A year in the LGA 2021-22

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 CBE [Senior Vice-chair]                                                

Michael Payne [Deputy-chair]                                                   

Tudor Evans OBE [Deputy-chair]                     

Georgia Gould [Deputy-chair]                           

Shabir Pandor [Deputy-chair] - Appointed 6 August 2021

Anntoinette Bramble [Deputy-chair]  -  Resigned 5 August 2021

Liberal Democrat

Joseph Harris [Vice-chair] - Appointed 6 July 2021

Bridget Smith [Deputy Chair]- Appointed 6 July 2021

Howard Sykes MBE [Vice-chair] - Resigned  6 July 2021    

Ruth Dombey OBE [Deputy-chair] - Resigned  6 July 2021    

Independent

Marianne Overton MBE [Vice-chair]

Hannah Dalton [Deputy-chair] - Appointed 6 July 2021

Clive Woodbridge [Deputy-chair] - Resigned 6 July 2021

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. We receive funding from the subscriptions of our member councils to ensure local government has a strong, credible voice on the national stage, and from central government to deliver a range of services to councils.

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 2021/22 we had 328 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 and beyond 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.

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 significantly improved position reported in the Triennial Valuation as at 31 March 2019, leading to contributions of less than £0.5 million annually for the next three years.

Review of the year

The last two years have been unprecedented and the impact of COVID-19 will continue to be felt for years to come. However, the pandemic did solidify the immense value of strong local leadership provided by councils – working as the delivery partner for the Government’s national strategy.

Throughout the period, the LGA continued to support local government in its response and championed its work to Government and the public.

Over the last 12 months the LGA has also played an important role in being local government’s voice in the development of Government schemes to welcome refugees from Afghanistan and Ukraine.

As the country learns to live with COVID-19, we have continued to campaign on the issues important to local government – such as housing, planning, climate, adult social care and council funding – which will help to level up communities in a way which is locally-led.

Throughout 2021/22 we have also supported councils in a range of ways through our sector support programme which is funded by Government. This year we sharpened our focus, using intelligence from councils, to support them on issues emerging from Government and economic and social issues affecting local authorities.

In 2021/22 the IDeA provided local authorities with support including:

• the delivery of 134 peer challenges and remote peer support, with more than half of these being Corporate Peer Challenges
• providing more than 55 councils facing severe financial challenges with direct finance support including Finance Improvement & Sustainability Associate (FISA) support for over 40 councils through our finance programme
• providing support through our Climate Change Programme to 98 per cent of all councils
• reaching more than 2,000 councillors through training and development opportunities organised via our Leadership team
• providing targeted workforce support to 79 councils including HR/employment law support, collective agreements protocols advice, DMA support and workforce planning support
• launching an Equalities Hub to collate the range of Equalities, Diversity and Inclusion support available to councils
• the National Graduate Development Programme, which develops leaders in the local government for the future, received 4,424 applications this year
• our procurement programme providing bespoke support to the sector following the Russian Invasion of the Ukraine
• our digital pathfinders programme awarded over £250,000 to a dozen councils to pilot innovative work in a few areas such as digital connectivity, digital inclusion and cyber security.

We worked closely with Government to highlight the importance of local services and the financial pressures councils face, with £4.8 billion of new government funding for councils in the Spending Review. We continue to make the case for adequately funding our local services as a way to meet the Government’s ambitions to ‘level-up’ communities.

We have also invested in our internal infrastructure and systems, as well as advancing our EDI agenda to make the LGA a more effective, efficient and inclusive place to work.

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 with our members, government ministers and departments, our parliamentary Vice-Presidents and other partners we secured a number of benefits for councils over the past year. Highlights include:

April 2021

• The Treasury announced a further business rates relief fund for businesses affected by COVID-19 outside the retail, hospitality, and leisure sectors, providing £1.5 billion for councils to distribute using their knowledge of local businesses and the local economy.
• The Government's reforms to public health set out in 'Transforming the public health system' made clear that responsibilities for public health would remain with councils and that it would not be proposing any changes to the scope of local authority public health commissioning responsibilities.
• The Government announced the coronavirus grant scheme providing help with food and bills for vulnerable households extension to June 2021, with an extra £40 million available.
• Following concerns raised by the LGA and councils, the Government confirmed it would not be introducing a proposed measure to temporarily lift the small sites threshold.
• Our report, ‘A perfect storm – health Inequalities and the Impact of COVID-19’, stressed the importance of driving forward work programmes that reduce inequalities, prevent poor health and improve people's opportunities for better health.

May 2021

• The Government announced details of a further 57 English high streets to receive a share of over £830 million, as part of the Future High Streets Fund.
• The Cultural Investment Fund was launched, providing council culture, library and museum services the chance to bid for £18.5 million for the Cultural Development Fund, £18.8 million for the Museum Estate and Development Fund, and £5 million for the Library Investment Fund.
• The LGA’s LG Inform COVID-19 reports were shortlisted for the Local Area Research and Intelligence Association Awards 2021 and received the ‘highly commended’ award for most engaging communication of local area research or analysis.
• Councils were given a further £200 million of the £750 million investment to tackle homelessness and rough sleeping.
• In the Queen’s Speech, the government announced a wide range of measures around planning, jobs, health and care reform, environment, climate change and building safety. Following LGA lobbying, we were pleased that the Speech confirmed that proposals on social care reform would be brought forward.

June 2021

• The Government extended the Infection Control and Testing Fund until 30 September 2021 providing an additional £251.3 million for the care sector, as well as the COVID Local Support Grant with a further investment of £160 million.
• The pressures in adult social care were prominent in the headlines and Parliamentary agenda following the public letter the LGA and national partners submitted to the Government, calling for reform proposals to be published before the summer recess.
• We published our annual report setting out what our sector-led improvement programme delivered in 2020/21. Highlights included the delivery of 300 remote based peer support activities to 250 councils, a new Rough Sleeping Peer Support offer accessed by 222 councils, a new online and hybrid meetings hub, and the publication of more than 150 examples of good practice to support the COVID-19 response.
• The Government announced the final £300 million of the Government's Culture Recovery Fund (CRF) to support organisations in need of urgent funding.

July 2021

• Over 2,000 local government colleagues and partners registered for the LGA’s 2021 Annual Conference, which included sessions with the Secretary of State for Housing, Communities and Local Government, the Secretary of State for Health and Social Care and the Chief Medical Officer. The LGA’s Chairman launched our new Build Back Local report, which set how with the right investment and powers national and local government can level-up communities and tackle inequalities.
• The Government unveiled 100 commitments in a £1.6 billion Disability Strategy aimed at improving the lives and opportunities of people with disabilities.
• The Government announced that more than £860 million would be invested in flood prevention schemes across the UK over the upcoming year.

August 2021

• The Government announced £8.6 billion to be put towards delivering around 119,000 homes as part of their Affordable Homes Programme funding.  

The funding was part of the largest single investment in affordable housing in a decade. 

September 2021

• The Government launched the Household Support Fund to help with essentials over the winter period, a £500 million fund to be distributed by councils in England.
• The LGA published a report setting out the challenges facing urban areas as they recovered from the economic impact of COVID-19, as well as a report on ‘Securing the Future of Public Sport and Leisure Services’ which brought together the views of over 260 stakeholders to articulate the sector’s vision for the future.
• The LGA Chairman gave evidence to the Home Affairs Committee to outline councils’ support for people arriving from Afghanistan and highlight the key issues for the Government to take into account in developing and implementing the schemes.
• The Health Secretary announced an additional £388.3 million to prevent the spread of infection in social care settings, including £25 million to support care workers to access COVID-19 and flu vaccines over the winter months.
• The LGA Chairman gave evidence to the Health and Care Public Bill Committee highlighting the need for the Secretary of State to consult with relevant health overview and scrutiny committees regarding NHS reconfiguration, leading to a shift in Government’s position.

October 2021

• The LGA’s Spending Review Submission set out the urgent need for public spending to be reset in a way that is fit for the future, flexible to allow the delivery of local priorities, and empowers councils to deliver on the ambition to level up our communities that central and local government share. Our analysis showed that councils in England faced extra cost pressures of almost £8 billion by 2024/25 just to keep vital local services running at current levels.
• The Spending Review and Autumn Budget included new government grant funding of £1.6 billion per annum for councils over the following three years (totalling £4.8 billion over the period) to support vital local services, money for school places, transport infrastructure, housing, as well as the release of the first £1.7 billion of the Levelling Up Fund.

November 2021

• Our National Children and Adult Services (NCAS) Conference heard from an impressive line-up of speakers including the Secretary of State for Health and Social Care, NHSE&I Chief Executive, and the Chief Medical Officer.
• In the lead-up to and throughout the COP26 Summit, the LGA called on government to use COP26 to empower local leaders with the right resources and powers to accelerate local climate change action. The summit held a dedicated local and regional government day which we had called for, and LGA’s cross-party delegation worked tirelessly to ensure that the draft text proposed by the conference recognised the urgent need for multilevel action and the role of local communities in addressing climate change.
• In advance of the Adult Social Care White Paper, we published four priorities for the adult social care white paper and published a briefing setting out our response to different parts of the government’s plan for health and social care.
• The House of Lords Committee on Youth Employment adopted the LGA’s recommendation and called on Government to implement Work Local in their report.

December 2021

• The provisional Local Government Finance Settlement for 2022/23 provided a potential increase of 6.9 per cent in cash terms to council core spending power, including new government grant, to support vital local services.
• Ahead of the publication of the Levelling Up White Paper, the LGA Chairman and Leader of the LGA Labour Group gave evidence to the House of Lords Constitution Committee as part of their inquiry into the Future Governance of the UK.
• The Chancellor announced a £1 billion support package for businesses impacted by the Omicron variant.
• The Government announced a £316 million Homelessness Prevention Grant, to support people who are homeless or at risk of losing their home, including £5.8 million to support people forced into homelessness as a result of domestic abuse.
• The Government announced a package of new measures to protect the social care sector from COVID-19, including a £300 million fund to support the recruitment and retention of social care workforce.

January 2022

• Our annual Local Government Finance Conference set out the immense pressure councils were under before the pandemic. The LGA’s new publication, commissioned by WPI Economics, provided a review of the current and alternative sources of local government revenue financing and an assessment of their strengths and weaknesses against the principles set out by the LGA: sufficiency, buoyancy, fairness, efficiency of collection, predictability, transparency and incentive.
• In a positive step, the Government made a major announcement on building safety, with the Housing Secretary telling developers they must pay the £4 billion cost of remediating unsafe cladding on buildings 11 to 18 metres tall.

February 2022

• Following significant work by the LGA to raise the Government’s delay in refunding court fees for council tax summons, the Ministry of Justice (MoJ) confirmed that refunds would be issued by 31 March 2022.
• The Government published its Health and Social Care Integration White Paper which will aim to bring the NHS and local government closer together to improve care for all. Following lobbying by the LGA, the important role councils play in joining up health and care services was recognised in the paper, as well as a focus on prevention and providing care and support to people in community settings.
• The Government announced the Levelling Up White Paper, outlining 12 missions to level up the UK relating to pay, productivity, local transport, gigabit-capable broadband, school performance, skills, life expectancy, wellbeing, pride in place, home ownership, crime rates and devolution deals.
• The Government published the 2022/23 public health settlement confirming that the total public health grant to local authorities will be £3.417 billion.

March 2022

• Following extensive pressure from the LGA, the Government announced an additional £150 million funding for bus and light rail operators until October 2022 to ensure services could continue to run.
• The LGA’s Climate Change Sector Support Programme, aimed at helping councils to reach their local carbon reduction and adaptation targets, engaged with 96 per cent of English councils from April 2021 to March 2022.
• The LGA Chairman and Chief Executive appeared at the Levelling up, Housing and Communities Committee as part of their one-day inquiry on support for Ukrainian refugees. They highlighted the crucial work councils were already undertaking, as well as ongoing concerns from local government across all arrival routes to the UK.

The directors present their strategic report on the Group for the year ended 31 March 2022.

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 3 December 2021, the LGA took on the business, assets and liabilities of its subsidiary Local Government Association (Properties).

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 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 believe that this exception results in the financial statements still showing a true and fair view.

Report of the business

In October 2019, 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 on recovery and economic growth following 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 ongoing pressure on our core funding, we have delivered a satisfactory financial outcome in 2021/22. From 1 April 2016, IDeA become the recipient of Direct Government Funding from the Department of Levelling Up, Housing and Communities (DLUHC) to pay for improvement services to councils, replacing Revenue Support Grant (“RSG top slice”). Our income from DLUHC Funding remained steady in the year, but with revised priorities and reflecting the change to remote working practices, and while other grants and service contracts were secured, overall income increased by a total of 7 per cent in 2021/22 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 payments towards their pension fund deficit.

As agreed by the LGA Board, the 2021/22 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 support opportunities to invest to save costs or generate additional commercial income, and also to cover the potential risks to the 3 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 per cent increase in membership subscriptions for 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 relies on delivering ever greater value to member councils at a time when councils will face cost of living pressures, increasing service demands and uncertain future funding levels.

During 2022/23 the LGA will continue to develop and manage its property assets to maximise their capital values and 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 Department for Levelling Up, Housing and Communities (DLUHC). This funding is received on behalf of the Local Government Association and its related bodies. The level of funding has been formally determined by DLUHC for the year to 31 March 2023. Funding for some of the Company’s principal funded programmes has also been agreed by the funders, with further awards expected shortly, despite some funding now being required to be secured via competitive tender. 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. At Layden House we have secured a single tenant for the office floors on a long term lease, and will begin active marketing of the two ground floor retail units during the summer of 2022, such that no material impact is expected to the Group.

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 and again in October 2021 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.

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.

We have now begun the process of developing a new three-year business plan, which will come into effect from October 2022.

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 four 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 £1.56 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 £67.63 million at 31 March 2022 (£101.94 million deficit at 31 March 2021). In order to pay off the pension deficit and liabilities for past employees, we have been making additional contributions as directed by the actuaries. Following the Triennial Valuation as at 31 March 2019, these additional contributions have reduced to under £0.5 million per annum on average. 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. We have transferred the administration of the IDeA LGPS from Camden to Merseyside (administrators of the LGA LGPS) as at 1 April 2021 to align actuarial assumptions and generate cost savings.

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 2021/22, with only five councils out of membership at the year end. All 22 Welsh councils are in membership through the Welsh LGA’s corporate membership of the LGA.

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 432 employees in the year ended 31 March 2022. We continue to monitor employee absence and whilst this has increased from an average annual number of sick days per employee of 2.0 days in March 2021 to 3.9 days in March 2022, it 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 2 per cent of the total trade debtors at March 2022 (1 per cent 2021).

Market value of land and buildings

The market value of 18 Smith Square, which was previously owned by Local Government Association (Properties), is considered at the latest valuation in March 2022 to be £49.50 million (2021 £47.5 million) with a net increase of £2.0 million in the year reflecting rental market conditions in the Westminster area. In the Group accounts 34 per cent (2021/22 34 per cent) of the above market value is reflected as an investment in the Group’s balance sheet. The remainder held as an operational asset at the current net book value of £16.5 million.

Layden House is classified as an investment property and has a market value at 31 March 2022 of £66.0 million (2021 £63.0 million), an increase of £3.0 million reflecting the recovering 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 brought added flexibility for office-based staff to vary their work locations, 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 videoconferencing 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. There are no car parking facilities. 

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 policy has undergone a full review during 2021/22 in the light of our renewed commitment to equality, diversity and inclusion and will be relaunched during 2022/23. 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

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 OBE, LGA Chairman and Chairman of the LGA Board

8 June 2022

The directors present their report and the audited financial statements of the Group and Company for the year ended 31 March 2022.

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 2022 were:

Conservative

James Jamieson OBE [Chairman]                                    

Izzi Seccombe OBE [Deputy-chairman]                                      

John Fuller OBE [Deputy-chairman]                 

Robert Alden [Deputy-chairman]                                  

Teresa O’Neill OBE [Deputy-chairman]

Labour

Nick Forbes CBE [Senior Vice-chair]                                                

Michael Payne [Deputy-chair]                                                   

Tudor Evans OBE [Deputy-chair]                     

Georgia Gould [Deputy-chair]                           

Shabir Pandor [Deputy-chair] - Appointed 6 August 2021

Anntoinette Bramble [Deputy-chair] - Resigned 5 August 2021

Liberal Democrat

Joseph Harris [Vice-chair] - Appointed 6 July 2021

 Bridget Smith [Deputy Chair] - Appointed 6 July 2021

Howard Sykes MBE [Vice-chair] - Resigned 6 July 2021    

Ruth Dombey OBE [Deputy-chair] - Resigned 6 July 2021  

Independent

Marianne Overton MBE [Vice-chair]

Hannah Dalton [Deputy-chair] - Appointed  6 July 2021

Clive Woodbridge [Deputy-chair] - Resigned 6 July 2021

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, despite emerging inflationary pressures. 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 to 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.

The directors are not aware of any material 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.

The LGA has a three-year Equality, Diversity & Inclusion (EDI) strategy and action plan approved by the LGA board in 2021. The LGA and its leadership are committed to listening and responding to staff concerns, to closely monitoring what our data tells us and to developing the organisation as a fully inclusive and safe environment where everyone can bring their whole-selves to work. 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, our four 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

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 per cent 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

PKF Littlejohn LLP has signified its willingness to continue in office as auditor.

This report was approved by the Board on 8 June 2022 and signed on its behalf.

James Jamieson OBE, 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:

• selected 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 2022 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 2022 and of the Group’s profit 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 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

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the parent Association's ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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 contained within the annual report. Our opinion on the 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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 Directors’ Report has 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 Association and its 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, or returns adequate for our audit have not been received from branches not visited by us; or
• the 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 Association 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 Association financial statements, the directors are responsible for assessing the Group’s and the parent Association’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 Association 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

• We obtained an understanding of the Group and parent Association and the sector in which it operates to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with management, sector research and application of cumulative audit knowledge and experience.
• We determined the principal laws and regulations relevant to the company in this regard to be those arising from the Companies Act 2006, Financial Reporting Standard 102 and relevant employee legislation.
• We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the company with those laws and regulations. These procedures included, but were not limited to enquiries of management, review of minutes and review of legal and regulatory correspondence.
• We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, that there was potential for management bias in the valuation of the investment properties. We addressed this through review of the valuation report prepared by management’s expert, testing the reasonableness of inputs to their calculation, and challenging assumptions applied in the valuations for example by agreement to third party metrics.
• We also identified potential for management bias in the judgements made around recoverability of debtors. We addressed this through examination of post year end cash received, review of correspondence with debtors and discussion of recoverability with management.
• We also identified potential for management bias in the accounting for the defined benefit pension scheme liability. We addressed this through review of the actuary report prepared by management’s expert, testing the reasonableness of inputs to their calculation, and challenging assumptions applied in the valuation.
• As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included but were not limited to the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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   

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