The directors present the strategic report for the year ended 31 March 2024.
The principal activities of the Company and its Operational Company (Sunderland Care and Support Limited) are those of providing social care services within Sunderland. The group commenced trading on 1 December 2013 and was formed as a Local Authority Trading Company (LATC) which is 100% owned by Sunderland City Council.
The trading results and the group's financial position for the period ended 31st March 2024 are shown in the attached financial statements and within the Operational Company financial statements.
Principle risks and uncertainties
Some uncertainties still exist around the global pandemic, war in Ukraine and cost of living crisis that hit every industry during 2023/2024, and Sunderland Care and Support (Holding Company) Limited is not an exception to that.
The principal risk facing the Company is always the requirement to ensure the delivery of safe and compliant services and the associated reputational risk if the Company fails to safeguard and provide high quality services to its customers. This risk is mitigated through:
• maintaining high standard robust policies and procedures
• developing strong relationships with customers
• ensuring continuous investment in staff development through internally and externally provided training.
The surge in the cost of living through utility bills and fuel prices has caused a pressure on the disposable income of households and this has caused market difficulties in the attraction and retention of staff required to optimally perform and even exceed our contractual obligations.
Market risk
The market risks have been highlighted in the Strategic Report of the Operational Group financial statements with the major risk being change to our customer base through the Social Care Act 2014, continued reduction of Government funding of Social Care and the ongoing impact from the pandemic and cost of living crisis. Our future strategy aims to transform our services to respond to the rapidly changing social care marketplace as well as diversifying our customer base.
Operational risk
The Company continuously monitors the range, efficiency and availability of its services and any fluctuating customer or commissioner requirements to ensure that it is able to meet those demands and business opportunities as and when they arise. The Company is reviewing its management structure which will reflect its leadership and management capacity to ensure the Company is able to meet CQC and Ofsted standards and its other legal and financial responsibilities.
Liquidity risk
Working capital is managed carefully, with cash forecasts produced to provide daily as well as medium to long term projections. This ensures sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.
Financial risk
In common with every other business, financial risks reside largely within either a failure to perform the services appropriately, or through failure to manage operational performance appropriately. The measures used by the directors to manage this risk include internal management controls, financial planning, timely and accurate management information and by careful monitoring of all budget costs and income.
Financial overview
The continuation of the reduction in Government funding of public sector services, particularly in Adult Social Care, and the increased demand for services during this financial period has been challenging. The Company is reliant on Sunderland City Council and North East and North Cumbria Integrated Care Board (ICB) for the majority of its income.
As a company we continue to provide good quality care to our customers and through our work with commissioners have demonstrated an ability to be an ethical and innovative partner who has been able to use its capabilities to create sustainable system savings and service improvement.
This continued pressure on funding will be managed through maintaining strong relationships with commissioners and seeking to diversify income streams through investment in growth areas.
The directors are pleased with the performance of the Company during this period and believe that the Company and the group is in a strong position to continue to expand and have the confidence in the Company’s ability to provide quality and good value services
Financial performance
Turnover was in line with expectations and costs were well controlled, with the result that a small profit was made for the period. The Company will continue to review and monitor its financial performance with a view to increasing its financial efficiency and resilience.
Strategy
The strategy adopted during the year has been to ensure Sunderland Care and Support (Holding Company) Limited continues to develop both corporately and financially so that, as a new organisation, the Company is financially viable, is able to provide high quality local services for local people, operates in an open and transparent manner and continues to invest in our workforce. This has entailed establishing the relevant governance and management structures whilst ensuring that contracted efficiency targets and outcomes are met.
Future developments
Our strategy continues to deliver a significantly improved business performance. The key objectives of the Company and the group from April 2024 to March 2025 have been highlighted in the Strategic Report of the Operational Group financial statements.
Key decisions
The Company also recognises the importance of mental wellbeing of its employees and has sought to provide support and advice wherever necessary. The Company engages on regular staff newsletters and other platforms such as employee noticeboards.
The Board has a duty to promote the success of the company for the benefit of its members as a whole having regards to the matters of our shareholders, our customers, our employees, our relationships with our suppliers and the impact of our operations on the communities in which we operate, and to ensure that we maintain a reputation for high standards of care and business conduct.
The Board of Directors consider that they have acted in good faith, and their actions have been to promote the success of the Company for the benefit of its shareholder, Sunderland City Council, and the wider stakeholders who are the people from our area, and in doing so have regard (amongst other matters) to:
Long term consequences – all decisions that affect the Company financially, operational, ethically and reputationally on a material scale are agreed by a unanimous board and referenced back to the Company’s business plan that has been approved by the Board
Employees – our performance is driven by a team of motivated and dedicated staff who we know through our staff surveys are highly engaged and proud to work for such a reputable and effective organisation
Regulators - Company registered services which are regulated by Care Quality Commission (CQC) and other relevant regulators. Regulators ultimately aim to protect customers and ensure they resolve high level of care and are treated fairly and safety. This clearly aligns to our strategy to put our customers at the heart of everything we do. Our regulators expect us to:
Have robust and efficient processes and controls in place to mitigate risks to protect our customers
Provide a high-quality, clinically robust services
Ensure we operate in a sustainable way
Provide appropriate and accessible training to enhance and maintain standards of safety and care
Provide regular supervision and support for our employees
The company has an open and honest relationship with CQC and self-reports incidents. We work with CQC to ensure we meet regulatory requirements, and we act quickly to address any issues or concerns raised
Company suppliers and customers – long term contracts for services are preferable and negotiated to ensure viability for both sides, which works for both suppliers and customers, and we always look to promote working with customers who we believe can make a real difference to their lives
Community and environmental impact – being a social care organisation automatically has an impact on the community, although the ethos and drive that has come through operational and financial control has enabled the Company to garner a good market share and as our relationship with Sunderland City Council and customers improves due to efficiencies and overall social care savings, we are able to implement, the greater our standing becomes in the community
Maintaining high standards – the good contractual key performance indicators prove that we are delivering on our promises to those who commission our services. Our CQC inspections this year were “Good” providing independent affirmation of the quality of our services
Acting fairly – we aim to behave in an ethical manner and regularly review codes of conduct and governance. Our policies and procedures are tested by internal audits. Any infringements to the fair behaviour of the Company are dealt with appropriately and within the confines of all legislative guidelines
We understand that it is important for business at all levels to engage with its stakeholders as we gain a better understanding of what areas they are interested in or concerned about and how our decisions have impacted them. The Board are updated regularly on stakeholder engagement and any stakeholder engagement supports the Board's regard to the likely consequences of any decision in the long term.
As is common in large companies, there may be some instances where conflicts arise between stakeholder groups. In these circumstances, the Board will undertake research and discussions to understand the needs and priorities of each stakeholder group. This should then ensure the needs of the stakeholders align with those of the Company, thus increasing the likelihood of the Company achieving long term sustainable success.
We have set out below how we have engaged with and taken into consideration the needs of our stakeholders. These stakeholders continue to represent the key resources and relationships of the Company, as well as being the key to the Company's long-term success.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2024.
The profit for the year, after taxation, amounted to £2,609 (2023: £3,717).
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
There have been no significant events affecting the Company since the year end that are not adequately disclosed in the financial statements.
In accordance with the company's articles, a resolution proposing that Robson Laidler Accountants Limited be reappointed as auditor of the company will be put at a General Meeting.
Streamlined energy and carbon reporting
Unit 2023/2024 2022/2023
Scope 2 emissions (indirect) tonnes CO2e 585.70 549.04
Scope 3 emissions (other indirect) tonnes CO2e 70.12 84.88
Total Greenhouse Gas emissions tonnes CO2e 655.82 633.92
Greenhouse gas emissions per employee tonnes CO2e 0.60 0.59
Data is provided as tonnes of carbon dioxide equivalent (CO2e) for all operations. Scope 2 and 3 include emissions from our sites, offices and vehicles. The Company’s chosen intensity measures is emissions per employee. The report data has been collated internally and CO2e have been calculated using actual prices per kwh and cost for car mileage taken from suppliers’ invoices and staff car mileage claims. CO2e has been calculated using the National Energy Foundation Carbon Calculator.
We have reported on the emissions sources required under The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 apart from the exclusions noted. The reported sources fall within our financial statements and are emissions over which we have financial control. We do not have responsibility for any emissions sources that are not included in our statements.
Sunderland Care and Support (Holding Company) Limited is concerned about energy consumption and carbon emissions and wishes to utilise the mandatory SECR legislation to identify ways of saving energy and reduce on carbon emissions.
The financial statements have been prepared on a going concern basis.
As a company ultimately wholly owned by Sunderland City Council, by its very nature it is a going concern and the directors have no reason to believe that any events would impact on this position. A five-year contract plus additional options to extend of up to 2 x 12 months was agreed in July 2020 with Sunderland City Council with the potential contract ceasing on the 30 November 2027.
Basis for 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 company's ability to continue as a going concern for a period of at least twelve 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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the 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 financial statements, the directors are responsible for assessing the 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 company or to cease operations, or have no realistic alternative but to do so.
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, outlines 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.
The risk of material misstatement due to error or fraud is deemed to be low within the entity as the company operate strong internal controls to mitigate any such risk. These controls are reviewed as part of the audit by performing controls sample testing as well as systems walkthroughs to ensure they are operating effectively. Other substantive testing is also performed on all material balances and therefore any instances of non-compliance should be identified or considered as insignificant.
Manual journal entries are scrutinised by data analytics software used as part of the audit.
The laws and regulations which are considered to be significant to the entity relate to health and safety. The entity also must comply with policies set out by Ofsted and the Care Quality Commission. Discussions are held with management to determine whether any breaches have occurred as well as legal expenditure being scrutinised for any evidence on non-compliance.
The audit was considered capable of identifying irregularities only to the extent of the substantive testing performed and from discussions with management.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. 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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Sunderland Care and Support (Holding Company) Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.
The preparation of financial statement s in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policy (see relevant note below).
The company is itself a subsidiary company and is exempt from the requirement to prepare group financial statements by virtue of section 400 of the Companies Act 2006. These financial statements therefore present information about the company as an individual undertaking and not about its group.
Group financial statements which include the company are prepared by Sunderland City Council. Please see the Council's website where these group financial statements are available at www.sunderland.gov.uk. Further information can be obtained from Director of Corporate Services, Sunderland City Council, City Hall, Plater Way, Sunderland, SR1 3AA.
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all the following conditions are satisfied:
- the amount of revenue can be measured reliably;
- it is probable that the Company will receive the consideration due under the contract;
- the stage of completion of the contract at the end of the reporting period can be measured reliably; and
- the costs incurred and the costs to complete the contract can be measured reliably.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Debtors
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transactions costs and are measured subsequently at amortised cost using that effective interest methods, less any impairment.
Creditors
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans,are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Exceptional items
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
The average monthly number of persons (including directors) employed by the company during the year was:
There were no staff costs for the year ended 31 March 2024 nor for the year ended 31 March 2023.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 March 2024 are as follows:
The company is wholly owned by Sunderland City Council. Income of £55,976,113 (2023: £49,101,335) was received from the Council during the reporting period. At the balance sheet date the Council owed the company £2,178,643 (2023: £2,434,881).
Sunderland Care and Support Limited is a subsidiary of the company. The expenditure of the company with Sunderland Care and Support Limited was £56,422,051 (2023: £49,730,241 ) in the reporting period. At the balance sheet date the company owed the subsidiary £2,374,624 (2023: £1,981,776).
During 2023/24 the company received income of £455,937 (2023: £638,906 ) from Together For Children Sunderland Limited, another wholly owned subsidiary of Sunderland City Council. At the balance sheet date Together For Children Sunderland Limited owed the company £136,484 (2023: £159,726).
The amounts owning to / (from) related parties at the year end was as follows:
2024 (£) 2023 (£)
Sunderland Care and Support Ltd 2,374,624* 1,981,776*
Sunderland City Council (2,178,643) (2,434,881)
Together for Children Ltd (136,484) (159,726)
*Note: VAT debtors / (creditor) included in figures between Holding Company and Operational Company of (£1,059,496) (2023:(£887,168)).