A year in the LGA 2020-21

Directors

The members of the LGA Board for the year were:

Conservative

James Jamieson [Chairman]

Izzi Seccombe OBE [Deputy-chairman]

John Fuller OBE [Deputy-chairman]

Robert Alden [Deputy-chairman]

Teresa O’Neill OBE [Deputy-chairman]

Labour

Nick Forbes [Senior Vice-chair]

Michael Payne [Deputy-chair]

Anntoinette Bramble [Deputy-chair]

Tudor Evans OBE [Deputy-chair]

Georgia Gould [Deputy-chair]

Liberal Democrat

Howard Sykes MBE [Vice-chair]

Ruth Dombey OBE [Deputy-chair]

Independent

Marianne Overton MBE [Vice-chair]

Clive Woodbridge [Deputy-chair]

Company Secretary

Claire Holloway

Registered office

18 Smith Square, London, SW1P 3HZ

Bankers

Barclays, UK Banking, 1 Churchill Place, London, E14 5HP

Independent auditor

PKF Littlejohn LLP, 15 Westferry Circus, Canary Wharf, London, E14 4HD

Company number

11177145

The Local Government Association (LGA) is the national voice of local government, working with councils to support, promote and improve local government.

We are a politically-led, cross-party organisation that receives funding from our member councils to ensure local government has a strong, credible voice with national government.

We aim to influence and set the political agenda on issues that matter to councils so they are able to deliver local solutions to national problems. We support councils through increasingly challenging times and focus our efforts where we can have most impact for our members.

We support councils to improve and help them to provide the best possible services to the people they serve. We play a leading role in improvement and innovation so that councils can continue to make a difference in their local areas and to the lives of their residents.

We work with councils in every part of England and Wales - county and district councils, metropolitan and unitary councils, London boroughs and Welsh unitary councils. Through our associate scheme we provide services to other organisations including fire and rescue and national park authorities, police and crime commissioners and town and parish councils.

In 2020/21 we had 335 English member councils along with the 22 Welsh authorities, in corporate membership through the Welsh Local Government Association (WLGA).

Working with and on behalf of our membership we:

• influence critical legislative, financial and policy decisions and shape the policies that underpin councils’ service delivery
• press for more powers to be devolved from Whitehall to local government
• shape emerging government thinking, ensuring councils’ views are represented
• work with public, private, community and voluntary organisations to secure their support for local priorities
• campaign on behalf of our membership, promote local government and defend its reputation through the local, regional and national media
• ensure the voice of local government is heard in Parliament
• support councils to share best practice, drive innovation and improvement and to continue to deliver essential services
• negotiate, in our role as national employer, fair pay and pensions and provide support and advice on workforce issues
• coordinate collective legal action on behalf of member councils
• deliver broader services to local government via our wholly owned companies and our joint ventures such as Local Partnerships, Geoplace and Public Sector Audit Appointments.

The LGA Board closely monitors the LGA Group’s financial performance against the agreed budget. The LGA’s leadership undertook significant work to develop the medium-term financial strategy of the LGA and its associated organisations. This includes a commercial strategy, whose purpose is to diversify the LGA’s sources of income, which is now being implemented.

As an example, Layden House, Farringdon – the former headquarters of IDeA, owned by the LGA – has undergone an extensive refurbishment, completed in May 2021. The building has now been let on a 15 year commercial lease.

The LGA Board has also reviewed the strategy for managing the pension costs of the LGA and the IDeA, in view of the c.£3.5 million additional contributions to reduce deficits over the past few years, which has contributed towards a vastly improved position reported in the Triennial Valuation as at 31 March 2019, leading to reduced contributions of less than £0.5 million annually for the next three years.

Review of the year

The past year has been significant for councils and their teams as they continued to respond to the unprecedented challenges caused by the COVID-19 pandemic. The pandemic has demonstrated the value of local leadership, with councils delivering essential services that improve the lives of millions. Councils have supported the homeless into safe accommodation, coordinated the delivery of PPE into care homes, helped local businesses to access a range of emergency grants, supported the vaccine roll-out and continued to combat climate change.

Throughout this period, the LGA has supported local government in its response and continued to promote their significant work to Government and the public. We have refocused our work to support councils in their role as part of the national effort to protect and support local communities. In all our discussions with Government, we have continued to highlight why councils are trusted by their local communities, making the case for them to be empowered to get on with their roles as local leaders, equipped with the right resources and funding to deliver.        

Through our close working with Government, we have secured £4.6 billion of un-ringfenced COVID-19 emergency funding for councils. We continue to make the case of why long-term investment in our local services will be vital for our national economic and social recovery, particularly a multi-year financial settlement that puts councils on a sustainable footing.

These financial statements relate to the year 2020/21 and highlight the valuable contributions the LGA has made over the past year. As we look forward towards recovery, we will continue to ensure that councils have the necessary powers and resources in order to improve lives, tackle deep set inequalities and build inclusive growth across the country.

Throughout 2020/21, the LGA continued to support and be an advocate for councils. Through our Re-thinking local campaign, we demonstrated how councils have been true leaders during the coronavirus pandemic, showing what is possible when leadership is rooted in local communities. But a response to a crisis cannot be the limit of our ambitions. Our campaign called for a stronger working relationship across Whitehall so that we can effectively engage all of government in a debate about how we build services for the future. With the right tools and resources councils can deliver on the ambitions we have for the diverse communities we represent.

The following sets out just some of the work we delivered over the last year.

At a glance: A year in the LGA

Over the last 12 months, we continued to campaign on behalf of our membership, taking every opportunity to secure the funding and powers that councils need to best serve their local communities and improve residents’ lives.

Through our work, including working with partners, our Vice-Presidents and others, we secured a number of benefits for councils over the past year. Highlights include:

April 2020

• Our sector led-improvement offer was rapidly refocused to provide councils with vital support to respond to COVID-19 and surrounding challenges. This included a range of new remote support offers, ongoing regional support, peer support and intelligence gathering in relation to COVID-19.
• The Government announced councils would receive a further £1.6 billion to help them deal with the immediate impact of COVID-19.
• The Transport Secretary announced a funding boost of nearly £400 million for bus services in England to keep essential routes operating during the pandemic.
• LGA Chairman and Chief Executive gave evidence to the Housing, Communities and Local Government Select Committee to discuss the impacts of COVID-19 on councils.

May 2020

• The Transport Secretary announced £1.7 billion of transport infrastructure investment into repairing local roads to improve journeys for cyclists, pedestrians and drivers.
• The Government announced a new funding package of £300 million to support the new COVID-19 test and trace service.
• The LGA’s virtual events programme was launched on 20 May with the first ever cross-party Vice Presidents’ Virtual Briefing, followed by our first webinar on 21 May where over 380 people joined us to hear ‘how to support the mental health and wellbeing of our communities during COVID-19’.

June 2020

• The Government announces an extension to the free school meals voucher scheme to ensure that vulnerable children will not go hungry over the summer holidays.
• We published the latest results of our resident satisfaction polling showing satisfaction with local councils is at its best since we began this research.

July 2020

• The Chancellor of the Exchequer delivered his Summer Economic Update by announcing investment in skills, creating jobs, apprenticeships and opportunities for young people, social housing decarbonisation and a focus on green jobs.
• In response to the COVID-19 pandemic the 2020 LGA Annual Conference was transformed into a series of 13 free virtual events held over a fortnight and attracting more than 4,000 virtual visits from local government colleagues and partners. The webinars provided the launch platform for our ‘Re-thinking local’ report, calling for a reassessment of what we want from our local areas, public services, our communities and lives as we rebuild our economy, get people back to work and create new hope.
• The Housing, Communities and Local Government Secretary announced a further £500 million extra funding to help councils through the COVID-19 crisis.
• We published our annual report setting out what our sector-led improvement programme delivered in 2019/20. Highlights from the report included the delivery of 129 peer challenges, placing 149 ngdp graduates in councils across the country and receiving 5,000 applications, and developing 958 councillors through participation in leadership programmes.
• We published seven key principles to underpin the reform of social care and support, considering the lessons learned from the pandemic. We urged Government and other parties to begin cross-party talks on reform.

 August 2020

• The Institute for Fiscal Studies published a report which was co-funded by the LGA and Economic and Social Research Council. The report suggested financial pressures on councils as a result of the COVID-19 pandemic will continue into the next year ‘and beyond’.
• The Government announced £588 million funding for hospital discharge and to support people needing additional follow-on care after they have been discharged from hospital.
• After significant LGA lobbying, the Government announced a further extension of the ban on evictions from social and private rented accommodation.
• The Government announced that the NHS Test and Trace programme would expand its support to councils. The announcement which we had been calling for meant local areas would have dedicated ring-fenced teams from the national service to focus their work on specific local areas, alongside the relevant public health team.

September 2020

• An LGA commissioned report from the Institute for Fiscal Studies about the future outlook for council finances estimated there could be a funding gap facing councils of £5.3 billion by 2023/24 just to maintain services at 2019/20 levels. The findings formed part of our submission to the Comprehensive Spending Review.
• Launched Net Zero Innovation Programme along with UCL. The Net Zero Innovation Programme brings together partnerships of researchers and climate change officers from councils across all the regions in England for an initial period of 12 months.
• Following lobbying from councils and care providers, Government announced that the Infection Control Fund, introduced in May 2020, would be extended to March 2021 and an extra £546 million would be made available to care providers.
• Launched three Return to Work campaigns – focusing on ICT, planning and legal – to identify and provide skilled professionals with free training or resources, to restart their highly-valued roles and support councils with their COVID-19 recovery strategies.

October 2020

• We set out our Comprehensive Spending Review submission which called on the Government to provide sustainable and certain long-term funding to councils, bring power and resources closer to people and begin cross-party work to provide a sustainable, long-term funding solution for adult social care services.
• We submitted our response to Tranche Two of the Government’s Business Rates Review Call for Evidence. We recommended that the Government explored in more detail Capital Values Tax and Land Value Tax and the response covered our views on maintaining the accuracy of rating lists, billing and alternatives to the current business rates system.
• The Government announced £6 million to help councils prepare for a new duty on councils to support victims of domestic abuse as part of the introduction of the Domestic Abuse Bill.

November 2020

• The 2020 Spending Review announcement provided more certainty for councils for 2021/22. The funding package included provision for a potential increase of 4.5 per cent in council core spending power to support vital local services, assuming a council tax rise of 5 per cent, compensation for 75 per cent of irrecoverable council tax and business rates income, a cut in the Public Works Loan Board lending rate, funding for building safety remediation and  £7.1 billion National Home Building Fund over the next four years to unlock up to 860,000 homes. 
• More than 626 posts from 260 contributors across Twitter, Facebook and Instagram reached 4.6 million people and saw us trending at number one on Twitter in the UK during the LGA-led #CouncilsCan Day, highlighting the critical role of local government during the pandemic.
• Our National Children and Adult Services Conference 2020 was run as a series of 18 virtual events held over three days. The event attracted over 700 delegates from councils and partners and included a mix of keynote and ministerial addresses with participatory workshop sessions, featuring experts from the adult, children and education sectors and people with lived experience. 

December 2020

• The beginning of the vaccination rollout. The LGA called for councils’ local knowledge of their communities to be utilised in encouraging priority groups to get vaccinated.
• The Government acted on the strong concerns expressed by the LGA and councils about its proposed update to the housing formula and on 16 December, Housing Secretary Robert Jenrick set out revised plans to enable the delivery of new homes which included an updated formula to prioritise the use of brownfield sites and urban areas.

 January 2021

• The LGA Model Councillor Code of Conduct was unanimously approved by the LGA Executive Advisory Board. We received 1,600 individual responses to the consultation on the Code from councillors, officers and on behalf of whole councils from all parts of local.
• After successful LGA lobbying, directors of public health were able to access data on the number of vaccines administered, including daily and cumulative total vaccination events by first and second doses and by the higher risk cohorts for local authority area.

February 2021 

• After significant lobbying from the LGA the vaccination data published by NHS England was updated to now include local authority level (district and single tier authorities), Parliamentary constituency, middle layer super output area and more.
• As at 1 February 2021, LG Inform Plus contained 1.2 billion values and 13,500 individual data items taken from 240 different collections covering 46 separate data sources such as ONS, PHE and Government departments.
• Housing Secretary, Robert Jenrick, announced a package of measures to protect leaseholders from the cost of removing unsafe ACM cladding from buildings. The Government confirmed it would pay for the removal of unsafe cladding for leaseholders in all residential buildings 18 metres (six storeys) and over, and higher in England. Non-interest loans will be offered to leaseholders in buildings between 11 and 18 metres (four to six storeys) with a guarantee that they will never pay more than £50 a month for cladding removal costs.

March 2021

• Councils marked a year since the start of the pandemic.
• At our Public Health Conference, the Secretary of State for Health and Social Care, Matt Hancock, announced the creation of a new Office for Health Promotion and the UK Health Security Agency. The 'Transforming the public health system' reform paper also confirmed that responsibilities for public health will remain with councils.
• Budget 2021 included a number of announcements to further mitigate the impact of the pandemic. Announcements included a mortgage guarantee scheme, boost to the Culture Recovery Fund, funding to increase traineeships and boost skills and UK Infrastructure Bank. The launch of the £4.8 billion Levelling Up Fund and Community Renewal Fund prospectuses are also an important way to help councils invest in their communities.
• The Government announced a package of reforms to the Right to Buy scheme, in what is a significant lobbying success for the LGA, following years of campaigning. The Government extended the timeframe councils have to spend receipts from three to five years and increased the percentage cost of a new home councils can fund using receipts from 30 to 40 per cent.

The Directors present their strategic report on the Group for the year ended 31 March 2021.

Principal activities                   

The Local Government Association (LGA) was incorporated on 30 January 2018.  On 1 April 2019 the LGA took on the business, assets and liabilities of the unincorporated Local Government Association, which had been set up on 1 April 1997 following the merger of the three previous local authority associations covering England and Wales (the Association of County Councils, the Association of District Councils and the Association of Metropolitan Authorities), to provide a single national voice for local government.

On 1 December 2020, the LGA took on the business, assets and liabilities of its subsidiary The Local Government Management Board.

During 2020/21 the LGA continued to streamline its merged operations with its subsidiaries – the Improvement and Development Agency for Local Government (IDeA), its property company Local Government Association (Properties), and its commercial company LGA Commercial Services Limited.

The shared objective of the LGA and its subsidiaries is to make an outstanding contribution to the success of local government working with and on behalf of the LGA’s member authorities to support, promote and improve local government.

Departure from United Kingdom Generally Accepted Accounting Principles (UKGAAP)

In line with prior years, the financial statements do not include a detailed note on the Association’s defined benefit pension scheme, instead just showing the combined Group view.

The LGA Board do not believe that this exception results in the financial statements not showing a true and fair view.

Report of the business

In October 2020, the LGA Board agreed a new three-year business plan, based on those issues of greatest importance to our member councils and rooted in the United Nations Sustainable Development Goals. The business plan was updated in October 2021, to reflect the changing situation and new emphasis arising from the COVID-19 pandemic.

Through the work of our Boards and Task and Finish Groups, made up of members from councils across England and Wales, the LGA has continued to make progress on delivering its priorities

Despite further pressure in our core funding, we have delivered a satisfactory financial outcome in 2020/21. From 1 April 2016, IDeA become the recipient of Direct Government Funding from the Ministry of Housing, Communities and Local Government (MHCLG) to pay for improvement services to councils, replacing Revenue Support Grant (“RSG top slice”). Our income from MHCLG Funding fell by £1.0 million in the year reflecting the change to remote working practices, and while other grants and service contracts were secured, overall income decreased by a total of 0.9 per cent in 2020/21 compared with the previous year. We continued to keep costs down and invested in reducing costs of back office services, at the same time as continuing to deliver on our key priorities and deliver direct support to councils. Both the LGA and the IDeA continued to make a significant payments towards their pension fund deficit.

As agreed by the LGA Board, the 2020/21 consolidated operating surplus (excluding pension scheme and investment property revaluation adjustments) has replenished the risk and contingency reserve in our balance sheet. This was created to be used to provide opportunities to invest to save costs or generate additional commercial income, and also to cover the potential risks to the three year plan included in the LGA’s Financial Strategy.

The LGA Board has overseen the LGA’s approach to Treasury Management and concluded that the LGA should continue to be cautious in its investment strategy. Substantial use has been made of the Public Sector Deposit Fund, a qualifying money market fund operated by CCLA Investment Management Ltd. No losses arose on treasury activities.

Following a real terms reduction in subscription income of over 48 per cent in the seven years to 2019, the LGA Board agreed an inflationary 2% increase in membership subscriptions 2021/22.

Future developments

In common with other parts of the public sector, we are taking steps to ensure we develop new sources of income as well as continuing to reduce our costs.

Our future success will rely heavily on our delivering ever greater value to local government at a time when councils themselves are facing significant reductions in their own funding and are, more than ever, questioning the value of every item of expenditure.

During 2021/22 the LGA will continue to develop and manage its property assets to maximise their capital values to offset the liabilities arising from our pension funds and to reduce costs and deliver additional commercial income to maximise levels of support to our membership.

The impact of COVID-19 on the Group and Company’s business has been assessed and has been determined to not be material. The IDeA receives grant funding from the Ministry for Housing, Communities and Local Government (MHCLG). This funding is received on behalf of the Local Government Association and its related bodies. The level of funding has been formally determined by MHCLG for the year to 31 March 2021. Funding for some of the Company’s principal funded programmes has also been agreed by the funders, with the remainder expected shortly. The majority of member subscription income has been received for the year.

For the investment property rental income streams, there has been, and is expected to be, no interruption for 18 Smith Square, while Layden House has secured tenants for the office floors on a long term lease, such that no material impact is expected to the Group. As agreed by both Boards of Directors, it is expected that the business, assets and liabilities for Local Government Association (Properties) will be transferred into Local Government Association via a transfer agreement during 2021/22.

Therefore, it is considered that the majority of the Group and Company’s income for the foreseeable future is secure and the Directors have therefore adopted the going concern basis for the preparation of these accounts.

Our priorities

In October 2019, based on feedback from our member councils and agreed by our politicians, we launched a new three-year business plan that set out our priorities, which was reviewed and updated in October 2020 in the light of the pandemic:

Funding for local government 

Fair and sustainable funding enables councils to plan and deliver essential public services beyond the short term, to raise more funds locally and to promote greater collective working across local public services.

Adult social care, health and wellbeing

Sustainable funding and better integration with health services enable councils to continue to support people to live safe, healthy, active, independent lives and to promote wellbeing and resilience for all ages.

Narrowing inequalities and protecting communities

Councils lead and work with diverse communities and partners to address inequalities and build safe, cohesive and resilient communities.

Places to live and work

Councils lead the way in driving inclusive and sustainable economic recovery, building the homes that people need and creating places where they want to live.

Children, education and schools

Councils have the powers and resources they need to bring partners together to deliver inclusive and high-quality education, help children and young people to fulfil their potential and offer lifelong learning opportunities for all.

Strong local democracy

A refocus on local democratic leadership, and a shift in power post-Brexit from Whitehall to local communities, leads to greater diversity of elected representatives, high standards of conduct and strong, flexible local governance.

Sustainability and climate action

Councils take the lead in driving urgent actions in their local areas to combat climate change and its impacts and to deliver zero net carbon by 2030. Principal risks and uncertainties.

Supporting councils

We support councils continuously to improve and innovate through a programme of practical peer-based support underpinned by strong local leadership and through our service delivery partnerships.

Principal risks and uncertainties

Our arrangements for risk management include the regular review of the LGA’s strategic risk register with clear responsibilities assigned to named senior officers for the management of the principal risks. These included ensuring that we deliver on our objectives and have impact for our members, ensuring that membership levels are maintained, ensuring that we have effective governance arrangements and financial sustainability, and ensuring that we maintain employee capacity and capability. We have also put in place clear governance and project management arrangements for projects designated as being high risk from a financial or operational point view.

Our principal liabilities other than those arising in ordinary day to day business relate to our combined pension deficit and three main liabilities: structural interest free debt of £8.2 million due to the predecessor Local Authority Associations and related to the purchase of the Smith Square property; bank debt of £2.08 million on separate loans due to Barclays relating to the Smith Square property, which is currently being repaid at the rate of £0.52 million each year; £20.0 million from Westminster City Council which we are using to fund the development of our properties; and a liability until 2022 for funding the District Councils’ Network (DCN), financed from cash received from the predecessor Local Authority Association.

The valuation of our combined pension deficit was £101.94 million at 31 March 2021 (£93.12 million deficit at 31 March 2020). In order to pay off the pension deficit and liabilities for past employees, we have been making additional contributions averaging over £4 million per annum. Following the Triennial Valuation as at 31 March 2019, these contributions have reduced to under £0.5 million per annum. Actuarial advice indicates that on reasonable long term assumptions, these contributions will be sufficient to eliminate the deficit over a period of 19 years for the LGA and 15 years for the IDeA. The LGA Board has commissioned further work to investigate ways in which the management of the pension deficit can be improved.

Key performance indicators

We have reviewed the impact of our work and the delivery of our priorities through robust performance management which has included regular reports to the LGA Board. In addition we have reviewed our own efficiency and effectiveness through a number of key indicators. These include the number of organisations in membership, which has remained static in 2020/21, with only four councils out of membership at the year end (currently five councils are out of membership). The National Association of Local Councils has entered into a corporate membership with the LGA and requested that 22 Town/Parish councils had access to our associate membership scheme.

In 2019 we carried out a survey of our members which gave us important information about customer satisfaction with 78 per cent of members indicating that they were satisfied overall with the work of the LGA. We have set ourselves the target of increasing member satisfaction and also their perceptions of the value for money we offer and we will monitor our progress with these through member surveys.

We review our financial sustainability by carefully controlling our staff costs. Currently we have 402 employees in the year ended 31 March 2021. We continue to monitor employee absence through the implementation of better recording methods (self-service) for staff and this has remained fairly stable from an average annual number of sick days per employee of 3.2 days in March 2020 to 2.0 days in March 2021, which is still well below national averages for sickness (8.0 days for public sector – Source: CIPD Health & Wellbeing at Work Survey 31 March 2020).

We continue to pay close attention to the collection of outstanding debt. The percentage of debtors over 12 months was 1 per cent of the total trade debtors at March 2021 (1 per cent 2020).

Market value of land and buildings

The market value of 18 Smith Square (formerly known as Local Government House), which is owned by LGA (Properties), is considered at the latest valuation in March 2021 to be £47.50 million (2020 £50.75 million) with a net decrease of £3.25 million in the year reflecting rental market conditions in the Westminster area.  In the Group accounts 34% (2020/21 34%) of the above market value is reflected as an investment in the Groups’ balance sheet. The remainder held as an operational asset at the current net book value of £17.2 million.

Layden House, previously owned by The Local Government Management Board, is now owned by the LGA following the LGMB business transfer on 1 December 2020 is classified  as an investment property and has a market value at 31 March 2021 of £63.0 million (2020 £64.4 million), a decrease of £1.4 million reflecting the reduced strength of the Farringdon rental market.

Environmental matters – minimising the impact of climate change

Through the General Assembly in July 2019, the LGA declared a climate emergency, and aligned its priorities to the United Nations Sustainable Development Goals.

The LGA is committed to minimising the environmental impacts of its activities, reducing pollution and CO2 emissions and contributing to a healthy future for all.  The past year has demonstrated that working and attending remotely now provides a real alternative to travelling to 18 Smith Square, both for staff and for the elected members who are actively engaged in the work of the LGA.

Flexible working 

Our interim flexible working policy allows office-based staff to work from home up to four days per week, subject to their role and to the needs of the business. For those who do not need to be based in 18 Smith Square, we offer home-based contracts. This means less journeys to work and a better work-life balance. Longer term it may enable us to further reduce the amount of office space that we occupy. 

Our ICT is designed to support flexible working, enabling staff to log in from home or other venue with a secure wifi connection, or from public transport when they are on the move. 

Head office - 18 Smith Square 

All meeting rooms at 18 Smith Square are equipped with video conferencing facilities, cameras and sound bars to support virtual or hybrid meetings and events.

Secure cycle facilities and showers are provided for those who prefer to cycle or run to work. 

Following its refurbishment 18 Smith Square’s EPC rating moved from F to B – a significant achievement for a heritage building in a conservation area. Lights are energy efficient LEDs, with motion sensors that switched off when not required. Windows that do not face the conservation area are triple glazed to reduce energy loss. Recycling bins are provided on every floor. 

Travel 

Where staff and members need to travel they are encouraged to use public transport wherever practicable to reduce the impact on the environment. 

Procurement 

The LGA has a robust procurement policy and process, which underpins the importance of all our contractors being able to demonstrate a commitment to sustainability and combatting climate change. Our procurement documentation states: 

“In adhering to our commitments, the contractor should have systems in place to account for and minimise environmental impacts in all areas of contract delivery”. 

Community and social issues, respect for human rights

2020 marks the 75th anniversary of the liberation of Nazi concentration and extermination camps. At their meeting on 11 March 2020, the LGA Board agreed to adopt the International Holocaust Remembrance Alliance definition of antisemitism.

The LGA’s Public Duties and Volunteering policy makes provision for colleagues to take time off for approved public and community activities.

A significant strand of our policy work is targeted at improving social cohesion, adult and children’s social care, and enhancing communities.

The LGA recognises that it has a responsibility to take a robust approach to modern slavery and human trafficking. The organisation supports the Modern Slavery Act 2015 and opposes modern slavery and human trafficking. It is committed to ensuring that such practices have no place within its supply chain or other activities.

In addition to the LGA’s responsibility as an employer, it also acknowledges its duty to notify the Secretary of State of suspected victims of modern slavery or human trafficking as introduced by section 52 of the Modern Slavery Act 2015.

Anti-fraud, bribery and corruption matters

The LGA has an anti-fraud, bribery and corruption policy and response plan which is reviewed annually. The Audit Committee receives an annual report on any instances of fraud, bribery or corruption. No instances were reported in the past year.

Section 172 statement

Section 172(1) of the Companies Act 2006 states that directors of a company must act in the way he/she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

• the likely consequences of any decision in the long term
• the interests of the company's employees
• the need to foster the company's business relationships with suppliers, customers and others
• the impact of the company's operations on the community and the environment
• the desirability of the company maintaining a reputation for high standards of business conduct, and
• the need to act fairly as between members of the company.

At the commencement of all Board meetings, Directors are reminded of their responsibilities in regard to this requirement, and agree to abide by it in their decision making.

By Order of the Board

James Jamieson, LGA Chairman and Chairman of the LGA Board

9 June 2021

The Directors present their report and the audited financial statements of the Group and Company for the year ended 31 March 2021.

Future developments

Future developments are set out in the Strategic Report.

Dividends

The LGA Constitution and the articles of the companies that the LGA controls directly do not permit the payment of dividends.

Directors

The Directors of the Company during the year ended 31 March 2021 were:

Conservative

James Jamieson [Chairman]

Izzi Seccombe OBE [Deputy-chairman]

John Fuller OBE [Deputy-chairman]

Robert Alden [Deputy-chairman]

Teresa O’Neill OBE [Deputy-chairman]

Labour

Nick Forbes [Senior Vice-chair]

Michael Payne [Deputy-chair]

Anntoinette Bramble [Deputy-chair]

Tudor Evans OBE [Deputy-chair]

Georgia Gould [Deputy-chair]

Liberal Democrat

Howard Sykes MBE [Vice-chair]

Ruth Dombey OBE [Deputy-chair]

Independent

Marianne Overton MBE [Vice-chair]

Clive Woodbridge [Deputy-chair]

Directors’ indemnity

The company has provided qualifying third-party indemnities for the benefit of its Directors.  These were provided during the year and remain in force at the date of this report.

Financial instruments

The Group operates a centralised treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the Group’s activities.

Our operations expose us to a variety of financial risks that include ensuring that the funds held by us are, first and foremost, secure; second, that adequate liquidity is maintained so that sufficient funds are always available to meet current liabilities; and third that the best return on investment is obtained subject to achievement of the first two objectives.

Price risk

We have relatively low exposure to price risk. Our employee costs are controlled through formal annual negotiations with employee representatives. Our back office services are now mainly delivered in house, with ICT services delivered through a jointly owned company with Brent Council, by Brent ICT team. Other services are procured from a range of external providers through competitive tendering arrangements in line with our formal procurement procedures.

Credit risk

We have a debt management policy and clear credit control procedures which include regular review and follow-up of our trade debtors.

Liquidity risk

Our agreed approach is to manage our revenue budget so as deliver a balanced budget that does not require a net call on cash for the financial year as a whole. We maintain an adequate level of day to day liquid funds to pay liabilities promptly as they fall due.

Cash flow risk

We have both interest-bearing assets and liabilities. Subject to our liquidity requirements, which are assessed on a weekly basis, surplus funds are deposited in accordance with the Approved Investment Strategy as agreed by the LGA Board.

Political and charitable contributions

Neither the LGA nor its subsidiaries made any charitable donations over £2,000 or any political donations or incurred any political expenditure during the year.

Branches outside the UK

The Group has a branch in Brussels.

Post balance sheet events

The impact of COVID-19 on the Group’s business interests are set out in the Strategic Report.

On 1 April 2021, the administration of the IDeA Local Government Pension Scheme (IDeA LGPS) was transferred from Camden Borough Council to the Merseyside Pension Fund (though the funds were not merged with the LGA LGPS).

The Directors are not aware of any other Post Balance sheet events.

Employees

Details of the number of employees and related costs can be found in Note 3 to the financial statements. In line with the LGA Pay Policy the LGA publishes the salaries of its Corporate Leadership Team on its website. These are updated annually to reflect the national pay award.  Details of the statutory requirement to publish gender pay-gap remuneration statistics can also be found on the LGA website.

Consultation with employees and their representatives has continued at all levels, with the aim of ensuring that their views are taken into account when decisions are made that are likely to affect their interests. Communication with all employees continues through direct briefing and regular use of our intranet. Directors receive periodic updates on staff performance measures, and the results of biennial staff surveys.

Staff are provided with relevant information on the LGA’s activities, and are encouraged to be involved in the LGA’s performance, by being invited to regular informal engagement opportunities such as the monthly All Staff webinar (which includes an annual update on financial performance), by sitting on panels such as the Commercial Ideas Lab and IT Strategy Board, as well as receiving updates through the intranet and associated bulletins.  Managers are encouraged to have regular one-to-one updates with their direct reports. Our HR team meets with union representatives monthly.

In 2020 the LGA commissioned an external consultancy to conduct a review of its approach to Equality, Diversity and Inclusion (EDI).  Following extensive consultation across the organisation, senior management agreed an EDI strategy and action plan and this has been adopted by the LGA Board. The LGA and its leadership are committed to listening and responding to staff concerns, to closely monitoring what our data tells us and to taking action as appropriate.

The LGA have set up an EDI Steering Group to oversee and drive delivery of the strategy and action plan which is chaired by senior management’s EDI champion and includes representatives from all directorates, staff network groups and the Trade Union.

The strategy and action plan are focused on the work we are doing internally in the LGA. There is also work happening to improve the work we do with councils on improvement and policy and discussions with Members are getting underway with the newly appointed Equalities Advocates on our Boards.  

The LGA offers apprenticeship and leadership development programme opportunities, and all staff have personal training and development plans with access to a variety of learning opportunities via the e-learning system

Statement of engagement with suppliers, customers and others in a business relationship with the Company

The LGA Executive Advisory Board comprises representative Members to ensure its ‘customers’ are at the heart of its decision making on policy decision.  Councillors’ Forum and the General Assembly / Annual Conference also make sure that the customer views are regularly canvassed.

The LGA follows all public procurement rules (including OJEU where required) to ensure that suppliers and others in a business relationship are treated fairly and transparently.  A list of the largest spend by supplier is available on the company website.  The LGA expects its suppliers to pay their employees the London Living Wage, have in place a modern slavery policy, and to support the LGA in achieving the United Nations Strategic Development Goals.

The LGA voluntarily follows the Government Prompt Payment Policy, with the aim of ensuring that 100% of all undisputed and valid invoices are paid within 30 days, with the Strategic Management Team receiving quarterly Key Performance Indicators on adherence.

Statement of corporate governance arrangements

The LGA Board oversees management of the LGA’s financial and other resources, and the financial and accommodation strategies for the wider Group.

The LGA Board has considered these accounts in the light of a report from the LGA Audit Committee, chaired by Cllr Daniel Humphreys, whose membership is independent of the LGA’s other Boards and Panels. 

Provision of information to auditors

So far as each of the directors is aware at the time this report is approved:

• there is no relevant audit information of which the Company’s auditors are unaware; and
• the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

Auditor

A tendering process is in progress in relation to the appointment of the role of Statutory Auditor.  A resolution for the appointment of the auditors of the Company is to be proposed at a forthcoming Board Meeting

This report was approved by the Board on 9 June 2021 and signed on its behalf.

James Jamieson, LGA Chairman and Chairman of the LGA Board      

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations

Company law requires the directors to prepare financial statements for each financial year.  Under that law the directors have elected to prepare the Group and Parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently
• make judgments and accounting estimates that are reasonable and prudent
• state whether applicable UK Accounting Standards, including FRS102 have been followed, subject to any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements comply with the Companies Act 2006.  They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group’s website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.

Opinion

We have audited the financial statements of the Local Government Association (the ‘Association’) and its subsidiaries (the ‘group’) for the year ended 31 March 2021 which comprise the Consolidated and Association Statements of Comprehensive Income, the Consolidated and Association Balance Sheets, the Consolidated and Association Statements of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

• give a true and fair view of the state of the Group’s and of the Association’s affairs as at 31 March 2021 and of the Group’s deficit for the year then ended
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.  

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

• the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
• the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the Group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the Group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the Group and parent company financial statements, the directors are responsible for assessing the Group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Alastair Duke (Senior Statutory Auditor)

For and on behalf of PKF Littlejohn LLP, 15 Westferry Circus, Canary Wharf, London E14 4HD

Statutory Auditor                                                   

Date: 28 September 2021 

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