of £201k and receives rental income of £22k in relation to these properties.

The council also sub-let other property resulting in total sub-lease rental income of £372k (2012/13 £430k).

Operating Leases The Council has acquired numerous vehicles, plant and equipment and land and buildings by entering into operating leases, with a range of typical lives. The future minimum lease payments due under non-cancellable leases in future years are:

Restated 2012/13 2013/14 £'000 £'000 Leases rolling over regularly 751 822 Not later than one year 2,132 1,462 Later than one year and not later than five years 5,349 4,468 Later than five years 8,356 7,200 16,588 13,952

The expenditure charged to each directorate line in the Comprehensive Income and Expenditure Statement during the year in relation to these leases was:

Economic Resources and Families and Regeneration, Families and Strategic Wellbeing: Growth & Wellbeing: Commission Children Environment Adults Total 2013/14 £'000 £'000 £'000 £'000 £'000 Minimum lease payments 8 664 1,891 71 2,633 Sublease payments receivable - - (14) - (14) 8 664 1,877 71 2,619

Economic Resources and Families and Regeneration, Families and Strategic Wellbeing: Growth & Wellbeing: Commission Children Environment Adults Total 2012/13 £'000 £'000 £'000 £'000 £'000 Minimum lease payments 26 837 1,995 237 3,095 Sublease payments receivable - - (14) - (14) 26 837 1,981 237 3,081

Council as Lessor

Finance Leases The Council has leased out land and buildings at various locations on finance leases with remaining terms of 5 to 191 years.

Page 58 Included within these leases is a material lease relating to Golden Square Shopping Centre Development. As at 31 March 2014, the total outstanding receivable amount remaining on this lease was £30.615m, repayable over a 191 year period. The Council has a gross investment in the lease, made up of the minimum lease payments expected to be received over the remaining term, and the residual value anticipated for the property when the lease comes to an end. The minimum lease payments comprise settlement of the long-term debtor for the interest in the property acquired by the lessee and finance income that will be earned by the Council in future years whilst the debtor remains outstanding. The gross investment is made up of the following amounts:

31 March 2013 31 March 2014 £'000 £'000 Finance lease debtors (net present value of minimum lease payments): Current 35 39 Non-current 32,022 31,983 Unearned finance income 300,713 298,896 Gross investment in the lease 332,770 330,918

The unearned finance income relates to future income due from tenants over the term of the leases. The longest of these leases will be running for the next 191 years.

The gross investment in the lease and minimum lease payments will be received over the following periods:

Gross investment in the lease Minimum Lease Payments 31 March 2013 31 March 2014 31 March 2013 31 March 2014 £'000 £'000 £'000 £'000 Not later than one year 1,851 1,851 1,851 1,851 Later than one year and not later than five years 7,355 7,302 7,355 7,302 Later than five years 323,564 321,766 323,564 321,766 332,770 330,918 332,770 330,918

As there is a possibility that worsening financial circumstances might result in lease payments not being made, the Council has set aside an allowance for uncollectable amounts as part of its sundry debtor impairment which includes rental income debtors raised by the Estates Department. The level of debtor impairment required is reviewed on an annual basis and is based on average actual collection rates.

The minimum lease payments do not include rents that are contingent on events taking place after the lease was entered into, such as adjustments following rent reviews. In 2013/14 £52,125 contingent rents were receivable by the Council (2012/13 £52,125).

Operating Leases The Council leases out land and buildings under operating leases. The future minimum lease payments receivable under non-cancellable leases in future years are:

Page 59 2012/13 2013/14 £'000 £'000 Leases rolling over regularly 1,017 1,332 Not later than one year 2,540 3,075 Later than one year and not later than five years 8,122 8,463 Later than five years 75,197 77,173 86,876 90,043

The minimum lease payments receivable include rents that were contingent on events taking place after the lease was entered into up until 31 March 2014, such as adjustments following rent reviews. The minimum lease payments do not include future contingent rents such as adjustments following rent reviews from 1 April 2014 onwards.

The authority leases out both land and property under operating leases. The value of these assets are included within Land & Buildings (Note 22) and Investment Properties (Note 24), and is presented below:

31/03/13 31/03/14 NBV NBV £'000 £'000 Investment Property 6,123 5,375 Land & Buildings 26,186 29,514 32,309 34,888

36 Pension Schemes

Defined Contribution Pension Schemes

Teachers Pensions Schemes Accounted for as Defined Contribution Schemes

Teachers employed by the Council are members of the Teachers’ Pension Scheme administered by the Department for Education. The Scheme provides teachers with specified benefits upon their retirement, and the Council contributes towards the costs by making contributions based on a percentage of members’ pensionable salaries.

The Scheme is technically a defined benefit scheme. However, the scheme is unfunded and the Department for Education uses a notional fund as the basis for calculating the employers’ contribution rate paid by Local Authorities. The Council is not able to identify its share of the underlying financial position and performance of the Scheme with sufficient reliability for accounting purposes. For the purposes of this Statement of Accounts, it is therefore accounted for on the same basis as a defined contribution scheme.

In 2013/14, the Council paid £6,384,901 to Teachers’ Pensions in respect of teachers’ retirement benefits, representing 14.1% of pensionable pay. The figures for 2012/13 were £8,287,988 and 14.1%. There were no contributions remaining payable at the year end. Six primary schools presently use external payroll providers and for these the schools have verified the amounts paid.

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The Council is responsible for the costs of any additional benefits awarded upon early retirement outside of the terms of the teacher’s scheme.

NHS Pensions Schemes Accounted for as Defined Contribution Schemes

Public Health professionals employed by the Council are members of the NHS Pension Scheme administered by the Department of Health. The Scheme provides lifestyle professionals with specified benefits upon their retirement, and the Council contributes towards the costs by making contributions based on a percentage of members’ pensionable salaries.

The Scheme is technically a defined benefit scheme. However, the scheme is unfunded and the Department of Health uses a notional fund as the basis for calculating the employers’ contribution rate paid by Local Authorities. The Council is not able to identify its share of the underlying financial position and performance of the Scheme with sufficient reliability for accounting purposes. For the purposes of this Statement of Accounts, it is therefore accounted for on the same basis as a defined contribution scheme.

In 2013/14, the Council paid £107,922 to NHS Pensions in respect of Public Health professionals’ retirement benefits, representing 14% of pensionable pay (£26,092 and 14% in 2012/13). There were no contributions remaining payable at the year end.

Page 61 Defined Benefit Pension Schemes

Participation in Pension Schemes

As part of the terms and conditions of employment of its officers, the Council makes contributions towards the cost of post employment benefits. Although these benefits will not actually be payable until employees retire, the Council has a commitment to make the payments that needs to be disclosed at the time that employees earn their future entitlement.

The Council participates in two post employment schemes:

 The Local Government Pension Scheme, administered locally by Cheshire Pension Fund by Cheshire West and Chester Council. This is a funded defined benefit final salary scheme, meaning that the Council and employees pay contributions into a fund, calculated at a level intended to balance the pension liabilities with investment assets.  Arrangements for the award of discretionary post retirement benefits upon early retirement – this is an unfunded defined benefit arrangement, under which liabilities are recognised when awards are made. However, there are no investment assets built up to meet these pension liabilities, and cash has to be generated to meet actual pensions payments as they eventually fall due.

Transactions Relating to Post-employment Benefits The cost of retirement benefits is recognised in the reported cost of services when they are earned by employees, rather than when the benefits are eventually paid as pensions. However, the charge required to be made against council tax is based on the cash payable in the year, so the real cost of post employment/retirement benefits is reversed out of the General Fund via the Movement in Reserves Statement. The following transactions have been made in the Comprehensive Income and Expenditure Statement and the General Fund Balance via the Movement in Reserves Statement during the year.

Page 62 2012/13 2013/14 £'000 £'000 Comprehensive Income and Expenditure Statement Cost of Services: Service cost comprising Current service cost 14,117 17,791 Past service costs (including curtailments) 1,384 348 (Gains) and losses on settlements (1,552) (2,012) Effects of business combinations and disposals 1,581 -

Financing and Investment Income and Expenditure Net interest expense 6,117 7,618 Total post-employment benefit charged to the 21,647 23,745 Surplus or Deficit on the Provision of Services

Other Post-employment Benefit Charged to the Comprehensive Income and Expenditure Statement Remeasurement of the net defined benefit liability comprising: Return on plan assets (excluding the amount (35,654) 1,215 included in the net interest expense) Actuarial gains and losses arising on the changes in - (13,034) demographic assumptions Actuarial gains and losses arising on the changes in (810) 17,274 other experience Actuarial gains and losses arising on changes in 72,237 (34,263) financial assumptions

Total post-employment benefit charged to the 57,420 (5,063) Comprehensive Income and Expenditure Statement

Movement in Reserves Statement Reversal of net charges made to the Surplus or Deficit on the Provision of Services for post- 6,571 8,371 employment benefits in accordance with the Code

Actual amount charged against the General Fund balance for pensions in the year Employers' contribution payable to the scheme (15,076) (15,374)

Page 63 Pension Assets and Liabilities Recognised in the Balance Sheet 2012/13 2013/14 £'000 £'000 Present value of the defined benefit obligation (644,874) (643,561) Fair value of plan assets 475,032 494,156 Sub-total (169,842) (149,405)

The liabilities show the underlying commitments that the Council has in the long run to pay post employment (retirement) benefits. The total liability of £149,405k has a substantial impact on the net worth of the Council as recorded in the Balance Sheet. However, statutory arrangements for funding the deficit mean that the financial position of the Council remains healthy:

 the deficit on the Local Government scheme will be made good by increased contributions over the remaining working life of employees (i.e. before payments fall due), as assessed by the scheme actuary  finance is only required to be raised to cover discretionary benefits when the pensions are actually paid

The total contributions expected to be made to the Local Government Pension Scheme in the year to 31 March 2015 is £15,260k.

Assets and Liabilities in Relation to Post-Employment Benefits Reconciliation of present value of the scheme liabilities (defined benefit obligation):

2012/13 2013/14 £'000 £'000 Opening balance as at 1 April 539,463 644,874 Current service cost 14,117 17,791 Interest cost 25,916 28,930 Contributions by scheme participants 4,633 4,595 Remeasurement gains and (losses): Actuarial gains and losses arising on the changes in - (13,034) demographic assumptions Actuarial gains and losses arising on changes in financial 72,237 (34,263) assumptions Other (810) 17,274 Past service costs (including curtailments) 1,384 348 Liabilities assumed on entity combinations 11,633 - Benefits paid (16,991) (19,290) Liabilities extinguished on settlements (6,708) (3,664) Closing balance as at 31 March 644,874 643,561

Reconciliation of fair value of the scheme (plan) assets:

Page 64 2012/13 2013/14 £'000 £'000 Opening fair value of scheme assets 411,965 475,032 Interest income 19,799 21,312 Remeasurement gain/(loss): The return on plan assets, excluding the amount included 35,654 (1,215) in the net interest expense Other - The effect of changes in foreign exchange rates - - Contributions from employers 15,076 15,374 Contributions from employees into the scheme 4,633 4,595 Benefits paid (16,991) (19,290) Other 4,896 (1,652) Closing fair value of scheme assets 475,032 494,156

Basis for Estimating Assets and Liabilities Liabilities have been assessed on an actuarial basis using the projected unit credit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels etc. Both the Local Government Pension Scheme and Discretionary Benefits liabilities have been assessed by Hymans Robertson LLP an independent firm of actuaries, estimates for the Council Fund being based on the latest full valuation of the scheme as a 31 March 2010.

The principal assumptions used by the actuary have been:

Page 65 2012/13 2013/14 Long-term expected rate of return on assets in the scheme: Equity investments 4.5% 4.3% Bonds 4.5% 4.3% Property 4.5% 4.3% Cash 4.5% 4.3%

Mortality assumptions Longevity at 65 for current pensioners: Men 22.9 years 22.3 years Women 25.7 years 24.4 years

Longevity at 65 for future pensioners: Men 24.9 years 24.1 years Women 27.7 years 26.7 years

Inflation/pension increase rate 2.8% 2.8% Salary increase rate 5.1% 3.6% Rate of increase in pensions 4.5% 4.3% Rate for discounting scheme liabilities 4.5% 4.3%

Take-up option to convert annual pension into retirement lump sum: Service to April 2008 50.0% 50.0% Service post April 2008 75.0% 75.0%

The Discretionary Benefit arrangements have no assets to cover its liabilities. The Local Government Pension Scheme’s assets consist of the following categories, by proportion of the total assets held:

Page 66 Period Ended 31 March 2014 Quoted prices Quoted prices in active not in active Percentage markets markets Total of Total Asset Category £'000 £'000 £'000 Assets Equity Securities: Consumer 65,032 - 65,032 13% Manufacturing 22,573 - 22,573 5% Energy and Utilities 13,539 - 13,539 3% Financial Institutions 24,748 - 24,748 5% Health and Care 6,019 - 6,019 1% Information Technology 19,303 - 19,303 4% Other 15,267 - 15,267 3% Debt Securities: Other - 29,443 29,443 6% Private Equity: All - 26,868 26,868 5% Real Estate: Uk Property - 31,179 31,179 6% Overseas Property - 1,703 1,703 1% Investment Funds and Unit Trusts: Equities 80,897 - 80,897 16% Bonds 86,272 - 86,272 17% Hedge Funds - 69,359 69,359 14% Cash and Cash Equivalents: All - 1,954 1,954 1% Totals 333,650 160,506 494,156 100%

Period Ended 31 March 2013 Quoted prices Quoted prices in active not in active Percentage markets markets Total of Total Asset Category £'000 £'000 £'000 Assets Equity Securities: Consumer 60,049 - 60,049 13% Manufacturing 24,350 - 24,350 5% Energy and Utilities 10,711 - 10,711 2% Financial Institutions 18,666 - 18,666 4% Health and Care 6,240 - 6,240 1% Information Technology 15,712 - 15,712 3% Other 15,755 - 15,755 3% Debt Securities: Other - 27,364 27,364 6% Private Equity: All - 30,114 30,114 6% Real Estate: Uk Property - 27,679 27,679 6% Overseas Property - 1,913 1,913 1% Investment Funds and Unit Trusts: Equities 100,501 - 100,501 21% Bonds 66,106 - 66,106 14% Hedge Funds - 67,730 67,730 14% Cash and Cash Equivalents: All - 2,142 2,142 1% Totals 318,090 156,942 475,032 100%

Page 67 37 Unusable Reserves

31/03/2013 31/03/2014 £000 £000 Capital Adjustment Account 221,887 196,418 Revaluation Reserve 96,579 107,750 Financial Instruments Adjustment Account (141) (234) Available-for-Sale Reserve - 4,873 Pensions Reserve (169,842) (149,405) Deferred Capital Receipts Reserve (England and Wales) 32,057 32,022 Collection Fund Adjustment Account 133 (781) Unequal Pay Back Pay Account (197) - Accumulating Compensated Absences Adjustment Account (4,912) (4,517) Total Unusable Reserves 175,564 186,126

Capital Adjustment Account The Capital Adjustment Account absorbs the timing differences arising from the different arrangements for accounting for the consumption of non-current assets and for financing the acquisition, construction or enhancement of those assets under statutory provisions. The Account is debited with the cost of acquisition, construction or enhancement as depreciation, impairment losses and amortisations are charged to the Comprehensive Income and Expenditure Statement (with reconciling postings from the Revaluation Reserve to convert fair value figures to a historical cost basis). The Account is credited with the amounts set aside by the Council as finance for the costs of acquisition, construction and enhancement.

The Account also contains accumulated gains and losses on Investment Properties and gains recognised on donated assets that have yet to be consumed by the Council.

Page 68 Restated 31/03/13 31/03/14 Note(s) £'000 £'000 Balance as at 1 April 263,860 221,887

Reversal of items relating to capital expenditure debited or credited to the Comprehensive Income and Expenditure Statement: Depreciation and impairment of non-current assets 22 (12,271) (10,561) Revaluation loss on PPE 22 (12,745) (9,698) Amortisation of intangible assets 25 (723) (748) Revenue expenditure funded from capital under statute 27 (5,889) (4,926) Carrying amount of non-current assets sold (38,739) (26,203) (70,367) (52,136) Adjusting amounts written out of the Revaluation Reserve 1,172 871 Net written out of the cost of non-current assets (69,195) (51,265) consumed in year

Capital financing applied in year: Restated Use of the Capital Receipts Reserve 8 3,113 4,740 Application of grants from the Capital Grants 6 21,671 18,248 Unapplied Account Statutory provision for the financing of capital investment 2,969 4,381 27,753 27,369 Movements in the market value of Investment Properties 24 (531) (1,573) Balance as at 31 March 221,887 196,418

The account also contains revaluation gains accumulated on Property, Plant and Equipment before 1 April 2007, the date that the Revaluation Reserve was created to hold such gains.

Note 6 provides details of the source of all the transactions posted to the Account, apart from those involving the Revaluation Reserve.

Revaluation Reserve The Revaluation Reserve contains the gains made by the Council arising from increases in the value of its PPE. The balance is reduced when assets with accumulated gains are:

 revalued downwards or impaired and the gains are lost  used in the provision of services and the gains are consumed through depreciation, or  disposed of and the gains are realised.

The reserve contains only revaluation gains accumulated since 1 April 2007, the date that the reserve was created. Accumulated gains arising before that date are consolidated into the balance on the Capital Adjustment Account.

Page 69 31/03/13 31/03/14 £'000 £'000 Balance as at 1 April 112,345 96,579 Upward revaluation of assets 1,117 15,283 Surplus or deficit on revaluation of non-current assets not posted to the Surplus on the Provision 1,117 15,283 of Services Disposal of non-curent assets (15,711) (3,241) Difference between fair value depreciation and (1,172) (871) hsitorical cost depreciation Balance as at 31 March 96,579 107,750

Financial Instruments Adjustment Account The Financial Instruments Adjustment Account absorbs the timing differences arising from the different arrangements for accounting for income and expenses relating to certain financial instruments and for bearing losses or benefitting from gains per statutory provisions. Warrington Borough Council uses the Account to manage amounts that are charged to the Comprehensive Income and Expenditure Account, but reversed out of the General Fund Balance to the Account in the Movement in reserves Statement. Over time the income or expense is posted back to the General Fund Balance in accordance with statutory arrangements. This account includes amounts relating to a discount on the early redemption of loans and interest adjustments relating to two step loans, and two soft loans.

31/03/13 31/03/14 £'000 £'000 Balance as at 1 April (78) (141) Amount by which finance costs to the CIES are different from finance costs chargeable in the year in accordance (63) (93) with statutory requirements Balance as at 31 March (141) (234)

Available-for-Sale Financial Instrument Reserve The Available-for-Sale Financial Instruments Reserve contains the gains made by the Authority arising from the increases in the value of its investments that have quoted market prices or otherwise do not have fixed or determinable payments. The balance is reduced when investments with accumulated gains are: -  Revalued downwards or impaired and the gains are lost;  Disposed of and the gains are realised.

31/03/13 31/03/14 £'000 £'000 Balance at 1 April - - Surplus or deficit on revaluation of financial assets not -4,873 posted to the Surplus on the Provision of Services Balance as at 31 March - 4,873

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Deferred Capital Receipts Reserve The Deferred Capital Receipts Reserve holds the gains recognised on the disposal of non-current assets but for which cash settlement has yet to take place. Under statutory arrangements, the Council does not treat these gains as usable for financing new capital expenditure until they are backed by cash receipts. When the deferred cash settlement eventually takes place, amounts are transferred to the Capital Receipts Reserve.

Restated 31/03/13 31/03/14 £'000 £'000 Balance as at 1 April 32,090 32,057 Restated Tfr to Capital Receipts Reserve (33) (35) Balance as at 31 March 32,057 32,022

Collection Fund Adjustment Account The Collection Fund Adjustment Account manages the differences arising from the recognition of council tax income in the Comprehensive Income and Expenditure Statement as it falls due from council tax payers compared with the statutory arrangements for paying across amount to the General Fund from the Collection Fund.

31/03/13 31/03/14 £'000 £'000 Balance as at 1 April 164 133 Amount by which council tax income to the Comprehensive Income and Expenditure Statement is (31) (914) different from council tax income calculated for the year in accordance with statutory requirements Balance as at 31 March 133 (781)

Unequal Pay Back Account The Unequal Pay Back Account compensates for the differences between the rate at which the Council provides for the potential costs of back pay settlements in relation to Equal Pay cases and the ability to understand statutory provisions to defer the impact on the General Fund Balance until such time as cash might be paid out to claimants.

31/03/13 31/03/14 £'000 £'000 Balance as at 1 April (197) (197) Amount by which amounts charged for Equal Pay claims to the Comprehensive Income and Expenditure Statement are different from the cost of settlements -197 chargeable in the year in accordance with statutory requirements Balance as at 31 March (197) -

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Accumulated Absences Account The Accumulated Absences Account absorbs the differences that would otherwise arise on the General Fund Balance from accruing for compensated absences earned but not taken in the year, e.g. annual leave entitlement carried forward at 31 March. Statutory arrangements require that the impact on the General Fund Balance is neutralised by transfers to or from the Account.

31/03/13 31/03/14 £'000 £'000 Balance as at 1 April (5,026) (4,912) Settlement or cancellation of accrual made at the end of 5,026 4,912 the preceding year Amounts accrued at the end of the current year (4,912) (4,517) Balance as at 31 March (4,912) (4,517)

Pensions Reserve The Pensions Reserve absorbs the timing differences arising from the different arrangements for accounting for post-employment benefits and for funding benefits in accordance with statutory provisions. The Council accounts for post-employment benefits in the Comprehensive Income and Expenditure Statement as the benefits are earned by employees accruing years of service, updating the liabilities recognised to reflect inflation, changing assumptions and investment returns on any resources set aside to meet the costs. However, statutory arrangements require benefits earned to be financed as the Council makes employer’s contributions to pension funds or eventually pay any pensions for which it is directly responsible. The debit balance on the Pensions Reserve therefore shows a substantial shortfall in the benefits earned by past and current employees and the resources the Council has set aside to meet them. The statutory arrangements will ensure that funding will have been set aside by the time the benefits come to be paid.

31/03/13 31/03/14 £'000 £'000 Balance as at 1 April (127,498) (169,842) Actuarial gains or losses on pensions assets and (38,666) 28,808 liabilities Reversal of items relating to retirement benefits debited or credited to the Surplus or Deficit on the Provision of (3,678) (8,371) Services in the Comprehensive Income and Expenditure Statement Balance as at 31 March (169,842) (149,405)

38 Financial Instruments, Risk and Collateral

Categories of Financial Instruments The Council’s financial instruments include financial assets (cash and cash equivalents and loans and receivables) and financial liabilities (trade payables arising from day-to-day operations and borrowings). The main purposes of the Council’s financial instruments are to raise finance to support the Council’s day-to-day operations

Page 72 (by investing surplus cash balances where appropriate) and finance investment undertaken through the capital programme.

The following categories of financial instrument are carried in the Balance Sheet:

Long-term Short-term 31/03/2013 31/03/2014 31/03/2013 31/03/2014 £'000 £'000 £'000 £'000 Investments Loans & receivables - - 3,841 29,224 Available for sale financial assets - 14,752 - - Unquoted equity investment at cost 150 2,538 - - Total Investments 150 17,290 3,841 29,224 Debtors Loans & receivables 41,092 43,287 - - Financial assets carried at contract amoun - - 15,396 10,971 Total Debtors 41,092 43,287 15,396 10,971 Borrowings Financial liabilities at amortised cost 118,460 137,803 2,286 12,252 Total Borrowings 118,460 137,803 2,286 12,252 Other Long Term Liabilities PFI & finance lease liabilities 9,513 9,131 204 209 Total Other Long Term Liabilities 9,513 9,131 204 209 Creditors Financial liabilities carried at contract cost - - 16,540 14,377 Total Creditors - - 16,540 14,377

The following gives an analysis of borrowing by type of debt.

Long-term Short-term 31/03/2013 31/03/2014 31/03/2013 31/03/2014 £'000 £'000 £'000 £'000 Public Works Loan Board 8,530 8,131 305 400 Money Market Loans 109,273 129,260 - 5,000 Other Temporary Loans 657 412 1,981 6,853 118,460 137,803 2,286 12,253

Long Term Equity Investments The Council has an investment of 22,222 shares valued at £1.65m representing at 15.66% shareholding in Warrington Sports Holding Ltd (WSHL). It has been determined that the Council does not have control of the company and it is not a subsidiary of the Council. As the fair value of the shares cannot be easily determined due the shares having no quoted market price in an active market, the fair value of the investment has been taken from the net asset value of WSHL, which is £9.7m, plus the greatest value of the tax loss of £914k which totals a valuation of around £10.6m. Warrington have 15.66% of the shares so the Council's share of the value of £10.6m is £1.650m (as detailed in a report and correspondence of Capita Treasury Services).

Reclassifications In 2013/14 the Council has not made any reclassifications.

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Income, Expense, Gains and Losses The gains and losses recognised in the Comprehensive Income and Expenditure Statement in relation to financial instruments are made up as follows.

Liabilities Liabilities measured at measured at amortised Loans and Available-for- amortised Loans and Available-for- cost receivables sale assets 2012/13 cost receivables sale assets 2013/14 £'000 £'000 £'000 £000 £'000 £'000 £'000 £000 Interest expense (5,549) - - (5,549) (5,299)--(5,299) Impairment losses - (693) - (693) - (2,512) - (2,512) Total expense in Surplus or Deficit on the Provision of (5,549) (693) - (6,242) (5,299) (2,512) - (7,811) Services Interest income - 2,467 - 2,467 -3,125- 3,125 Total income in Surplus or Deficit on the Provision of - 2,467 - 2,467 - 3,125 - 3,125 Services Net gain/(loss) for the year (5,549) 1,774 - (3,775) (5,299) 613 - (4,686)

Fair Values of Assets and Liabilities

Financial liabilities, financial assets represented by loans and receivables and long- term debtors and creditors are carried in the Balance Sheet at amortised cost. Their fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the following assumptions:

 estimated ranges of rates at 31 March 2014 of 1.44% to 4.29% for loans from the PWLB and 4.44% and 4.82% for other loans receivable and payable, based on new lending rates for equivalent loans at that date  no early repayment or impairment is recognised  where an instrument will mature in the next 12 months, carrying amount is assumed to approximate to fair value  the fair value of trade and other receivables is taken to be the invoiced or billed amount

The fair values calculated are as follows:

31/03/2013 31/03/2014 Carrying Carrying Amount Fair Value Amount Fair Value £'000 £'000 £'000 £'000 Long-term Financial liabilities 127,973 128,183 146,934 163,691 Short-term Financial liabilities 2,490 1,852 12,462 1,680 Long-term creditors - - - - Short-term creditors 16,540 16,540 14,377 14,377

The fair value of the liabilities is higher than the carrying amount because the Council’s portfolio of loans includes a number of fixed rate loans where the interest rate payable is higher than the prevailing rates at the Balance Sheet date. This shows a notional future loss (based on economic conditions at 31 March 2014).

Page 74 31/03/2013 31/03/2014 Carrying Carrying Amount Fair Value Amount Fair Value £'000 £'000 £'000 £'000 Long-term financial assets 150 150 16,402 16,402 Short-term financial assets 3,841 4,028 29,224 29,224 Long-term debtors 41,092 41,092 43,287 43,287 Short-term debtors 15,396 15,396 10,971 10,971

The fair value of the assets has been accounted for as the valuation of the Council’s portfolio of investments.

Short term debtors and creditors are carried at cost as this is a fair approximation of their value.

Nature and Extent of Risks Arising from Financial Instruments

The Council’s activities expose it to a variety of financial risks:

 credit risk – the possibility that other parties might fail to pay amounts due to the Council  liquidity risk – the possibility that the Council might not have funds available to meet its commitments to make payments  market risk – the possibility that financial loss might arise for the Council as a result of changes in measures such as interest rates and stock market movements

Overall procedures for managing risk The Council has adopted the CIPFA Code of Practice for Treasury Management in Public Services. It maintains and operates a Treasury Management Policy comprising an overview of the principles and practices to which the activity will comply. Alongside this Policy, the Department for Communities and Local Government has issued guidance under section 15(1) (a) of the Local Government Act 2003, to which local authorities must have regard. Annually the Council approves a Treasury Management Strategy for the forthcoming year. A yearly outturn report is also reported to Full Council. The Council’s Audit and Corporate Governance Committee is also charged with the Governance of treasury management and receive quarterly update reports on its activities.

The annual Treasury Management Strategy for 2013/14 which incorporates the prudential indicators (treasury management governing indicators) was approved by Council on 4 March 2013.

The key issues within the strategy were:

 the Authorised Limit for 2013/14 was set at £720.8m. This is the maximum limit of external borrowings or other long term liabilities  the Operational Boundary was set at £665.3m. This is the expected level of debt and other long term liabilities during the year

Page 75  the maximum amounts of fixed and variable interest rate exposure were set at 100% and 40%  The use of investments to fund the capital programme, thus reducing borrowing costs

The Council operated within its 2013/14 Treasury Management Strategy during 2013/14 and a full 2013/14 Treasury Management Outturn Report will be reported to full Council in September 2014.

All Treasury Management Policies and strategies are implemented by the Council’s Treasury Management Team. The Council maintains written principles for overall operation of Treasury Management (Treasury Management Practices Statement TMPS) which are annually reported to the Audit and Corporate Governance Committee.

The Council also employ Treasury Management Advisors (Sector), who advise on risk mitigation strategies and keep the Council up to date daily on treasury market developments.

Credit Risk Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to the Council’s customers.

The risk is minimised through the Annual Investment Strategy, which requires that deposits are not made with financial institutions unless they meet identified minimum credit criteria, as laid down by Fitch, Moody’s and Standard and Poors Rating Services. The Annual Investment Strategy also imposes a maximum sum to be invested and a maximum length of investment with a financial institution located within each category.

The Council uses the creditworthiness service provided by our Treasury Management Consultants (Sector). This service uses a sophisticated modelling approach with credit ratings from all three rating agencies - Fitch, Moodys and Standard and Poors, forming the core element. However, it does not rely solely on the current credit ratings of counterparties but also uses the following as overlays:

 credit watches and credit outlooks from credit rating agencies  Credit Default Swap (CDS) spreads to give early warning of likely changes in credit ratings  sovereign ratings to select counterparties from only the most creditworthy countries

Institutions are split into colour bandings for length of investment though for the amount credit ratings for Standard and Poor’s are used.

Length of investment – based on colour

 yellow: unlimited funds;

Page 76  purple: Nationalised Banks and Government support – Investment for up to 2 years  blue: nationalised or semi nationalised UK banks – investment for up to 1 year  orange: up to 1 year  red: up to 6 months  green: up to 3 months  no colour - not to be used

Limit on amount of investment

Counterparty type/rating Maximum Limit 1. Specified Investments (limit per counterparty) UK Government Unlimited Local Authorities £20.0m Money Market Funds with a minimum rating AAA £20.0m Institutions with a minimum rating of AAA/A1 £20.0m Institutions with a minimum rating of AA-/A2 £15.0m Institutions with a minimum rating of A-/A2 £10.0m Building Societies – assets greater than £5,000 million £5.0m Building Societies – assets greater than £1,000 million £2.5m Building Societies – assets greater than £250 million £1.0m Building Societies – for Local Authority Mortgage Scheme £1.0m

2. Non-specified Investments (limit per counterparty) Investments for more than 365 days £20.0m Other non-specified investments £10.0m

3. Other Limits (on day of investment) Aggregate value of Non-specified Investments £30.0m

The full investment strategy for 2013/14 was approved by the Council on 4 March 2013.

Customers for goods and services are assessed, taking into account their financial position, past experience and other factors, with individual credit limits being set in accordance with internal ratings and parameters set by the Council.

The Council had a total of £43.636m deposited with a number of banks and financial institutions at 31 March 2014, the full amount is potentially exposed to credit risk, there is a specific risk attached to amounts deposited with the individual institutions based on their ability to make interest payments and repay the principal outstanding, it is however more difficult to assess the risk in general terms. Recent experience has shown that it is rare for such entities to be unable to meet their commitments. A risk of non- recoverability applies to all of the Council’s deposits, but there was no evidence at the 31 March 2014 that this was likely to crystallise.

The following analysis summarises the Council’s potential maximum exposure to credit risk on its financial assets, based on experience of default and uncollectability over the last three financial years.

Page 77 Adjustment Expected Expected for market maximum maximum Amount at Amount at Historical conditions exposure to exposure to 31 March 31 March experience at 31 March default at 31 default at 31 Capita Credit Counterparty 2013 2014 of default 2014 March 2014 March 2013 Counterparties Rating Type/Rating £'000 £'000 % % £'000 £'000 Deposits with Banks and Financial Institutions Santander Green A/A1 - 9,985 0 0 - - National Westminster Blue A-/A2 4,966 9,026 0 0 - - Handelsbanken Orange AA-/A1+ - 14,600 0 0 - - CCLA Money Market Fund Yellow AAA - 25 0 0 - - Bank of Scotland Blue A/A1 1,000 - 0 0 - - Bank of Scotland Blue A/A1 1,000 - 0 0 - - CCLA Property Fund Blue AAA - 11,049 0 0 - - Total Banks and Financial Institutions 6,966 44,685 - -

Debtors Trade Debtors 13,236 7,841 1.050 1.050 117 139 Other Debtors 37,546 46,417 1.050 1.050 404 394 Total Debtors 50,782 54,258 521 533 Total 57,748 98,943 521 533

No credit limits were exceeded during the reporting period and the Council does not expect any losses or non-performance by any of its counterparties in relation to deposits and bonds.

The Council does not generally allow any credit for customers but some of the current balance is past its due date for payment. The past due but not impaired amount can be analysed by age as follows:

31/03/2013 31/03/2014 £'000 £'000 Less than three months 6,687 3,097 Three to six months 1,197 917 Six months to one year 845 1,672 More than one year 4,507 2,155 13,236 7,841

Liquidity Risk The Council has a comprehensive cash flow management system that seeks to ensure that cash is available as needed. If unexpected movements happen, the Council has ready access to borrowings from the money markets and the Public Works Loans Board. There is no significant risk that it will be unable to raise finance to meet its commitments under financial instruments. Instead, the risk is that the Council will be bound to replenish a significant proportion of its borrowings at a time of unfavourable interest rates. To this extent rates are monitored to ensure that limits are adhered to regarding the maturity structure of Fixed Rate Debt to negate against a significant proportion of the debt portfolio being repayable at any one time. The maturity analysis of financial liabilities is as follows:

Page 78 31/03/2013 31/03/2014 £'000 £'000 Less than 1 year 610 10,573 Between 1 and 2 years 267 292 Between 2 and 5 years 2,767 17,232 Between 5 and 10 years - 5,278 Between 10 and 20 years 281 4 Between 20 and 30 years 35,097 50,720 Between 30 and 40 years 15,769 - Between 40 and 50 years 778 778 More than 50 years 63,500 63,500 119,069 148,377

The above analysis within the ‘over 20 year categories’ includes £110m of LOBO (Lender Option Borrower Option) loans that could potentially be called by the lender in the next financial year. However, given the level on the low interest rate environment it is not expected they will be called or require repayment.

All trade and other payables are due to be paid in less than one year.

Market Risk

The Council is exposed to market risk in terms of the value that an instrument will fluctuate due to changes in:

Interest Rate Risk The Council is exposed to risk in terms interest rate movements in its borrowings and investments. Movements in interest rates have a complex impact on the Council. For instance, a rise in interest rates would have the following effects:

 borrowings at variable rates – the interest expense charged to the Surplus or Deficit on the Provision of Services will rise  borrowings at fixed rates – the fair value of the liabilities borrowings will fall  investments at variable rates – the interest income credited to the Surplus or Deficit on the Provision of Services will rise  investments at fixed rates – the fair value of the assets will fall

Borrowings are not carried at fair value, so nominal gains and losses on fixed rate borrowings would not impact on the Surplus or Deficit on the Provision of Services or other Comprehensive Income and Expenditure. However, changes in interest payable and receivable on variable rate borrowings and investments will be posted to the Surplus or Deficit on the Provision of Services and affect the General Fund Balance. Movements in the fair value of fixed rate investments that have a quoted market price will be reflected in other Comprehensive Income and Expenditure.

The Council has a number of strategies for managing interest rate risk. Policy is to aim to keep a maximum of 40% of its borrowings in variable rate loans. During periods of falling interest rates, and where economic circumstances make it favourable, fixed rates loans will be repaid early to limit exposure to losses. The risk of loss is ameliorated by

Page 79 the fact that a proportion of Government grant payable on financing costs will normally move with prevailing interest rates or the Council’s cost of borrowing and provide compensation for a proportion of any higher costs.

The treasury management team has an active strategy for assessing interest rate exposure that feeds into the setting of the annual budget and which is used to update the budget quarterly during the year. This allows any adverse changes to be accommodated. The analysis will also advise whether new borrowing taken out is fixed or variable.

If interest rates had been 1% higher throughout the year, based on the transactions undertaken in year and all other variables constant, the Surplus or Deficit on the Provision of Service in the Comprehensive Income and Expenditure Statement would have benefited by £0.0025m, comprising £0.0041m additional interest income on investments and £0.0016m extra interest payments on borrowing costs. The decrease in fair value of fixed rate borrowing liabilities (no impact on Comprehensive Income and Expenditure Statement) would have been £19.881m. A 1% fall in interest rates would result in movements being reversed.

Price Risk The Council does not generally invest in equity shareholding but does have a £1.65m investment in Warrington Sports Holdings Limited, an unquoted long term investment. Consequently the Council is not exposed to losses arising from movements in share prices.

Foreign Exchange Risk The Council has no financial assets or liabilities denominated in foreign currencies and thus have no exposure to loss arising from movements in exchange rates.

Collateral

The Council has not pledged any financial assets as collateral for liabilities or contingent liabilities in 2013/14 as this is not permited under Section 13 of the Local Government Act 2003.

Collateral held Where the Council is permitted to sell or re-pledge collateral in the absence of default by the owner of the collateral, the Code requires its fair value to be disclosed. At 31 March 2014 this was £13.072m and is made up of:

Deferred Care Charges These are charges against people’s properties for receiving adult social care packages. The Council meets the cost of the care package and the costs are met the eventual sale of the clients property. The value for 2013/14 is £6.448m (£8.150m 2012/13).

Loans to Registered Providers (RP’s) The Council has three loans to RP’s to promote housing development in the Borough. Collateral is held against the organisations properties to the value of the loan plus 10%. The value for 2013/14 is £6.103m (£6.248m 2012/13)

Page 80 Warrington Borough Transport (WBT) The Council has provided a loan to WBT of £0.520m in 2013/14 for which collateral is held against the organisations fleet for the full value of the loan

A legal case for which collateral was held in 2012/13 to the value of £0.052m against the estate of a bankrupt person has been resolved.

No collateral is held for council tax and non-domestic rates as permitted by the Code. Collateral held for Right to Buy Discounts is also excluded because the amount receivable is determined by the selling price of properties.

The Council holds collateral by way of security on property for Social Services Residential Charges, legal charges loans held by the Council and general credit debts. The Council chooses not to sell or repledge the collateral it holds on the basis of the vulnerability of many of the parties concerned, the time-expiry of the discounts, loans and grants and the considered opinion that the categories are thought to be of such little commercial value that it is unlikely that they would be an attractive proposition for a third party.

39 Contingent Assets and Liabilities

Contingent Assets

A contingent asset is an asset that may be received but only if a certain future event occurs. The Council has identified the following contingent assets as at 31 March 2014. Housing Stock VAT reclaim Following the transfer of its Housing Stock to Golden Gates Housing Trust the Council entered into an agreement to reclaim the VAT on Improvement Works to dwellings. The estimated value of these works is £276m over the next 25 years and so it is expected that £55m of VAT would be recoverable. The agreement put in place means that WBC would expect to receive up to £28m.

Prescribed Right to Buy The Council has entered into an agreement with Golden Gates Housing Trust relating to the future sales under the Prescribed Right to Buy (PRTB) regulations. This relates to any future sales of the transferred stock to existing tenants until November 2040.

Capital receipts from sold properties The Council will receive capital receipts at the end of each financial year for any dwellings sold within the year. The only exclusion to this agreement is former Commission for New Town dwellings where the sale proceeds must be passed onto the Homes and Community Agency. The Council will receive 100% of the receipt generated net of administrative costs and net income foregone that is detailed in Schedule 13 of the Transfer Agreement. The Council received £895.3k of right to buy receipts in 2013/14.

Section 106 agreements The Council has contingent assets in relation to Section 106 Agreements.

Page 81 Trade Waste VAT The Council provides trade waste services for which a charge is levied to users of the service. The charge has historically included Value Added Tax. Her Majesty’s Revenues and Customs have now determined that the provision of trade waste services by a Local Authority is a non-business activity. The Council is anticipating a net recovery of output tax on the provision of trade waste services of up to £0.279m.

Contingent Rents Contingent Rents (contingent rent is such amount that is paid as part of lease payments but is not fixed or agreed in advance at the inception of the lease rather the amount to be paid is dependent on some future event) for 2013/14 were £0.52m.

Contingent Liabilities

A Contingent Liability is a potential liability which depends on the occurrence or non- occurrence of one or more uncertain future events. The Council has identified the following contingent liabilities as at 31 March 2014.

NNDR Appeals The Council has made a provision for NNDR Appeals based upon its best estimates of the actual liability as at the year-end in known appeals. It is not possible to quantify appeals that have not yet been lodged with the Valuation Office so there is a risk to the Council that national and local appeals may have a future impact on the accounts.

Land Charges Land Charges legislation changed in 2010 and the fee paid to Councils was revoked. Clients are able to apply for a refund for personal searches of the local land charges register they had paid for going back to January 2005. A Contingent Liability of £3.104m exists for this.

Planning conditions A number of agreements in accordance with Section 106 of the Town and Country Planning Act 1990 exist between the Council and developers associated with the planning conditions attached to new developments. In respect of contributions received to date, should the conditions in the agreement not be met by the Council then amounts would become repayable to developers.

MMI The Municipal Insurance Scheme of Arrangement was enacted in 2012/13. The liability upon the Council as a scheme creditor cannot be fully estimated at this stage for unknown claims incurred but not reported between 1974 and 1992. Whilst the council has considered the financial impact in producing its Statement of Final Accounts there is a risk that the Council’s financial liability could change.

Grants The Council submits grant claims on an on-going basis. From time to time the interpretation of legislation may be a matter of professional and technical judgement. In

Page 82 this context it may lead to possible grant qualifications by the external auditors. It is not possible to produce a reliable forecast for the cost of any grant qualifications.

40 Cash Flow Statement – Operating Activities

The cash flows for operating activities include the following items:

31/03/13 31/03/14 £'000 Note(s) £'000 (2,453) Interest received (3,184) 7,049 Interest paid 5,239 4,596 2,055

The surplus or deficit on the provision of services has been adjusted for the following non-cash movements:

Restated 31/03/13 31/03/14 £'000 Note(s) £'000 (12,271) Depreciation 22 (10,561) (13,287) Revaluation loss (11,271) (723) Amortisation 25 (748) (2,060) Increase/decrease in impairment for bad debts (4,162) 6,962 Increase/decrease in creditors (4,833) 11,214 Increase/decrease in debtors (2,024) (60) Increase/decrease in inventories 169 (6,571) Restated Movement in pension liability (8,371) Carrying amount of non-current assets and non-current (64,388) (31,113) assets held for sale, sold or de-recognised Other non-cash items charged to the net surplus or 1,212 (2,644) deficit on the provision of services (79,972) (75,558)

The surplus or deficit on the provision of services has been adjusted for the following items that are investing and financing activities:

31/03/13 31/03/14 £'000 Note(s) £'000 Proceeds from short-term (not considered to be cash equivalents) and long-term investments (includes 3,080 5,293 investments in associates, joint ventures and subsidiaries) Proceeds from sale of property, plant and equipment, 20,660 16,000 investment property and intangible assets Any other items for which the cash effects are investing or 9,949 1,669 financing cashflows 33,689 22,962

Page 83 41 Cash Flow Statement – Investing Activities

31/03/13 31/03/14 £'000 Note(s) £'000 Purchases of property, plant & equipment, investment 27,462 31,237 propert and intangible assets 2,000 Purchase of short-term and long-term investments 11,379 Proceeds from the sale of property, plant & equipment, (3,080) (5,293) investment property and intangible assets (9,949) Proceeds of short-term and long-term investments (1,669) (21,737) Other receipts for investing activities (16,783) (5,304) 18,871

42 Cash Flow Statement – Financing Activities

31/03/13 31/03/14 £'000 Note(s) £'000 (3,313) Cash receipts of short-term and long-term borrowing (30,084) Cash payments for the reduction of the outstanding 167 liabilities relating to finance leases and on-balance 169 sheet PFI contracts 120 Repayments of short-term and long-term borrowing 776 (3,026) (29,139)

43 Related Parties

The Council is required to disclose material transactions with related parties – bodies or individuals that have the potential to control or influence the Council or to be controlled or influenced by the Council. Disclosure of these transactions allows readers to assess the extent to which the Council might have been constrained in its ability to operate independently or might have secured the ability to limit another party’s ability to bargain freely with the Council. In this context, related parties include:

 Central Government  Members  Officers  Other Public Bodies  Entities controlled or significantly influenced by the Council

Materiality Materiality has been assessed with regards to the Council and the related party.

Central Government Central Government has significant influence over the general operations of the Council – it is responsible for providing the statutory framework, within which the Council operates, provides the majority of its funding in the form of grants and prescribes the terms of many of the transactions that the Council has with other parties (e.g. council tax bills, housing benefits). Grants received from Government departments are set out in the subjective analysis in Note 19 Amounts Reported for Resource Allocation Decisions. Grant receipts outstanding at 31 March 2014 are shown in Note 21. Any

Page 84 debtors and creditors relating to Central Government are shown in Notes 30 and 32, respectively.

Members Members of the Council have direct control over the Council’s financial and operating policies. The total of Members’ allowances paid in 2013/14 is shown in Note 15.

Members are required to complete a declaration of interests, disclosing any party where they, or their spouse, have control or influence.

The register of Members’ interests is available for public inspection at the Town Hall upon request.

Members also have to declare interests in any matter on Committee/Executive Board agendas and any offers of hospitality.

Business Activities In 2013/14 seventeen Members held material interests in the following organisations with whom the Council carried out business.

Expenditure Expenditure Creditors Payments to Organisations where Members or their 2012-13 2013-14 31 Mar 2014 spouse hold a personal interest £ £ £ Keate House Residential Home 613,471 558,095 - Golden Gates Housing Trust 744,142 211,646 3,360 Warrington Wolves Foundation 34,842 90,346 - Helena Partnerships 3,639 6,385 - Warrington Borough Transport 1,364,428 997,666 48,206 Livewire 1,016,342 5,835,138 1,392 Culture Warrington 241,437 1,909,706 - Healthwatch Warrington - 60,000 - Langtree Group plc 59,303 78,320 - North West Employers 77,223 39,527 - Warrington Labour Group 15,495 14,288 - Cheshire Day Nursery 87,384 75,953 - Warrington Community Transport 211,554 166,810 - Priestley College 121,870 215,209 1,000 Seashell Trust 91,869 193,716 - Warrington YMCA 52,738 84,325 - Warrington Housing Association 819,928 529,515 -

Income Income Debtors Receipts from Organisations where Members or their 2012-13 2013-14 31 March 2014 spouse hold a personal interest £ £ £ Keate House Residential Home 5,347 - - Golden Gates Housing Trust 1,206,820 1,094,936 62,987 Warrington Wolves Foundation 3,173 4,073 180 Warrington Borough Transport 153,886 458,271 - Livewire - 790,845 87,337 Culture Warrington - 66,475 37,332 Langtree Group plc - 3,070 - North West Employers - 6,563 Priestley College 14,843 21,307 - Warrington YMCA 830 482 - Warrington Housing Association 53,423 226,464 3,936

In each of these cases, Members are not involved in the commissioning of services from these organisations, and the level of activity with each party is not unusual.

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Also Golden Gates Housing Trust and Warrington Housing Association have loans with Warrington Borough Council, which are classed as long term debtors and shown in Note 38 Financial Instruments.

Grants Made The following grants were made to local voluntary groups where eight Members have a level of influence; however, grants were not awarded by Members directly.

Expenditure Expenditure Creditors Grants to Organisations where Members or their close 2012-13 2013-14 31 Mar 2014 relatives hold a personal interest £ £ £ Latchford Baptist Church 100 - - St Rocco's Hospice 1,600 970 - Tim Parry & Jonathan Ball Foundation for Peace 1,490 7,403 504 Sankey Canal Restoration Trust - 855 - Culcheth Age Conern - 2,000 - Latchford West Community Forum - 3,000 - Warrington District Citiziens Advice Bureau 426,830 582,284 - Howley Credit Union 1,500 720 -

Officers All Executive Directors of the Council, plus Assistant and Operational Directors were required to complete a declaration of interests. Individual Departmental Management Teams also had discretion to cascade the forms down to lower levels of budget holder if deemed appropriate.

Most of the officers’ declarations were immaterial, or it could not be demonstrated that the officer had influence over the transactions.

There were five material declarations, but none were pecuniary interests.

Expenditure Expenditure Creditors Payments to Organisations where Officers or their 2012-13 2013-14 31 Mar 2014 spouse hold a personal interest £ £ £ Warrington Wolves Foundation 34,842 90,346 - Low Carbon Lymm 17,107 20,683 - Alternative Futures 103,113 1,030,805 - MT Dawe Ltd 43,236 74,646 - Marketing Cheshire 224,504 184,990 -

The Chief Executive is a Director of the Warrington Wolves Rugby League Club but plays no part in the commissioning of services or awarding of grants.

The Executive Director for Economic Regeneration, Growth & the Environment is a Director of Marketing Cheshire – the Cheshire and Warrington Tourist Board.

The Climate Change manager is the secretary of Low Carbon Lymm, a local pressure group.

One consultant with Warrington and Co., is under a long term contract and his company is MT Dawe Ltd. These payment represent his remuneration.

Page 86 The Head of Adult Assessment and Care Management has a relative involved with Alternative Futures, however the contract between the Council and the related party predates any involvement of the member of staff and their relative.

Income Income Debtors Receipts from Organisations where Officers or their 2012-13 2013-14 31 March 2014 spouse hold a personal interest £ £ £ Warrington Wolves Foundation 3,173 4,073 180 Alternative Futures 150 - - Marketing Cheshire - 617 -

Officers’ remunerations are detailed in Note 16.

Other Public Bodies The following table shows the precepts and levies during the year 2013/14.

Precepts/Levies Other Expenditure Precepts/Levies Other Expenditure Precepting & Levying Bodies 2012-13 2012-13 2013-14 2013-14 ££ ££ Police & Crime Commissioner for Cheshire 10,625,598 326,323 9,410,005 296,806 Cheshire Fire Authority 4,699,499 2,240 5,181,550 374 Town and Parish Councils 1,541,486 3,107 1,556,558 3,237 Cheshire West and Chester Council 834,048 4,190,888 789,009 3,556,416 Environment Agency 115,956 83,000 115,956 456,982

The precepts paid to the Cheshire Fire Authority, Cheshire Police Authority and the Town and Parish Councils are to distribute Council Tax collected on behalf of the related party.

The levy paid to Cheshire West and Chester Council is with regard to historic Pension costs. There were various other payments made to Cheshire West and Chester Council, with £2.35m for Concessionary Travel reimbursements, being the most significant.

The payment to the Environment Agency is the Flood Defence levy, where there was some other expenditure primarily for drainage works.

Three Council Members sit on the Board for Cheshire Fire Authority, and two Members sit on the Board for Cheshire Police Authority.

The Council also provided Treasury Management services to the Cheshire Fire Authority during 2013/14. The total income received was £5,500, an increase of £100 from the previous year.

Entities Controlled or Significantly Influenced by the Council In the Council’s own single-entity accounts, the interests in companies and other entities are recorded as financial assets at cost, less any provision for losses. The Council had interests in one limited company during the financial year:

 Warrington Borough Transport

Warrington Borough Transport is wholly owned by Warrington Borough Council and is consolidated into the Group Accounts as a subsidiary.

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Pension fund Warrington Borough Council is a member of the Cheshire Pension Fund but is not an administering Council.

One Member sits on the Board of Cheshire Pension Fund.

Details of the Fund can be found in Note 36.

44 Trust Funds

The Council acts as one of several trustees for the Alderman Bennett Trust. The purpose of the trust is to conserve, preserve, protect, improve and enhance the amenities of the town. In 2013/14 the trust has assets of £0.02m, no change from 2012/13. The Council also holds monies on behalf of residents who are unable to manage their own affairs. For 2013/14 these funds amounted to £4.0m (£3.145m in 2012/13) and are managed in an independent client account outside of the Council’s main bank account.

45 Prior Period Adjustments

Loans to Registered Providers As part of the 2012/13 financial year the Council loaned monies to two registered providers (RPs). These were treated as long term debtors and deferred capital receipts were created to represent the future repayments. The deferred capital receipts were created by adjusting the Capital Adjustment Account (CAA). The net adjustment amounted to £5.680m.

In October, after the 2012/13 Statement of Accounts had been approved CIPFA provided further guidance on these type of accounting transactions, and it was clear that the creation of the deferred capital receipts was in error.

IAS 8 requires that once an error in the accounts is identified that is corrected in the earliest period. The following notes to the accounts have been restated in accordance with IAS 8, and the restatements are shown below:

 Note 27: Capital Expenditure and Financing  Note 37: Unusable Reserves

Page 88 Restated Prior Period 2012/13 2012/13 Adjustment Note(s) £'000 £'000 £'000 Opening Capital Financing Requirement 155,874 155,874 -

Capital Investment Property, Plant and Equipment 22 27,714 27,714 - Intangible Assets 25 123 123 - Revenue Expenditure Funded by Capital Under Statute 5,889 5,889 - Long Term Debtor - Warrington Housing Association 3,806 3,806 - Long Term Debtor - Golden Gates Housing 1,742 1,742 - Long Term Debtor - Local Authority Mortgage Schemes 1,500 1,500 - 40,774 40,774 -

Sources of Finance Capital Receipts 8 (3,252) (3,252) - Deferred Capital Receipts 5,819 139 (5,680) Government Grants & Other Contirbutions (20,282) (20,082) 200 Sums set aisde from Revenue: General Fund (50) (50) - Developers Contribution (S106) (1,539) (1,539) - Minimum Revenue Provision (2,968) (2,968) - (22,272) (27,752) (5,480) Closing Capital Financing Requirment 174,376 168,896 (5,480) Explanations of movements in year Increase in underlying need for borrowing 18,502 13,022 (5,480)

Note 37: Unusable Reserves

Restated Prior Period 31/03/13 31/03/13 Adjustment £'000 £'000 £'000 Capital Adjustment Account 216,207 221,887 5,680 Revaluation Reserve 96,579 96,579 - Financial Instruments Adjustment Account (141) (141) - Deferred Capital Receipts Reserve 37,737 32,057 (5,680) Collection Fund Adjustment Account 133 133 - Unequal Pay Back Pay Account (197) (197) - Accumulating Comsensated Absences Account (4,912) (4,912) - Pensions Reserve (169,842) (169,842) - Total Unusable Reserves 175,564 175,564 -

Deferred Capital Receipts Reserve

Restated Prior Period 31/03/13 31/03/13 Adjustment £'000 £'000 £'000 Balance as at 1 April 32,090 32,090 - Tfr to Capital Receipts Reserve 5,647 (33) (5,680) Balance as at 31 March 37,737 32,057 (5,680)

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Capital Adjustment Account

Restated Prior Period 31/03/13 31/03/13 Adjustment Note(s) £'000 £'000 £'000 Balance as at 1 April 263,860 263,860 -

Reversal of items relating to capital expenditure debited or credited to the Comprehensive Income and Expenditure Statement: Depreciation and impirment of non-current assets 22 (12,271) (12,271) - Revaluation loss on PPE 22 (12,745) (12,745) - Amortisation of intangible assets 25 (723) (723) - Revenue expenditure funded from capital under statute 27 (5,889) (5,889) - Carrying amount of non-current assets sold (38,739) (38,739) - (70,367) (70,367) - Adjusting amounts written out of the Revaluation Reserve 1,172 1,172 - Net written out of the cost of non-current assets (69,195) (69,195) - consumed in year

Capital financing applied in year: Use of the Capital Receipts Reserve 8 (2,567) 3,113 5,680 Application of grants from the Capital Grants Unapplied 8 21,671 21,671 Account - Statutory provision for the financing of capital investment 2,969 2,969 - 22,073 27,753 5,680 Movements in the market value of Investment Properties 24 (531) (531) - Balance as at 31 March 216,207 221,887 5,680

Page 90

IAS19 Change to Accounting Standard There have been significant changes in relation to the international accounting standard IAS19 Employee Benefits. This has resulted in changes to accounting treatment for financial years on or after 1 January 2013. There is no impact on the Balance Sheet and the main changes are as follows:

Expected Return on Assets This is in relation to the return on Pension Scheme assets such as those held by Cheshire West and Chester Local Government Pension Fund. Advance credit for anticipated outperformance of return seeking assets (such as equities) is no longer permitted by IAS19. This has been replaced with an equivalent figure calculated using a discount rate (as opposed to using a figure calculated using expected return on assets assumptions).

Asset Disclosures IAS 19 requires a much more detailed breakdown of the pension fund assets. The values of the assets, broken down into different classes that distinguish between the nature and risk now need to be disclosed. A further breakdown is also needed showing those assets that have a quoted market price and those that do not. The disclosure included in the Council’s 2012/13 published financial statements only showed the main categories of equities, bonds, property and cash as required. As a result of the change some of these categories are split further.

Disclosure Presentation In order to be consistent with new requirements of the IAS19 the disclosures in relation to the Council’s defined benefit pension scheme have changed from those published in 2012/13. By making these changes to the accounting standard, it is intended that the presentation of the information is easier for the user to understand (see note 36).

46 Acquired & Discontinued Operations

The Council has acquired Public Health operations from the NHS in April 2013. With the transfer brought a number of commissioning responsibilities for the Council, together with overall responsibility for improving health at borough level. The national Public Health outcomes framework has been developed, which sets out key outcomes of interest for partners in improving health including some mandatory services including :- the National Child Measurement Programme; NHS health check assessments; comprehensive sexual health services (including testing and treatment for sexually transmitted infections, contraception outside of the GP contract and sexual health promotion and disease prevention; the local authority role in dealing with health protection incidents, outbreaks and emergencies; providing public health support to health care commissioners. (No operations were acquired in the year to 31 March 2013)

Page 91 Collection Fund

2012/13 2013/14

Business Council Business Council Rates Tax Total Rates Tax Total £'000 £'000 £'000 £'000 £'000 £'000 - (194) (194) Opening fund Balance - (159) (159)

Amounts required by statute to be credited to the Collection Fund: - (98,099) (98,099) Council Tax (net receivable) - (87,933) (87,933) (94,900) - (94,900) Non-domestic rates (net receivable) (104,790) - (104,790) - - - Transitional protection payments non-domestic rates 1,318 - 1,318 Amounts required by statute to be debited to the Collection Fund: Precepts and demands from major preceptors and the authority - council tax - 10,593 10,593 - Cheshire Police Authority - 9,435 9,435 - 4,685 4,685 - Cheshire Fire Service - 4,172 4,172 - 81,699 81,699 - Warrington Borough Council and Parishes - 72,836 72,836 Shares of non-domestic rating income to major preceptors and the authority - non-domestic rates -- -- Cheshire Fire Service 988 - 988 -- -- Warrington Borough Council and Parishes 50,000 - 50,000 Payment with respect to central share of the non- 94,589 - 94,589 domestic rating income to be paid to central 49,416 - 49,416 government by billing authorities Impairment of debts/appeals for council tax: - - -7 7- write-offs of uncollectable amounts --- -850850- allowance for impairment -682682 Impairment of debts/appeals for non-domestic rates: -- -- write-offs of uncollectable amounts 7-7 -- -- allowance for impairment 2,672 - 2,672 Charge to General Fund for allowable collection 311 - 311 308 - 308 costs for non-domestic rates Other transfers to General Fund in accordance with -- - 1,652 - 1,652 non-domestic rates regulations Contributions towards previous year's Collection -300300 --- Fund surplus - council tax

- 35 35 Movement on fund balance 1,572 (809) 764 - (159) (159) Closing fund Balance 1,572 (968) 605

Page 92 With the introduction of the changes to the National Non-Domestic Rates (see Note 2 of the Collection Fund) the Authority has reformatted the main Collection Fund Statement to present Council Tax and NNDR separately. For 2012/13 this is a presentational change only and does not affect the prior year comparators or Collection Fund balance. This presentational change has been made to make the accounts more transparent and readable to the user, and follows IAS1.

Notes to the Collection Fund Statement

1 Council Tax

Council Tax income derives from charges raised according to the value of residential properties, which have been classified into eight valuation bands by estimating 1 April 1991 values. Individual charges are set by calculating the amount of income to be achieved from Council Tax and dividing this by the Council Tax Base (the total number of properties in each band converted to an equivalent number of Band D properties). The tax for a Band D property is multiplied by the appropriate ratio to give an amount due for properties in each band.

Number of Dwellings after Discounts and Band D Band Value Range Exemptions Ratio Equivalents Disabled A Up to £40,000 33 5/9 18 A Up to £40,000 22,132 6/9 14,755 B £40,000 - £52,000 16,982 7/9 13,208 C £52,000 - £68,000 17,054 8/9 15,159 D £68,000 - £88,000 10,438 9/9 10,438 E £88,000 - £120,000 6,194 11/9 7,570 F £120,000 - £160,000 4,118 13/9 5,948 G £160,000 - £320,000 2,450 15/9 4,082 H £320,000 and over 155 18/9 310 79,556 71,488

The total number of Band D Equivalents is then adjusted for non-collection, new properties and other adjustments to produce the Council Tax Base.

Page 93 2 National Non-Domestic Rates (NNDR)

The Council collects National Non-Domestic Rates (NNDR) for its area based on local rateable values provided by the Valuation Office Agency (VOA) multiplied by a uniform business rate set nationally by Central Government. The Government specifies a rate in the pound (47.1p for 2013/14 and 46.2p for small businesses) which is then multiplied by the rateable value to produce a charge to each business. The aggregate rateable value or total value of properties for Warrington is £253,607,487.

In previous financial years the total amount due, less certain allowances, was paid to a central pool (the NNDR pool) administered by Central Government, which, in turn, paid to Local Authorities their share of the pool, such shares being based on a standard amount per head of the local adult population.

In 2013/14, the administration of NNDR changed following the introduction of a business rates retention scheme which aims to give Councils a greater incentive to grow businesses but also increases the financial risk due to volatility and non-collection of rates. Instead of paying NNDR to the central pool, local authorities retain a proportion of the total collectable rates due. In the case of Warrington the local share is 49%. The remainder is distributed to preceptors and in the case of Warrington these are Central Government: 50% and Cheshire Fire Authority: 1%.

The business rates shares payable for 2013/14 were estimated before the start of the financial year as £51.020m to Central Government, £1.020m to Cheshire Fire Authority and £50.000m to Warrington Council. These sums have been paid in 2013/14 and charged to the collection fund in year.

When the scheme was introduced, Central Government set a baseline level for each authority identifying the expected level of retained business rates and a top up or tariff amount to ensure that all authorities receive their baseline amount. Tariffs due from authorities payable to Central Government are used to finance the top ups to those authorities who do not achieve their targeted baseline funding. In this respect Warrington paid a tariff to Central Government in 2013/14 to the value of £22.588m.

3 Collection Fund Surplus

An estimate is made on 15 January each year of the surplus/deficit on the Collection Fund which is then distributed between the billing authorities in the following year. Warrington Borough Council predicted a break even position in 2012/13, which was distributed as shown below:

2012/13 2013/14 £'000 £'000 253 Warrington Borough Council - 32 Cheshire Police Authority - 15 Cheshire Fire Authority - 300 TOTAL -

Page 94 4. Movement on Collection Fund Adjustment Account

The Collection Fund contains monies collected on behalf of Warrington Borough Council, Cheshire Police Authority and Cheshire Fire Authority. The table below shows how the movement in the Collection Fund balance is split between the three precepting bodies. Only the Council's share of the movement is shown in the Comprehensive Income and Expenditure Account, and the corresponding entry is shown in Note 6 (Adjustments between Accounting Basis and Funding Basis under Regulations).

2012/13 2013/14 Business Council Business Council Rates Tax Total Rates Tax Total £'000 £'000 £'000 £'000 £'000 £'000 - 35 35 Movement on Collection 1,572 (809) 764 Fund Balance Less adjustments for: - (2) (2) - Cheshire Police Authority - 104 104 - (2) (2) - Cheshire Fire Authority - 46 46 - 31 31 TOTAL 1,572 (659) 914

Page 95 Group Accounts

Introduction

The CIPFA Code of Practice requires that where a Council has material financial interests and a significant level of control over one or more entities, it should prepare Group Accounts. The aim of these accounts is to give an overall picture of the Council’s financial activities and the resources employed in carrying out those activities. Before group accounts can be produced, the following actions need to be carried out:

 Determine whether the Council has any form of interest in an entity  Assess the nature of the relationship between the Council and the entity

Inclusion within the Group Accounts

The Council has relationships with a number of entities over which it has varying degrees of control or influence. The Code of Practice requires these to be classified into the categories of subsidiaries, associates and joint ventures. The meanings of these are outlined below.

Subsidiary

An entity is a subsidiary of the reporting Council if the Council is able to exercise control over the operating and financial policies of the entity and the Council is able to gain benefits from the entity or is exposed to the risk of potential losses arising from this control.

The following entities are classified as subsidiaries of the Council and have been consolidated:

Warrington Borough Transport (WBT)

Warrington Borough Transport is a company set up in accordance with the provision of the Transport Act 1985 to take over the Council’s passenger transport undertaking. Warrington Borough Council wholly owns WBT but is not liable for any losses that it may make.

Copies of the audited accounts can be obtained from the following address when available:

Warrington Borough Transport Ltd Wilderspool Causeway Warrington WA4 6PT

Page 96 Special Purpose Entity

As part of the preparation of the accounts it was identified that the two trusts, LiveWire and Culture Warrington, meet with the tests as outlined in SIC12 – Consolidation Special Purpose Entities and are therefore Special Purpose Entities and should be consolidated into the Council’s Group Accounts. However, as the Council has no actual financial investment in the trusts and they are both immaterial to the single entity financial statement, in accordance with paragraph 9.1.1.6 of the Code, the two trusts have not been consolidated into the Group Accounts.

Joint Venture

An entity in which the reporting Council has an interest on a long term basis and which is jointly controlled by the reporting Council and one or more other entities under a contractual or other binding arrangement.

On March 3rd, 2014 Warrington Borough Council (WBC) and Langtree Land and Property PLC entered into an agreement to create a joint venture company (JVC) “Wire Regeneration Limited”. Both WBC and Langtree were issued 3,701,870 £1 Shares in the JVC. Each party has a total of three directors on the board, with WBC being represented by elected members. In accordance with paragraph 9.1.1.6 of the Code, the JVC has been not consolidated into the Group Accounts and the Council’s holdings are deemed to be immaterial.

Determining the Group Boundary

To ensure that the Group entities incorporated into the Group Accounts are correct, a detailed exercise was carried out, but no companies, other than those detailed above, were determined to be a Group Entity.

Please note that although Warrington Borough Council does have an investment in Warrington Wolves, it was determined that there is no Group Relationship as WBC does not have a significant influence over the organisation as our shareholding is less than 14% and we only have one board member who has a connection with the Council.

Page 97 Main Statements

The Group Accounts replicate the main statements in the single entity accounts and narrative explanations are given on the single entity main statements.

Please note that these accounts are based upon unaudited accounts for Warrington Borough Transport. The final accounts in September will be updated with the audited figures.

Group Movement in Reserves Statement

This statement shows the movement in the reserves of the Group entities, and shows how the reserves have been adjusted from the single entity accounts to those shown on the Group Balance Sheet. A full breakdown of the single entity statement is shown in Notes 6, 7, 8 and 23 of the main statements.

Page 98 Earmarked Total Authority's Total General General Capital Major Capital Total Total Reserves Share of Reserves Fund Fund Receipts Repairs Grants Usable Unusable of the Reserves of of the Balance Reserves Reserve Reserve Unapplied Reserves Reserves Authority Subsidiary Group £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance as at 31 March 2012 1,282 32,534 - 2,021 11,392 47,229 275,660 322,889 2,529 325,418 Movement in reserves during the year Restated Surplus or (deficit) on provision of services (63,211) - - - - (63,211) - (63,211) 902 (62,309) Other Comprehensive Income and Expenditure Surplus or (deficit) on revaluation of non-current assets ------1,117 1,117 - 1,117 Actuarial gains or (losses) on pensions reserve ------(38,666) (38,666) - (38,666) Total Comprehensive Income and Expenditure (63,211) - - - - (63,211) (37,549) (100,760) 902 (99,858) Restated Adjustments Between Accounting Basis & Funding 63,558 - - (2,021) 1,010 62,547 (62,547) - - - Basis Under Regulations Net Increase or (Decrease) before Transfers to Earmarked 347 - - (2,021) 1,010 (664) (100,096) (100,760) 902 (99,858) Reserves Transfers (to) or from Earmarked Reserves (336) 336 ------Increase or (Decrease) in Year 11 336 - (2,021) 1,010 (664) (100,096) (100,760) 902 (99,858) Balance Sheet as at 31 March 2013 1,293 32,870 - - 12,402 46,565 175,564 222,129 3,431 225,560 Movement in reserves during the year Surplus or (deficit) on provision of services (35,417) - - - - (35,417) - (35,417) (919) (36,336) Other Comprehensive Income and Expenditure Surplus or (deficit) on revaluation of non-current assets ------15,283 15,283 - 15,283 Surplus or (deficit) on revaluation of financial assets - - - - - 4,873 4,873 - 4,873 Actuarial gains or (losses) on pensions reserve ------28,808 28,808 - 28,808 Total Comprehensive Income and Expenditure (35,417) - - - - (35,417) 48,964 13,547 (919) 12,628 Adjustments Between Accounting Basis & Funding Basis Under 40,062 - 588 - (2,248) 38,402 (38,402) - - - Regulations Net Increase or (Decrease) before Transfers to Earmarked 4,645 - 588 - (2,248) 2,985 10,562 13,547 (919) 12,628 Reserves Transfers (to) or from Earmarked Reserves (4,236)4,236------Increase or (Decrease) in Year 409 4,236 588 - (2,248) 2,985 10,562 13,547 (919) 12,628 Balance Sheet as at 31 March 2014 1,702 37,106 588 - 10,154 49,550 186,126 235,676 2,512 238,188

Page 99 Group Comprehensive Income and Expenditure Account

This statement shows the accounting cost in the year of providing services provided by the Group entities in accordance with generally accepted accounting practices, rather than the amount to be funded from taxation. The taxation position is shown in the Group Movement in Reserves Statement.

2012/13 2013/14 Gross Gross Net Gross Gross Net Expenditure Income Expenditure Expenditure Income Expenditure £'000 £'000 £'000 £'000 £'000 £'000 88,524 (78,411) 10,113 Central Services to the Public 76,608 (69,687) 6,921 25,001 (3,669) 21,332 Cultural and Related Services 16,662 (3,011) 13,651 20,351 (5,277) 15,074 Enviornment and Regulatory Services 20,108 (5,178) 14,930 6,350 (3,502) 2,848 Planning Services 7,988 (4,776) 3,212 215,403 (170,497) 44,906 Childrens and Education Services 195,517 (148,322) 47,195 30,109 (13,713) 16,396 Highways, Roads and Transport Services 30,979 (14,250) 16,729 10,348 (2,427) 7,921 Other Housing Services 8,667 (1,825) 6,842 83,933 (31,715) 52,218 Adult Social Care 85,844 (32,674) 53,170 - - - Public Health 7,895 (8,911) (1,016) 4,648 (45) 4,603 Corporate and Democratic Core 4,163 (911) 3,252 (168) - (168) Non-Distributed Cost (1,664) - (1,664) 484,499 (309,256) 175,243 Cost of Services 452,767 (289,545) 163,222 53,081 Other Operating Expenditure 25,828 10,173 Restated Financing & Investment Income & Expenditure 11,612 (173,101) Taxation and Non-Specific Grant Income (164,326) 65,396 (Surplus) or Deficit on Provision of Services 36,336 (194) Tax expenses of subsidiaries - 65,202 Group (Surplus) or Deficit 36,336 (1,117) (Surplus) or Deficit on revaluation of non-current assets (15,283) - (Surplus) or Deficit on revaluation of financial assets (4,873) 35,773 Restated Remeasurement of the net defined benefit liability (28,808) 34,656 Other Comprehensive Income and Expenditure (48,964) 99,858 Total Comprehensive Income and Expenditure (12,628)

Page 100 Group Balance Sheet

The Balance Sheet shows the value as at the Balance Sheet date of the assets and liabilities recognised by the Group entities.

31st March 31st March 2013 2014 £'000 £'000 Property, Plant & Equipment 432,583 431,389 Heritage Assets 13,652 14,227 Investment Property 37,328 33,845 Intangible Assets 1,581 948 Long Term Investments 150 16,402 Long Term Debtors 43,067 45,217 Long Term Assets 528,361 542,028 Assets Held for Sale 1,669 - Short Term Investments 2,174 115 Inventories 924 1,081 Short Term Debtors 39,588 30,508 Cash and Cash Equivalents 8,388 32,936 Current Assets 52,743 64,640 Cash and Cash Equivalents (6,674) (3,559) Short Term Borrowing (2,365) (12,336) Short Term Creditors (30,931) (35,088) Provisions (1,187) (3,049) Current Liabilities (41,157) (54,032) Long Term Creditors (5,012) (4,714) Grants Receipts in Advance - Capital (799) (817) Grants Receipts in Advance - Revenue (13,361) (12,971) Provisions (1,074) (1,375) Long Term Borrowing (122,961) (144,707) Other Long Term Liabilities (170,915) (149,405) Deferred Tax Liability (265) (459) Long Term Liabilities (314,387) (314,448) Net Assets 225,560 238,188 Usable Reserves 49,162 51,228 Unusable Reserves 176,398 186,960 Total Reserves 225,560 238,188

Page 101 Group Cash Flow

The Cash Flow Statement shows the changes on cash and cash equivalents of the Group entities during the reporting period. The statement shows how the Group entities generate and use cash and cash equivalents by classifying cash flows as operating, investing and financing activities.

Restated 2012/13 2013/14 £'000 £'000 65,396 Net (surplus) or deficit on the provision of services 36,336 Adjustments to net surplus or deficit on the provision (80,981) (76,813) of services for non-cash movements Adjust for items included in the net surplus or deficit 34,190 on the provision of services that are investing or 22,962 financing activities 18,605 Net cash flows from Operating Activities (17,515) (3,212) Investing Activities 18,909 (3,792) Financing Activities (29,057) Net (increase) or decrease in cash and cash 11,601 (27,663) equivalents Cash and cash equivalents at the beginning of the (13,315) (1,714) reporting period Cash and cash equivalents at the end of the (1,714) (29,377) reporting period

Page 102 Explanatory Notes to the Group Accounts

Only the main statements are shown for the Group Accounts, as the figures in the explanatory notes do not differ materially from the single entity.

The notes below are specific to the Group Accounts.

G1 Reconciliation of Single Entity Deficit for the Year to the Group Deficit

2012/13 2013/14 £'000 £'000

(Surplus)/Deficit on the authority's single entity Income and 63,211 35,417 Expenditure Account for the year Add: Surplus or deficit arising from other entities included in the group accounts analysed into the amounts attributable to (902) 919 subsidiary: WBT (Surplus)/Deficit 62,309 Group Account (Surplus)/Deficit for the year 36,336

G2 Financial Position of Subsidiaries

The table below shows the financial positions of Warrington Borough Transport.

2012/13 2013/14 £'000 Warrington Borough Transport £'000 (708) (Surplus) / Deficit in Year 919

7,664 Long Term Assets 6,695 937 Current Assets 1,047 (3,166) Current Liabilities (1,625) (1,950) Long Term Liabilities (3,551) 3,485 Net Assets 2,566

G3 Group Accounting Policies

The Accounting Policies of Subsidiary companies have been aligned with the Council’s Accounting Policies. The Council’s Accounting Policies are contained in Annexe A - Accounting Polices of the Council’s Explanatory Notes to the Core Financial Statements, where applicable.

Any statutory adjustments between accounting basis and funding basis included in the Council’s Accounting Policies do not apply to Subsidiary Companies.

Subsidiaries are consolidated on a line-by-line basis.

Page 103 Glossary of Terms

AAA FITCH RATING Highest credit quality - ‘AAA’ ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

AA FITCH RATING Very high credit quality - ‘AA’ ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

A FITCH RATING High credit quality - ‘A’ ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings.

ACCOUNTING PERIOD The period of time covered by the accounts; normally a period of twelve months commencing on 1st April. The end of the accounting period is the Balance Sheet date.

ACCRUALS Sums included in the final accounts to recognise revenue and capital income and expenditure earned or incurred in the financial year, but for which actual payment had not been received or made as at 31 March.

ACTUARIAL GAINS AND LOSSES For a defined benefit pension scheme, the changes in actuarial surpluses or deficits that arise because:

 Events have not coincided with the actuarial assumptions made for the last valuation (experience gains and losses); or  The actuarial assumptions have changed

ASSET An item having value to the Council in monetary terms. Assets are categorised as either current or fixed:

 A current asset will be consumed or cease to have material value within the next financial year (e.g. cash and stock);  A non-current asset provides benefits to the Council and to the services it provides for a period of more than one year and may be tangible e.g. a community centre, or intangible, e.g. computer software licences.

AUDIT OF ACCOUNTS An independent examination of the Council’s financial affairs.

Page 104 BALANCE SHEET A statement of the recorded assets, liabilities and other balances at the end of the accounting period.

BORROWING Government support for capital investment is described as either Supported Capital Expenditure (Revenue) known as SCE(R) or Supported Capital Expenditure (Capital Grant) known as SCE(C). SCE can be further classified as either Single Capital Pot (SCP) or ring-fenced.

BUDGET The forecast of net revenue and capital expenditure over the accounting period.

CAPITAL EXPENDITURE Expenditure on the acquisition of a non-current asset, which will be used in providing services beyond the current accounting period, or expenditure which adds to and not merely maintains the value of an existing non-current asset.

CAPITAL FINANCING Funds raised to pay for capital expenditure. There are various methods of financing capital expenditure including borrowing, leasing, direct revenue financing, usable capital receipts, capital grants, capital contributions, revenue reserves and earmarked reserves.

CAPITAL PROGRAMME The capital schemes the Council intends to carry out over a specific period of time.

CAPITAL RECEIPT The proceeds from the disposal of land or other non-current assets. Proportions of capital receipts can be used to finance new capital expenditure, within rules set down by the Government but they cannot be used to finance revenue expenditure.

CLAW-BACK Where average council house rents are set higher than the Government’s prescribed average limit rent, used in the calculation of rent rebates, the percentage difference reduces the amount of rent rebate subsidy due to the Council, i.e. it is “clawed-back” by the Government.

CIPFA The Chartered Institute of Public Finance and Accountancy.

COLLECTION FUND A separate fund that records the income and expenditure relating to Council Tax and non-domestic rates.

COMMUNITY ASSETS Assets that the Council intends to hold in perpetuity, that have no determinable useful life and that may have restrictions on their disposal. Examples of community assets are parks and historical buildings.

Page 105 CONSISTENCY The concept that the accounting treatment of like items within an accounting period and from one period to the next are the same.

CONTINGENT ASSET A contingent asset is a possible asset arising from past events whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the Council’s accounts.

CONTINGENT LIABILITY A contingent liability is either:

 A possible obligation arising from past events whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the Council’s control; or  A present obligation arising from past events where it is not probable that a transfer of economic benefits will be required, or the amount of the obligation cannot be measured with sufficient reliability.

CORPORATE AND DEMOCRATIC CORE The corporate and democratic core comprises all activities that Local Authorities engage in specifically because they are elected, multi-purpose Authorities. The cost of these activities are thus over and above those which would be incurred by a series of independent single purpose, nominated bodies managing the same services. There is therefore no logical basis for apportioning these costs to services.

CREDITOR Amount owed by the Council for work done, goods received or services rendered within the accounting period, but for which payment has not been made by the end of that accounting period.

CURRENT SERVICE COST (PENSIONS) The increase in the present value of a defined benefits pension scheme’s liabilities, expected to arise from employee service in the current period.

DEBTOR Amount owed to the Council for works done, goods received or services rendered within the accounting period, but for which payment has not been received by the end of that accounting period.

DEFERRED CHARGES Expenditure which can be properly deferred (i.e. treated as capital in nature), but which does not result in, or remain matched with, a tangible asset. Examples of deferred charges are grants of a capital nature to voluntary organisations.

DEFINED BENEFIT PENSION SCHEME Pension schemes in which the benefits received by the participants are independent of the contributions paid and are not directly related to the investments of the scheme.

Page 106 DEPRECIATION The measure of the cost of wearing out, consumption or other reduction in the useful economic life of the Council’s non-current assets during the accounting period, whether from use, the passage of time or obsolescence through technical or other changes.

DISCRETIONARY BENEFITS (PENSIONS) Retirement benefits, which the employer has no legal, contractual or constructive obligation to award and are awarded under the Council’s discretionary powers such as the Local Government (Discretionary Payments) Regulations 1996.

EQUITY The Council’s value of total assets less total liabilities.

EVENTS AFTER THE BALANCE SHEET DATE Events after the Balance Sheet date are those events, favourable or unfavourable, that occur between the Balance Sheet date and the date when the Statement of Accounts is authorised for issue.

EXCEPTIONAL ITEMS Material items which derive from events or transactions that fall within the ordinary activities of the Council and which need to be disclosed separately by virtue of their size or incidence to give fair presentation of the accounts.

EXPECTED RETURN ON PENSION ASSETS For a funded defined benefit scheme, this is the average rate of return, including both income and changes in fair value but net of scheme expenses, which is expected over the remaining life of the related obligation on the actual assets held by the scheme.

EXTRAORDINARY ITEMS Material items, possessing a high degree of abnormality, which derive from events or transactions that fall outside the ordinary activities of the Council and which are not expected to recur. They do not include exceptional items, nor do they include prior period items merely because they relate to a prior period.

FAIR VALUE The fair value of an asset is the price at which it could be exchanged in an arm’s length transaction less, where applicable, any grants receivable towards the purchase or use of the asset.

FINANCE LEASE A lease that transfers substantially all of the risks and rewards of ownership of a non- current asset to the lessee.

GOING CONCERN The concept that the Statement of Accounts is prepared on the assumption that the Council will continue in operational existence for the foreseeable future.

GOVERNMENT GRANTS Grants made by the Government towards either revenue or capital expenditure in return for past or future compliance with certain conditions relating to the activities of

Page 107 the Council. These grants may be specific to a particular scheme or may support the revenue spend of the Council in general.

HOUSING BENEFITS A system of financial assistance to individuals towards certain housing costs administered by Authorities and subsidised by central Government.

HOUSING REVENUE ACCOUNT (HRA) A separate account to the General Fund, which includes the income and expenditure arising from the provision of housing accommodation by the Council.

IMPAIRMENT A reduction in the value of a non-current asset to below its carrying amount on the Balance Sheet.

INCOME AND EXPENDITURE ACCOUNT The revenue account of the Council that reports the net cost for the year of the functions for which it is responsible and demonstrates how that cost has been financed from precepts, grants and other income.

INFRASTRUCTURE ASSETS Non-current assets belonging to the Council that cannot be transferred or sold, on which expenditure is only recoverable by the continued use of the asset created. Examples are highways, footpaths and bridges.

INTANGIBLE ASSETS An intangible (non-physical) item may be defined as an asset when access to the future economic benefits it represents is controlled by the reporting entity. This Council’s intangible assets comprise computer software licences.

INTEREST COST (PENSIONS) For a defined benefit scheme, the expected increase during the period of the present value of the scheme liabilities because the benefits are one period closer to settlement.

INVENTORIES Items of raw materials and stores a Council has procured and holds in expectation of future use. Examples are consumable stores, raw materials and products and services in intermediate stages of completion.

INVESTMENTS (PENSION FUND) The investments of the Pension Fund will be accounted for in the statements of that fund. However, Authorities are also required to disclose, as part of the disclosure requirements relating to retirement benefits, the attributable share of the pension scheme assets associated with their underlying obligations.

LIABILITY A liability is where the Council owes payment to an individual or another organisation.

 A current liability is an amount which will become payable or could be called in within the next accounting period, e.g. creditors or cash overdrawn.

Page 108  A deferred liability is an amount which by arrangement is payable beyond the next year at some point in the future or to be paid off by an annual sum over a period of time.

LIQUID RESOURCES Current asset investments that are readily disposable by the Council without disrupting its business and are either:

 Readily convertible to known amounts of cash at or close to the carrying amount; or  Traded in an active market

LONG-TERM CONTRACT A contract entered into for the design, manufacture or construction of a single substantial asset or the provision of a service (or a combination of assets or services which together constitute a single project), where the time taken to substantially complete the contract is such that the contract activity falls into more than one accounting period.

MATERIALITY The concept that the Statement of Accounts should include all amounts which, if omitted, or misstated, could be expected to lead to a distortion of the financial statements and ultimately mislead a user of the accounts.

MINIMUM REVENUE PROVISION (MRP) The minimum amount which must be charged to the revenue account each year in order to provide for the repayment of loans and other amounts borrowed by the Council.

NEGATIVE SUBSIDY If the Subsidy Housing Revenue Account produces a result, which assumes that the Council’s income is higher than its expenditure, a “negative subsidy” situation arises. In this case the Council must pay an amount equivalent to the deficit, from its Housing Revenue Account to the Government.

NET BOOK VALUE The amount at which non-current assets are included in the Balance Sheet, i.e. their historical costs or current value less the cumulative amounts provided for depreciation.

NET DEBT The Council’s borrowings less cash and liquid resources.

NON-DISTRIBUTED COSTS These are overheads for which no user now benefits and as such are not apportioned to services

NATIONAL NON-DOMESTIC RATES (NNDR) The National Non-Domestic Rate is a levy on businesses, based on a national rate in the pound set by the Government and multiplied by the assessed rateable value of the

Page 109 premises they occupy. It is collected by the Council on behalf of central Government and then redistributed back to support the cost of services.

NON-OPERATIONAL ASSETS Non-current assets held by the Council but not directly occupied, used or consumed in the delivery of services. Examples are investment properties, assets under construction or assets surplus to requirements pending sale or redevelopment.

OPERATING LEASE A lease where the ownership of the non-current asset remains with the lessor.

OPERATIONAL ASSETS Non-current assets held and occupied, used or consumed by the Council in the pursuit of its strategy and in the direct delivery of those services for which it has either a statutory or discretionary responsibility.

PAST SERVICE COST (PENSIONS) For a defined benefit pension scheme, the increase in the present value of the scheme liabilities related to employee service in prior periods arising in the current period as a result of the introduction of, or improvement to retirement benefits.

PENSION SCHEME LIABILITIES The liabilities of a defined benefit pension scheme for outgoings due after the valuation date. Scheme liabilities measured during the projected unit method reflect the benefits that the employer is committed to provide for service up to the valuation date.

PRECEPT The levy made by precepting Authorities by billing Authorities, requiring the latter to collect income from Council Tax on their behalf.

PRIOR YEAR ADJUSTMENT Material adjustments applicable to previous years arising from changes in accounting polices or from the correction of fundamental errors. This does not include normal recurring corrections or adjustments of accounting estimates made in prior years.

PROVISION An amount put aside in the accounts for future liabilities or losses which are certain or very likely to occur but the amounts or dates of when they will arise are uncertain.

PUBLIC WORKS LOAN BOARD (PWLB) A Central Government Agency which provides loans for one year and above to Authorities at interest rates only slightly higher than those at which the Government can borrow itself.

RATEABLE VALUE The annual assumed rental of a hereditament, which is used for NNDR purposes.

Page 110 RELATED PARTIES There is a detailed definition of related parties in IAS 24. For the Council’s purposes related parties are deemed to include the Council’s members, the Chief Executive, its Directors and their close family and household members.

RELATED PARTY TRANSACTIONS The Statement of Recommended Practice requires the disclosure of any material transactions between the Council and related parties to ensure that stakeholders are aware when these transactions occur and the amount and implications of such.

REMUNERATION All sums paid to or receivable by an employee and sums due by way of expenses allowances (as far as those sums are chargeable to UK income tax) and the money value of any other benefits received other than in cash. Pension contributions payable by the employer are excluded.

RESERVES The accumulation of surpluses, deficits and appropriations over past years. Reserves are reported in two categories – usable and unusable. Usable reserves are those the Council may use to provide services subject to the need to maintain a prudent level of reserves and any statutory limitation on their use. Unusable reserves are those the Council may not use to provide services and are technical adjustments or specific capital reserves.

RESIDUAL VALUE The net realisable value of an asset at the end of its useful life.

RETIREMENT BENEFITS All forms of consideration given by an employer in exchange for services rendered by employees that are payable after the completion of employment.

REVENUE EXPENDITURE The day-to-day expenses of providing services.

REVENUE EXPENDITURE FUNDED FROM CAPITAL UNDER STATUTE (REFCUS) Items of capital expenditure that do not result in, or remain matched by, the Council’s property, plant and equipment.

REVENUE SUPPORT GRANT A grant paid by Central Government to Authorities contributing towards the general cost of their services.

TEMPORARY BORROWING Money borrowed for a period of less than one year.

TRUST FUNDS Funds administered by the Council for such purposes as prizes, charities, specific projects and on behalf of minors.

Page 111 USEFUL ECONOMIC LIFE (UEL) The period over which the Council will derive benefits form the use of a non-current asset.

WORK IN PROGRESS (WIP) The cost of work performed on an uncompleted project at the year end.

Page 112 ANNEXE A STATEMENT OF ACCOUNTING POLICIES

1.1 General Principles

The Statement of Accounts summarises the Council's transactions for the 2013/14 financial year and its position at 31 March 2014. The Council is required to prepare an annual Statement of Accounts by the Accounts and Audit Regulations 2011, which require the Accounts to be prepared in accordance with proper accounting practices. These practices primarily comprise the Code of Practice on Local Authority Accounting in the United Kingdom 2013/14 (the Code), the 2013/14 Code update and Service Reporting Code of Practice 2013/14, supported by International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS).

The accounting convention adopted in the Statement of Accounts is principally historical cost, modified by the revaluation of certain categories of non-current assets and financial instruments. The accounts are prepared on a going concern basis.

As permitted under the Code, the concept of materiality has been utilised when determining appropriate disclosures to be made in the financial statements. Information is not material if omitting or misstating it would not influence the decisions of an informed user of the statements.

1.2 Accruals of Income and Expenditure

Activity is accounted for in the year that it takes place, not simply when cash payments are made or received. In particular:

 Revenue from the sale of goods is recognised when the Council transfers the significant risks and rewards of ownership to the purchaser and it is probable that economic benefits or service potential associated with the transaction will flow to the Council.  Revenue from the provision of services is recognised when the Council can measure reliably the percentage of completion of the transaction and it is probable that economic benefits or service potential associated with the transaction will flow to the Council.  Supplies are recorded as expenditure when they are consumed – where there is a gap between the date supplies are received and their consumption they are carried as inventories on the Balance Sheet.  Expenses in relation to services received (including services provided by employees) are recorded as expenditure when the services are received rather than when payments are made.  Interest receivable on investments and payable on borrowings is accounted for respectively as income and expenditure on the basis of the effective interest rate for the relevant financial instrument rather than the cash flows fixed or determined by the contract.  Where revenue and expenditure have been recognised but cash has not been received or paid, a debtor or creditor for the relevant amount is recorded in the Balance Sheet. Where debts may not be settled, the balance of debtors is

Page 113 written down and a charge made to revenue for the income that might not be collected.

1.3 Acquisitions and Discontinued Operations

Acquired operations Acquired operations occur as a result of the reorganisation of local government, or the transfer of services acquired as a consequence of legislation. All operations acquired in year will be treated in line with the Council’s accounting policies.

As a result of restructuring under The Health and Social Care Act 2012, Public Health responsibilities transferred to the Council from the NHS as at 1 April 2013. More detail can be found in Note 46 to the core financial statements.

Discontinued Operations The results of discontinued operations are shown as a single amount on the face of the Comprehensive Income and Expenditure account comprising the profit or loss of discontinued operations and the gain or loss recognised either on measurement to fair value less costs to sell or on the disposal of the discontinued operation. A discontinued operation is a cash generating unit or a group of cash generating units that has been disposed of, or is classified as held for sale and represents a separate entity within our group accounts.

1.4 Cash and Cash Equivalents

Cash includes all bank credit balances and overdrafts held by the Council as part of its normal cash management, including all deposit accounts accessible without notice.

Cash Equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Cash Equivalents include investments with a fixed maturity of three months or less from the date of acquisition and available for sale assets such as cash placed in money market funds.

In the Cash Flow Statement, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Council’s cash management.

1.5 Charges to Revenue for Non-Current Assets

Services, support services and trading accounts are debited with the following amounts to record the cost of holding fixed assets during the year:

 depreciation attributable to the assets used by the relevant service  revaluation and impairment losses on assets used by the service where there are no accumulated gains in the Revaluation Reserve against which the losses can be written off  amortisation of intangible fixed assets attributable to the service

Page 114 The Council is not required to raise council tax to fund depreciation, revaluation and impairment losses or amortisations. However, it is required to make an annual contribution from revenue towards the reduction in its overall borrowing requirement equal to an amount calculated on a prudent basis determined by the Council in accordance with statutory guidance.

Depreciation, revaluation and impairment losses and amortisations are therefore replaced by the contribution in the General Fund Balance, by way of an adjusting transaction with the Capital Adjustment Account in the Movement in Reserves Statement for the difference between the two.

1.6 Exceptional Items

When items of income and expenditure are material, their nature and amount is disclosed separately either on the face of the Comprehensive Income and Expenditure Statement or in the notes to the accounts, depending on how significant the items are to an understanding of the Council’s financial performance.

1.7 Employee Benefits

Benefits Payable during Employment Short-term employee benefits are those due to be settled wholly within 12 months of the year-end. They include such benefits as wages and salaries, paid annual leave and paid sick leave, bonuses and non-monetary benefits (e.g. cars) for current employees and are recognised as an expense for services in the year in which employees render service to the Council. An accrual is made for the cost of holiday entitlements (or any form of leave e.g. time off in lieu) earned by employees but not taken before the year-end which employees can carry forward into the next financial year. The accrual is made at the wage and salary rates applicable in the following accounting year, being the period in which the employee takes the benefit. The accrual is charged to Surplus or Deficit on the Provision of Services, but then reversed out through the Movement in Reserves Statement so that holiday benefits are charged to revenue in the financial year in which the holiday absence occurs.

The Council does not award long term employee benefits i.e. those which are not expected to be paid or settled within 12 months of the balance sheet date.

Termination Benefits Termination benefits, whether they are a decision by the Council to terminate an officer’s employment before the normal retirement date or an officer’s decision to accept voluntary redundancy, are charged on an accruals basis to the relevant service line (or in discontinued operations) in the Comprehensive Income and Expenditure Statement.

Where termination benefits involve the enhancement of pensions, statutory provisions require the General Fund balance to be charged with the amount payable by the Council to the pension fund or pensioner in the year, not the amount calculated according to the relevant accounting standards. In the Movement in Reserves Statement, appropriations are required to and from the Pensions Reserve to remove the notional debits and credits for pension enhancement termination benefits and

Page 115 replace them with debits for the cash paid to the pension fund and pensioners and such amounts payable but unpaid at the year-end.

Post-Employment Benefits Employees of the Council are members of three separate pension schemes:

 The Teachers’ Pension Scheme, is an unfunded scheme administered by Capita Teachers’ Pensions on behalf of the Department for Education (DfE).  The Local Government Pensions Scheme, known as the Cheshire Pension Fund and administered by Cheshire West and Chester Council.  Public Health employees transferred from the NHS – this scheme is administered on behalf of the NHS by NHS Pensions.

All schemes provide defined benefits to members (retirement lump sums and pensions) earned as employees working for the Council.

Teachers’ and NHS Pension Schemes The arrangements for the teachers’ and the NHS schemes mean that liabilities for these benefits cannot ordinarily be identified specifically to the Council. The scheme is therefore accounted for as if it was a defined contribution scheme and no liability for future payments of benefits is recognised in the Balance Sheet and the service revenue account in the Comprehensive Income and Expenditure Statement are charged with the employer’s contributions payable to the Teachers’ and NHS Pensions in the year.

The Local Government Pension Scheme The Local Government Scheme is accounted for as a defined benefits scheme:

 The liabilities of the Cheshire Pension Fund scheme attributable to the Council are included in the Balance Sheet on an actuarial basis using the projected unit method i.e. an assessment of the future payments that will be made in relation to retirement benefits earned to date by employees, based on assumptions about mortality rates, employee turnover rates, etc, and projections of projected earnings for current employees  Liabilities are discounted to their value at current prices, using a discount rate of 4.3% (based on the indicative rate of return on iBoxx Sterling Corporate Index, AA over 15 years)  The assets of Cheshire Pension Fund attributable to the Council are included in the Balance Sheet at their fair value:  quoted securities – current bid price  unquoted securities – professional estimate  unitised securities – current bid price  property – market value  The change in the net pensions liability is analysed into the following components:  current service cost – the increase in liabilities as a result of years of service earned this year; allocated in the Comprehensive Income and Expenditure Statement to the services for which the employees worked  past service cost – the increase in liabilities as a result of a scheme amendment or curtailment whose effect relates to years of service earned

Page 116 in earlier years; debited to the Surplus or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement as part of Non Distributed Costs  net interest on the net deferred liability (asset) i.e. net interest expense for the authority the charge during the periodis the net deferred liability (asset) that came from the passage of time charged to the Financing and Investment Income and Expenditure line of the Comprehensive Income and Expenditure Statement. This is calculated by applying the discount rate used to measure the defined benefit obligation at the net defined liability (asset) at the beginning of the period taking into account any changes to the net defined benefit liability (asset) during the period as a result of the contribution and benefit payments.  the return on fund assets excluding amounts included in net interest on the net defined benefit liability (asset) charged to the Pension Reserve as Other Comprehensive Income and Expenditure.  actuarial gains and losses – changes on the net pensions liability that arise because events have not coincided with assumptions made at the last actuarial valuation or because the actuaries have updated their assumptions; charged to the Pensions Reserve as Other Comprehensive Income and Expenditure  contributions paid to the Cheshire Pension Fund – cash paid as employer’s contributions to the pension fund in settlement of liabilities; not accounted for as an expense

In relation to retirement benefits, statutory provisions require the General Fund balance to be charged with the amount payable by the Council to the pension fund or directly to pensioners in the year, not the amount calculated according to the relevant accounting standards. In the Movement in Reserves Statement, this means that there are transfers to and from the Pensions Reserve to remove the notional debits and credits for retirement benefits and replace them with debits for the cash paid to the pension fund and pensioners and any such amounts payable but unpaid at the year-end. The negative balance that arises on the Pensions Reserve thereby measures the beneficial impact to the General Fund of being required to account for retirement benefits on the basis of cash flows rather than as benefits earned by employees.

Employer contribution rates are reviewed every three years. The last review took place at 31 March 2013; effective from 1 April 2013. The employer contribution rate set for the Council was 21.1% for 2013/14 (20.1% in 2012/13). In accordance with current regulations the actuary set the rate at a level sufficient to enable the Pension Fund to meet 100% of existing prospective liabilities, including pension increases.

Discretionary Benefits The Council has restricted powers to make discretionary awards of retirement benefits in the event of early retirements. Any liabilities estimated to arise as a result of an award to any member of staff (including teachers) are accrued in the year of the decision to make the award and accounted for using the same policies as are applied to the Local Government Pension Scheme.

1.8 Events after the Reporting Period

Page 117 Events after the reporting period are those events both favourable and unfavourable, that occur between the end of the reporting period and the date when the Statement of Accounts is authorised for issue. Two types of events can be identified:

 those that provide evidence of conditions that existed at the end of the reporting period – the Statement of Accounts is adjusted to reflect such events  those that are indicative of conditions that arose after the reporting period – the Statement of Accounts are not adjusted to reflect such events, but where a category of events would have a material effect, disclosure is made in the notes of the nature of the events and their estimated financial effect

Events taking place after the date of authorisation for issue are not reflected in the Statement of Accounts.

1.9 Financial Instruments

Financial Liabilities Financial liabilities are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured at fair value and are carried at their amortised cost. Annual charges to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest payable are based on the carrying amount of the liability, multiplied by the effective rate of interest for the instrument. The effective interest rate is the rate that exactly discounts estimated future cash payments over the life of the instrument to the amount at which it was originally recognised.

For most of the borrowings that the Council has, this means that the amount presented in the Balance Sheet is the outstanding principal repayable (plus accrued interest) and interest charged to the Comprehensive Income and Expenditure Statement is the amount payable for the year according to the loan agreement.

The bonds issued by the Council in previous years are carried at a lower amortised cost than the outstanding principal, and interest is charged at a marginally higher effective rate of interest than the rate payable to bondholders as a material amount of costs incurred in its issue is being financed over the life of the stock.

Gains and losses on the repurchase or early settlement of borrowing are credited and debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement in the year of repurchase / settlement. However, where repurchase has taken place as part of a restructuring of the loan portfolio that involves the modification or exchange of existing instruments, the premium or discount is respectively deducted from or added to the amortised cost of the new or modified loan and the write-down to the Comprehensive Income and Expenditure Statement is spread over the life of the loan by an adjustment to the effective interest rate.

Where premiums and discounts have been charged to the Comprehensive Income and Expenditure Statement, regulations allow the impact on the General Fund Balance to be spread over future years. The Council has a policy of spreading the gain or loss over the term that was remaining on the loan against which the premium was payable

Page 118 or discount receivable when it was repaid. The reconciliation of amounts charged to the Comprehensive Income and Expenditure Statement to the net charge required against the General Fund Balance is managed by a transfer to or from the Financial Instruments Adjustment Account in the Movement in Reserves Statement.

Financial Assets Financial assets are classified into two types:

 loans and receivables – assets that have fixed or determinable payments but are not quoted in an active market  available-for-sale assets – assets that have a quoted market price and/or do not have fixed or determinable payments

Loans and Receivables Loans and receivables are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured at fair value. They are subsequently measured at their amortised cost. Annual credits to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest receivable are based on the carrying amount of the asset multiplied by the effective rate of interest for the instrument. For most of the loans that the Council has made, this means that the amount presented in the Balance Sheet is the outstanding principal receivable (plus accrued interest) and interest credited to the Comprehensive Income and Expenditure Statement is the amount receivable for the year in the loan agreement.

When soft loans are made, a loss is recorded in the Comprehensive Income and Expenditure Statement (debited to the appropriate service) for the present value of interest that will be foregone over the life of the instrument, resulting in a lower amortised cost than the outstanding principal. Interest is credited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement at a marginally higher effective rate of interest than the rate receivable from the voluntary organisations, with the difference serving to increase the amortised cost of the loan in the Balance Sheet. Statutory provisions require that the impact of soft loans on the General Fund Balance is the interest receivable for the financial year – the reconciliation of amounts debited and credited to the Comprehensive Income and Expenditure Statement to the net gain required against the General Fund Balance is managed by a transfer to or from the Financial Instruments Adjustment Account in the Movement in Reserves Statement.

Where assets are identified as impaired because of a likelihood arising from a past event that payments due under the contract will not be made, the asset is written down and a charge made to the relevant service (for receivables specific to that service) or the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. The impairment loss is measured as the difference between the carrying amount and the present value of the revised future cash flows discounted at the asset’s original effective interest rate.

Any gains and losses that arise on de-recognition of an asset are credited or debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.

Page 119

Available-for-Sale Assets Available-for-sale assets are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured and carried at fair value. Where the asset has fixed or determinable payments, annual credits to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest receivable are based on the amortised cost of the asset multiplied by the effective rate of interest for the instrument. Where there are no fixed or determinable payments, income (e.g. dividends) is credited to the Comprehensive Income and Expenditure Statement when it becomes receivable by the Council.

Assets are maintained in the Balance Sheet at fair value. Values are based on the following principles:

 instruments with quoted market prices – the market price  other instruments with fixed and determinable payments – discounted cash flow analysis  equity shares with no quoted market prices – independent appraisal of company valuations

Changes in fair value are balanced by an entry in the Available-for-Sale Reserve and the gain/loss is recognised in the Surplus or Deficit on Revaluation of Available-for-Sale Financial Assets. The exception is where impairment losses have been incurred – these are debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement, along with any net gain or loss for the asset accumulated in the Available-for-Sale Reserve.

Where assets are identified as impaired because of a likelihood arising from a past event the payments due under the contract will not be made (fixed or determinable payments) or fair value falls below cost, the asset is written down and a charge made to the Financing and Investment Income line in the Comprehensive Income and Expenditure Statement. If the asset has fixed or determinable payments, the impairment loss is measured as the difference between the carrying amount and the present value of the revised future cash flows discounted at the asset’s original effective interest rate. Otherwise, the impairment loss is measured as any shortfall of fair value against the acquisition cost of the instrument (net of any principal repayment and amortisation).

Any gains and losses that arise on the de-recognition of the asset are credited or debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement, along with any accumulated gains or losses previously recognised in the Available-for-Sale Reserve.

Where fair value cannot be measured reliably, the instrument is carried at cost (less any impairment losses).

1.10 Grants and Contributions

Page 120 Revenue, Revenue Expenditure Funded from Capital under Statute (REFCUS) and Capital grants with conditions attached are held as receipts in advance on the Balance Sheet until such time as the condition no longer applies, at which point the grant is recognised as income in the Comprehensive Income and Expenditure Statement. Conditions are stipulations that specify that the future economic benefits or service potential embodied in the asset or service acquired using the grant or contribution are required to be consumed by the recipient as specified, or future economic benefits or service potential must be returned to the transferor.

Specific revenue and REFCUS grants are accrued and credited to income within service revenue accounts when the conditions regarding their use are met. Any income credited to service revenue accounts in excess of the expenditure they are intended to fund are, subject to approval, appropriated to revenue grants and contributions unapplied earmarked reserves from the General Fund Balance in the Movement in Reserves Statement until the expenditure is incurred. When the expenditure is incurred, the grant is appropriated back to the General Fund in the Movement in Reserves Statement to ensure that there is no adverse impact on the council tax position. REFCUS grants are reversed out of the General Fund Balance in the Movement in Reserves Statement to either the Capital Adjustment Account if the grant has been used to finance capital expenditure in the year, or to the Capital Grants Unapplied Account Reserve until it is applied to fund capital expenditure, at which point it is transferred to the Capital Adjustment Account.

Non-specific revenue grants, including Revenue Support Grant are credited to Taxation and Non-Specific Grant Income at the foot of the Comprehensive Income and Expenditure Statement.

General revenue grants are subject to the normal carry-forward processes attributable to General Fund balances.

Grants relating to the funding of non-current asset (capital) expenditure are credited to Taxation and Non-Specific Grant Income at the foot of the Comprehensive Income and Expenditure Statement when the conditions regarding their use are met. These charges are reversed out in the Movement in Reserves Statement to either the Capital Adjustment Account if the grant has been used to finance capital expenditure in the year, or to the Capital Grants Unapplied Account Reserve until it is applied to fund capital expenditure, at which point it is transferred to the Capital Adjustment Account.

1.12 Interest in Companies and Other Entities

The Council has interests in companies and other entities. Subject to the level of materiality and exposure to risk, these are consolidated to produce group accounts. In the Council’s own single-entity accounts, the interests in companies and other entities are recorded as financial assets at cost, less any provision for losses.

The Council had interests in two limited companies during the financial year:

 Warrington Borough Transport  Wire Regeneration Limited

Page 121 Warrington Borough Transport is wholly owned by Warrington Borough Council and is consolidated into the Group Accounts as a subsidiary.

Wire Regeneration Limited is a Joint Venture Company with Langtree Land and Property PLC, with each investor owning a 50% share in the joint venture. The Council’s investment is shown as an investment on the single entity balance sheet.

1.14 Interest Receivable or Payable

The effective interest rate method is used to measure the carrying value of a financial asset or liability measured at amortised cost, and to allocate associated interest income or expense to the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to equal the amount at initial recognition. The effective interest is adjusted to the actual interest payment or receipt through the Movement in Reserves Statement to ensure only actual interest is charged to Council Tax.

For financial assets and liabilities carried at cost because the effective rate of interest is the same as the carrying rate of interest, the carrying value is adjusted for accrued interest.

1.15 Internal Interest

Interest earned is recorded initially in the Comprehensive Income and Expenditure Statement. Subsequent allocations are made to certain other individual funds based on individual cash flows and an average rate of interest.

1.16 Investment Property

Investment properties are those that are used solely to earn rentals and/or for capital appreciation. The definition is not met if the property is used in any way to facilitate the delivery of services or production of goods or is held for sale.

Investment properties are measured initially at cost and subsequently at fair value, based on the amount at which the asset could be exchanged between knowledgeable parties at arm’s length. Properties are not depreciated but are revalued annually according to market conditions at the balance sheet date (year-end). Gains and losses on revaluation are recorded in the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. The same treatment is applied to gains and losses on disposal.

Rentals received in relation to investment properties are credited to the Financing and Investment Income line and result in a gain for the General Fund Balance. However, revaluation and disposal gains and losses are not permitted by statutory arrangements to have an impact on the General Fund Balance. The gains and losses are therefore reversed out of the General Fund Balance in the Movement in Reserves Statement and recorded in the Capital Adjustment Account and (for any sale proceeds greater than £10,000) the Capital Receipts Reserve.

1.17 Jointly Controlled Operations and Jointly Controlled Assets

Page 122

Jointly controlled operations are activities undertaken by the Council in conjunction with other ventures that involve the use of the assets and resources of the ventures rather than the establishment of a separate entity. The Council recognises the assets that it controls and the liabilities that it incurs on the Balance Sheet and debits and credits the Comprehensive Income and Expenditure Statement with the expenditure it incurs and the share of income it earns from the activity of the operation.

Jointly controlled assets are items of property, plant or equipment that are jointly controlled by the Council and other ventures’, with the assets being used to obtain benefits for the ventures. The joint venture does not involve the establishment of a separate entity. The Council accounts for only its share of the jointly controlled assets, the liabilities and expenses that it incurs on its own behalf or jointly with others in respect of its interest in the joint venture and income that it earns from the venture.

1.18 Leases

In accordance with IAS 17 all leases are assessed and classified as to whether they are finance leases or operating leases. Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the property, plant or equipment from the lesser to the lessee. All other leases are classified as operating leases.

Where a lease covers both land and buildings, the land and buildings elements are considered separately for classification.

Arrangements that do not have the legal status of a lease but convey a right to use an asset in return for payment are accounted for under this policy where fulfilment of the arrangement is dependent on the use of specific assets.

The Council as Lessee

Finance Leases Property, plant and equipment held under finance leases is recognised on the Balance Sheet at the commencement of the lease at its fair value measured at the lease’s inception (or the present value of the minimum lease payments, if lower). The asset recognised is matched by a liability for the obligation to pay the lessor. Initial direct costs of the Council are added to the carrying amount of the asset. Premiums paid on entry into a lease are applied to writing down the lease liability. Contingent rents are charged as expenses in the periods in which they are incurred.

Lease payments are apportioned between:

 a charge for the acquisition of the interest in the property, plant and equipment; applied to write down the lease liability, and  a finance charge (debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement)

Property, plant and equipment recognised under finance leases is accounted for using the policies applied generally to such assets, subject to depreciation being charged

Page 123 over the lease term if this is shorter than the asset’s estimated useful life (where ownership of the asset does not transfer to the Council at the end of the lease period).

The Council is not required to raise council tax to cover depreciation or revaluation and impairment losses arising on leased assets. Instead, a prudent annual contribution is made from revenue funds towards the deemed capital investment in accordance with statutory requirements. Depreciation and revaluation and impairment losses are therefore substituted by a revenue contribution in the General Fund Balance, by way of an adjusting transaction with the Capital Adjustment Account in the Movement in Reserves Statement for the difference between the two.

Operating Leases Rentals paid under operating leases are charged in the Comprehensive Income and Expenditure Statement as an expense of the services benefitting from the use of the leased property, plant or equipment. Charges are made on a straight-line basis over the life of the lease; even if this does not match the pattern of payments (e.g. there is a rent-free period at the commencement of the lease).

The Council as Lessor

Finance Leases Where the Council grants a finance lease over a property or an item of plant or equipment, the relevant asset is written out of the Balance Sheet as a disposal. At the commencement of the lease, the carrying amount of the asset in the Balance Sheet (whether property, plant and equipment or Assets held-for-sale) is written off to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal. A gain, representing the Council’s net investment in the lease, is credited to the same line in the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal i.e. netted off against the carrying value of the asset at the time of disposal, matched by a lease (long-term debtor) asset in the Balance Sheet.

Lease rentals receivable are apportioned between:

 a charge for the acquisition of the interest in the property; applied to write down the lease debtor (together with any premiums received) and  finance income (credited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement)

The gain credited to the Comprehensive Income and Expenditure Statement on disposal is not permitted by statute to increase the General Fund Balance and is required to be treated as a capital receipt. Where a premium has been received, this is posted out of the General Fund Balance to the Capital Receipts Reserve in the Movement in Reserves Statement. Where the amount due in relation to the lease asset is to be settled by the payment of rentals in future financial years, this is recorded out of the General Fund Balance to the Deferred Capital Receipts Reserve in the Movement in Reserves Statement. When the future rentals are received, the element for the capital receipt for the disposal of the asset is used to write down the lease debtor. At this point, the deferred capital receipts are transferred to the Capital Receipts Reserve.

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The written-off value of disposals is not a charge against council tax, as the cost of fixed assets is fully provided for under separate arrangements for capital financing. Amounts are therefore appropriated to the Capital Adjustment Account from the General Fund Balance in the Movement in Reserves Statement.

Operating Leases Where the Council grants an operating lease over a property or an item of plant or equipment, the asset is retained in the Balance Sheet. Rental income is credited to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Credits are made on a straight-line basis over the life of the lease, even if this does not match the pattern of payments (e.g. there is a premium paid at the commencement of the lease). Initial direct costs incurred in negotiating and arranging the lease are added to the carrying amount of the relevant asset and charged as an expense over the lease term on the same basis as rental income.

1.20 Overheads and Support Services

The cost of Overheads and Support Services are charged to those that benefit from the supply of services based on use and in accordance with Chartered Institute of Public Finance and Accountancy (CIPFA) Service Reporting Accounting Code of Practice 2013/14 (SeRCOP). The total absorption costing principle is used – the full cost of overheads and support services are shared between users in proportion to the benefits received, with the exception of:

 Corporate and Democratic Core – costs relating to the Council’s status as a multifunctional democratic organisation  Non Distributed Costs – the cost of discretionary benefits awarded to employees retiring early and any depreciation and impairment losses chargeable on non- operational properties

These two categories are defined in SeRCOP and accounted for as separate headings in the Comprehensive Income and Expenditure Statement, as part of Net Expenditure on Continuing Services.

1.21 Prior Period Adjustments, Changes in Accounting Policies and Estimates and Errors

Prior period adjustments may arise as a result of a change in accounting policies or to correct a material error. Changes in accounting estimates are accounted for prospectively i.e. in the current and future years affected by the change and do not give rise to a prior period adjustment.

Changes in accounting policies are only made when required by proper accounting practices or the change provides more reliable or relevant information about the effect of the transactions, other events and the conditions on the Council’s financial position and financial performance. Where a change is made, it is applied retrospectively (unless otherwise stated) by adjusting opening balances and comparative amounts for the prior period as if the new policy had always been applied.

Page 125 There are two changes in accounting policy for 2013/14:

 The Code adopted amendments to IAS 19 employee benefits and this is deemed to be a change in the accounting policy for 2013/14. The amendments include new classes of components of defined benefits cost to be recognised in the financial statements. These are remeasures of the net defined benefits liability (asset). There has also been an amendment to the recognition criteria for past service cost and remuneration benefits.  The adoption of the amendments to IAS 1 presentation of Financial Statements by the Code is also a change in accountancy policy. The amendments require separate disclosure on gains and losses reclassifiable into the Surplus or Deficit on the Provision of Services if there are any.

The nature of the impact of these changes is explained further in Note 2 to the core financial statements and further IAS 19 disclosures are included in notes 36.

A change in accounting policy generally requires the disclosure of three Balance Sheets to reflect the impact on the current period, the end of the preceding period and the impact on the opening Balance Sheet of the previous period.

The adoption of IAS 1 and IAS 19 amendments will not have a material impact on the accounts and does not require the publication of a third Balance Sheet at the beginning of the earliest comparative period.

In accordance with the requirements of the 2013/14 Code the financial statements do not include the measurement and disclosure requirement of IFRS 13 Fair Value Measurement. Adoption of IFRS has been deferred to the 2014/15 Code.

Changes in accounting estimates are accounted for prospectively i.e. in the current and future years affected by the change, there is no prior period adjustment.

Material errors discovered in prior period figures are corrected retrospectively by amending opening balances and comparative amounts for the prior period.

1.22 Property, Plant and Equipment

Assets that have physical substance and are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and that are expected to be used during more than one financial year are classified as Property, Plant and Equipment.

Recognition Assets are capitalised in accordance with the Council’s capitalisation and componentisation policies.

Expenditure on the acquisition, creation or enhancement of Property, Plant and Equipment is capitalised on an accruals basis, provided that it is probable that the future economic benefits or service potential associated with the item will flow to the Council and the cost of the item can be measured reliably. Expenditure that maintains

Page 126 but does not add to an asset’s potential to deliver future economic benefits or service potential i.e. repairs and maintenance, is charged as an expense when it is incurred.

The Council does not have a formal de minimis level for capital expenditure. However in normal circumstances, individual items of expenditure below £10,000 would be treated as revenue expenditure, except in regard to vehicles, which by their nature can be purchased at an amount lower than £10,000. Where a specific case can be made for capitalising the expenditure where it relates to a capital grant, where there are many items below the de minimis limit that in aggregate are above the limit or where not capitalising expenditure would present a pressure on the revenue budget, items under £10,000 can be capitalised.

Measurement Assets are initially measured at cost comprising:

 the purchase price  any costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management  the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located

The Council does not capitalise borrowing costs incurred whilst assets are under construction.

The cost of assets acquired other than by purchase is deemed to be its fair value, unless the acquisition does not have commercial substance (i.e. it will not lead to a variation in the cash flows of the Council). In the latter case, where an asset is acquired via an exchange, the cost of the acquisition is the carrying amount of the asset given up by the Council.

Donated assets are measured initially at fair value. The difference between fair value and any consideration paid is credited to the Taxation and Non-Specific Grant Income line of the Comprehensive Income and Expenditure Statement, unless the donation has been made conditionally. Until conditions are satisfied, the gain is held in the Donated Assets Account. Where gains are credited to the Comprehensive Income and Expenditure Statement, they are reversed out of the General Fund Balance to the Capital Adjustment Account in the Movement in Reserves Statement.

Assets are carried in the Balance Sheet using the following measurement bases:

 infrastructure, community assets and assets under construction – depreciated historical cost  dwellings – fair value, determined using the basis of existing use value for social housing (EUV-SH)  all other assets – fair value, determined as the amount that would be paid for the asset in its existing use (existing use value – EUV).

Where there is no market-based evidence of fair value because of the specialist nature of an asset, depreciated replacement cost (DRC) is used as an estimate of fair value.

Page 127

Where non-property assets that have short useful lives or low values (or both), depreciated historical cost basis is used as a proxy for fair value. Assets included in the Balance Sheet at fair value are revalued regularly to ensure that their carrying amount is not materially different from their fair value at the year-end. All PPE Assets are formally revalued over a 5 year period. Any PPE asset that is not formally valued in a financial year will have a desktop valuation undertaken at the end of the Accounting period to determine if there is any material difference that requires further consideration.

Increases in valuations are matched by credits to the Revaluation Reserve to recognise unrealised gains. Exceptionally, gains might be credited to the Comprehensive Income and Expenditure Statement where they arise from the reversal of a loss previously charged to a service.

Where decreases in value are identified, they are accounted for:

 where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount of the asset is written down against that balance (up to the amount of the accumulated gains)  where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying amount of the asset is written down against the relevant service line(s) in the Comprehensive Income and Expenditure Statement

The Revaluation Reserve contains revaluation gains recognised since 1 April 2007, the date of its formal implementation. Gains arising before that date have been consolidated into the Capital Adjustment Account.

Revaluations The Council carries out a rolling programme of revaluations that ensures all Property, Plant and Equipment required to be measured at fair value is revalued at least every five years. If material capital expenditure takes place on a capital scheme, the scheme in question will be revalued upon completion of the additional capital expenditure. Valuations of land and buildings were carried out in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors. Valuations of vehicles, plant, furniture and equipment are based on current prices where there is an active second–hand market or latest list prices adjusted for the condition of the asset.

The significant assumptions applied in estimating the fair values of the PPE property assets were for those assets valued on the Depreciated Replacement Cost method whereby they were valued by adopting the "instant build" approach as set in the Government Financial Reporting Manual. The Council carries out a revaluation of property assets classed as investment assets every year.

Impairment Assets are assessed at each year-end as to whether there is any indication that an asset may be impaired. Examples of events and changes in circumstances that indicate impairment may have incurred include:

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 significant decline (i.e. more than expected as a result of the passage of time or normal use) in an asset’s carrying amount during the period, that is specific to the asset  evidence of obsolescence or physical damage of an asset  a commitment by the Council to undertake a significant reorganisation  a significant adverse change in the statutory or other regulatory environment in which the Council operates

Where indications exist and any possible differences are estimated to be material, the recoverable amount of the asset is estimated and, where this is less than the carrying amount of the asset, an impairment loss is recognised for the shortfall.

Where impairment losses are identified, they are accounted for as follows:

 where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount of the asset is written down against that balance (up to the amount of the accumulated gains)  where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying amount of the asset is written down against the relevant service line(s) in the Comprehensive Income and Expenditure Statement Where an impairment loss is reversed subsequently, the reversal is credited to the relevant service line(s) in the Comprehensive Income and Expenditure Statement, up to the amount of the original loss, adjusted for depreciation that would have been charged if the loss had not been recognised.

Depreciation Depreciation is provided for on all Property, Plant and Equipment assets by the systematic allocation of their depreciable amounts over their useful lives. An exception is made for assets without a determinable finite useful life (i.e. freehold land and certain Community Assets) and assets that are not yet available for use (i.e. assets under construction).

Depreciation is calculated on the following basis:

 dwellings and other buildings – straight line allocation over the useful life of the property as estimated by the valuer  vehicles, plant, furniture and equipment – straight line allocation over 3 to 10 years, dependant on the initial value of the asset or where the item is in fact a component of a land and building asset the asset is depreciated on a straight line basis over the useful life as estimated by the valuer  infrastructure – straight line allocation over 40 years

Where an item of Property, Plant and Equipment asset has major components whose cost is significant in relation to the total cost of the item, the components are depreciated separately.

Revaluation gains are also depreciated, with an amount equal to the difference between current value depreciation charged on assets and the depreciation that would

Page 129 have been chargeable based on their historical cost being transferred each year from the Revaluation Reserve to the Capital Adjustment Account.

Componentisation Policy Component accounting is a concept involving the splitting of assets into significant component parts.

The main purpose of component accounting is to produce accurate primary statements with the cost of the use of an asset correctly reflected in the Comprehensive Income and Expenditure Statement by carrying the correct depreciation associated with fixed assets and also with the correct values of fixed assets presented in the Balance Sheet.

Components have also been depreciated over different lives than the host (main) asset and recognised where they have a significant value when compared to the value of the host assets.

The Council has adopted a policy that recognises that material assets when revalued i.e. assets that have a building value of over £500,000 are to be recognised separately. The component has to have a value of at least 20% of the building value and a useful life which is at least 20% lower than the asset as a whole.

Disposals and Non-current Assets Held for Sale When it becomes probable that the carrying amount of an asset (or disposal group) will be recovered principally through a sale transaction rather than through its continuing use, it is reclassified as an Asset Held for Sale. The asset (or disposal group) is revalued immediately before reclassification and then carried at the lower of this amount and fair value less costs to sell. Where there is a subsequent decrease to fair value less costs to sell, the loss is recorded to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Gains in fair value are recognised only up to the amount of any previously losses recognised in the Surplus or Deficit on Provision of Services. Depreciation is not charged on Assets Held for Sale.

If assets (or disposal group) no longer meet the criteria to be classified as Assets Held for Sale, they are reclassified back to non-current assets and valued at the lower of their carrying amount before they were classified as held for sale; adjusted for depreciation, amortisation or revaluations that would have been recognised had they not been classified as Held for Sale, and their recoverable amount at the date of the decision not to sell.

A ‘disposal group’ is a group of assets, possibly with some associated liabilities, which the Council intends to dispose of in a single transaction. The measurement basis required for non-current assets classified as held for sale is applied to the group as a whole, and any resulting loss reduces the carrying amount of the non-current assets in the disposal group in the order of allocation required by IAS 36.

Assets that are to be abandoned or scrapped are not reclassified as Assets Held for Sale.

When an asset is disposed of or decommissioned, the carrying amount of the asset in the Balance Sheet (whether Property, Plant and Equipment or Assets Held for Sale) is

Page 130 written off to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal. Receipts from disposals (if any) are credited to the same line in the Comprehensive Income and Expenditure Statement also as part of the gain or loss on disposal (i.e. netted off against the carrying value of the asset at the time of disposal). Any revaluation gains accumulated for the asset in the Revaluation Reserve are transferred to the Capital Adjustment Account.

Amounts received for a disposal in excess of £10,000 are categorised as capital receipts. A proportion of receipts relating to housing disposals (75% for dwellings, 50% for land and other assets, net of statutory deductions and allowances) is payable to the Government. The balance of receipts is required to be credited to the Capital Receipts Reserve, and can then only be used for new capital investment or set aside to reduce the Council’s underlying need to borrow (the capital financing requirement). Receipts are appropriated to the Reserve from the General Fund Balance in the Movement in Reserves Statement.

The written-off value of disposals is not a charge against council tax, as the cost of fixed assets is fully provided for under separate arrangements for capital financing. Amounts are appropriated to the Capital Adjustment Account from the General Fund Balance in the Movement in Reserves Statement.

Heritage Assets Heritage Assets are tangible assets with historic, artistic, scientific, technological, geographical or environmental qualities that are held and maintained principally for their contribution to knowledge and culture.

Due to the cost of obtaining valuations for Heritage Assets outweighing the accounting benefit, especially in the current climate of local government funding cuts, the policy adopted is to carry these assets at their insured value.

A de minimis level of £10,000 has been established for inclusion of Heritage Assets on the asset register. Any assets with a value of less than the de-minimis are not significant, e.g. fossils, minor water-colour paintings etc. The Council does not hold any Heritage Assets which have a value in excess of the de minimis which are not disclosed on the Balance Sheet.

Any new Heritage Assets will be recognised and subsequently measured at valuation or cost. For significant Heritage Assets donated to the Council a valuation will be obtained where possible, at which value the asset shall be recognised. If a valuation cannot be obtained, the asset will not be recognised on the Balance Sheet but will be disclosed in the notes to the core financial statements, along with the reason why a valuation cannot be given.

The carrying amounts of Heritage Assets are reviewed where there is evidence of impairment, e.g. where an item has suffered physical deterioration or breakage or where doubts arise as to its authenticity. Any impairment is recognised and measured in accordance with the Council’s general policies on impairment.

Page 131 No depreciation is charged on these assets as they are deemed to have indeterminable lives.

Any disposals will follow the Council’s de-recognition of Non-Current Asset Policy, including the legislative arrangements to ensure no impact on the General Fund for gains and losses on disposal.

Further details on Heritage Assets can be found in note 23 to the accounts.

1.23 Private Finance Initiative (PFI)

PFI and similar contracts are agreements to receive services, where the responsibility for making available the property, plant and equipment needed to provide the services passes to the PFI contractor. As the Council is deemed to control the services that are provided under the PFI schemes, and as ownership of the property, plant and equipment may pass to the Council at the end of the contracts for no additional charge, the Council carries the assets used under the contracts on its Balance Sheet as part of Property, Plant and Equipment.

The Council has two housing PFI schemes. Anson and Blenheim Close where the operator was responsible for constructing 105 new dwellings for social housing, the maintenance of the properties and tenancy management services. John Morris House is the second scheme where the operator was responsible for constructing 38 new self- contained flats for social housing and the maintenance of the properties together with a tenancy management service. These PFI schemes have been accounted for as in the paragraph above.

The original recognition of these assets at fair value (based on the cost to purchase the property, plant and equipment) was balanced by the recognition of a liability for amounts due to the scheme operator to pay for the capital investment. For John Morris House the liability was written down by an initial capital contribution of £395k. No applicable contribution was recorded for Anson and Blenheim Close.

Non-current assets recognised on the Balance Sheet are revalued and depreciated in the same way as property, plant and equipment owned by the Council.

The amounts payable to the PFI operators each year are analysed into five elements:

 fair value of the services received during the year – debited to the relevant service in the Comprehensive Income and Expenditure Statement  finance cost – an interest charge of 5.718% for John Morris House and 9.040% for Anson and Blenheim Close on the outstanding Balance Sheet liability, debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement  contingent rent – increases in the amount to be paid for the property arising during the contract, debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement  payment towards liability – applied to write down the Balance Sheet liability towards the PFI operator (the profile of write-downs is calculated using the same principles as for a finance lease)

Page 132  lifecycle replacement costs – proportion of the amounts payable is posted to the Balance Sheet as a prepayment and is recognised as additions to Property, Plant and Equipment when the relevant works are eventually carried out

With both the Council’s PFI schemes the operator is allowed to retain third party income (the operator keeps all the rental income from the dwellings). This is accounted for by the credit side of the PFI scheme being pro-rated between a finance lease creditor and a deferred income balance. Essentially, the deferred income balance represents the benefits that the Council is to receive over the life of the contract. This balance is then released to the Comprehensive Income and Expenditure Statement over the life of the contract.

The MRP charged on the Council’s two PFI schemes will be reversed out of the accounts via the Capital Adjustment Account.

1.24 Provisions

Provisions are required for any liabilities of uncertain timing or amount that have been incurred. In accordance with the Code, provisions are made when the Council has a present obligation (either legal or constructive) as a result of a past event; it is probable that a transfer of economic benefit will be required to settle it; and a reliable estimate can be made of the financial obligation. If it becomes probable that a transfer of economic benefit is no longer required to settle the obligation, the provision is reversed.

Provisions are charged as an expense to the appropriate service line in the Comprehensive Income and Expenditure Statement in the year that the Council becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

When payments are eventually made, they are charged to the provision carried in the Balance Sheet. Estimated settlements are reviewed at the end of each financial year – where it becomes less than probable that a transfer of economic benefits will now be required (or a lower settlement than anticipated is made), the provision is reversed and credited back to the relevant service.

Where some or all of the payment required to settle a provision is expected to be recovered from another party (e.g. from an insurance claim), this is only recognised as income for the relevant service if it is virtually certain that reimbursement will be received if the Council settles the obligation.

Contingent Liabilities A contingent liability arises where an event has taken place that gives the Council a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the Council. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably.

Page 133 Contingent liabilities are not recognised in the Balance Sheet but disclosed in a note to the accounts.

Contingent Assets A contingent asset arises where an event has taken place that gives the Council a possible asset whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the Council.

Contingent assets are not recognised in the Balance Sheet but disclosed in a note to the accounts where it is probable that there will be an inflow of economic benefits or service potential.

1.25 Reserves

The Council sets aside specific amounts as reserves for future policy purposes or to cover contingencies. Reserves are created by appropriating amounts out of the General Fund Balance in the Movement in Reserves Statement. When expenditure to be financed from a reserve is incurred, it is charged to the appropriate service in that year against the Surplus of Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement. The appropriate reserve amount is then appropriated back into the General Fund Balance in the Movement in Reserves Statement so that there is no net charge against council tax for the expenditure.

Certain reserves are kept to manage the accounting processes for non-current assets, financial instruments, and retirement and employee benefits and do not represent usable resources for the Council – these reserves are explained in the relevant policies.

1.26 Self Insurance

The Council maintains an Insurance Fund to meet the excess amount of any insurance claims not covered by its external insurers and to self insure for a number of risks. The Fund consists of an Insurance Provision to cover known actual claims made and an Insurance Reserve which provides an additional contingency to meet further claims.

1.27 Revenue Expenditure Funded from Capital Under Statute (REFCUS)

Expenditure incurred during the year that may be capitalised under statutory provisions but that does not result in the creation of a non-current asset has been charged as expenditure to the relevant service in the Comprehensive Income and Expenditure Statement in the year. Where the Council has determined to meet the cost of this expenditure from existing capital resources or by borrowing, a transfer in the Movement in Reserves Statement from the General Fund Balance to the Capital Adjustment Account then reverses out the amounts charged so that there is no impact on the level of council tax.

1.28 Revenue Recognition

The revenue recognition policy covers the sale of goods (produced by the Council for the purpose of sale or purchased for resale), the rendering of services (excluding services directly related to construction contracts), interest, royalties and dividends,

Page 134 non-exchange transactions (i.e. council tax) and where previously a liability had been recognised (i.e. creditor) on satisfying the revenue recognition criteria.

Revenue is recognised and measured at the fair value of the consideration receivable. However, if payment is on deferred terms, the consideration receivable is recognised initially at the cash price equivalent. The difference between this amount and the total payments received is recognised as interest revenue in the Surplus or Deficit on provision of services. Short duration receivables with no stated interest rate are measured at original invoice amount where the effect of discounting is immaterial. There is no difference between the delivery and payment dates for non-contractual, non-exchange transactions i.e. revenue relating to council tax and business rates, and therefore these transactions are measured at their full amount receivable.

1.29 Trade and Other Creditors

Trade and other creditors are not recognised when the Council becomes committed to purchase the goods or services but when the ordered goods or services have been delivered or rendered. With the exception of financial instruments, creditors are recognised and measured in accordance with the revenue recognition policy.

1.30 Trade and Other Debtors

Trade and other debtors are not recognised when the Council becomes committed to supply the goods or services but when the goods or services have been supplied or rendered. With the exception of financial instruments, debtors are recognised and measured in accordance with the revenue recognition policy.

1.31 Value Added Tax (VAT)

VAT payable is included as an expense only to the extent that it is not recoverable from Her Majesty’s Revenue and Customs. VAT receivable is excluded from income.

1.32 Local Taxation

The authority is a Council Tax and Business Rates Billing Authority collecting on behalf of other authorities as well as itself. The collectiobn on behalf of other authorities is treated as being on an agency basis and thus only the elements of Council Tax and Business Rates that relate to the authorities are included in its main financial statements. The collection fund account covers all local taxation collected by the authority on behalf of itself, other local authorities and the government.

Page 135 Agenda Item 12

Stephen Broomhead Chief Executive Lynton Green Director of Finance and Information Services New Town House Buttermarket Street Warrington WA1 2NH

Grant Thornton UK LLP 4 Hardman Square Spinningfields Manchester M3 3EB

25th September 2014

Dear Sirs

Warrington Borough Council

Financial Statements for the year ended 31 March 2014

This representation letter is provided in connection with the audit of the financial statements of Warrington Borough Council for the year ended 31 March 2014 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view in accordance with International Financial Reporting Standards.

We confirm that to the best of our knowledge and belief having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves:

Financial Statements i We have fulfilled our responsibilities for the preparation of the financial statements in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in Great Britain ("the Code") as adapted for International Financial Reporting Standards; in particular the financial statements give a true and fair view in accordance therewith. ii We have complied with the requirements of all statutory directions and these matters have been appropriately reflected and disclosed in the financial statements. iii We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud. iv Significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable. v We are satisfied that the material judgements used by us in the preparation of the financial statements are soundly based, in accordance with the Code, and adequately disclosed in the financial statements. There are no further material judgements that need to be disclosed. vi We confirm that we are satisfied that the actuarial assumptions underlying the valuation of pension scheme liabilities for IAS19 disclosures are consistent with our knowledge. We confirm that all settlements and curtailments have been identified and properly accounted for. We also confirm that all significant retirement benefits have been identified and properly accounted for. vii Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of International Financial Reporting Standards and the code. viii All events subsequent to the date of the financial statements and for which International Financial Reporting Standards and the code require adjustment or disclosures have been adjusted or disclosed. ix We have not adjusted the misstatements brought to our attention in the Audit Findings report, which are considered to be immaterial to the results of the Council and its financial position at the year-end. The financial statements are free of material misstatements, including omissions. x We have no plans or intentions that may materially alter the carrying value or classification of assets and liabilities reflected in the financial statements. xi We believe that the Council’s financial statements should be prepared on a going concern basis on the grounds that current and future sources of funding or support will be more than adequate for the Council’s needs. We believe that no further disclosures relating to the Council's ability to continue as a going concern need to be made in the financial statements.

Information Provided xii We have provided you with:

a. access to all information of which we are aware that is relevant to the preparation of the financial statements such as records, documentation and other matters;

b. additional information that you have requested from us for the purpose of your audit; and

c. unrestricted access to persons within the Council from whom you determined it necessary to obtain audit evidence. xiii We have communicated to you all deficiencies in internal control of which management is aware. xiv All transactions have been recorded in the accounting records and are reflected in the financial statements. xv We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud. xvi We have disclosed to you all information in relation to fraud or suspected fraud that we are aware of and that affects the Council and involves:

a. management;

b. employees who have significant roles in internal control; or

c. others where the fraud could have a material effect on the financial statements. xvii We have disclosed to you all information in relation to allegations of fraud, or suspected fraud, affecting the Council’s financial statements communicated by employees, former employees, regulators or others. xviii We have disclosed to you all known instances of non-compliance or suspected non- compliance with laws and regulations whose effects should be considered when preparing financial statements. xix We have disclosed to you the entity of the Council's related parties and all the related party relationships and transactions of which we are aware.

Annual Governance Statement

We are satisfied that the Annual Governance Statement (AGS) fairly reflects the Council’s risk assurance and governance framework and we confirm that we are not aware of any significant risks that are not disclosed within the AGS

Approval

The approval of this letter of representation was minuted by the Council's Audit and Corporate Governance Committee at its meeting on 25 September 2014.

Signed on behalf of the Council

Name……………………………

Position………………………….

Date…………………………….

Name……………………………

Position………………………….

Date…………………………….

Agenda Item 12

APPENDIX 2

Warrington Borough Council Presentational Review of the 2013-14 Financial Statements

Query Pg. No. No. Grant Thornton Query Response 1 5 Can you highlight some of the major savings that Link included in Foreword to will arise from the Invest to Save schemes? Executive Board report 2 10 Is it correct to refer to Dwelling Rents in the final Removed paragraph given the Council no longer has its own

houses? 3 11 Second full paragraph could signpost more clearly Agree - signposting included where performance against budget is set out, i.e.

in Section 5 of the Foreword on pg. 12 4 13 First full paragraph refers to October 2014, should Agree this be October 2013? 5 13 Second full paragraph penultimate sentence Agree 'Council's' - rogue apostrophe 6 13 Third full paragraph - final sentence needs to be Agree re-worded 7 13 Some more information about what is meant by Reworded legacy decisions would be helpful 8 14 Families and Wellbeing Directorate - final sentence No, the 2013-14 savings have - are these savings being 'planned' or delivered in been delayed and therefore advance? not fully achieved so are being offset by one off grant funding 9 14 Second sentence 'children moving into adults' Reworded could be phrased better 10 14 Final line on page - 'additional funding received Reworded from health' - need to clarify what is meant by this,

i.e. CCG/DoH? 11 15 Do you need to clarify how benefits are almost Central Government fund the wholly-funded from subsidy so there is no HB payments consequence to the Authority of any notional under or overspend? 12 15 Reference to 'income overspends' - could this be Yes it does mean that as the re-worded. Do you mean that income targets have end of the sentence says that

not been achieved? '£1.125m shortfall for the year' 13 17 Bullets refer to a number of 'key capital projects'. Link included in Foreword to Descriptions don’t really provide an indication of Executive Board report

what the projects are as they are very high-level 14 20 Surplus or Deficit on revaluation of financial assets' Agree in MIRS should be referenced to Note 37. 15 21 As above for query 16, should revaluation of Agree financial assets be referenced to Note 37? Query Pg. No. No. Grant Thornton Query Response 16 21 CIPFA Model statements show Other Operating Detail of these items can be Expenditure, Financing & Investment Income and found in the notes (9,10,11) Expenditure Gross, i.e. split into income and expenditure. Can an extra column be added to provide this level of detail? 17 22 Now long term investments are material they Balance Sheet cross-referenced perhaps ought to have a note reference. to updated Note 38.

18 22 Should be in £000 rather than £00 Agree

19 23 Final line should refer to ' end of the reporting Agree period' rather than the beginning 20 24 Second paragraph - should this state that changes Agree to IAS 19 have not had a material impact rather

than 'will not have' 21 24 Second paragraph, second sentence refers to Agree policies being approved, surely they have already

been approved. 22 26 Penultimate paragraph - should the JV be included Agree as part of the disclosure on Group Accounts 23 26 Can you review the wording of the paragraph on Further information is included Group Accounts as it states that Warrington to say that as WBT is wholly Borough Transport is immaterial and then it owned and WBC is the sole explains that it has been consolidated? shareholder, it has been included. 24 26 Reference to PFI assets refers to the 31 March Agree 2013 figure. Can you update this? This section also refers to Note 37 when the reference should be to Note 34 25 27 Section on Property Assets should make clear that Within the note no other IAS's the impairment review has taken place as required are referenced so would be

in accordance with IAS 36. inconsistent 26 29 The section on assumptions is all about changes in The disclosure on assumptions assumptions increasing the pension liability; given reflects the impact on the the reality of what has happened (i.e. the liability negative impact of assumptions has reduced), does the Council need a disclosure and further information can be explaining that things can go both ways found in the second paragraph on the decreased liability as a result actual value of a reduced liability has been recorded and modelled the value of an increased liability so this demonstrates that this can go both ways 27 29 Penultimate paragraph - 'years' ' - misuse of Agree apostrophe 28 30 Do you need to clarify what you do to update The section states that valuations on an interim basis as required by IAS valuations are made by

16 qualified valuers 29 34 Environment Service's' - rogue apostrophe Agree

30 36 Misspelling of similar in Note 10 Agree

Query Pg. No. No. Grant Thornton Query Response 31 38 Additional full stop in Note 16 Agree

32 39 Is the Integrated Adult Health post funded by Social Care Commissioning (too Warrington CCG? Can you expand the abbreviation long for the note)

SCC? 33 39 It looks a bit odd that you pay the chief less than Agree the deputy and other directors - do you want to

disclose his part time status? 34 45 Last paragraph - 'Council's' - rogue apostrophe Agree

35 46 Has the prior year comparator in Note 21 been Agree restated as it does not appear to completely agree

back? 36 52 Some of the figures for Sources of Finance 2012/3 The CFR has been restated as do not match the 2012/3 statement. For example per note 45. Closing Capital Financing Requirement is 174,576 not 168,896. 37 68 Should the final sentence read 'accumulated gains Agree and losses' rather than 'accuulates…?’ 38 85 Debtors and Creditor balances are as at 31 March Agree 2014 rather than 2013-14 39 87 Final paragraph states Council has 'material Agree - the paragraph will be interests' in companies. Is this actually the case reworded given that only interest consolidated relates to Warrington Borough Transport? 40 42 Should be restating Note 19 to show the 2012-13 Agree figures based on the new Directorate structure

Agenda Item 12

APPENDIX 3

Grant Thornton Annual Findings Report – Recommendations

Rec Recommendation Priority Management Response Implementation No date & responsibility

1 The Council have continued Low A workshop with Members was January 2015 to improve its arrangement held in 2013/14 to consider (the closure for financial closedown and changes to the foreword and programme the compilation of draft some were made. However commences in financial statements. There further improvements are January and runs is room to further improve intended for 2014/15. Internal continuously with regard to: quality assurance timescales throughout the - Explanatory foreword and slipped slightly in 2013/14 year) - Strengthening the internal resulting in the process not Chief Accountant quality assurance being as robust as required. arrangements to reduce the This will be a priority for number of amendments 2014/15 required 2 The Council should review Medium This has been added to the January 2015 their approach to asset closure of accounts programme Chief Accountant valuation to ensure that all for 2014/15 classes of assets are materially correct. Especially if the market becomes more volatile 3 Proactively review activities Medium Post balance sheet events are January 2015 and disclose any material already included on the closure Chief Accountant post balance sheet events programme but could not be reviewed until after the draft accounts had been presented. This will continue to feature on the programme in 2014/15 4 Ensure governance Medium A new member of staff has January 2015 arrangements with regard to been appointed to strengthen Chief Accountant borrowing to lend remain fit the team who manage this for purpose 5 Review controls in place for High A revised process was used this January 2015 recording and reporting year to report recharges that Chief Accountant recharges to directorates was not as effective as the previous one. The previous process will continue until a more effective and robust process can be implemented.

Agenda Item 12

Agenda Item 12

WARRINGTON BOROUGH COUNCIL AUDIT & CORPORATE GOVERNANCE COMMITTEE 25 September 2014

Report of the: Director of Finance and Information Services Report Author: Lynton Green, Director of Finance and Information Services Contact Details: Email Address: Telephone: [email protected] 01925 4423925 Ward Members: All

TITLE OF REPORT: AUDIT OF THE 2013/14 STATEMENT OF ACCOUNTS

1. PURPOSE OF THE REPORT

1.1 The draft final accounts for 2013/14 were presented to the Audit & Corporate Governance Committee at their meeting on 23 June 2014. The Council’s External Auditors, Grant Thornton, have now completed their audit and this report highlights key issues and summarises changes to the accounts arising from this process. The final accounts are included at Appendix 1

2. BACKGROUND

2.1 Subject to consideration of the Auditors Findings report, the 2013/14 Statement of Accounts are presented for approval by the Committee as presenting a true and fair view of the Council’s financial position as at 31 March 2014.

2.2 The Council has worked closely with Grant Thornton during the process of the audit and have closely monitored the process for the preparation of the final statement of accounts for 2013/14. As a result the closure process went smoothly and without material concern.

3. CHANGES MADE SINCE THE DRAFT ACCOUNTS

3.1 Since the draft statement of accounts was presented to Committee on 23 June 2014, a number of changes have been made. None of these changes are material and mainly related to presentational and disclosure items. These are included in Appendix 2

3.2 One main item to draw the Committee’s attention to is the inclusion of Events after the Reporting Period (Note 5). During 2013/14 the Council agreed to provide loans to three registered housing providers, however these loans were not drawn down Agenda Item 12

until 2014/15. Note 5 allows us to provide details of events that have taken place after the 31 March 2014 that are not reflected in the accounts and as a result a note has been included regarding the drawdown of funds from these loans.

4. REPORT FROM GRANT THORNTON

4.1 This year the auditor has reported no material misstatements in the accounts. This is a significant improvement on previous years and is as a result of an overall improvement in the closure of accounts process across the Council, robust project management procedures in place and an excellent working relationship with the external auditors.

4.2 The auditor has reported five recommendations, one high, three medium and one low in the accounts that the Council has accepted. These are included in Appendix 3 together with the Council’s response.

4.3 Included within the auditor’s report are 5 material misclassifications & disclosure changes, the last of which the Council had on its post balance sheet plan as this could not be actioned until after the draft accounts were presented to committee (see paragraph 3.2). The other four have been accepted with the auditor and corrected.

4.4 Other misclassifications and disclosure changes (6 in total) included within the auditor’s report have been accepted. None of these items represent a material change in the primary statements. There are no uncorrected errors in the accounts.

4.5 In reporting on the findings of the Value for Money conclusion the auditor has concluded that the Council has proper arrangements in place to secure economy, efficiency and effectiveness in its use of resources and intends to provide an unqualified opinion on Value for Money.

5. CONFIDENTIAL OR EXEMPT 5.1 The report is not confidential or exempt.

6. FINANCIAL CONSIDERATIONS

6.1 The report relates to the 2013/14 financial year and has no net financial impact on the Council’s revenue or capital position.

7. RISK ASSESSMENT

7.1 A key requirement in producing the Statement of Accounts is that an unqualified opinion is given by the external auditors. Without this opinion, the Council’s reputation for sound financial standing could be at risk. Agenda Item 12

7.2 The risk of an unqualified opinion has been mitigated through robust project management and monitoring of the closure of accounts process and as a result the Auditor expects to provide an unqualified opinion on the Council’s accounts for 2013/14.

8. EQUALITY AND DIVERSITY/EQUALITY IMPACT ASSESSMENT

8.1 The Council completes Equality Impact Assessments as and when necessary in the provision of its services, of which the financial implications are included within the accounts. There are no specific equalities issues that arise as a result of the compilation and publication of the annual Statement of Accounts.

9. CONSULTATION 9.1 None

10. CONCLUSION

10.1 The process for the preparation of the 2013/14 Statement of Accounts has improved again this year and has gone without consequence. Further progress has been made on the development of working papers and some statements, including the Foreword were revised as a result of making the statements more understandable and easy to read. 10.2 Of the issues reported by Grant Thornton, there were material misstatements reports, something that has not happened for a significant time. All other reported items were minimal and related to misclassifications and disclosure items. All errors discussed with the external auditor have been corrected and as a result there are no uncorrected errors in the accounts. 10.3 Although this has been a highly successful closure of accounts process, there is still room for improvement and a post closure review and lessons learnt session will take place to ensure a more robust programme will be in place for 2014/15.

11. REASONS FOR RECOMMENDATIONS

11.1 To meet the Council’s statutory obligations to approve the audited statement of accounts by 30 September each year.

12. RECOMMENDATIONS

12.1 That the Committee: Agenda Item 12

a) note the contents of the Audit Findings Report from Grant Thornton on the audit of the financial statements;

b) note the changes made to the draft accounts presented to the Committee on 23 June 2014 as set out in Appendix 2 of this report;

c) note the Council’s responses to the recommendations included within the report for Grant Thornton as set out in Appendix 3.

d) note that the Director of Finance and Information Services will submit a Letter of Representation to Grant Thornton;

e) approve the audited 2013/14 Statement of Accounts included in Appendix 1 for publication;

13. BACKGROUND PAPERS • Closure working papers

Contacts for Background Papers:

Name E-mail Telephone Shaer Halewood [email protected] 01925 442766

Agenda Item 13 APPENDIX 1

Grant Thornton 21 June Audit Committee Update 2014 – Challenge questions

Section 1 – Accounting and audit issues

(a) Understanding your accounts – member guidance

1. Have members referred to the Grant Thornton guide for members?

• On 8 April 2014, a workshop was held with a representation of members of the Committee to review and improve the format of the accounts following various reports and training sessions held by CIPFA and Grant Thornton to make the accounts more readable. • The workshop looked at best practice from other sets of accounts as identified by Grant Thornton and actions were agreed to de-clutter the accounts and improve the explanatory foreword. Some of these changes have been reflected in the 2013/14 accounts however this is an ongoing process and each year the accounts will be reviewed and revised as appropriate.

(b) Accounts – top issues for 2013/14 closedown

1. Has your statutory Financial Officer addressed the closedown issues and assessed the potential impact for your financial statements?

• The foreword has been changed to be more explanatory, with the account reordered to read more naturally. The accounts have also been de-cluttered with some notes removed. • The accounts are internally consistent, and any new accounting requirements for Provisions, Pensions and PFI have been reflected • Revaluations of assets have been updated to ensure the carrying value is not materially different to the fair value. • There has been extensive dialogue between the Audit team and the Finance team on potentially challenging areas, and a way forward has been agreed. • The accounting policy for schools has been included in critical judgements within the accounts. Assets derecognised in the accounts have been disclosed within disposals.

(c) CIPFA Bulletin

1. Has your statutory Financial Officer reviewed the guidance and assessed the potential impact on your financial statements?

• LAAP Bulletin 98 has been considered when compiling the financial statements and appropriate action taken.

Section 2 – Local government guidance

(a) Audit Commission VFM Profiles - Waste

1. How has the Council used the Audit Commission briefing paper to consider how their:

i) overall spending on household waste management has changed over time? ii) Spending is divided between waste minimisation, recycling or disposal of waste, and how this has changed over time? iii) Spending on different components of waste management compares with authorities that have a similar or better performance?

The Council has considered the document and:

i) Overall spending has reduced due to the introduction of fortnightly collections ii) Spending is divided between those areas, and savings have been made as part of contract efficiencies iii) Benchmarking is carried out by CIPFA, and has been considered. This will feed into the Outcomes Based Budget process for 2015/16.

(b) Blue badge fraud prevention

1. Is the authority actively pursuing measures to prevent Blue Badge abuse, including prosecuting fraudsters?

• The Council's Anti-Fraud and Corruption Statement and Policy was updated in April 2014 to emphasise management responsibility for putting in place controls to minimise the risk of fraud and to encourage staff to report concerns at the earliest opportunity, using the whistleblowing reporting procedure if necessary. The Statement and Policy notes that "the Council is committed to making sure that the opportunity for fraud, bribery and corruption is minimised and adopts a ‘Zero Tolerance’ approach to fraud, bribery and corruption."

• The Council participated in a data matching exercise facilitated by the Audit Commission under its Flexible Matching initiative. During 2013/14 lists of Blue Badge holders were matched to deceased records provided by the DwP, to identify potential fraud or error. A number of matches were identified for Blue Badges, which highlighted the fact that the Blue Badge recording system had not been updated recently with information obtained from checking deceased lists. These badges have been cancelled; the checks against the deceased lists have been reinstated, and the information is also now being passed on to other relevant sections (e.g. refuse service, to cancel assisted collections). Internal Audit will continue to review matches during 2014/15 and assess further arrangements that could be put into place to ensure that we are able to cancel/ recover badges on the death of the holder.

(c) Local Government Pension Scheme (LGPS) reform

1. Has your Director of Finance & Information Services briefed members on the potential implications of the Government’s proposed LGPS reform for the future management of the locally administered LGPS and is the fund preparing a consultation response?

• The Council’s pension scheme is administered by Cheshire Pension Fund. Members have been made aware of changes to the scheme.

(d) Priority School Building Programme (PSBP)

1. Has the authority considered the implications of the Priority School Building Programme for its schools building and refurbishment programme?

• The Council have considered implications for the secondary estate. We have identified those parts of each school estate which we consider to have highest priority need for investment. • William Beamont Academy has been given funding from PSBP. • There is a PSPB2 which we have responded to consultation

(e) Assessing costs and benefits of local partnerships

1. Has the authority considered the applicability of the Government’s cost benefit analysis guidance in considering the costs/benefits of local service delivery options?

• Members of staff have attended training for cost/benefit analysis and intend to utilise this for the Outcomes Based Budgeting process for 2015/16.

Section 3 – Grant Thornton

(a) Local Government Governance Review (LGGR)

1. The Grant Thornton LGGR report includes a number of case studies summarising good practice in risk leadership, partnerships and alternative delivery models and public communication. Has the Authority reviewed these case studies and assessed whether it is meeting good practice in these areas?

• The Council has reviewed a whole range of case studies and best practice, not just from the document, and has considered these when developing savings proposals. From the document, we can show that we have used the Warwickshire CC model of public consultation, and we are now changing the way we prioritise budget savings, based on information received from the public.

2. The report includes key questions for members to ask officers on risk management and alternative delivery models. Are these issues being considered and responded to by officers?

• The Council has its own risk management process which is followed rigorously, and this is also applied when applying alternative service delivery models. We compile a risk register that forms part of the background document presented to members when approving decisions, allowing them to be better informed.

Agenda Item 13

WARRINGTON BOROUGH COUNCIL

AUDIT AND CORPORATE GOVERNANCE COMMITTEE 25 September 2014

Report of the: Lynton Green, Director of Finance and Information Services Report Author: Shaer Halewood, Chief Accountant and Deputy Section 151 Officer Contact Details: [email protected] Telephone: 01925 443925

Ward Members: All

TITLE OF REPORT: RESPONSE TO GRANT THORNTON CHALLENGE QUESTIONS

1. PURPOSE

1.1 To provide Members with the assurance that the Council has effective actions in place in response to Grant Thornton’s (GT) report presented to the Committee relating to the progress on delivering their responsibilities as our external auditors.

2. CONFIDENTIAL OR EXEMPT

2.1 The report is not confidential or exempt.

3. INTRODUCTION AND BACKGROUND

3.1 On June 21 2014 Grant Thornton provided the Committee with a progress update that included emerging issues and developments impacting on the Council. In the report, GT posed several ‘challenge questions’ for the Council to consider our governance arrangements and accounting treatment in relation to the issues. The Council have responded to GT on these issues and the response is included in Appendix 1.

3.2 The report was set over three areas – (1) Accounting and Audit Issues (2) Local Government Guidance and (3) Grant Thornton related items. Each section contained areas of emerging issues that GT suggested the Committee may wish to consider. Emerging issues raised within the report included:

• Closure of Accounts issues including guidance for Members • CIPFA Bulletins and Audit Commission profiles • Blue Badge Fraud prevention • Local Government Pension Scheme Reform

Agenda Item 13

• Priority School Building Programme • Assessing Costs/Benefits of Local Partnerships • Local Government Governance Review

4. OVERALL CONCLUSION TO THE CHALLENGE

4.1 The Council can demonstrate that it has considered the impact of new developments and emerging issues. The challenge questions have been responded to positively and the implications of such new initiatives have been mitigated where an adverse impact was anticipated or capitalised on where we can learn from best practice.

4.2 In some areas work is on-going to assess the impact of new developments and emerging issues as some areas especially of new legislation are quite new and will take time to properly investigate.

5. FINANCIAL CONSIDERATIONS

5.1 There is no specific cost associated with the report, although areas for consideration highlighted in the report have had and will continue to have an impact on funding. This will be taken into account in the relevant initiative.

6. RISK ASSESSMENT

6.1 New developments and emerging issues always carry an element of risk and where these are significant they have been included on the Strategic Risk Register. Where the risk is Directorate specific, this will have been included within the individual Directorate risk register.

7. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT

7.1 There are no specific Equality and Diversity Impact Issues as a result of the report. Where relevant the implementation of new developments includes Equality Impact Assessments as part of the normal process.

8. CONSULTATION

8.1 None

9. REASONS FOR RECOMMENDATION

9.1 To provide assurance to Members of the Committee that appropriate processes are in place to account for the new developments and emerging issues listed in the Grant Thornton report.

Agenda Item 13

10. RECOMMENDATION

10.1 That the Audit and Corporate Governance Committee note the content of the report.

11. BACKGROUND PAPERS

Grant Thornton update report to Audit & Corporate Governance Committee 21 June 2014

Contacts for Background Papers:

Name E-mail Telephone Shaer Halewood [email protected] 01925 442766

Agenda Item 14

WARRINGTON BOROUGH COUNCIL AUDIT AND CORPORATE GOVERNANCE COMMITTEE 25 September 2014

Report of the: Chief Finance Officer Report Author: Danny Mather, Corporate Finance Manager Contact Details: Email Address: Telephone: [email protected] 01925 442344 Ward Members: All

TITLE OF REPORT: 2014/15 TREASURY MANAGEMENT APRIL - AUGUST MONITORING REPORT

1. PURPOSE OF THE REPORT

1.1 The Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice for Treasury Management (revised 2011), recommends that members be updated on treasury management activities regularly (Treasury Management Strategy, annual and midyear reports), but preferably more frequently. This report provides an update on the 2014/15 treasury activity and performance and therefore ensures this Council is implementing best practice in accordance with the Code. This report is being presented to the Audit and Corporate Governance committee as they are the body charged with the scrutiny of Treasury Management by the Council.

1.2 This report provides an update on the 2014/15 treasury activity and performance undertaken up to period 5 (31 August 2014). The report also provides an assessment of the economic environment in that period.

2. BACKGROUND

2.1 Treasury Management is the management of the Council’s cash flows, its banking, money market and capital market transactions together with the effective control of the risks associated with those activities.

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2.2 The table below shows the Council’s treasury portfolio at the end of August 2014:

Balance Balance Movement 31 March 31 August during 2014 2014 year Council Treasury Portfolio £m £m £m Council Borrowing - short-term temporary borrowing 5.2 5.3 0.1 - long-term borrowing 142.0 159.0 17.0 147.2 164.3 17.1 Council Investments - deposits with financial institutions -44.7 -48.0 -3.3 -44.7 -48.0 -3.3

NET 102.5 116.3 13.8

3. COUNCIL INVESTMENTS

3.1 The Council often has a positive cash flow due to the fact that it receives cash in advance of spending such as grants, business rates and Council Tax. The Council also maintains reserves and provisions which are earmarked for various approved purposes.

3.2 This means that the Council has at times, surplus cash balances pending expenditure in line with approved budgets and the capital investment programme. These balances are invested and generate interest, which forms part of the Council’s budget.

3.3 The table above shows that at 31st August 2014 the Council held £48m of investments an increase of £3.3m on the balance at the start of the financial year. This is due to cash receipts from Council Tax and NNDR which are front-loaded to the start of the year.

3.4 Investments at 31st August 2014 by maturity were:

Investment Portfolio £m

Overnight Deposit 31.912 Between 1 week and 1 month 0.0 Between 1 and 3 months 0.0 Between 3 months and 1 year 5.0

Over 1 year 11.048

Total Investments 47.960

Agenda Item 14

3.5 Investment at 31st August 2014 by counterparty were:

Investment Portfolio £m Banks 36.887 Building Societies 0.0 Money Market Funds 0.025 Other 11.048 Total Investments 47.960

3.6 The breakdown of the overnight deposits and fixed investments are shown below:

Overnight Deposits Balance Balance Movement Yearly Avg Counter Party 31/03/2014 31/08/2014 Interest Rate

£ £ £ % Santander (Alliance & Leicester) 9,985,000 9,985,000 0 0.80% Bank of Scotland 0 2,971,008 2,971,008 0.40% Yorkshire Bank 0 0 0 - Nat West (Select Liquidity) 9,026,000 4,075,891 (4,950,109) 0.25% Handelsbanken 14,606,407 14,855,136 248,729 0.46% Legal and General MMF 0 0 0 - Prime Rate Money Market Fund 0 0 0 - Ignis Money Market Fund 0 0 0 - Deutsche Money Market Fund 0 0 0 - CCLA Money Market Fund 25,000 25,000 0 33,642,407 31,912,035 (1,730,372)

3.7 The Council has reclassified the Local Authority Mortgage Scheme as a long term debtor in the Council’s final accounts when previously they had been reported as investments. The details are shown below:

Balance Balance Movement 31 March 31 August during Local Authority Mortgage Scheme 2014 2014 year £ £ £ Lloyds/TSB 2,000,000 2,000,000 0.0 Leeds Bank 500,000 500,000 0.0 Lloyds/TSB 1,000,000 1,000,000 0.0 Lloyds/TSB 2,000,000 2,000,000 0.0

Total Local Authority Mortgage 5,500,000 5,500,000 0.0 Scheme

Agenda Item 14

Commercial Loans and Loans Balance Balance Movement with Registered Social 31 March 31 August during Landlords 2014 2014 year £ £ £ Warrington Housing Assoc. 924,785 912,889 (11,896) Golden Gates Housing Trust 1,742,186 1,721,693 (20,493) Warrington Housing Assoc. 2,881,588 2,863,900 (17,688) Warrington Borough Transport 200,000 200,000 0 Warrington Borough Transport 320,000 320,000 0 Muir Housing Group 0 2,000,000 2,000,000 Warrington Borough Transport 0 200,000 200,000 Warrington Borough Transport 0 300,000 300,000 Helena Housing Group 15,000,000 15,000,000 Total of Commercial Loans 6,068,559 23,518,482 17,449,923

4. COUNCIL BORROWING

4.1 The Council borrows to fund the approved capital investment programme in accordance with its prudential indicators. It also borrows to finance cash flows in the short term.

4.2 The strategy aim for borrowing is to minimise the revenue cost of debt whilst securing the Council from unexpected revenue pressures caused by changes in interest rates.

4.3 The Council’s borrowing portfolio as at 31st August 2014 is made up of the following:

Borrowing Portfolio Total as at 31/08/2014

£m Money Market Loans 133.5 PWLB Loans 25.5 Temporary Loans 5.3 Total 164.3

4.4 In order to minimise the revenue cost of debt, the majority of the Council’s borrowing is at interest rates fixed for the duration of the loan. Borrowing at 31st August 2014 by type of loan is detailed below:

Borrowing Portfolio Total as at 31/08/2014 £m Variable interest rates 0.3

Fixed interest rates 164.0

Total 164.3

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4.5 In addition to borrowing at fixed rates, certainty can be locked in by borrowing over extended periods. An analysis of the maturity profile of fixed rate borrowing at 31st August 2014 was:

Borrowing Portfolio Total as at 31/08/2014

£m

Within 12 months 5.5 Between 1-2 years 5.1 Between 2 – 5 years 17.0 Between 5 – 10 years 5.3 Between 10-30 years 67.0

30 years or more 64.3

Total 164.2

4.6 The tables below show the detail of the loans making up Council’s debt portfolio:

Money Market Start Maturity Interest Principal Counter Party Date Date Rate % £ DEPFA BANK PLC 21/04/97 21/10/35 5.800 5,000,000 BAYERISHCE LANDESBANK 27/03/02 27/03/42 4.980 5,000,000 EURAPAISCHE HYPOTHEKEN 02/04/02 02/04/42 5.000 5,000,000 EURO HYPO 26/04/02 28/04/42 4.990 15,000,000 DEPFA BANK PLC 01/04/03 01/04/43 4.223 5,000,000 DEPFA ACS BANK 01/04/03 01/04/43 4.304 10,000,000 DEXIA FINANCE PUBLIC BANK 24/11/05 24/11/65 3.820 10,000,000 BARCLAYS BANK 03/04/06 05/04/66 3.810 5,000,000 BARCLAYS BANK 20/01/06 20/01/66 3.960 10,000,000 BARCLAYS BANK 26/07/07 26/07/77 4.180 25,000,000 DEXIA FINANCE PUBLIC BANK 16/08/06 17/08/76 4.230 13,500,000 London Borough of Newham 31/10/13 31/10/17 1.850 5,000,000 London Borough of Bromley 31/10/13 31/10/16 1.450 5,000,000 Gt Manch Pension Fund 06/11/13 15/04/14 0.500 0 Hampshire CC 19/11/13 18/11/16 1.300 4,000,000 Hampshire Police & Crime 19/11/13 18/11/16 1.300 1,000,000 Hampshire CC 13/12/13 12/12/18 2.350 5,000,000 London Borough of Barnet 15/04/14 15/10/15 1.000 5,000,000 Bonds 01/04/08 01/04/50 5.000 12,275 Total Outstanding 133,512,275

Agenda Item 14

Public Works Loan Board Start Maturity Interest Principal Counter Party Date Date Rate % £ PWLB 25/09/97 23/03/23 6.625 277,737 PWLB 22/02/07 30/09/56 4.350 222,189 PWLB 13/01/10 13/01/15 3.120 266,627 PWLB 15/01/10 15/01/35 4.530 438,824 PWLB 13/08/10 13/08/35 3.940 49,869 PWLB 22/10/10 22/10/15 1.870 111,095 PWLB 26/11/10 30/09/55 5.260 555,473 PWLB 20/06/11 20/06/16 3.020 2,000,000 PWLB 27/02/12 27/02/37 3.760 1,703,774 PWLB 11/06/12 11/06/37 3.260 2,838,928 PWLB 24/04/14 24/04/39 3.940 2,000,000 PWLB 04/08/14 04/08/39 3.800 15,000,000

Total Outstanding 25,464,516

4.7 The Council’s Capital Programme currently contains a 2014/15 borrowing requirement of £711.357m. The Council is currently following its strategy of running down its investments to finance capital and it is forecast that the Council will borrow later in the financial year.

4.8 The Council’s borrowing has increased this year £17.1m in 2014/15 to fund the capital programme.

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5. COMPLIANCE WITH TREASURY AND PRUDENTIAL LIMITS

5.1 It is a statutory duty for the Council to determine and keep under review the affordable borrowing limits. The Council’s approved Treasury and Prudential Indicators (affordability limits) are outlined in the approved Treasury Management Strategy Statement. 5.2 During the financial year to date the Council has operated within the treasury limits and Prudential Indicators set out in the Council’s Treasury Management Strategy Statement and in compliance with the Council’s Treasury Management Practices. The Prudential and Treasury Indicators are shown below:

Prudential Indicator 2014/15 2014/15 Indicator Estimate £m £m Capital Expenditure 737.4 737.4 In Year Borrowing Requirement Authorised limit for external debt 1153.2 164.2 Operational boundary for external debt 1032.4 164.2 Gross Borrowing 1022.4 164.2 Investments -45.6 -45.0 Net Borrowing 976.9 119.2 Capital Financing Requirement (CFR) 1044.4 886.9 Ratio of financing costs to net revenue stream 12.8 8.2 Incremental impact of capital investment decisions: a) Increase in council tax (band change) per an 43.4 43.97 Limit of fixed interest rates based on net debt 100% 100% Limit of variable interest rates based on net debt 40% 40% Principal sums invested > 364 days 30.0 11.0 Maturity structure of borrowing limits: Under 12 months 25% 3.4% 12 months to 2 years 25% 3.1% 2 years to 5 years 35% 10.4% 5 years to 10 years 30% 3.2% 10 years and above 100% 80.0%

6. BENCHMARKING

6.1 The Council regularly compares its performance against both CIPFA and Sector benchmarking. The CIPFA benchmarking report shows that the Council is making a return of 1.20% on its investments compared to an average return of 1.07% for April to June 2014 (the latest figures available).

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6.2 The table below shows our position compared to the Sector benchmark returns for the April - June. Again it can be seen that the Council is performing well above the benchmark return.

Benchmark Benchmark Council Return Performance 7 day 0.34% 0.50% 1 month 0.36% - 3 month 0.41% - 6 month 0.52% - 12 month 0.82% 1.48%

7. MANAGEMENT OF RISK

7.1 Credit and counterparty risk and market risk in the period have been successfully managed within and monitored against the framework approved in the Treasury Management Strategy approved by Council in March 2014.

8. ECONOMIC UPDATE

8.1 During the quarter ended 30th June 2014: • Indicators suggested that the economic recovery accelerated; • Household spending rose again; • Inflation fell to its lowest level since September 2009; • The Monetary Policy Committee (MPC) suggested that the economy might warrant higher interest rates before the end of the year; • Low tax receipts put the fiscal tightening slightly off track; and • The European Central Bank (ECB) made announcements designed to boost bank lending and counter the risk of deflation.

9. INTEREST RATE FORECAST

9.1 The table below provides a summary of Sector’s interest rate forecast:

Rates Bank 5yr PWLB 10yr PWLB 25yr PWLB 50yr PWLB Sept-14 0.50% 2.70% 3.70% 4.40% 4.40% Dec-14 0.50% 2.80% 3.70% 4.40% 4.40% Mar-15 0.75% 2.90% 3.80% 4.50% 4.50% June-15 0.75% 3.00% 3.90% 4.60% 4.60% Sept-15 1.00% 3.00% 4.00% 4.70% 4.70% Dec-15 1.00% 3.10% 4.00% 4.70% 4.70% Mar-16 1.25% 3.20% 4.10% 4.80% 4.80% Jun-16 1.25% 3.30% 4.20% 4.80% 4.80%

Agenda Item 14

Sep-16 1.50% 3.30% 4.20% 4.90% 4.90% Dec-16 1.75% 3.40% 4.30% 4.90% 4.90% Mar-17 2.00% 3.50% 4.40% 4.90% 4.90% Jun-17 2.00% 3.60% 4.40% 5.00% 5.00%

10. DEBT RESCHEDULING

10.1 Debt rescheduling opportunities have been limited in the current economic climate and structure of interest rates following increases in PWLB new borrowing rates in October 2010. During the period from April to August 2014 no debt rescheduling was undertaken.

11 YEAR END FORECAST POSITION

11.1 The Council is forecasting a balance position at the year end, based on the figures at the end of August 2014.

12 TREASURY MANAGEMENT DEVEOPMENTS

12.1 Local Authority Mortgage Scheme – during the period the 200th mortgage award was approved.

12.2 Loans to Registered Social Landlords – during the period the Council continued to expand its Loans to Registered Social Landlords Scheme. In line with the Council’s 2014/15 Capital Programme agreed by Full Council in March 2014. A £90m loan facility was signed with Helena Partnerships in the period (agreed by Executive Board on 31/1/14). The loan to Helena Partnerships as enabled them to bid and receive Homes and Community Agency (HCA) grant allocation to build 394 new homes across the region, including the following 160 new properties in Warrington:

• Harrison Sq ( Ph 1) – 31 houses/apartments for rent • Harrison Centre (Ph 2) – 16 houses for rent • Marsden Ave, Latchford – 73 houses for rent and shared ownership • Orford Rd – 40 houses and apartments for rent and shared ownership

On 11 September 2014 a £60m loan facility was signed with Wulvern Housing Group (agreed by Executive Board on 14/7/14). The Council hope to conclude the £30m loan facility with Plus Dane Group (agreed by the Executive Board on 10/3/14) in quarter 3. Discussions are also on going with a number of other Registered Providers regarding potential new future loans.

12.3 Local Authority Property Fund – the Council’s investment with the Churches, Charities and Local Authority (CCLA) Property Fund continues to perform well. The

Agenda Item 14

fund is a unit trust fund that invests in commercial and industrial property in the UK. During the period the fund grew in value to £213m with 69 local authorities investing in it. The fund yielded a 5.5% return in the period. The fund also purchased its first property in Warrington in the period with the purchase of the Royal Mail Regional Distribution Centre at Winwick Quay.

12.4 Warrington Borough Transport (WBT) – the Council has completed a £1.15m loan facility to WBT which was agreed by the Executive Board in May 2013 and there have been two drawdowns of the facility of £300k in May 2014 and £200k in July 2014.

12.5 Challenger Banks – in line with the Council’s 2014/15 Treasury Management Strategy the Council has invested in July 2014 with Aldermore Bank (£1m) and Sainsbury Bank (£1m). The Director of Finance and Information Systems added Sainsbury Bank and the Cambridge and Counties Bank to the Council’s list of Counterparties in the period.

12.6 Green Energy Bonds – further diversification of the Council’s investment portfolio took place in the period with the adding of green energy bonds by the Director of Finance and Information Services to the Council’s counterparty list, with an individual bond limit of £5m. The first investment of £2m took place in September 2014. A full update on this investment and the investment class will be given to the Treasury Management Board at their next meeting.

12.7 LGA Bond Agency - In line with the Council’s 2014/15 Capital Programme agreed by full Council in March 2014. The Director of Finance and Information Services approved a £200k investment in the Local Government Association (LGA) Municipal Bond Agency in the period. Prior to making the investment the full business case went to the Treasury Management Board.

12.8 OMEGA Warrington Limited (OWL) – work continued of the proposed £7.5m loan in the period (agreed by the Executive Board on 13/1/14). It is forecast that the loan will be finalised in quarter 3 2014.

13 CONFIDENTIAL OR EXEMPT

13.1 Not confidential.

14 FINANCIAL CONSIDERATIONS

14.1 Not applicable.

15 RISK ASSESSMENT

Agenda Item 14

15.1 A full risk assessment has been undertaken. The Council’s annual Treasury Management Strategy details the financial risk facing the Council’s treasury portfolio over the coming year.

16 EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT

16.1 The Finance Service undertakes Equality Impact Assessment (EIA) in its wider functions. Service changes that emerge from proposal contained in the Treasury Management Strategy are subject to equality impact assessments.

17 CONSULTATION

17.1 Not applicable.

18 CONCLUSION

18.1 All investment and borrowing activity has been undertaken in full compliance with the Council’s approved Treasury Management Policy and Treasury Management Strategy.

19 REASONS FOR RECOMMENDATIONS

19.1 To ensure the Council compiles with the 2011 revised CIPFA Treasury Management Code of Practice.

20 RECOMMENDATIONS

20.1 That the assurance provided by this report is considered by committee.

20.2 The Committee endorse the Director of Finance & Information Services decision to add Sainburys Bank, Cambridge & Counties Bank and Green Energy Bonds to the Council’s Counterparty list.

20.3 The Committee endorse the Director of Finance & Information Services decision to invest £200k in the LGA Municipal Bond Agency.

21 BACKGROUND PAPERS

21.1 Treasury working papers. Contacts for Background Papers:

Name E-mail Telephone Danny Mather [email protected] 01925 Corporate Finance Manager 442344

Agenda Item 15

WARRINGTON BOROUGH COUNCIL

AUDIT AND CORPORATE GOVERNANCE COMMITTEE – 25th SEPTEMBER 2014

Report of the: Director of Finance & Information Services and the Solicitor to the Council and Assistant Director Corporate Governance

Report Author: Lynton Green and Timothy Date Contact Details: Email Address(es): Telephone: [email protected] 01925 443925 [email protected] 01925 442150

Ward Members: Latchford West - Councillors McLaughlin and Morgan

TITLE OF REPORT: SOUTHERN GATEWAY REGENERATION SCHEME - WILDERSPOOL STADIUM

1. PURPOSE

1.1 To provide clarity for members over the current status of the stadium. To address some of the questions that have been frequently asked since the ownership was transferred as part of the Southern Gateway regeneration.

2. CONFIDENTIAL OR EXEMPT

2.1 Not confidential or exempt

3. INTRODUCTION AND BACKGROUND

3.1 As part of establishing a Joint Venture Company to deliver regeneration within the Southern Gateway area of the Warrington the Council has contributed land and buildings into a Joint Venture with Langtree Group PLC. The Joint Venture was legally incorporated in March 2014.

3.2 This is a 50/50 Joint venture with both parties making equal contributions into the venture. The JV is now known as “Wire Regeneration” and includes a joint board with three representatives from each partner. For Warrington Council the current board members are the Council’s Chief Executive, the Leader of the Council, and the Executive Member for Corporate Resources and Assignments.

3.3 Since the establishment of the Joint Venture a number of members have asked questions relating to associated issues, and therefore these are presented in this report to try and give a clearer picture, but also to give the opportunity for further questions to be asked in a clear and transparent forum..

Agenda Item 15

3.4 Frequently Asked Questions

3.5 Who owns the former Wilderspool rugby stadium now?

The ownership of the Wilderspool former rugby ground was transferred by the Council as part of the Council’s contribution into a JV company called “Wire Regeneration” in March 2014. This JV company is 50% the Council and 50% Langtree Group plc.

3.6 Has the Council transferred its holding of the rugby ground to the new company Wire Regeneration?

Yes, as above, along with the Wharf industrial estate and a small number of other local properties. Langtree manages all the property in the JV on behalf of Wire Regeneration, the JV company.

3.7 Do Warrington Wolves still have any interest? Do Warrington Wolves have any financial commitment to clearing the site?

The rugby club's occupation of the ground was a lease from the Council giving them rights to use it. Langtree now manages the property, the rugby club has handed the keys back to Langtree. The Council has not been formally advised that the lease has come to an end, but that is now not a Council issue. The rugby club no longer has any financial commitment to clearing the site.

3.8 Who are Buckingham Group Contracting and what is there involvement?

They are a separate firm from Wire Regeneration. They have been commissioned by Wire Regeneration to undertake the deconstruction, remediation and preparation of the former Warrington Wolves rugby stadium, In layman’s terms this means demolition and making good the ground afterwards ready for any new development.

3.9 What has been said publicly about plans for the stadium site and the wider area? This is part of the "Southern Gateway" regeneration site and Wire Regeneration is now leading this for us. The aspiration for the site stated in Exec Board reports is mixed use with homes, offices, employment and ancillary retail.

4. FINANCIAL CONSIDERATIONS

4.1 There are no direct financial consequences arising from this report. A full financial appraisal was considered as part of the Executive Board report to establish the Joint Venture.

5. RISK ASSESSMENT Agenda Item 15

5.1 There are no direct risks arising from this report. A risk assesment was considered as part of the Executive Board report to establish the Joint Venture.

6. EQUALITY AND DIVERSITY / EQUALITY IMPACT ASSESSMENT

6.1 None

7. CONSULTATION

7.1 None

8. REASONS FOR RECOMMENDATION

8.1 To encourage an open debate on the ownership and related issues to do with Wilderspool Stadium.

9. RECOMMENDATION

9.1 Members are asked to note and provide any further comments on the content of the report.

10. BACKGROUND PAPERS

Report to Executive Board – Capital Investment in the Southern Gateway Joint Venture Company - 14 October 2013

Contacts for Background Papers:

Name E-mail Telephone Steve Park [email protected] 01925 443940

Agenda Item 16 WARRINGTON BOROUGH COUNCIL AUDIT AND CORPORATE GOVERNANCE COMMITTEE 25 SEPTEMBER 2014

Report of the: Director of Finance and Information Services Report Author: Jean Gleave, Chief Internal Auditor Contact Details: Email Address: Telephone: [email protected] 01925 442354 Ward Members: All

TITLE OF REPORT: INTERNAL AUDIT QUARTERLY PERFORMANCE REPORT TO 12 SEPTEMBER 2014

1. PURPOSE OF THE REPORT

1.1 The purpose of the report, attached as Appendix 1, is to brief the Audit and Corporate Governance Committee on the progress being made against the Internal Audit work programme for the year 2014/15. It covers the period from 16 June 2014 to 12 September 2014.

2. CONFIDENTIAL OR EXEMPT

Not confidential.

3. FINANCIAL CONSIDERATIONS

3.1 Effective internal controls and an effective internal audit service can have a positive impact on the Council’s financial position. Through identification of areas where controls can be strengthened, losses can be prevented and value for money improved.

4. RISK ASSESSMENT

4.1 A key requirement in producing the Annual Governance Statement is to be able to place reliance on the Opinion and Annual Report of the Chief Internal Auditor. The Strategic and Directorate risk registers will be reviewed quarterly to ensure that they reflect the issues raised from the Internal Audit workplan. This process will also be used to ensure that the Audit workplan reflects any changing risks identified by services.

5. EQUALITY AND DIVERSITY/EQUALITY IMPACT ASSESSMENT

5.1 The work required to deliver the Audit Services plan is identified through a regular risk assessment process. This is carried out using an established methodology that is designed to show that all potential audit areas are considered fairly. The Equality Impact Assessment for Audit has been reviewed and updated.

6. CONSULTATION

Agenda Item 16

N/A

7. REASONS FOR RECOMMENDATIONS

7.1 To ensure that the Council maintains an effective framework of internal control and manages its key risks and to ensure the continued provision of an effective internal audit function.

8. RECOMMENDATION

8.1 That the Audit and Corporate Governance Committee considers, comments on and notes this report as part of its monitoring role.

9. BACKGROUND PAPERS

Internal Audit working papers and reports

CONTACTS FOR BACKGROUND PAPERS:

Name E-mail Telephone Jean Gleave [email protected] 01925 442354 Chief Internal Auditor

Agenda Item 16 Appendix 1 Internal Audit Service

INTERNAL AUDIT PROGRESS REPORT

September 2014

Internal Audit 5th Floor Quattro New Town House Buttermarket Street Warrington WA1 2NH

Agenda Item 16 Appendix 1

CONTENTS

Section Page

1. Management Summary 1

2. Reports Issued 2

3. Progress against 2013/14 plan 3

4. Follow up of previously agreed 8 recommendations

5. Key Performance Indicators 10

Appendix A – Report Summaries – Limited / Minimal assurance opinions

Appendix B – Report Summaries – Follow up of High Priority Recommendations

Appendix C –Reporting Definitions

Internal Audit Progress Report September 2014

1. MANAGEMENT SUMMARY

Introduction

The purpose of this report is to brief the Audit and Corporate Governance Committee on the progress being made against our planned work for the year 2014/15. It covers the period up to 12 September 2014.

Summary of audit activity

We have issued 9 final reports since the previous meeting of the Committee and 7 reports are at draft stage. Detail of the reports issued is provided in Section 2 with summaries for reports that carry limited or minimal assurance opinions included at Appendix A. The timing and progress of the reviews is set out in more detail in Section 3. We have liaised with the external auditors Grant Thornton to co- ordinate work on financial systems to support their work for the 2013/14 accounts; this work is now complete.

Additional work by Internal Audit during this period has included involvement in investigation work. We are continuing to raise awareness for counter fraud and have given a fraud presentation to ICT staff. We have also taken part in a presentation to the Leadership Development Forum meeting in September 2014, together with the benefits fraud team and the Council’s financial investigator. We have been working with neighbouring Local Authorities to prepare bids for the counter fraud fund that was announced by DCLG in July 2014. We are continuing with the reciprocal working arrangements with Sefton Council and continue to meet with the Cheshire Local Authorities with a view to sharing resources and providing mutual support. The contracts auditor from Cheshire West & Chester internal audit team is currently providing audit work on the Bridge Street review.

Work has also included: - detailed substantive testing to support external audit work on the 2013/14 accounts. This has included testing of payroll; related parties; and fixed assets; - grant audit testing – complex families; - preparation for the uploading of the NFI fraud data matching – October 2014; - proactive work on Blue Badges –review of matches.

1

Internal Audit Progress Report September 2014

Follow ups

We have performed detailed follow up work on a number of the reports that we issued in 2013/14 including: Client Finances; Children’s Homes and Market/Hatters Row. A summary of progress made in implementing our previous recommendations is included in Section 4. Outstanding Critical or High Priority recommendations are included at Appendix B.

2. REPORTS ISSUED

Since the previous meeting of the Committee 9 reports have been issued as final and a further 7 reports are currently in draft.

Final Reports issued: - F&W budgetary control - CYPS Records Management - Council Tax / NDR - Walton Lea - Fixed Assets - Financial Accounting system - Data Protection - Market follow up

The following reports are currently in draft awaiting management responses: - Hatters Row - St Andrew’s PS - St Paul of the Cross PS - St Stephen’s PS - Bradshaw PS - Brook Acre PS - Dallam PS - Payroll – detailed testing

We anticipate being able to present the above draft reports as final reports to the next meeting 2

Internal Audit Progress Report September 2014

3. PROGRESS AGAINST 2014/15 PLAN On 24 April 2014 the Audit and Corporate Governance Committee agreed the Internal Audit plan for the year. The table below provides details of the approved plan, when reviews are planned and actually undertaken. Audit Title Planned Start Actual Start Date Actual Final Assurance Opinion Comments Quarter Report Date RESOURCES AND STRATEGIC COMMISSIONING FINANCIAL SYSTEMS Financial accounting system C/f from 13/14 Jun 14 Aug 14 Substantial Final report Payroll: C/f from 13/14 - new starters, leavers and other permanent payroll amendments Apr 14 Sep 14 Substantial Draft memo - Detailed testing temporary amendments Apr 14 Sep 14 - Draft memo Fixed Assets Reconciliation: C/f from 13/14 - Detailed testing – QA process Apr 14 June 14 - Feedback as part of QA process

- System review Mar 14 Aug 14 Substantial - design Final Report

Financial Performance / Budgetary C/f from 13/14 Mar 14 Aug 14 Substantial F&W budgetary control – Final Control report issued. NDR / Council Tax recovery and C/f from 13/14 Apr 14 Aug 14 High Final Report enforcement Accounts Receivable Q1 Aug 14 In progress Attendance at Debt Recovery group ongoing Capital Programme Q1 Aug 14 Initial review of CIPG and capital programme underway Housing and Council Tax benefits Q3 Council Tax Reduction Scheme Q3 Retention of business rates / pooling Q4 arrangements 3

Internal Audit Progress Report September 2014

Audit Title Planned Start Actual Start Date Actual Final Assurance Opinion Comments Quarter Report Date Treasury Management Q4 Accounts Payable Q4 Financial accounting system Q4 Payments to Staff Q4 Detailed testing to support XA Q4 - Payroll - Fixed assets KEY BUSINESS SYSTEMS Recruitment and Employment - Q2 Jul 14 Follow up undertaken Follow up of sickness review and extra work ERGE Better Care Fund / Pooled budget Q3 Initial meetings held TOR to be Integrated Commissioning drawn up in Sep 14

Members allowances – follow up Q3 Scheduled to start in Sep 2014 13/14 review Electoral Registration Q4 Regulation of Investigatory Powers Q4 (RIPA) AUTHORITY WIDE Regeneration schemes – Bridge C/f from 13/14 Jun 14 Consultancy review re Street governance arrangements. Contract Regulations C/f from 13/14 Governance Q3 Risk Management arrangements – inc Q3 business continuity and emergency planning Information Governance – data Q4 breaches Management Info / Data Quality / PIs Q4 ICT: Q4 PSN compliance ICT Training 4

Internal Audit Progress Report September 2014

Audit Title Planned Start Actual Start Date Actual Final Assurance Opinion Comments Quarter Report Date ICT strategy/policies – follow up Fraud – NFI Ongoing NFI data to be uploaded Oct 2014 Anti-Fraud & Corruption: Ongoing Separate workplan in place: • Corporate Sanctions Policy • Grant payments • Awareness raising • Proactive work • Concessionary Travel / Blue Blue badges –review of Badges 5 matches Anti-Fraud & Corruption: Ongoing Separate workplan in place: • Corporate Sanctions Policy • Grant payments • Awareness raising • Proactive work • Concessionary Travel / Blue Blue badges –review of Badges 5 matches Related Parties testing Q4 Grant Auditing: Bus Operators Grant Grant included in Community Transport Grant Police & Crime Commissioner Grant Complex families 1/4 review Apr/Jul 14 - Grant claim signed Q1 and Q2 reviews completed Value for Money: Use of IDEA to interrogate contract payments Review of advertising spend (CE request) FAMILIES AND WELLBEING DIRECTORATE WIDE Safeguarding and Monitoring Q3 Peer review Oct 14

5

Internal Audit Progress Report September 2014

Audit Title Planned Start Actual Start Date Actual Final Assurance Opinion Comments Quarter Report Date Governance Arrangements Q4

Service Improvement Q4 CHILDREN AND YOUNG PEOPLE’S SERVICES Follow-up: Children’s Homes Q1 Apr 14 - - Follow up complete Children in Need Q3 Children in Care Q3 Child and Family Support Q4 Children’s Centres Q4 Adoption Services Q4 Higher Needs Funding Q3 Sep 14 Request to carry out assurance work on use of funds by colleges Youth Offending Service - - - - Review of assurance from Halton PUBLIC HEALTH Governance review C/f from 13/14 Inc with Directorate wide review Housing Services Q1 Jun 14 In progress Public Health Services Q4 ADULT SERVICES Commissioning and contract C/f from 13/14 Apr 14 In progress - waivers management Procurement and contract Q1 Apr 14 Jul 14 Substantial Walton Lea – final report management and monitoring Financial Impact Assessment Q3 Care Management Q3 Safeguarding and Monitoring – Client Q1 Jul 14 Follow up of 13/14 review – Finances Q4 work completed in May and July 2014. Separate additional work in progress to reconcile client finance accounting systems. 6

Internal Audit Progress Report September 2014

Audit Title Planned Start Actual Start Date Actual Final Assurance Opinion Comments Quarter Report Date ECONOMIC REGENERATION, GROWTH AND ENVIRONMENT Section 106 Moneys c/f from 13/14 Apr 14 In progress Transformation of Services c/f from 13/14 Due to start Budget monitoring Q3 Due to start Waste Services Q2 Aug 14 In progress Walton Hall Q3 Sep 14 In progress Pest Control Q3 Concessionary Travel / Local bus Q4 contracts Planning, Policy and Programmes Q4 CONTRACT Bridge Street Q1 Apr 14 Review in progress Regeneration schemes Q3 Energy management Ongoing Input to project group CHILDREN AND YOUNG PEOPLE – SCHOOLS AUDITS St Andrew’s PS c/f from 13/14 Jun 14 Substantial Review added at management request –Draft Report St Paul of the Cross PS Q1 Jun 14 High Draft Report St Stephen’s CPS Q1 Jun 14 High Draft Report Bradshaw CPS Q1 Jun 14 Substantial Draft report Brook Acre CPS Q1 Jun 14 Substantial Draft report Dallam CPS Q1 Jun 14 Substantial Draft report Bridgewater Q3 Academy conversion – closure review ICT governance c/f 13/14 Due to start in Sep 14

7

Internal Audit Progress Report September 2014

4. FOLLOW UP OF PREVIOUSLY AGREED RECOMMENDATIONS The following tables summarise follow up work, and the performance of the Council’s management in implementing agreed recommendations:

No of Recommendations Recommendations Date Recommenda Implemented or Comments Outstanding Due Report tions Superseded Ref. Audit Title C/ M L C/H M C/H M H

062/2013 Jul 13 Walton Hall/Games in 1 19 0 1 12 - 7 Follow up review undertaken. Review /001 Parks indicated that a number of agreed actions were still outstanding. The management at Walton Hall are working with the finance manager to address the issues and are re- structuring the team later in the year. A further follow up review will be undertaken in 2014/15 to assess progress.

Commissioning – 1 6 2 Nov 13 Follow up to undertaken with 2014/15 041/2013 Children in Care review /001 051/2013 Mobile Computing 1 7 0 Dec 13 Follow up in progress /002 Follow up in progress 051/2013 ICT Policies 0 6 1 Dec 13 /001 Follow up work completed in May and July 054/2013 7 4 1 1 3 6 1 Apr 14 Client Finances 2014. 5 of the 6 o/s high priority /001 recommendations have been implemented in part. 034/2014 Occupational Health 1 3 0 Mar 14 Follow up to be scheduled /001 034/2013 Confirmation received via e-mail from HR Sickness Absence 2 7 0 2 6 0 1 Apr 14 /001 Advisory Services Manager that 1 rec has

8

Internal Audit Progress Report September 2014

been partially implemented and all others fully implemented. ICT Training & 0 8 0 Apr 14 Follow up in progress 033/2013 Development /001

0 14 2 0 14 0 0 Apr 14 Follow up complete 015/2013 Complaints /001 011/2014 Regeneration 6 0 0 Mar 14 To be followed up in the review on Bridge /003 Schemes Street that is in progress. 027/2013 Members Allowances 0 4 1 Aug 14 Follow up in 14/15 scheduled work. /001 & Mayoral Support Follow up work undertaken in July 14 and 040/2013 Children’s Residential 15 10 7 8 2 7 8 May 14 follow up report issued. /001 Homes – Financial services 052/2013 Neighbourhood 2 5 6 Sep 14 Follow up in progress /001 Working

011/2014 Regeneration 6 0 0 Mar 14 Follow up work to be undertaken during /003 Schemes 2014/15 as part of the Bridge Street review 017/2014 0 3 0 Sep 14 Follow up in progress Accounts Payable /001

015/2015 Financial Accounting 2 2 2 Nov 14 Not yet due /001 System

019/2014 Contact Centre 2 8 1 Apr 15 Not yet due /001 Income and Banking

Data Sharing 5 3 0 Apr 15 Not yet due 051/2014 Agreements /003 9

Internal Audit Progress Report September 2014

5. KEY PERFORMANCE INDICATORS

The table below details the key Performance Indicators (PIs) for Audit Services for the period to 12 September 2014 compared to the targets.

To date summaries of the post audit feedback forms indicate an overall satisfaction rate of 100% with the audit service, with 100% of respondents noting that they were ‘very satisfied‘ with the service provided. A review by the Chief Internal Auditor against the new Public Sector Internal Audit Standards has been completed and indicates 93% compliance with the standards, with the main area of non compliance being the external assessment process.

Ref Indicator Target Achieved Achieved Achieved Achieved Quarter 1 Quarter 2 Quarter 3 Quarter 4 FIN022 Final reports issued within 25 80% 75% 63% working days of completion of fieldwork Reasons One report was Two reports were outside 25 days – outside 25 days, delays in issuing the one due to late report and delays in management receiving responses. responses and one due to auditor annual leave.

10

Internal Audit Progress Report September 2014

Appendix A

REPORT SUMMARIES – LIMITED (MARGINAL) / MINIMAL ASSURANCE OPINIONS

None Issued

11 Internal Audit Progress Report September 2014

Appendix B FOLLOW UP OF HIGH PRIORITY RECOMMENDATIONS 054/2013/001 - Client Finances

PLANNED DATE OF RESPONSIBLE COMMENTS OR FURTHER AGREED ACTION ACTION OFFICER ACTION REQUIRED (MONTH END)

Recommendations implemented in the Executive Mar 14 Follow up work following areas: Director F&W undertaken in May - Written procedures, recording of safe and July 14. Client contents/keys and empty property Director of Finances team moved checks Finance & IS location to the Council’s Finance Partial progress and/or further work Team and additional required to ensure implementation in the support has been following areas: extended. - Bankline system, pre-paid cards, senior Significant additional management checks, deceased clients, piece of work being Civica supporting documentation for undertaken by IA to income/expenditure transactions posted reconcile Sage and to client accounts. Softbox accounts.

040/2013/001 Children’s Residential Homes – Financial Services

PLANNED DATE OF RESPONSIBLE COMMENTS OR FURTHER AGREED ACTION ACTION OFFICER ACTION REQUIRED (MONTH END) Recommendations implemented in the Meeting to discuss following areas: the follow up work is being arranged with - Payroll (all 5 implemented) the new head of service. Not implemented – total of 18. Key risk areas as follows:

Purchase Orders – 5 x recs, none implemented (2 of which high)

Procurement Cards – 5/7 recs not implemented (1 x high)

Personal Allowances – 7/11 not implemented (4 x high)

12 Internal Audit Progress Report September 2014

Appendix C Overall Audit Opinion/Recommendation Definitions

We have four categories by which we classify our overall audit opinion and our opinion of the individual key control areas. They have been revised during 2013/14 and are defined as follows:

Key controls are being applied consistently and effectively. This means that the key risks in the terms of reference are being High Assurance properly managed and our review did not identify any weaknesses that would impact on the achievement of the key system, function or process objectives.

Key controls exist but there is some inconsistency in their application and some of the key risks in the terms of reference may Substantial Assurance need attention. The likely impact of these weaknesses on the achievement of the key system, function or process objectives is not expected to be significant.

A number of key controls do not exist and/or are not applied consistently or effectively. This means that a number of the key Limited Assurance risks in the terms of reference need attention. These weaknesses in the design and/or operation of key controls could impact upon achievement of key system, function or process objectives.

A significant number of key controls do not exist and/or there are major omissions in the application of key controls. This means that Minimal Assurance a significant number of risks in the terms of reference are not being managed properly, which may put the achievement of the Council’s objectives at risk.

Recommendation Risk Ratings

Each of the issues identified have been categorised according to risk as follows:

 A top priority owing to a control weakness that has or could have a significant impact on the achievement of key system, function, or process objectives, and Critical also the Council’s objectives.

 An important issue owing to a control weakness that has or could have a significant impact on the achievement of key system, function, or process High objectives.

 A control weakness that has or could have an impact on the achievement of the Medium key system, function or process objectives. An issue, which, if addressed, would contribute towards raising the standard of internal control.

 A minor issue which does not impact upon the achievement of key system, function or process objectives. However implementation of the recommendation Low would improve overall control or help to reduce a minor level of non-compliance with an existing control process.

13 Agenda Item 17 WARRINGTON BOROUGH COUNCIL AUDIT AND CORPORATE GOVERNANCE COMMITTEE 25 SEPTEMBER 2014 Report of the: Chair of the Audit and Corporate Governance Committee Report Author: Louise Murtagh, Democratic Services Officer Contact Details: Email Address: Telephone: [email protected] 01925 442111 Ward Members: All

TITLE OF REPORT: 2013/2014 ANNUAL REPORT OF THE AUDIT AND CORPORATE GOVERNANCE COMMITTEE

1. PURPOSE OF THE REPORT

1.1 The purpose of the report, attached as Appendix 1, is to provide an overview of the work completed by the Audit and Corporate Governance Committee during the municipal year 2013/2014.

1.2 The self assessment and evaluation of effectiveness completed by Members of the Committee on 30 April 2014, and reviewed by the Committee during the meeting of 23 June 2014, provided members with an opportunity to assess the performance and effectiveness of the Committee and to identify any areas where development was needed. The self assessment was taken from the Chartered Institute of Public Finance and Accountancy (CIPFA) Practical Guidance for Audit Committees issued in December 2013.

2. CONFIDENTIAL OR EXEMPT

Not confidential.

3. FINANCIAL CONSIDERATIONS

N/A

4. RISK ASSESSMENT

4.1 The Council must ensure that it has an appropriate governance framework in place to comply with legislative requirements. A key requirement for the Audit and Corporate Governance Committee in order for the Committee to meet its Terms of Reference (Appendix 2) is to agree the assurances it requires and when these should be received.

5. EQUALITY AND DIVERSITY/EQUALITY IMPACT ASSESSMENT

5.1 The production of an annual report is derived from CIPFA best practice guidance. There are no specific equalities issues in relation to the content of this report.

Agenda Item

5.2 Following presentation of the report to Council on 20 October 2014 a copy will be available on the Council website and can be produced other formats if required.

6. CONSULTATION

N/A

7. REASONS FOR RECOMMENDATIONS

7.1 To ensure the Audit and Corporate Governance Committee follows best practice as recommended by CIPFA in promoting open and transparent governance.

8. RECOMMENDATION

8.1 That the Audit and Corporate Governance Committee endorse the report to be presented to full Council.

9. BACKGROUND PAPERS 9.1 Self Assessment documents

CONTACTS FOR BACKGROUND PAPERS:

Name E-mail Telephone Louise Murtagh [email protected] 01925 442111

Agenda Item 17

ANNUAL REPORT OF THE

AUDIT and CORPORATE GOVERNANCE COMMITTEE for the period

20 May 2013 to 8 June 2014

FOREWORD & INTRODUCTION BY THE CHAIRMAN

I am pleased to be able to introduce the fifth Audit and Corporate Governance Committee Annual Report which covers the municipal year 2013/14.

Warrington Council established a Governance Committee in 2007 and in 2010 this was renamed the Audit and Corporate Governance Committee to better reflect the responsibilities of the Committee. A sub-committee was also established to deal specifically with issues surrounding the Council’s constitutional arrangements.

This report aims to summarise the work and achievements of the Audit and Corporate Governance Committee during 2013/2014. The production of such a report is recommended as good practice by the National Audit Office.

The Committee’s main purpose is to provide assurances on governance and risk management arrangements, internal control and financial management. This is achieved by considering reports from internal and external sources, and making recommendations to the Council for action to address any deficiencies.

The Committee’s Work Programme has continued to grow steadily. There has been a high level of continuity in committee membership over the past couple of years and with this expertise and a knowledge of finance and audit matters.

The Constiutional Sub-Committee became a committee in its own right and was asked to contribute to a number of changes in the way that the Council operated internally and across Cheshire. Although the stand-alone Constitution Committee reported directly to full Council its work was linked to the Audit and Corporate Governance Committee through its members being taken from the Audit and Corporate Governance Committee. Details of the key reports considered by the Committee are listed within this report.

I would like to thank all the members that served on this Committee in 2013/2014 and particularly the Deputy Chair Councillor Bretherton.

Councillor C Fitzsimmons Chair 2013/2014 Municipal year Agenda Item 17

2013/14 Annual Report of the Audit and Corporate Governance Committee

Contents

1. Role of the Audit Committee

2. Composition of the Audit and Corporate Governance Committee

3. Constitutional Committee

4. Effectiveness of Audit and Corporate Governance Committee

5. Audit and Corporate Governance Committee Training

6. Meetings held during the year

7. Internal Control, Governance and Risk Management Systems

8. External Audit

9. Internal Audit

10. Key Reports Presented to the Audit and Corporate Governance Committee 11. Other Matters and Looking Ahead 12. Conclusion

Appendices

A. Terms of Reference of the Audit and Corporate Governance Committee and the Constitutional Committee B. Work Programme 2013/2014 and reports considered by the Audit and Corporate Governance Committee

Agenda Item 17

1. ROLE OF THE AUDIT AND CORPORATE GOVERNANCE COMMITTEE

1.1 The Audit and Corporate Governance Committee operated during the year in accordance with the Terms of Reference agreed by the Council. These can be found at Appendix A.

1.2 As part of the self-assessment exercise undertaken in April 2014, the Committee identified areas where development is needed and reviewed the Terms of Reference of the Committee in line with the model terms of reference issued by the Chartered Institute of Public Finance & Accountancy (CIPFA).

2. COMPOSITION OF THE AUDIT AND CORPORATE GOVERNANCE COMMITTEE

2.1 Council Committees are established on a political proportionality basis, as far as practicable, in line with the political composition of the Council. The Council Constitution allowed for political parties to make temporary substitutions to committees. The membership of the Audit and Corporate Governance Committee, as agreed by full Council was as follows:

Party Number of Councillor Name members Conservative 1 P Kennedy

Labour 8 C Fitzsimmons, P Bretherton, J Carter (for 27 June 2013 only), J Davidson, G Friend, J Joyce, J Kerr-Brown, S Parish and C Vobe (from 26 September 2013)

Liberal 2 B Axcell and I Marks Democrat

2.2 Standing invitations to attend Audit and Corporate Governance Committee meetings were extended to the Chief Executive; Deputy Chief Executive; Director of Finance & Information Services; Monitoring Officer; Internal Audit; and External Audit.

3. CONSTITUTION COMMITTEE

3.1 The Constitution Committee considered a whole host of amendments put forward by the Planning Improvement Board and the Development Management Committee including – a) The removal of the requirement to complete a ‘prescribed form’ to enable a referral to the planning committees b) A review of the timetable for referrals to the planning committees c) Changes to the scheme of delegation d) A review of the ‘objection trigger’ to refer an item to the planning committees.

3.2 Procedural issues surrounding Leader’s Announcements and Questions at Council.

3.3 The options open to Members in relation to the status of the Corporate Parenting Forum Agenda Item 17

3.4 Amending Standing Orders relating to the recording of votes on budget or Council Tax matters

3.5 Committee structures with specific reference to a reduction to size of the Licensing Committee membership

3.6 The recommendation to full Council of the establishment of a pan-Cheshire Joint Health Scrutiny Protocol

4. EFFECTIVENESS OF THE AUDIT AND CORPORATE GOVERNANCE COMMITTEE

4.1 The Committee had been active during the year in carrying out its duty in providing the Council with assurance that effective internal control arrangements were in place.

4.2 Specifically the Committee has: • Reviewed the Strategic Risk Register and contributed to the development of the register • Reviewed compliance with the CIPFA Practical Guidance for Audit Committees December 2013 and undertaken a self-assessment. • Reviewed the bad debt write offs • Continued to consider the Council’s new policy committee structure • Reviewed the decisions of the Strategic Procurement Panel regarding the status of procurement decisions under the Addendum to Contract Regulations October 2013

4.3 Nominated members Councillors Fitzsimmons, Kennedy, Axcell and Parish completed a self-assessment and evaluation of the effectiveness of the Committee at a workshop on 30 April 2014; the Solicitor to the Council and the Chief Internal Auditor assisted with the interpretation of the questions and gave advice on best practice. As part of the self- assessment exercise the Committee agreed that they would continue to review the effectiveness of the Committee and the Terms of Reference and would review reports providing assurance on value for money.

4.4 A working group was also established to look at the way in which the Statement of Accounts would be presented for 2013/2014. The aim of this was to enable as many people as possible to understand what is a very complicated document

5. AUDIT AND CORPORATE GOVERNANCE COMMITTEE TRAINING

5.1 Training on the role of the Audit & Corporate Governance Committee was provided for new members at the meeting in June 2013 by Internal Audit.

5.2 To assist with the Committee’s understanding of the context of fraud nationally the Audit Manager presented an update at the meeting in January 2014.

5.3 To assist with self-development Committee members considered and discussed the CIPFA Practical Guidance for Audit Committees issued in December 2013.

Agenda Item 17

6. MEETING HELD DURING THE YEAR

During the year 7 meetings were held and the following Member attendance was recorded

Councillor/Date 27/06/13 26/09/13 21/11/13 16/01/14 13/02/14 20/03/14 24/04/14        B Axcell      P Bretherton X X

J Carter X   J Davidson X X X X X        C Fitzsimmons        G Friend      J Joyce X X       P Kennedy X   J Kerr-Brown X X X X X      I Marks X X        S Parish    C Vobe X X X

A full list of the reports presented to the Members at these meetings can be found at Appendix B to this report.

7. INTERNAL CONTROL, GOVERNANCE AND RISK MANAGEMENT SYSTEMS

7.1 At each meeting the Committee has considered reports from its Internal and External Auditors and has also received regular updates on the robustness of governance and risk management arrangements from the Deputy Chief Executive, the Director of Finance & Information Services and the Assistant Director Partnerships & Performance.

7.2 Specifically, the Audit Committee has gained assurance on the effectiveness of the strategic risk register; financial performance; the processes for governance and the framework of assurance; and counter fraud arrangements.

7.3 The Council’s Annual Governance Statement incorporating the Statement on Internal Control was considered and was recommended to the Council for approval.

Agenda Item 17

7.4 The Committee received updates on anti-fraud bribery and corruption and approved a revised Anti-Fraud, Bribery and Corruption Statement and Policy at the meeting in April 2014.

8. EXTERNAL AUDIT

8.1 The Committee has reviewed the work and findings of External Audit by:

• discussing and agreeing the nature and scope of the Annual Plan; • considering the extent of its co-ordination with, and reliance on, Internal Audit; • receiving and considering reports derived from the Annual Plan; and • receiving and considering the annual audit letter before its submission to the full Council.

8.2 The Audit and Corporate Governance Committee has also met in private with External Audit to allow discussion of matters in the absence of executive officers. This is in line with best practice and CIPFA guidance. Guidance recommends that the Committee should have the opportunity to meet with both External Audit and Internal Audit independent of the presence of those officers with whom the auditor must retain a working relationship. The Chair of the Committee also meets privately with the external auditor periodically to discuss matters.

9. INTERNAL AUDIT

9.1 The Committee has reviewed and considered the work and findings of the Council’s Internal Auditors by:

• discussing and agreeing the nature and scope of the Annual Plan; • receiving and considering regular Progress Reports from the Chief Internal Auditor; • receiving and considering reports derived from the Annual Plan • receiving the Chief Internal Auditor’s annual opinion on the system of internal control, governance and risk management which gave the opinion of substantial assurance.

9.2 The Committee also met in private with Internal Audit so as to allow discussion of matters in the absence of executive officers.

9.3 For both Internal and External Audit reports, the Committee ensured that management actions agreed in response to reported weaknesses, had either been implemented or that there had been adequate explanation for delay or non-implementation.

10. KEY REPORTS PRESENTED TO THE COMMITTEE

10.1 The Council has agreed to a number of large scale capital development programmes for Warrington. The Committee has looked at the governance arrangements for these over the municipal year.

10.2 The Council operated a risk based audit service and received regular updates on the risk register and risk management reports to provide assurances that the plans were appropriate. Agenda Item 17

10.3 In line with the Committee’s advisory function members were asked to consider a number of reports before they were presented to full Council. These included revisions to financial regulations, the community governance review of Cuerdley Parish Council, and the treasury management strategy. Additionally the Committee received a referral from Council to investigate the matter of construction industry blacklists of trade unionism.

11. OTHER MATTERS AND LOOKING AHEAD

11.1 The Committee has statutory duties and responsibility for scrutiny of Council Tax and National Non-Domestic Rate setting; and approval of the Statement of Accounts.

11.2 The financial climate remained very challenging, and efficiency and value for money would be high on the agenda making the role of the Committee and its oversight even more important in the year ahead.

11.3 The Committee received information relating to the financial aspects of the Council’s new responsibilities with regard to the changes to the NHS. They will continue to receive reports relating these new Public Health duties during 2014/2015.

11.4 Scrutiny of the governance arrangements relating to the Council’s ambitious regeneration schemes would continue as progress was made.

11.5 The Treasury Management Board was set up to look at the specifics behind the Council’s investments and borrowing. Councillors from this Committee were members of the Board and for the municipal year 2014/2015 the Committee would receive regular updates summarising the Board’s findings.

12. CONCLUSION

The Committee is of the opinion that this annual report is consistent with the Annual Governance Statement, Head of Internal Audit Opinion and the External Audit VFM review and there are no matters that the Committee is aware of at this time that have not been disclosed appropriately.

Chair Audit and Corporate Governance Committee

September 2014 Agenda Item 17

Appendix A

Terms of Reference of the Audit & Corporate Governance Committee

1. to discharge the responsibilities set out in the Accounts and Audit Regulations 2003; 2. to develop, maintain, monitor and review the Council’s Code of Corporate Governance and to undertake, as appropriate, an assessment of wider governance issues, including the Constitution and the administration and conduct of the Council’s business and report to Council as necessary; 3. to oversee, monitor and review the Finance Procedure Rules and report to Council as necessary; 4. to monitor and review the Council’s audit functions and requirements in 5. relation to both internal and external audit; 6. to agree, monitor and review the Council’s Risk Management Strategy and to ensure that effective Risk Management is embedded throughout the Council; 7. to ensure the Council has in place appropriate policies and processes 8. to safeguard the Council’s resources and their use including appropriate mechanisms for anti-fraud and corruption; 9. to monitor and review the Section 151 Officer (the Council’s Chief Finance Officer) and his/her appointed Deputies in the performance of their duties and responsibilities; 10. to approve the Council’s Statement of Accounts and Statement of Internal Control as authorised by the full Council and as required under the relevant Account and Audit Regulations; 11. to approve the Council’s Council Tax base each year.

Terms of Reference of the Constitutional Committee

To make recommendations to Council on the development and maintenance of, and amendments to, the Council’s Constitution. Work Programme 2013/2014 Appendix B

Agenda Item/Report Section 27/06/13 26/09/13 21/11/13 16/01/14 13/02/14 20/03/14 24/04/14 Completed

  TRAINING INFORMAL MEETING     WITH IA/XA Chair Produce annual report of the Audit and Corporate   Governance Committee (to Full Council) Committee Working moved to early Review of effectiveness of 2014/15 Party the Audit and Corporate programme as awaiting CIPFA Governance Committee – guidance complete self assessment Democratic Review Audit and Services Corporate Governance         Committee work programme Legal & moved to early Review Audit and Audit 2014/15 Corporate Governance programme as Committee training awaiting CIPFA requirements guidance Legal Election Fees and    Charges Review of the Audit and Legal moved to early 2014/15 Corporate Governance programme as Committee’s terms of awaiting CIPFA reference guidance Work Programme 2013/2014 Appendix B Review (draft) Annual Governance Governance Statement Group &CIA draft   (AGS) Review reports from Governance Group &CIA Governance Group and    implementation of AGS action plan items Review of strategic risk P'ships &   register Perfmnce Review annual Risk P'ships &   Management report Perfmnce Review of Code of CIA & Legal   Corporate Governance Review draft statement of Finance   accounts Review of final statement Finance   of accounts Management letter of Finance   representation Write Offs of Irrecoverable Finance    Debt Treasury management Finance   strategy Treasury management Finance quarterly monitoring report  half  year    report Treasury management Finance practices statement   Annual Treasury Outturn Finance   Report Approval of National Non Finance Domestic Rates Form 1   Work Programme 2013/2014 Appendix B Approve Council Tax base Finance  

Approve Accounting Finance   Policies Annual report of the Chief CIA Internal Auditor on the system of internal control.  

Review the effectiveness Committee of Internal Audit / compliance with the Code   of Practice

Review of External Audit Committee

to be confirmed Review annual internal CIA  

audit plan draft final  Internal audit monitoring CIA reports including monitoring of      implementation of recommendations Review Anti-fraud bribery CIA & and corruption strategy Solicitor  

Implementation of actions CIA in response to “Managing  the Risk of Fraud” Annual   Report

Regulation of Legal Investigatory Powers  report & grant of through   authorisations training

Work Programme 2013/2014 Appendix B Agree External Audit plan External Audit  

Grant Thornton - External agreement of Fees Audit  

External Audit Update - External including responses to Audit &        Challenge Questions Finance Annual Findings Report External Audit  

Annual Audit Letter External Audit  

Certification of claims and External returns Audit  

May Elections Report No Elections held in 2013

AD HOC REPORTS 2013-14 

Review of Policy Policy Committees   Legal Governance Arrangements Cuerdley    Parish Council Legal Review of changes to Financial procedure rules  

Work Programme 2013/2014 Appendix B

Planning Improvement Development   Board Update Control   RIPA inspection 2014 Legal Governance contained in IA arrangements for Area  Report Boards Internal Audit

Polling District Review taken directly to 2013/2014 Electoral Council

Waivers to Contract  Regulations Finance

 within write-off Charging Policy Finance report

Audit report of St  Gregory's High School Internal Audit Verbal Report Transfer of Public Health Health Functions to Local  Authorities Finance  Referral from Council - Blacklisting of  Construction Workers Finance 

Local Audit and  Accountability Act 2014 Internal Audit 

Agenda Item 18 WARRINGTON BOROUGH COUNCIL AUDIT AND CORPORATE GOVERNANCE COMMITTEE 25 SEPTEMBER 2014 Report of the: Chair of the Audit and Corporate Governance Committee Report Author: Louise Murtagh, Democratic Services Officer Contact Details: Email Address: Telephone: [email protected] 01925 442111 Ward Members: All

TITLE OF REPORT: AUDIT AND CORPORATE GOVERNANCE DRAFT COMMITTEE WORK PROGRAMME 2014/15

1. PURPOSE OF THE REPORT

The purpose of the report is to set out the work programme for the Audit and Corporate Governance Committee. This is scheduled into a timetable of meetings. Appendix 1 provides a copy of this schedule.

2. CONFIDENTIAL OR EXEMPT

Not confidential.

3. FINANCIAL CONSIDERATIONS

N/A

4. RISK ASSESSMENT

The Council must ensure that it has an appropriate governance framework in place to comply with legislative requirements. A key requirement for the Audit and Corporate Governance Committee in order for the Committee to meet its Terms of Reference is to agree what assurances it requires and when these should be received.

5. EQUALITY AND DIVERSITY/EQUALITY IMPACT ASSESSMENT

The workplan is derived from best practice guidance which seeks to include all potential areas of assurance that the Committee may seek to review in line with its Terms of Reference. There are no specific equalities issues in relation to the content of this report. However, section one of the Equality Impact Assessment (EIA) asks for information on the directorate, department and assessment lead responsible for the policy / service / function that is being assessed and whether it is a ‘new’ or ‘existing’ development. Also requested is background information on the policy/service/function. Headline questions for each of the items presented to the Audit and Corporate Governance Committee should include: 1. What are the main aims and objectives of the policy/service/function? 2. Who are the main stakeholders?

Agenda Item 18

3. What outcomes are delivered as a result? 4. How is the service promoted/explained to those it might affect directly or indirectly? 5. Is there evidence of any complaints on grounds of discrimination? If yes, how were these resolved?

Answers to these questions need to be clearly stated and documented at the outset of an E.I.A.

6. CONSULTATION

N/A

7. REASONS FOR RECOMMENDATIONS

To ensure the Audit and Corporate Governance committee gains assurance on the governance and assurance processes in place on which the Council places reliance.

8. RECOMMENDATION

That the Audit and Corporate Governance Committee comments upon and approves the attached workplan.

9. BACKGROUND PAPERS

Audit and Corporate Governance Committee Terms of reference.

CONTACTS FOR BACKGROUND PAPERS:

Name E-mail Telephone Louise Murtagh [email protected] 01925 442111

Governance Committee

Pre-Agenda meeting 3.00pm (Tuesday) Agenda Items Due Agenda dispatch N/A draft agenda emailed 12 June 2014 13 June 2014 02 September 2014 16 September 2014 17 September 2014 28 October 2014 18 November 2014 19 November 2014 16 December 2014 06 January 2015 07 January 2015 13 January 2014 03 February 2015 04 February 2015 24 February 2015 10 March 2015 11 March 2015 31 March 2015 21 April 2015 22 April 2015 Dates Pre-Committee meeting 3.00pm (Tuesday) Meeting Date - Thursday 17 June 2014 23 June 2013 (mon) 23 September 2014 25 September 2014 25 November 2014 27 November 2014 13 January 2015 15 January 2015 10 February 2015 12 February 2015 17 March 2015 19 March 2015 28 April 2015 30 April 2015 Audit & Corporate Governance Committee Agenda Item/Report Section 23/06/14 25/09/14 27/11/14 15/01/15 12/02/15 19/03/15 30/04/15 Completed TRAINING INFORMAL MEETING WITH IA/XA Produce annual report of the Chair Audit and Corporate  Governance Committee (to Full Council) Review of effectiveness of the Committee Audit and Corporate Working Party   Governance Committee – complete self assessment Review Audit and Corporate Democratic Governance Committee work Services        programme Legal & Audit Review Audit and Corporate within  self Governance Committee assessme training requirements nt Election Fees and Charges Legal  Review of the Audit and Legal within Corporate Governance  self Committee’s terms of assessme reference nt Governance Review (draft) Annual Group &CIA draft  Governance Statement (AGS) Review reports from Governance Governance Group and Group &CIA   implementation of AGS action plan items Review of strategic risk Deputy Chief    register Executive Review annual Risk Deputy Chief  Management report Executive Review of Code of Corporate CIA & Legal  Governance Review draft statement of Finance  accounts Review of final statement of Finance  accounts Management letter of Finance  representation Write Offs of Irrecoverable Finance   Debt Treasury management Finance  strategy Treasury management Finance quarterly monitoring report   half year   report Treasury management Finance  practices statement Annual Treasury Outturn Finance  Report Approval of National Non Finance  Domestic Rates Form 1 Approve Council Tax base Finance  Approve Accounting Policies Finance  Annual report of the Chief CIA Internal Auditor on the system  of internal control. Review the effectiveness of Committee Internal Audit / compliance  with the Code of Practice Review of External Audit Committee Review annual internal audit CIA  draft  final plan Internal audit monitoring CIA reports including monitoring of     implementation of recommendations Review Anti-fraud bribery and CIA & Solicitor  corruption strategy Anti-Fraud, Bribery and CIA Corruption Annual Report  2013/2014 Regulation of Investigatory Legal  Powers report & grant of through  authorisations training Agree External Audit plan External Audit  Grant Thornton - agreement of External Audit  Fees External Audit Update - External Audit  including responses to & Finance update      Challenge Questions only Annual Findings Report External Audit  Annual Audit Letter External Audit  Certification of claims and External Audit  returns May Elections Report Returning  Officer

AD HOC REPORTS 2014- 2014 Treasury Management Update Finance  Academy School Liabilities Finance  Southern Gateway Finance  Regeneration Scheme