Statement of Accounts 2018/19 1.0 Preface 1.1 Introduction to the 2018/19 Statement of Accounts by Councillor Abdul Jabbar MBE, Deputy Leader and Cabinet Member for Finance and Corporate Services Councillor Abdul Jabbar MBE I am very pleased to welcome you to Oldham Council’s Statement of Accounts for 2018/19 which gives me the opportunity to highlight the excellent management of the Council’s resources and to set this in the context of the financial challenges being faced by the Council. As a Co-operative Council, Oldham is committed to its co-operative future where everyone does their bit to create a confident and ambitious Borough and to develop a different relationship with citizens, partners and staff. This means being a Council that listens, responds and engages as locally as possible and has strong civic and community leadership. This co- operative ethos underpins the Council’s approach to its financial strategy. The Authority approved a robust 2018/19 net revenue budget on 28 February 2018. However, once the financial year was underway Oldham, like many other Councils, experienced considerable difficulty in managing a number of pressures, particularly within Children’s Social Care. This was despite the allocation of significant additional Council resources within the budget. The accounts show that despite this pressure in Children’s Social Care, underspending elsewhere, particularly on capital financing costs enabled the financial position to be managed so that there was an overall £0.849m surplus at the year end. This was better than anticipated and allowed balances to be increased and financial resilience to be enhanced. Work undertaken throughout 2018/19 focused on delivering a balanced budget for 2019/20. This was approved by Council on 27 February 2019. However, Members were advised of the budget gaps for each of the four years 2020/21 to 2023/24, with the most significant challenge being in 2020/21. Clearly, given the current operating climate, particularly with the uncertainty around the future funding for the Local Government sector, coupled with Brexit, there remains much work to do. The Councils co-operative agenda has created the operational framework to facilitate change and support our efforts to balance the budget. We are working smarter to deliver services differently; including working with partners, in both the public and private sector. In addition, the devolution agenda, especially with regard to Health and Social Care, is also having an increasing influence on how services are delivered and resources are deployed. 2 The Council is committed to the regeneration of Oldham Town Centre and the wider Borough and this remains a key Council priority. A number of major schemes have been completed or are currently underway together with exciting longer term proposals which are at the development stage. This is aimed at revitalising the Oldham offer and the prosperity of the Borough. Our success in the early closure of the accounts has continued. The 2017/18 Statement of Accounts was approved by the Audit Committee on 16 July 2018 and we are working to an even faster timetable for 2018/19. This year we handed over our accounts for audit on 2 May 2019 whilst also distributing the draft Statement of Accounts to members of the Audit Committee in line with best practice. The accounts were reviewed by the Audit Committee on 6 June, with approval following on 25 June, once again ahead of the statutory deadline. Our working practices are such that we are able to achieve an early closure at the same time as enhancing the quality of the documentation. I want to thank all of our Finance and Internal Audit staff who have once again worked hard to close the accounts to a very high standard. I also want to acknowledge the excellent work done to balance the Council’s budget, and to monitor and manage the financial position of the Council throughout the financial year. This is demonstrated by the overall outturn position not varying significantly from the in-year projections. Careful financial administration allows fully informed decision making when determining the best use of Council resources so that services of the best possible quality can be delivered. Councillor Abdul Jabbar MBE Deputy Leader and Cabinet Member for Finance and Corporate Services 3 1.2 Narrative Report Message from the Director of Finance – Anne Ryans Anne Ryans The Statement of Accounts has once again been prepared to a high standard and was submitted to the External Auditor on 2 May 2019 in accordance with the planned timeline. The Council received formal approval of its accounts on 25 June 2019. A Local Authority in England is required to publish the unaudited statement of accounts for public inspection. This period for the exercise of public rights must include the first 10 working days of June. In practical terms, the deadline for publication is by 31 May 2019. The Regulations also require that Local Authorities in England publish their audited statement of accounts by 31 July 2019 (including on the Authority’s website). The Council has been operating an accelerated closedown timetable since 2008/09, making 2018/19 the eleventh successive year the Council has handed over the accounts before the statutory deadline. Whilst there is also no longer a requirement for the Audit Committee members to review the draft accounts, the Council continued with best practice principles in this regard and issued the draft accounts to the members of the Audit Committee for comment along with a briefing paper highlighting the significant items included in the 2018/19 Statement of Accounts. There was a meeting of the Audit Committee on 6 June which allowed Members to have the opportunity to ask questions and review the draft accounts prior to the meeting to formally approve the accounts. Preparation of the 2018/19 accounts in a timely manner provides the Council with the opportunity to conclude its consideration of the 2018/19 financial position and then move on to address the many challenges of 2019/20, and plan for future financial years. During 2018/19, working in partnership under the banner of ‘Oldham Cares’, the Finance Service has continued to collaborate even more closely with Finance Officers from Oldham Clinical Commissioning Group (CCG) and other colleagues from the National Health Service (NHS) in order to drive forward the financial benefits of integrated working in Health and Social Care in Oldham. This joint working is providing a major opportunity to improve Health and Social Care service provision and to operate more efficiently and drive out savings. In addition, the Finance Service also continues to contribute to initiatives with other Local Authorities, regional bodies and Central Government. Examples of this include supporting the piloting of 100% Business Rates Retention with other Greater Manchester (GM) Districts, membership of the Greater Manchester Association of Municipal Treasurers together with Greater Manchester Chief Accountants and Treasury Managers groups. The financial standing of the Council continues to be robust, and this is clearly demonstrated by this Statement of Accounts which shows that the level of both balances and reserves have largely been maintained. Good financial management disciplines, processes and procedures 4 are evident, supporting the financial resilience of the organisation. The Finance Service operates in an environment of continuous change; we are not complacent and adapt when change is required, whether that be through organisational redesign, partnership working or advances in the use of technology. During 2018/19, the structure of the service was revised to create a £0.200m saving which contributed to balancing the budget for 2019/20. The Council is continuing to make a considerable investment in the town centre and is progressing a revised vision which encompasses housing, heritage, economic growth and education and skills. Plans for the Oldham Museum of Arts/Archives (OMA) which incorporates a heritage centre have received significant external grant support which is enabling progress and will complement other town centre heritage assets including the Old Town Hall. The development at Princes Gate has also secured external investment which will see a hotel and food store built on part of the site together with potential for a major housing scheme. A significant development in 2018/19 was that on 2 July 2018, the Council took full ownership of the Unity Partnership Ltd. Established in 2007, it provides a range of services on behalf of the Council including exchequer activities, property, and highways maintenance plus IT and consultancy services. This acquisition will enable the Council to more closely align delivery of these services to the objectives of the Council and further support the drive for efficiency and effectiveness. The Statement of Accounts has been prepared in accordance with the requirements of the Chartered Institute of Public Finance and Accountancy (CIPFA) 2018/19 Code of Practice on Local Authority Accounting in the UK. It therefore aims to provide information so that members of the public, including electors and residents of Oldham, Council Members, partners, stakeholders and other interested parties are able to have: • A full and understandable explanation of the overarching financial position of the Council and the outturn for 2018/19. • 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. The style and format of the accounts complies with CIPFA standards and is similar to that of previous years. It is worth highlighting that for the second consecutive year the External Auditors made no recommendations for improvement within the 2017/18 Annual Audit Report. This is a testament to the high standard of the financial information provided within the statements.