Financial Statements 2020/20211.89
Total Page:16
File Type:pdf, Size:1020Kb
1 Further Information The Financial Statements are available on the Council’s website at: https://www.southtyneside.gov.uk/article/38543/Financial-Statements Hard copies (for a charge) can be requested by writing to: Corporate Director Business and Resources Town Hall and Civic Offices Westoe Road South Shields NE33 2RL If you know someone who would like this information in a different format, please contact Members Support on 0191 427 1717. We are committed to improving the information that we provide to you and would be grateful for any suggestions or comments you may wish to make about our published Financial Statements. Please let us have your views by contacting us at the above address. 2 Contents Page Financial Statements Section 1 Narrative Statement by Corporate Director Business and Resources 5 Section 2 Statement of Responsibilities for the Accounts 18 Statement of Accounts Section 3 Independent Auditors’ Report 19 Section 4 Core Financial Statements Movement in Reserves Statement 20 Comprehensive Income and Expenditure Statement 21 Balance Sheet 22 Cash Flow Statement 23 Notes to the Core Financial Statements 24 Section 5 Supplementary Financial Statements Housing Revenue Account Income and Expenditure Statement 93 Collection Fund Statement 99 Section 6 Group Financial Statements Group Introduction 101 Group Movement in Reserves Statement 104 Group Comprehensive Income and Expenditure Statement 105 Group Balance Sheet 106 Group Cash Flow Statement 107 Notes to the Group Financial Statements 108 Section 7 Tyne and Wear Pension Fund Statements 117 Glossary Section 8 Glossary of Financial Terms 168 Annual Governance Statement Section 9 Annual Governance Statement 177 3 Notes to the Core Financial Statements Note Note Title Page No. Expenditure and Funding Analysis 24 1 Critical Judgements in Applying Accounting Policies 25 2 Assumptions made about the Future and Other Sources of Estimation 26 3 Adjustments between Accounting Basis and Funding Basis under Regulations 28 4 Major Items of Income and Expenditure 30 5 Expenditure and Funding Analysis Note 30 6 Transfers to or from Earmarked Reserves 32 7 Events after the Reporting Period 33 8 Other Operating Income and Expenditure 33 9 Financing and Investment Income and Expenditure 33 10 Taxation and Non-Specific Grant Income 34 11 Property, Plant and Equipment 34 12 Intangible Assets 36 13 Financial Instruments 37 14 Short Term Debtors 41 15 Cash and Cash Equivalents 41 16 Assets Held for Sale 42 17 Short Term Creditors 42 18 Long and Short Term Provisions 42 19 PFI and other Long Term Contracts 43 20 Usable Reserves 46 21 Unusable Reserves 46 22 Operating Activities 48 23 Investing Activities 49 24 Financing Activities 49 25 Trading Operations 49 26 Pooled Budgets 50 27 Members’ Allowances 50 28 Council, Schools and Statutory Officers’ Remuneration 50 29 External Audit Costs 52 30 Dedicated Schools Grant 52 31 Government Grant Income 54 32 Capital Expenditure and Capital Financing 55 33 Leases 56 34 Related Parties 57 35 Impairment Losses 60 36 Contingent Liabilities 60 37 Contingent Assets 60 38 Financial Instruments Risks 61 39 Trust Funds 65 40 Pension Schemes Accounted for as Defined Contribution 66 41 Defined Benefit Pension Schemes 67 42 Accounting Standards Issued not yet Adopted 72 43 Accounting Policies 73 4 Section 1 – Narrative Statement by Corporate Director Business and Resources 1. Introduction These accounts set out the results of the Council’s financial activities for the year ended 31 March 2021 and outline our financial position at that date. The narrative statement provides: • A review of the Council’s financial results and financial standing for the year. • Information about the activities and significant matters that took place during the year that had an impact on Council finances. • An explanation of the principal financial statements. • An assessment of the future financial prospects of the Council. South Tyneside Council seeks to make the best possible use of resources available with regard to economy, efficiency and effectiveness. This is a responsibility shared by Members and officers of the Council with the Council’s Chief Financial Officer, the Corporate Director Business and Resources, having a specific role in ensuring the adequacy of resources and proper financial administration. Our Medium Term Financial Plan (MTFP) sets out how we will do this over a future five-year horizon. The Statement of Accounts looks back at our results over the past financial year. 2. Revenue Financial Summary for the Year Revenue expenditure relates to the day-to-day running costs of providing Council services, including pay costs, property running costs and supplies and services. These costs are largely funded by a combination of grants from central Government and local taxation (council tax and non-domestic rates). The table on the next page summarises our in-year revenue spending position including expenditure by schools. The Council underspent its budget by £1.4m in the year after accounting for transfers to and from earmarked reserves with the financial impact of the Covid-19 pandemic largely falling into this financial year. The overall change in earmarked reserves can be seen in more detail in note 6 to the core Financial Statements. 5 Section 1 – Narrative Statement by Corporate Director Business and Resources Revenue financial summary budget outturn from budget £m £m £m Note 1 Revenue spending Children, Adults and Health Group 98.536 96.914 (1.622) Business and Resources Group 5.120 6.752 1.632 Regeneration and Environment Group 22.747 21.375 (1.372) Net cost of services and operating expenditure 126.403 125.041 (1.362) Funding sources General government grants (49.842) (49.842) - Non-domestic rates retained (14.470) (14.470) - Contribution to Collection Fund 0.128 0.128 - Contribution to earmarked reserves 1.245 1.245 - Council tax payers (63.464) (63.464) - Total revenue funding (126.403) (126.403) - Contribution to General Fund balance for the year - (1.362) (1.362) Note 1 : reported variance from budget is after accounting for any year end movement in earmarked reserves The actual outturn position is shown in the Statement of Accounts as the net expenditure chargeable to the General Fund and HRA balances column of the expenditure funding analysis. This column also includes the outturn for the Housing Revenue Account (HRA) the results of which are reported in section 8 of the Narrative Statement. Children, Adults and Health Group The major services provided by the Children, Adults and Health Group include public health, social care for elderly and vulnerable adults, protection of children at risk from abuse or neglect, support to children and adults with disabilities, as well as a range of educational and support services for young people from early years through school age to youth provision and further learning. The revenue spending highlights during the year were as follows: • Adult social care, through commissioned and directly provided care, underspent by £2.7m against the original budget in 2020/21. This was primarily due to the Covid- 19 pandemic and associated restrictions throughout the year, resulting in reduced demand for long term residential and home care services. In addition, the service made Covid-19 support payments to care providers in the borough, offset by Covid- 19 government grants. The Council seeks to continue to manage the response to Covid-19 in the borough through integrated approaches to care and support and working closely with independent care providers as well as health and third sector partners. • The cost of looked after children through foster placements, social work staffing levels and out of borough child placements is a pressure for the Council with this service exceeding budget by £1.7m in the year. The Council continues to manage these demand-led pressures through pro-active intervention to support families, improve professional practice, adopt a multi-agency approach and align expenditure more closely to meet need. This is safely limiting the numbers of looked after 6 Section 1 – Narrative Statement by Corporate Director Business and Resources children contrary to national trends. The effectiveness of the Council’s children’s services has been recognised nationally through its status as a Partner in Practice. • Within the commissioning and quality assurance service there were cost pressures of £0.2m primarily relating to an increase in the number of required placements in special schools over the past three years resulting in increased demand for home to school transport for young people with special educational needs and disabilities. A review of the service was undertaken in 2019 to identify and implement measures to reduce both the need and cost of transport for young people, which has had a positive impact during 2020/21, reducing the cost pressure compared to the previous financial year. • Within public health there were cost pressures of £0.2m primarily as a result of delays in implementing new contracts for services and the cost relating to demand for commissioned contracts exceeding budget. This was offset by contain outbreak management grant funding for the public health team who led the Council’s response to the Covid-19 pandemic. Business and Resources Group The major services provided by the Business and Resources Group include leisure and libraries and a range of support services to ensure the proper functioning of the Council. The revenue spending highlights during the year were as follows: • There was a cost pressure of £2.9m relating to leisure and libraries, primarily as a result of the extended closure of facilities due to the Covid-19 pandemic. £2.4m of this was met from Covid-19 funding from central Government, with the remaining £0.5m a cost pressure for the Council. • There was a pressure of £0.4m relating to the increased cost of insurance following a review of risk and provisions undertaken in year.