Financial Statements 2019/20202.6MB
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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 24 Comprehensive Income and Expenditure Statement 25 Balance Sheet 26 Cash Flow Statement 27 Notes to the Core Financial Statements 28 Section 5 Supplementary Financial Statements Housing Revenue Account Income and Expenditure Statement 100 Collection Fund Statement 106 Section 6 Group Financial Statements Group Introduction 108 Group Movement in Reserves Statement 111 Group Comprehensive Income and Expenditure Statement 112 Group Balance Sheet 113 Group Cash Flow Statement 114 Notes to the Group Financial Statements 115 Section 7 Tyne and Wear Pension Fund Statements 124 Glossary Section 8 Glossary of Financial Terms 178 Annual Governance Statement Section 9 Annual Governance Statement 187 3 Notes to the Core Financial Statements Note Note Title Page No. Expenditure and Funding Analysis 28 1 Critical Judgements in Applying Accounting Policies 29 2 Assumptions made about the Future and Other Sources of Estimation 30 3 Adjustments between Accounting Basis and Funding Basis under Regulations 32 4 Major Items of Income and Expenditure 34 5 Expenditure and Funding Analysis Note 34 6 Transfers to or from Earmarked Reserves 36 7 Events after the Reporting Period 37 8 Other Operating Income and Expenditure 37 9 Financing and Investment Income and Expenditure 37 10 Taxation and Non-Specific Grant Income 38 11 Property, Plant and Equipment 38 12 Intangible Assets 40 13 Financial Instruments 41 14 Short Term Debtors 45 15 Cash and Cash Equivalents 46 16 Assets Held for Sale 46 17 Short Term Creditors 47 18 Long and Short Term Provisions 47 19 PFI and other Long Term Contracts 48 20 Usable Reserves 51 21 Unusable Reserves 51 22 Operating Activities 53 23 Investing Activities 54 24 Financing Activities 54 25 Trading Operations 55 26 Pooled Budgets 55 27 Members’ Allowances 56 28 Council, Schools and Statutory Officers’ Remuneration 56 29 External Audit Costs 58 30 Dedicated Schools Grant 58 31 Government Grant Income 60 32 Capital Expenditure and Capital Financing 61 33 Leases 62 34 Related Parties 63 35 Impairment Losses 66 36 Contingent Liabilities 67 37 Contingent Assets 67 38 Financial Instruments Risks 67 39 Trust Funds 72 40 Pension Schemes Accounted for as Defined Contribution 72 41 Defined Benefit Pension Schemes 73 42 Accounting Standards Issued not yet Adopted 79 43 Accounting Policies 79 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 31st March 2020 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 schools expenditure. The Council underspent its budget by £0.4m in the year after taking into account transfers to and from earmarked reserves with the financial impact of the Covid-19 pandemic largely falling into the 2020/21 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 Original Actual Variance Revenue financial summary budget outturn from budget £m £m £m Note 1 Revenue spending Children, Adults and Health Group 91.790 98.405 6.615 Business and Resources Group 10.373 2.767 (7.606) Economic Regeneration Group 22.162 22.767 0.605 Net cost of services and operating expenditure 124.325 123.939 (0.386) Funding sources General government grants (49.043) (49.043) - Non-domestic rates retained and top up grant (14.306) (14.306) - Contribution from Collection Fund (0.455) (0.455) - Council tax payers (60.521) (60.521) - Total revenue funding (124.325) (124.325) - Contribution to General Fund balance for the year - (0.386) (0.386) Note 1 : reported variance from budget is after accounting for any 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: • The cost of adult social care through commissioned and directly provided care is a cost pressure for the Council, with this service exceeding budget by £1.7m in the year. The Council seeks to manage these demand-led pressures by providing a timely and integrated approach to care and support. Our assessment and targeted investment in supporting the well-being of clients continues to ensure the most appropriate packages of care are provided. The Council continues to work very closely with health partners in delivering integrated preventative services which reduce demand on more costly health and social care interventions as well as promotion of information and advice to expand self-serve and self-care taking account of services and support available in the community. • 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 £2.0m in the year. The Council continues to manage 6 Section 1 – Narrative Statement by Corporate Director Business and Resources 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 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 £1.3m primarily relating to increased demand for home to school transport for young people with special educational needs and disabilities resulting from an increase in the number of required placements in special schools over the past three years. A review of the service was undertaken recently to identify and implement measures to reduce both the need and cost of transport for young people. • Within public health there were cost pressures of £0.9m primarily as a result of delays in implementing new contracts for services and the cost relating to demand for commissioned contracts exceeding budget. Additional resources have been allocated into this budget in 2020/21 to further match the budget with demand. 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: • Net additional income of £6.7m received from Government relating to temporary social care funding all of which offset cost pressures within social care identified in Children’s Adults and Health Group. • Net underspend of £1.4m on digital and ICT services due primarily to re-profiling of capital investment. • There was a cost pressure of £1.0m in relation to capital receipts used to service debt repayments as all planned land sales did not crystallise in year. • Additional investment income received in year resulted in an £0.5m favourable variance against budgeted income for the year.