Company registration number 08681649 (England and Wales)
SUNDERLAND CARE AND SUPPORT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
SUNDERLAND CARE AND SUPPORT LIMITED
COMPANY INFORMATION
Directors
Councillor L Williams
Councillor JE Fletcher
Mr DA Lough
Mr G King
Councillor A Smith
(Appointed 15 November 2023)
Secretary
Mr PM Melia
Company number
08681649
Registered office
City Hall
Plater Way
Sunderland
Tyne and Wear
England
SR1 3AA
Auditor
Robson Laidler Accountants Limited
Fernwood House
Fernwood Road
Jesmond
Newcastle upon Tyne
NE2 1TJ
SUNDERLAND CARE AND SUPPORT LIMITED
CONTENTS
Page
Strategic report
1 - 5
Directors' report
6 - 9
Independent auditor's report
10 - 12
Profit and loss account
13
Statement of comprehensive income
14
Balance sheet
15
Statement of changes in equity
16
Statement of cash flows
17
Notes to the financial statements
18 - 34
SUNDERLAND CARE AND SUPPORT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

Sunderland Care and Support Ltd (SCAS) was formed on the 1 of December 2013, as a Local Authority Trading Company (LATC) which is 100% owned by Sunderland City Council.

 

As we enter our eleventh full financial year, notwithstanding the major reduction in Adult Social Care funding, Ukraine war, cost of living crisis and the rise in demand for services, SCAS continues to develop corporately as an organisation, to remain financially viable and to continue to deliver high quality services to some of the most vulnerable people in society.

 

Despite the adverse financial situation within Social Care generally, it is pleasing that customers and their families continue to recognise the exceptional services delivered by the Company. There are seven Care Quality Commission (CQC) registered services.. The current ratings are as follows:

 

 

Service Location

Inspection Body

Inspection Date

Rating

Date of submission of most recent PIR

Grindon Mews

CQC

22.06.18

Good in all areas

Jul-23

Shared Lives

CQC

30.09.19

Good in all areas

Oct-23

Villette Lodge

CQC

19.08.20

Good in all areas

Mar-24

Community Support Service

CQC

17.09.20

Good in all areas

Jul-23

Grindon Short Break

CQC

02.11.20

Good overall, outstanding in care

Mar-24

Farmborough Court

CQC

09.11.20

Full inspection – Good

Jun-23

 

 

28.02.23

Focussed Inspection – Good for well-led and safe

 

Supported Living Service

CQC

29.06.21

Good overall, outstanding in care

Aug-23

 

 

The Company is proud that it directly employs the large majority of its workforce and has continued to invest in training throughout difficult economic times and the pandemic. Having a loyal, dedicated and skilled workforce continues to pay dividends in a sector where labour shortages and cost pressures are impacting operators of all sizes.

 

The Company is also proud of its apprenticeship scheme in which we offer 23 apprentice placements. This continuous investment in apprenticeships will ensure that we have a steady stream of qualified employees who are able to supplement our existing workforce, both now and in the future.

 

Directors would once again like to thank all of our employees for their hard work and contribution to the Company’s operation throughout this financial year and to reinforce that SCAS purely exists to support people to achieve their best quality of life and our aim going forward is to be providing care and support that transforms people’s lives.

 

SUNDERLAND CARE AND SUPPORT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Review of the business

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.

 

The quality of our services has been confirmed not just by regulators such as the Care Quality Commission (CQC) and Commissioners but also by consistently high feedback from the people and their families who have used our services.

 

Our aims for the forthcoming year are to continue to play a key role in the delivery of integrated health and social care across the City of Sunderland via the Company’s involvement with the Recovery at Home Service, review of Bed Based Services in Farmborough Court and Community Equipment Service within the Integrated Care at a Place level in Sunderland. The overarching aim is to provide better, more efficient, community-based, GP-led care using new ways of working, new technologies and improved planning to keep people as well as possible and out of hospital.

 

Everything the Company does is driven by the need to benefit the customers we serve, and we also strive to listen to the needs of people in those communities that we operate within. The quality of the services we provide are directly related to the skills, experience, passion and commitment of our workforce. To ensure the on-going success and sustainability of SCAS we will continue to restructure our operations, invest in our workforce to ensure our employees feel valued and implement clear strategies to ensure our services and workforce are excellent in service delivery and that our services are lean, well led, effective and efficient

 

Our strength comes from the incredible team we have at SCAS and we look forward to the year ahead with enthusiasm, knowing that with the drive and determination we possess in the company we can continue to deliver the highest quality services for customers and meet the many challenging targets that face us.

SUNDERLAND CARE AND SUPPORT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
Principal risks and uncertainties

The risks that the Company faces in the next financial period are to ensure that we can remain sustainable within our existing contracts, and to ensure that any new ventures are to the benefit of both the Company and the customer.

 

The Social Care marketplace is extremely challenging with reviews of service users and the rates paid generally resulting in reduction of income. If this trend continues it could impact on our ability to attract and retain good employees.

 

Market risk

The major risk to the business is the reduction in Government funding of Social Care. The financial position of Sunderland City Council and North East and North Cumbria Integrated Care Board (ICB) will mean that as a company we will have to find new ways to become more efficient and effective. Another key risk is that the Company unit costs are too high to win contracts or new business when compared to other providers. SCAS mitigates these risks by continually monitoring market prices, driving down costs, exploring new ways to sell and expand services, introducing new unit costs for all services and providing a first-class service to customers.

 

Operational risk

SCAS continuously monitors the range, efficiency and availability of its services and any fluctuating customer or commissioner requirements to ensure that it can meet those demands and business opportunities as and when they arise.

 

There are performance, monitoring and governance arrangements in place to ensure high standards in supplies, buildings, equipment and fleet. SCAS continues to invest in Workforce Training and Development.

 

Interest rate risk

 

The Company does not have any external borrowings and as such interest risk is not considered to be significant.

 

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

Financial risks are managed through internal management controls, financial planning, timely and accurate management information and by careful monitoring of all budget costs and income. Stock and debtor controls are also vigorously monitored. Issues identified are acted upon and mitigating actions put in place as appropriate. An internal audit plan and checks are in place and regularly reviewed and any recommendations from audits are implemented across the company.

 

Infrastructure risk

 

Resilience of the Company’s infrastructure is also a key in a workplace which has an ever-increasing focus on technology as a fundamental part of its operations. Extensive training, investment and testing is undertaken to ensure the infrastructure is robust with disaster recovery in place, has appropriate levels of cyber security and data is protected.

SUNDERLAND CARE AND SUPPORT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Key performance indicators

SCAS measures a range of key performance indicators (KPI's) which cover activity levels, employee absenteeism, referrals, quality measures against core standards and outcomes of care provided to clients. A number of these KPI's are also monitored as part of the main service contract with Sunderland City Council.

 

Key Objectives - April 2024 to March 2025

Objective

How

When

Who

Business Development & Growth

Pursue growth and new activity. Identify potential partners and nurture rich and productive relationships to deliver high quality services

Respond effectively and consistently to tender opportunities as they arise

Senior Management Team

SCAS greater development within Integrated Care at a Place level in Sunderland 

 

SCAS to consider opportunities and risks of its services becoming part of a new out of hospital / place model

Ongoing

COO

Marketing Strategy

Develop a marketing strategy (with updated website) to promote Day Services and Short Breaks Services to increase income opportunities from potential customers

 

Develop capacity to deliver planned care at volume

Assistive Technology, Telecare and Community Equipment with growth and capacity

October 2024

Executive Management Team

Business Plan

Annual review of annual business plan

September 2024

Board and Executive Management Team

Effective Governance

Ensure openness, transparency and candour in all that we do

 

Continually assess and improve outcomes in relation to the management of risks and the associated Action Plans

 

Introduce a new company governance structure

Develop a new Finance and Performance Group

Ongoing

Board and Executive Management Team

SUNDERLAND CARE AND SUPPORT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -
Other performance indicators

Objective

How

When

Who

Value for Money and Efficiency

Ensure sustainability of financial position

 

Introduce new unit costs for all services

 

Continue to evidence value for money of services provided

 

Adopt best practice in procurement throughout Sunderland Care and Support Ltd

 

Monitor delivery of all efficiency targets in line with the Business Plan

July 2024

Board and Executive Management Team

Skilled & Engaged Workforce

Ensure Company has low levels of staff vacancies

 

Ensure Sunderland Care and Support Ltd commitment to Mandatory and Statutory Training

 

Reduce number of days lost due to illness down to 12 days on average per employee

March 2025

Executive Management Team

On behalf of the board

Councillor L Williams
Director
27 September 2024
SUNDERLAND CARE AND SUPPORT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 6 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

Sunderland Care and Support Limited is a Local Authority Trading Company established by Sunderland City Council. It is responsible for delivering a range of social care, health and support services to residents across the City of Sunderland and in the region. These services were transferred in order to enable the Company to become more cost effective and compete in the Social Care marketplace.

Results and dividends

The profit for the year, after taxation, amounted to £135,601 (2023 - loss £1,743,854)

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Councillor L Williams
Councillor JE Fletcher
Mr DA Lough
Mr G King
Councillor M Thornton
(Resigned 15 November 2023)
Councillor A Smith
(Appointed 15 November 2023)
Qualifying third party indemnity provisions

Directors are provided with indemnity insurance procured by Sunderland City Council for Directors' and Officers' liability.

SUNDERLAND CARE AND SUPPORT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
Disabled persons

Sunderland Care and Support Ltd is committed to equality and diversity and our goal is to embed it into our practices and everything we do. We want to ensure that all of the people we support receive the best possible service and that everyone is supported to develop and achieve to the best of their abilities.

 

Our objective is to ensure that services are provided fairly to all the people we support and that all of the people we support have equal opportunities.

 

For the people we support, we will:

 

 

As an employer we will:

 

 

We are committed to an active equal opportunities policy from recruitment and selection, through training and development, appraisal and promotion to retirement. It is our policy to promote an environment free from discrimination, harassment and victimisation. All decisions relating to employment practices will be objective, free from bias and based solely on work criteria and individual merit. We are responsive to the needs of our employees, residents and the community at large.

 

All applicants with disabilities receive fair treatment and are considered solely on their ability to do the job, taking into account any reasonable adjustments required. We also ensure appropriate training for employees with disabilities as for other employees.

 

Sunderland Care and Support Ltd is an equal opportunities employer.

Employee involvement

We strive to ensure that our resources support the delivery of our business plan and to this end we are committed to developing our people to deliver our business aims. In keeping with our culture we value feedback from our employees on people management issues.

 

Our comprehensive internal communication strategy aims to encourage two way communication within the organisation and enhances learning and development. Initiatives include:

 

 

Business relationships

Please refer to the S172 statement in the Strategic Report within the Sunderland Care and Support (Holding Company) Ltd financial statements for commentary on the group’s engagement with stakeholders.

SUNDERLAND CARE AND SUPPORT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
Post reporting date events

There have been no significant events affecting the Company since the year end that are not adequately disclosed in the financial statements.

Future developments

Future developments are set out in the Strategic Report.

Auditor

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.

Energy and carbon report

                    Unit         2023/2024 2022/2022

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.

 

Statement of directors' responsibilities

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 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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 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 company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

SUNDERLAND CARE AND SUPPORT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

 

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

Going Concern

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.

 

The Company’s pension surplus of £1.860m is recognised in full in the financial statements. The directors have reviewed the Company’s forecasts for next financial year from the date of formally approving the financial statements. Therefore the Board consider preparation on a going concern basis to be appropriate.

Contingent Liability

The Company has received a number of employment tribunal claims from staff who are seeking financial redress in relation to periods where unequal pay is alleged to have been applied by the Company. The Company is strenuously defending these claims. The outcome and the timing of any outcome of these claims is unknown and as such these claims cannot be assessed or quantified at this time and therefore have been disclosed as a contingent liability in the Company’s accounts.

On behalf of the board
Councillor L Williams
Director
27 September 2024
SUNDERLAND CARE AND SUPPORT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SUNDERLAND CARE AND SUPPORT LIMITED
- 10 -
Opinion

We have audited the financial statements of Sunderland Care And Support Limited (the 'company') for the year ended 31 March 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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:

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 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

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 our audit:

SUNDERLAND CARE AND SUPPORT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SUNDERLAND CARE AND SUPPORT LIMITED (CONTINUED)
- 11 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company 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:

Responsibilities of directors

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.

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:

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 of Ofsted and the Care Quality Commissions. 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.

SUNDERLAND CARE AND SUPPORT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SUNDERLAND CARE AND SUPPORT LIMITED (CONTINUED)
- 12 -

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.

Michael T Moran BA FCA
Senior Statutory Auditor
For and on behalf of Robson Laidler Accountants Limited
27 September 2024
Accountants
Statutory Auditor
Fernwood House
Fernwood Road
Jesmond
Newcastle upon Tyne
NE2 1TJ
SUNDERLAND CARE AND SUPPORT LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
2024
2023
Notes
£
£
Turnover
4
59,062,501
52,127,105
Cost of sales
(55,417,198)
(50,609,356)
Gross profit
3,645,303
1,517,749
Administrative expenses
(4,010,233)
(3,275,199)
Other operating income
1,799
-
0
Operating loss
(363,131)
(1,757,450)
Interest receivable and similar income
8
543,308
17,565
Interest payable and similar expenses
-
0
(710,000)
Profit/(loss) before taxation
180,177
(2,449,885)
Tax on profit/(loss)
9
(44,576)
706,031
Profit/(loss) for the financial year
135,601
(1,743,854)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

SUNDERLAND CARE AND SUPPORT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
2024
2023
£
£
Profit/(loss) for the year
135,601
(1,743,854)
Other comprehensive income
Actuarial (loss)/gain on defined benefit pension schemes
(7,850,000)
39,360,000
Tax relating to other comprehensive income
1,962,500
(9,840,000)
Total other comprehensive income for the year
(5,887,500)
29,520,000
Total comprehensive income for the year
(5,751,899)
27,776,146
SUNDERLAND CARE AND SUPPORT LIMITED
BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 15 -
2024
2023
Notes
£
£
£
£
Current assets
Debtors
10
5,975,402
4,884,656
Cash at bank and in hand
-
0
185,281
5,975,402
5,069,937
Creditors: amounts falling due within one year
11
(4,759,328)
(3,869,815)
Net current assets
1,216,074
1,200,122
Provisions for liabilities
Deferred tax liability
13
413,691
2,335,840
(413,691)
(2,335,840)
Net assets excluding pension surplus
802,383
(1,135,718)
Defined benefit pension surplus
15
1,860,000
9,550,000
Net assets
2,662,383
8,414,282
Capital and reserves
Called up share capital
14
1
1
Profit and loss reserves
16
2,662,382
8,414,281
Total equity
2,662,383
8,414,282
The financial statements were approved by the board of directors and authorised for issue on 27 September 2024 and are signed on its behalf by:
Councillor L Williams
Director
Company registration number 08681649 (England and Wales)
SUNDERLAND CARE AND SUPPORT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2022
1
(19,361,865)
(19,361,864)
Year ended 31 March 2023:
Loss
-
(1,743,854)
(1,743,854)
Other comprehensive income:
Actuarial gains on defined benefit plans
-
39,360,000
39,360,000
Tax relating to other comprehensive income
-
(9,840,000)
(9,840,000)
Total comprehensive income
-
27,776,146
27,776,146
Balance at 31 March 2023
1
8,414,281
8,414,282
Year ended 31 March 2024:
Profit
-
135,601
135,601
Other comprehensive income:
Actuarial gains on defined benefit plans
-
(7,850,000)
(7,850,000)
Tax relating to other comprehensive income
-
1,962,500
1,962,500
Total comprehensive income
-
(5,751,899)
(5,751,899)
Balance at 31 March 2024
1
2,662,382
2,662,383
SUNDERLAND CARE AND SUPPORT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
23
(250,527)
1,695,047
Income taxes paid
(41,535)
(13,912)
Net cash (outflow)/inflow from operating activities
(292,062)
1,681,135
Investing activities
Interest received
53,308
17,565
Net cash generated from investing activities
53,308
17,565
Net (decrease)/increase in cash and cash equivalents
(238,754)
1,698,700
Cash and cash equivalents at beginning of year
185,281
(1,513,419)
Cash and cash equivalents at end of year
(53,473)
185,281
Relating to:
Cash at bank and in hand
-
0
185,281
Bank overdrafts included in creditors payable within one year
(53,473)
-
0
SUNDERLAND CARE AND SUPPORT LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
1
Judgements and key sources of estimation uncertainty

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.

 

The item in the Company's Balance Sheet at 31 March 2024 for which there is a significant estimation uncertainty in the forthcoming financial year is as follows:

 

McCloud Judgement

Following a review of public service pension schemes in 2011, all schemes were reformed with the objective of reducing the overall cost to the taxpayer and putting schemes on a more sustainable footing.

 

The reforms included transitional protections for those members who were closest to retirement. Protections applied to active members who were within 10 years of their Normal Pension Age on 1 April 2012. All LGPS members transferred to the new 2014 Scheme on 1 April 2014 but members within 10 years of normal retirement were given an underpin promise that benefits earned after 1 April 2014 would be at least as valuable, in terms of amount and when they could be drawn, as if they had remained in the 2008 Scheme.

 

In 2018 the Government lost a Court of Appeal case (the ‘McCloud/Sargeant judgement) which found that the transitional protection arrangements put in place when the firefighters’ and judges’ pension schemes were reformed were age discriminatory.

 

This is likely to have implications for all public sector schemes due to the similarities in the way members closest to retirement were protected and could lead to members of the LGPS, who were discriminated against, being compensated.

 

In light of this, the accounts include an allowance for estimated liabilities relating to potential remedies for age discrimination within the LGPS arrangements. This assumes that the Government will legislate to change the scheme in the future to compensate members who have been discriminated against.

 

In 2019 there was an increase in the pension liability of £3.250 million, with additional pension costs included within past service costs, as disclosed in the pensions note. Until the Government announce scheme changes there is some uncertainty over the final liability that may emerge.

Pension Liability

Estimation of the net liability to pay pensions depends on a number of complex judgements relating to the discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality rates and expected returns on pension fund assets. A firm of consulting actuaries is engaged to provide the Company with expert advice about the assumptions to be applied.

 

The effects on the net pension liability for funded LGPS benefits of changes in individual assumptions can be measured. However, the assumptions interact in complex ways. Increase in life expectancy and salaries will result in increased liabilities, and changes in returns on assets could result in either a reduction or increase in the liability.

 

The yearly actuarial assessment of the liability takes into account changes in assumptions and the timeframe involved in the payment of the assessed contributions to reduce the liability.

SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
2
Accounting policies
Company information

Sunderland Care and Support Limited is a private company, limited by shares, registered in England and Wales. The company's registered office address can be found on the Company Information page.

2.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

 

The preparation of financial statement in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.

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.sunderlandgov.uk. Further information can be obtained from Director of Corporate Services, Sunderland City Council, City Hall, Plater Way, Sunderland, SR1 3AA.

2.2
Going concern

The use of the going concern basis of accounting is appropriate because there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the group to continue as a going concern. Sunderland City Council have confirmed that is will financially support the company for at least a further 12 months from the date the financial statements are signed by the directors and the auditor.true

 

The financial statements have been prepared on a going basis. The directors have reviewed the company's forecasts for next financial year from the date of formally approving the financial statements. On this basis, and given the ongoing support of Sunderland City Council, the Board consider preparation of the financial statements on a going concern basis to be appropriate.

2.3
Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

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 of 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.

SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Accounting policies
(Continued)
- 20 -

Agency income and expenditure

A number of items of income and expenditure have been removed from the company's financial statements on the basis that company is acting as an agent in accordance with FRS 102, where in an agency relationship, an entity (the agent) shall include in revenue only the amount of its commission. The amounts collected on behalf of the principal are not revenue of the entity.

2.4
Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 

In the Cash Flow Statement, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

2.5
Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.

 

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.

 

For financial assets measured at amortised cost, the impairment loss in measured as the difference between an assets carrying amount and the present value of the established cash flows discounted at the asset's original effective interest rate. If a financial asset has variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

 

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the assets and settle the liability simultaneously.

Other financial assets

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.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Accounting policies
(Continued)
- 21 -
Derecognition of financial assets

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.

Other financial liabilities

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

2.6
Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

 

Current or deferred taxation assets and liabilities are not discounted.

Current tax

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing difference that have originated but not reversed at the balance sheet date.

 

Timing difference arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recongised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

 

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

 

SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Accounting policies
(Continued)
- 22 -
2.7
Provisions

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

 

Provisions are charged as an expense to the Statement of Comprehensive Income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation taking into account relevant risks and uncertainties.

 

When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

 

2.8
Retirement benefits

 

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

 

The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Defined benefit pension plan

The Company operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

 

The liability recognised in the Balance Sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of plan assets at the reporting date (if any) out of which the obligations are to be settled.

 

The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount' rate').

 

The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.

 

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.

 

The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:

 

a) the increase in net pension benefit liability arising from employee service during the period; and

b) the cost of plan introductions, benefit changes, curtailments and settlements.

SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Accounting policies
(Continued)
- 23 -

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.

 

The company operates a defined benefits pension scheme and the pension charge is based on a full actuarial valuation dated 31 March 2019.

 

The company is an admitted body of the Tyne and Wear Pension Fund ("LGPS") and provides pension arrangements to its employees. The scheme is classified as a Defined Benefit Scheme based on final pensionable pay and as such must comply with reporting standard FRS 102. The requires the company to disclose certain information concerning assets, liabilities, income and expenditure related to the scheme for its employees. These disclosures have been prepared by AON Hewitt the actuary of the Tyne and Wear Pension Fund. The purpose of the pensions' disclosure is to provide clear information on the impact of the company's obligation to fund the retirement benefits of its staff on its financial position and performance. Even where this obligation is discharged through a pension fund, the company is responsible for employer's contributions set at a level to ensure the liabilities of the fund can be met.

 

The liabilities of the pension scheme attributable to the company are included in the Balance Sheet on an actuarial basis using the projected unit method, this is, an assessment of the future payments that will be made in relation to retirement benefits earned to date by employees based on assumptions about mortality rates, employee turnover rates and projections of earnings for current employees.

Assets have been valued at bid value in accordance with FRS 102.

 

The net Pension Liability is analysed into the following components:

 

Current Service Costs

The increase in liabilities as a result of years of service earned this year is allocated to the Statement of Comprehensive Income.

 

Past Service Costs

The increase in liabilities arising from current year decisions that affect years of service earned in previous years.

 

Interest costs

The expected increase in the present value of liabilities during the year as they move one year closer to being paid.

 

Expected Return on Assets

The annual investment return on the fund assets attributable to the company based on an average of the expected long term return.

 

Actuarial Gains and Losses

Changes in the net pension liability that arise because events have not coincided with assumptions made in the last actuarial valuation or because the actuaries have updated their assumptions.

 

Contributions paid to the Pension Fund

Cash paid as employer's contributions to the pension fund.

 

SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Accounting policies
(Continued)
- 24 -

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Balance Sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Balance Sheet date.

 

Interest income

Interest income is recognised in the Statement of Comprehensive Income 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.

2.9

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs and are measured subsequently at amortised cost using the effective interest method, less any impairment.

2.10

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.

2.11

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight line basis over the lease term.

3
Exceptional item
2024
2023
£
£
Expenditure
Exceptional item - Cost of sales
165,916
8,867
4
Turnover
2024
2023
£
£
Turnover analysed by class of business
Contributions recevied
56,584,852
49,737,678
Fees and charges
2,315,189
2,281,300
Sundry receipts
162,460
108,127
59,062,501
52,127,105
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
20,788
16,842
SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Operational
1,049
1,026
Administration
46
46
Total
1,095
1,072

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
40,689,620
36,076,954
Social security costs
3,195,627
2,922,965
Pension costs
2,590,264
4,515,232
46,475,511
43,515,151
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
92,473
99,467

Three of the directors are non-executive directors and have not received any emoluments (2023: 3 received no remuneration).

 

The remuneration of key management personnel was £95,684 (2023: £106,382).

8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
53,308
17,565
Interest on the net defined benefit asset
490,000
-
0
Total income
543,308
17,565
SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 26 -
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
4,225
41,535
Adjustments in respect of prior periods
-
0
(57,328)
Total current tax
4,225
(15,793)
Deferred tax
Origination and reversal of timing differences
40,351
(690,238)
Total tax charge/(credit)
44,576
(706,031)

The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit/(loss) before taxation
180,177
(2,449,885)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
45,044
(465,478)
Effect of change in corporation tax rate
-
0
(183,138)
Permanent capital allowances in excess of depreciation
-
0
(325)
Increase/decrease in pension fund liability leading to an increase/(decrease) in tax
-
0
(690,000)
Deferred tax movement
-
0
690,238
Deferred tax not recognised
-
0
(57,328)
Marginal relief
(468)
-
0
Taxation charge/(credit) for the year
44,576
(706,031)

In addition to the amount charged/(credited) to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2024
2023
£
£
Deferred tax arising on:
Actuarial differences recognised as other comprehensive income
(1,962,500)
9,840,000
SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 27 -
10
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
443,458
315,671
Other debtors
5,531,944
4,568,985
5,975,402
4,884,656
11
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
12
53,473
-
0
Trade creditors
884,025
529,860
Corporation tax
4,225
41,535
Other taxation and social security
733,795
639,988
Other creditors
3,083,810
2,658,432
4,759,328
3,869,815
12
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
53,473
-
0
Payable within one year
53,473
-
0
13
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
(1,598)
-
Short term timing differences
415,289
2,335,840
413,691
2,335,840
SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
13
Deferred taxation
(Continued)
- 28 -
2024
Movements in the year:
£
Liability at 1 April 2023
2,335,840
Charge to profit or loss
40,351
Effect of change in tax rate - other comprehensive income
(1,962,500)
Liability at 31 March 2024
413,691
14
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
15
Retirement benefit schemes

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £546,127 (2023: £493,647).

 

Contributions totalling £113,365 (2023: £98,079) were payable to the fund at the reporting date.

 

All new employees are able to join the defined contributions pension scheme.

 

Defined benefit schemes

The company also operates a defined pension scheme. The disclosures below relate to the funded liabilities within the Tyne and Wear Pension Fund (the 'Fund') which is part of the Local Government Pension Scheme (the 'LGPS'). The funded nature of the LGPS requires Sunderland Care and Support Limited and its employees to pay contributions into the Fund, calculated at a level intended to balance the pensions liabilities with investment assets. The latest actuarial valuations of Sunderland Care and Support Limited liabilities took place as at 31 March 2024. Liabilities have been estimated by the independent qualified actuary on an actuary basis using the projected unit credit method.

2024
2023
Key assumptions
%
%
Discount rate
4.8
4.7
Expected rate of increase of pensions in payment
2.6
2.7
Expected rate of salary increases
4.1
4.2
CPI inflation
2.6
2.7
SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
15
Retirement benefit schemes
(Continued)
- 29 -
Mortality assumptions
2024
2023

Assumed life expectations on retirement at age 65:

Years
Years
Retiring today
- Males
21.0
21.6
- Females
24.2
24.6
Retiring in 20 years
- Males
22.3
22.9
- Females
25.6
26.1
2024
2023

Amounts recognised in the profit and loss account

£
£
Current service cost
2,060,000
4,050,000
Net interest on net defined benefit liability/(asset)
(490,000)
710,000
Total costs
1,570,000
4,760,000
2024
2023

Amounts taken to other comprehensive income

£
£
Actual return on scheme assets
(5,370,000)
(1,230,000)
Less: calculated interest element
4,440,000
2,500,000
Return on scheme assets excluding interest income
(930,000)
1,270,000
Actuarial changes related to obligations
(3,590,000)
(40,630,000)
Adjustment loss due to restriction of surplus
12,370,000
-
Total costs/(income)
7,850,000
(39,360,000)

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

2024
2023
£
£
Present value of defined benefit obligations
85,670,000
84,830,000
Fair value of plan assets
(87,530,000)
(94,380,000)
Surplus in scheme
(1,860,000)
(9,550,000)
SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
15
Retirement benefit schemes
(Continued)
- 30 -
2024

Movements in the present value of defined benefit obligations

£
Liabilities at 1 April 2023
84,830,000
Current service cost
2,060,000
Benefits paid
(2,120,000)
Contributions from scheme members
540,000
Actuarial gains and losses
(3,590,000)
Interest cost
3,950,000
At 31 March 2024
85,670,000

The defined benefit obligations arise from plans which are wholly unfunded.

2024

Movements in the fair value of plan assets

£
Fair value of assets at 1 April 2023
94,380,000
Interest income
4,440,000
Return on plan assets (excluding amounts included in net interest)
930,000
Benefits paid
(2,120,000)
Contributions by scheme members
2,270,000
Restriction of surplus
(12,370,000)
At 31 March 2024
87,530,000

The actual return on plan assets was £5,370,000 (2023 - £1,230,000).

2024
2023

Fair value of plan assets at the reporting period end

£
£
Equity instruments
50,540,000
48,320,000
Debt instruments
25,380,000
23,880,000
Property
10,390,000
9,910,000
Cash
700,000
1,700,000
Other
12,890,000
10,570,000
Unrecognised asset
(12,370,000)
-
87,530,000
94,380,000
SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 31 -
16
Profit and loss reserves
2024
2023
£
£
At the beginning of the year
8,414,281
(19,361,865)
Profit/(loss) for the year
135,601
(1,743,854)
Actuarial differences recognised in other comprehensive income
(7,850,000)
39,360,000
Tax on actuarial differences
1,962,500
(9,840,000)
At the end of the year
2,662,382
8,414,281
17
Financial commitments, guarantees and contingent liabilities

The Company has received a number of employment tribunal claims from staff who are seeking financial redress in relation to periods where unequal pay is alleged to have been applied by the Company. The Company is strenuously defending these claims. The outcome and the timing of any outcome of these claims is unknown and as such these claims cannot be assessed or quantified at this time and therefore have been disclosed as a contingent liability in the Company’s accounts.

18
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
541,360
541,360
Between two and five years
361,895
903,255
903,255
1,444,615

The operating lease costs during the year were £541,360 (2023: £555,537). All lease commitments relate to land and buildings.

SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 32 -
19
Related party transactions

The company is wholly owned by Sunderland Care and Support (Holding Company) Limited. Income of £56,422,051 (2023: £49,730,241) was received from the Holding Company during the reporting period. At the balance sheet date Sunderland Care and Support (Holding Company) Limited owed the company £3,675,928 (2023: £1,981,776).

 

Sunderland City Council is the ultimate owner of the Sunderland Care and Support Limited, as it is the sole-owner of Sunderland Care and Support (Holding Company) Limited. Service level agreements for the provision of various services are in place and amounts totalling £5,433,732 (2023: £5,450,327) were paid to the Council in the year. Income was received from Sunderland City Council of £6,344,563 (2023: £5,694,460).

 

During 2023/24 the company received income of £36,635 (2023: £24,983) from Together For Children Sunderland Limited, another wholly owned subsidiary of Sunderland City Council. Payments of £nil (2023: £nil) were made to Together for Children in 2023/24.

 

The amount owing to/(from) related parties at the year end was as follows:

 

2024 2023

£         £

 

Sunderland Care and Support (Holding Company) Ltd         (2,374,624)* (1,981,776)*

Sunderland City Council                 (1,506,021) (1,467,908)

Together for Children Sunderland Limited         Nil      35,406

 

* Note: VAT debtor / (creditor) included in figures between Holding Company and Operational Company of £1,059,496 (2023: £887.168).

20
Ultimate controlling party

The ultimate parent undertaking is Sunderland City Council by virtue of its 100% shareholding in the company's immediate parent undertaking, Sunderland Care and Support (Holding Company) Limited. There is no individual controlling party.

SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 33 -
21
Agency Income and Expenditure

Home Improvement Agency and Disabled Facilities Grants

 

The Company acts as an agent for Sunderland City Council ("Council") in relation to Home Improvement Agency and Disabled Facilities Grants, which are spent on improving facilities for disabled people in their homes and also funds the minor alterations and handyperson scheme. The Company administers the scheme on behalf of the Council, managing the expenditure that is funded mainly by external grants. The Company incurs expenditure and is reimbursed by the Council, but this is not included in turnover as the Company is an agent of the Council. The Company does include in income its fees paid for by the Council for managing this expenditure.

 

Income and expenditure that has been eliminated within these financial statements during the year was £4,003,937 (2023: £3,732,319).

 

Telehealth and Assistive Technology

 

The Company acts as an agent for Sunderland City Council ("Council") in relation to Telehealth and Assistive Technology, which are spent on devices or systems that help maintain or improve a person's ability to do things in everyday life. These can assist with a range of difficulties, including problems with memory and mobility. The Company administers the scheme on behalf of the Council, managing the expenditure that is funded mainly by external / Council funding. The Company incurs expenditure and is reimbursed by the Council, but this is not included in turnover as the Company is an agent of the Council.

 

Income and expenditure that has been eliminated within these financial statements during the year was £829,696 (2023: £372,122).

 

Community Equipment Refurbishment

 

The Company acts as an agent for Sunderland City Council ("Council") in relation to the Community Equipment Refurbishment, which are spent on building works related to the improvement of the Community Equipment Service. The Company administers the scheme on behalf of the Council, managing the expenditure that is funded by Council. The Company incurs expenditure and is reimbursed by the Council, but this is not included in turnover as the Company is an agent of the Council.

 

Income and expenditure that has been eliminated within these financial statements during the year was £124,328 (2023: £152,201).

 

Client monies for supported living

 

The Company administers a fund for its clients that are living in supported accommodation provided by the company. Income is received from housing benefit for the upkeep of living areas, and expenditure is incurred as and when needed on those areas. The income, expenditure and cash balances held have been removed from these financial statements.

 

Income in the year was £0 (2023: £142,296) and expenditure in the year was £4,749 (2023: £114,859).

 

Cash balances held on behalf of clients is £707,078 (2023: £702,329).

 

Corporate and social responsibility - good causes fund

 

As part of its commitment to corporate and social responsibility, the Company raises money for good causes in Sunderland and makes donations to those causes. The income, expenditure and cash balances held have been removed from these financial statements.

 

Income in the year was £14,469 (2023: £6,478) and expenditure in the year was £7,887 (2023: £1).

 

Cash balances held on behalf of these good causes activities was £14,271 (2023: £7,689).

SUNDERLAND CARE AND SUPPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 34 -
22
Cash Drop

The company delivers cash to customers on behalf of the Financial Safeguarding Team. The income, expenditure and cash balances held have been removed from these financial statements.

 

Funds brought-forward and income received in the year totalled £203,310 (2023: £203,966) and expenditure in the year was £203,310 (2023: £199,868).

 

Cash balances held at year-end on behalf of customers were £1,826 (2023: £4,098).

23
Cash (absorbed by)/generated from operations
2024
2023
£
£
Profit/(loss) for the year after tax
135,601
(1,743,854)
Adjustments for:
Taxation charged/(credited)
44,576
(706,031)
Finance costs
-
0
710,000
Investment income
(543,308)
(17,565)
Pension scheme non-cash movement
330,000
2,050,000
Movements in working capital:
(Increase)/decrease in debtors
(1,090,746)
1,663,013
Increase/(decrease) in creditors
873,350
(260,516)
Cash (absorbed by)/generated from operations
(250,527)
1,695,047
24
Analysis of changes in net funds/(debt)
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
185,281
(185,281)
-
Bank overdrafts
-
0
(53,473)
(53,473)
185,281
(238,754)
(53,473)
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