Financial Statements 2018/19 CONTENTS ROYAL BOROUGH OF WINDSOR & MAIDENHEAD AND GROUP STATEMENT OF ACCOUNT FOR THE YEAR ENDED 31st MARCH 2019 Page Narrative Report 3 - Provides an explanation of the Group's financial position - Assists in the interpretation of the financial statements - Contains a commentary on the major influences affecting the authority's income and expenditure, cash flow and information on the financial needs and resources of the Group. Approval of Accounts 15 - Formal approval of the accounts by Council. Auditor's Report 16 - Auditor's opinion on the Group financial statements will be added post audit. Statement of Responsibilities for the Statement of Accounts 21 - Sets out the respective responsibilities of the Group and the Head of Finance for the accounting statements. ACCOUNTING STATEMENTS Group Comprehensive Income and Expenditure Statement 22 - Shows the net cost for the year of all the functions for which the Group is responsible and demonstrates how that cost is financed from general government grants and income from local taxpayers. Group Movement in Reserves Statement 23 - Shows how the Income and Expenditure Account for the Group impacts on the Council Tax and General Fund Balances. - Shows those gains and losses that are not reflected in the Income and Expenditure Account. Group Balance Sheet 25 - Is fundamental to the understanding of the Group's financial position at the year end. It shows the balances and reserves and its long-term indebtedness. Council & Group Cash Flow Statement 26 - Summarises the inflows and outflows of cash arising from transactions with third parties for revenue and capital purposes. Notes to the Accounting Statements 27 - Provide explanatory notes for the Royal Borough's Group financial statements. Supplementary Accounting Statements Collection Fund 78 - Shows the income derived from Council Tax and Non-Domestic Rates and illustrates how these are distributed to the preceptors and the General Fund. Royal County of Berkshire Pension Fund Accounts 81 - Provides information about the financial position, performance and financial adaptability of the Pension Fund. They show how the resources entrusted to it have been managed and nature of its assets at the year end. Glossary of Terms 107 Narrative report Introduction At the heart of everything the council does is our dual commitment to both an excellent customer experience and providing value for money. These golden threads run through every decision and action the council takes and are central to how we deliver services to residents. As well as thinking about how progress is achieved, the strategic priorities focus on what is important to residents. Healthy, skilled and independent residents; safe and vibrant communities; a growing economy with affordable housing and an attractive, well- connected borough - these are equally important for the council to deliver its vision to build a borough for everyone. Source: Annual Report The financial statements have been prepared in accordance with the Code of Practice on Local Authority Accounting in the UK 2018/19, issued by CIPFA/ LASAAC Local Authority Code Board. 3 The aim of the accounts is to enable members of the public, residents, council members, partners and other stakeholders to understand the financial position of the council as at 31 March 2019 and also be assured that it can demonstrate financial resilience moving forward. The council's financial statements for the year are set out on the following pages. The accounts are supported by the statement of accounting policies, and various notes. The accounts provide reassurance to residents and other stakeholders that the public money for which the council is responsible has been accounted for properly. Background The Council approved a four year plan in July 2017 through to March 2021 (Building a Borough for Everyone) and this has informed the 2018/19 Annual Service Plans. Together these documents help the Council focus on its six strategic objectives. Healthy, skilled and independent residents Safe and vibrant communities. Growing economy, affordable housing. Attractive and well-connected borough. Well-managed resources delivering value for money. An excellent customer experience. The 2018/19 net budget for the Royal Borough was £85.336 million. Within the revenue budget for 2018/19 we have been able to reduce costs through a savings programme. However we have also seen historical savings and income budgets come under pressure. Since 2011 we have made efficiencies of over £50 million and have been able to ensure our residents have the services they expect. Chart 1 Cumulative 8 year analysis of savings / efficiencies 60.00 50.00 40.00 £m 30.00 20.00 10.00 - 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Series1 8.34 14.62 22.12 28.39 33.42 39.15 45.09 50.48 Expenditure on services is classified into two main types, revenue expenditure and capital expenditure. Revenue expenditure is, broadly, day to day expenditure e.g. salaries, wages, rents etc. whilst capital expenditure creates or contributes to the acquisition of assets, e.g. land, buildings, vehicles etc. Current accounting policies require that the council calculates an annual charge for the use of capital assets and these annual charges form part of the revenue expenditure of the council. 4 We continue to provide cost effective quality services that our residents need and we are able to maintain the lowest levels of council tax outside London at £1,008 for a Band D property in 2018/19 including the adult social care precept. Chart 2 below shows the comparison of all unitary authorities’ (outside London) equivalent Band D council tax for 2018/19. Chart 2 Chart 3 shows the average Band D level of council tax set by the council since the financial year 2010/11. Chart 3 RBWM Band D Council Tax 2010/11 - 2018/19 £1,050.00 £1,000.00 £950.00 £900.00 £850.00 £800.00 £750.00 £700.00 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Core Council Tax ASC Precept Although Band D is used as a comparator across councils, in fact, each property is assigned one of eight bands based on property value, and the tax is set as a fixed amount for each band. The following diagram provides an analysis of council tax by property band. 5 Domestic Properties eligible for Council Tax Charge Band No. % A A 1,448 2.6% H B G B 2,437 4.4% C C 7,597 13.6% D 13,931 24.9% E 12,040 21.5% F F 7,677 13.7% D G 9,098 16.2% E H 1,723 3.1% Total Properties 55,951 100.0% Source: Internal analysis, figures are from the collection fund notes. Risks Each year we analyse risks that could impact on the achievement of our objectives in the budget. For the purpose of this narrative some of the risks are included below. Brexit. There has been and remains a lot of uncertainty but it is widely expected that it will affect interest and inflation rates as well as the business and tourism economies. We are mindful of this when making significant treasury decisions. However we have received direct grant support (£315,000) for issues arising, and this is largely unspent in mid-October 2019. Environmental risks. Emergency / Disaster relief such as a major flood. Whilst we could reasonably expect government assistance for this, our experience of using the Bellwin formula for shows that we would not be able to recover 100% of our costs and there could be a small impact e.g. £250,000 on our reserves. Impact of Service Increases. A significant number of our major services are delivered through joint ventures and major contactors e.g. Adult Services. Whilst these services are carefully managed by experienced contract managers there is a risk of delivery failure. This could result in a budgetary pressure and / or the Council’s reputation suffering. More importantly would be the potential impact on our service users. Impact of Service Increases. Each year, service managers put forward savings as part of the budget process for the following year. These receive a great deal of scrutiny prior to their approval in the budget, however there is a small risk that when it comes to implementation some of the savings may not be achieved. This will impact on our reserves which are set at a level to cope with this risk 6 Strategy and Resource allocation The council commenced the year with the following objectives and strategies: To increase council tax by 1.95% meaning that residents in Windsor and Maidenhead will still have the lowest council tax, for a unitary authority, outside of London. To increase the Adult Social Care (ASC) precept by 3% in order to provide additional funding for older people and residents with special needs, an area where the council is also making additional investment within the budget as well as the £6.4 million figure for ASC. To make savings of £5.4 million to enable council tax to remain affordable and to continue to provide the services and improvements that residents value. To increase visitor parking charges in some locations for non-residents, to more closely align to other council areas. Other fees and charges will be capped at the Retail Prices Index, unless charges have been increased to bring the council close to benchmarked rates. Maintain our 18 street wardens working on borough streets to provide a reassuring and responsive presence. Upgrade and expand CCTV along with investment in road improvements. Keep all 14 libraries open, with extended hours for some and continued investment in stock and buildings.