Oldham Council. Statement of Accounts 2019/20 1 Contents 1.0 Preface ..................................................................................................................... 3 1.1 Introduction to the 2019/20 Statement of Accounts by Councillor Abdul Jabbar MBE, Deputy Leader and Cabinet Member for Finance and Corporate Services 3 1.2 Narrative Report ...................................................................................................... 5 2.0 Statements to the Accounts ................................................................................. 41 2.1 Statement of Responsibilities for the Statement of Accounts ........................... 41 2.2 Auditors Report ..................................................................................................... 42 3.0 Core Financial Statements and Explanatory Notes ............................................. 51 3.1 Comprehensive Income and Expenditure Statement .......................................... 51 3.2 Movement in Reserves Statement ........................................................................ 52 3.3 Balance Sheet ........................................................................................................ 54 3.4 Cash Flow Statement ............................................................................................ 55 3.5 Index of Explanatory Notes to the Accounts ....................................................... 56 3.6 Explanatory Notes to the Core Financial Statements ......................................... 57 4.0 Supplementary Financial Statements and Explanatory Notes ......................... 141 4.1 Housing Revenue Account (HRA) ...................................................................... 141 4.2 Collection Fund ................................................................................................... 144 5.0 Group Accounts .................................................................................................. 147 6.0 Annual Governance Statement 2019/20 ............................................................. 159 7.0 Glossary of Terms ............................................................................................... 181 2 1.0 Preface 1.1 Introduction to the 2019/20 Statement of Accounts by Councillor Abdul Jabbar MBE, Deputy Leader and Cabinet Member for Finance and Corporate Services Councillor Abdul Jabbar MBE As Cabinet Member for Finance and Corporate Services I am immensely proud to welcome you to Oldham Council’s Statement of Accounts for 2019/20. The Accounts are an opportunity to not only present the Council’s outturn financial position for 2019/20 but to demonstrate the excellent financial management exercised by the Oldham Finance Team, especially in the context of the challenges being faced by the Council. I have been a Councillor for more than 25 years and during that time I have seen many changes in both the Borough of Oldham and the Council itself. Much of the change has been welcomed but the challenges caused by the reduced funding available to the Council have been a cause of concern. The financial challenges have continued over the last year with budget pressures having to be addressed. Other changes have included the increasing integration with the Oldham Clinical Commissioning Group (CCG) to promote joint working across health and social care, the General Election and most recently, the impact of the COVID-19 pandemic. The pandemic has resulted in the most widespread adjustment to our way of life that any of us can remember and it is the responsibility of Local Authorities to support their residents and local businesses in these challenging times. Although the impact on the 2019/20 financial year has been limited, the pandemic sets the scene for future financial years and places additional strain on the budget for 2020/21. The effect on both the local and national economy cannot yet be determined with any accuracy however the pandemic will have a significant impact on the Council’s resources, in terms of increased expenditure but especially lost income. During 2019/20 the trend of the increasing demand for services has continued and this has resulted on higher spending in some areas and hence pressure on revenue budgets. Our budget monitoring processes have, however, been robust in identifying any overspending and options to address them. I am happy to see once again we have managed to respond resulting in a very small favourable variance of £0.270m compared to the revised budget. The most significant overspending areas in 2019/20 continued the trend from 2018/19 in the People and Place, Children’s Services and Community Health & Adult Social Care portfolios. This has been offset by underspends in the Capital, Treasury and Technical Accounting Portfolio, again a trend in Oldham that has prevailed for the past few years. 3 However, it is important to remember that there has been much to celebrate in the year with the positive outcome of the Council’s Corporate Peer Challenge, particularly highlighting the performance of the Finance team. Also, the approval of the major regeneration strategy, ‘Creating a Better Place’ which sets an ambitious plan for building new homes, creating job opportunities and re-engaging communities and partners through property/estate co-location and collaboration. As well as delivering major transformation of the Borough from a place perspective, the strategy is expected to deliver indicative medium to long term savings to support the revenue budget in future years. After another eventful year the Council’s Officers and Members must now look at what the 2020’s will bring, weighing the expectations and needs of residents against the funding constraints. However, I am confident that Oldham, as a resilient Borough with excellent opportunities for the future, will be able to rise to whatever challenges the future will bring. Finally, I would like to recognise the hard work and dedication shown by the Finance and Internal Audit teams throughout the year, particularly demonstrated by this robust set of accounts, the work undertaken to set the 2020/21 budget along with the support provided in delivering key Council objectives. Councillor Abdul Jabbar MBE Deputy Leader and Cabinet Member for Finance and Corporate Services 4 1.2 Narrative Report Message from the Director of Finance – Anne Ryans Anne Ryans My role as the Director of Finance and Section 151 Officer is to ensure that the Council’s financial affairs are properly administered, and its financial position remains stable and robust. This is essential to ensure that the Council is able to provide quality services to all the residents of Oldham and to continue to take forward the development and regeneration of the Borough. The following Statement of Accounts give an overview of the Council’s finances for 2019/20. I am pleased to report that we have maintained our strong financial position, which demonstrates once again the excellent standard of financial management and stewardship of the Council’s resources. The Oldham Council Finance Team aims to prepare the Statement of Accounts to the highest standards and in accordance with the guidance for Local Authorities in the UK. The Statement of Accounts provides information so that members of the public, including electors and residents of Oldham, Council Members, partners, stakeholders and other interested parties can have: • A full and understandable explanation of the overarching financial position of the Council and the outturn for 2019/20. • Confidence that the public money with which the Council has been entrusted has been used and accounted for in an appropriate manner. • Assurance that the financial position of the Council is sound and secure. It is important to note that the deadlines for the preparation of the Accounts have been changed for 2019/20. Having considered the impact of the COVID-19 pandemic and in consultation with key stakeholders, the Ministry of Housing, Communities and Local Government (MHCLG) introduced the Accounts and Audit (Coronavirus) (Amendment) Regulations 2020 which have amended the Accounts and Audit Regulations 2015. The draft Accounts must now be submitted for audit by 31 August 2020 rather than 31 May 2020 and the timeline for the conclusion of the audit is now 30 November 2020 rather than 31 July 2020. The Accounts were submitted to the External Auditor on 31 May 2020 in accordance with internal timelines, and significantly ahead of the revised statutory deadline. The Council has continued to follow best practice principles and submitted the draft accounts to the Audit Committee to allow Members the opportunity to review them before they are asked 5 to formally approve the Statement of Accounts. The review of the accounts took place at the meeting of the Audit Committee on 23 June 2020. The Finance Service strives to continuously improve its procedures and processes and we have gladly taken on board the recommendations made by the External Auditor as part of the 2018/19 accounts audit. The recommendations were relatively minor in nature and were adopted by the Council during the year. The Finance Team provides a high quality financial management service for the Council. In addition to the preparation of the Statement of Accounts, a key task is financial planning over a five year medium term timescale. Alongside budget preparation, performance management and reporting, the ability to look strategically beyond the current budget period is crucial to supporting