Routes to Work Ltd - Performance and Finance
North Lanarkshire Council · 12 May 2023
Back to Enterprise and Fair Work Committee — 12 May 2023 and its agenda
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North Lanarkshire Council Report Enterprise and Fair Work Committee Does this report require to be approved? ☐ Yes ☒ No Ref JO’N/PK Date 12/05/23 Routes to Work Ltd – Performance & Finance Report From Janie O’Neill, Chief Officer (Education -South) E-mail oneillja@northlan.gov.uk Telephone Executive Summary Routes to Work Ltd.’s performance was previously considered by the former ALEOs and External Bodies Monitoring Sub Committee. Following changes to North Lanarkshire Council’s Scheme of Administration, responsibility for oversight of service delivery by arm’s length bodies now rests with the relevant service committee. The functions delivered by Routes to Work on behalf of the Council fall within the Terms of Reference of the Enterprise and Fair Work Committee and a performance report is submitted in line with the Strategic Performance Framework considered by members in November 2019. This report outlines Routes to Work Ltd.’s performance against its charitable objectives and Council priorities for Q2 2021/22 to Q3 2022/23. This report also provides commentary in respect of the charity’s governance arrangements to provide assurance that Council obligations are being satisfied. The financial performance of Routes to Work Ltd. for Q2 2021/22 to Q3 2022/23 and overall financial standing is also included within this report. Future reports will be submitted on a 6 monthly basis to committee. Recommendations It is recommended that Committee: (1) Note Routes to Work operational performance and finance for Q2 2021/22 to Q3 2022/23, along with wider achievements during that period. The Plan for North Lanarkshire Priority Improve economic opportunities and outcomes Ambition statement (11) Increase economic opportunities for adults by understanding, identifying, and addressing the causes of poverty and deprivation and barriers to financial inclusion
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1. Background 1.1 Routes to Work, established in 2002, is a company limited by guarantee with charitable status which is owned by North Lanarkshire Council. The organisation provides a range of free employability services to North Lanarkshire residents and specialises in providing case worker support to unemployed residents as well as support with accessing vocational training and the short-term costs associated with moving from benefits to employment, such as childcare and travel. They also provide in-work support for up to 6 months for those participants that require it. 1.2 In 2017 the company amended its Memorandum and Articles of Association to extend its area of operation into other local authority areas thereby enabling Routes to Work to bid to deliver national employability programmes in these areas. This is intended to support the long-term sustainability of the company. While joint delivery of the Council’s EU funded programme has been and is currently the major source of income for Routes to Work, in the past the organisation has delivered a wide range of other programmes on behalf of the Council or in conjunction with the Council’s Employability team. 1.3 Routes to Work’s Board of Directors consists of up to ten members – two are Category A members appointed by North Lanarkshire Council (one an elected member, and one a senior Council officer) and up to eight Category B directors, who bring specialist expertise to the company and are selected through a formal nominations procedure. The Board currently has 7 independent directors with interests and/or experience in local community development and engagement, lifelong learning and skills, business development and support, HR and Law. The Board of Directors has responsibility for ensuring that Routes to Work’s services are delivered in accordance with approved Service Level Agreements and charitable objectives and meets quarterly to fulfil these duties. Council funded activities delivered by Routes to Work are also aligned to The Plan for North Lanarkshire and Council Programme of Work areas. 1.4 Finally, Routes to Work were comprehensively reviewed in 2019 with the outcomes from the review considered by the Policy and Strategy Committee at its meeting in September 2019, where it was noted that the charity is performing well and delivering on its key objectives. The options appraisal confirmed that retaining Routes to Work as an arm’s length provider remained the best option for the council. In addition to contractual performance monitoring by this committee, the Audit and Scrutiny Panel is responsible for ensuring the effectiveness of each entity’s governance arrangements, including financial governance. The Policy and Strategy Committee retains responsibility for considering the outputs from reviews by the council into its arm’s length delivery arrangements, including recommendations in relation to Best Value and potential future delivery options. 2. Report Operational Performance Q2 2021/22 to Q3 2022/23 2.1 The operational performance overview for employability initiatives delivered by Routes to Work in the reporting period are attached at Appendix 1. The following points are service delivery highlights which are not included within the performance measures.
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Service Delivery Highlights 2.2 Knowledge Transfer Partnership (KTP) – Social Value Framework Routes To Work became an organisational member of Social Value UK, which will give their staff valuable resources and opportunities to learn about social value evaluation and continuously improve the impact they have on the world around us. As part of their ambition to create a social value evaluation framework, they established a strategic partnership with the University of the West of Scotland through their Knowledge Transfer Partnership. With guidance from a multidisciplinary team of nine Academics from the Schools of Business & Creative Industries and Health & Life Sciences, they are working on embedding social value throughout their organisation's decisions and services. In the upcoming months, the forecast evaluation will be submitted for assurance from SVI. With the framework of data collection and stakeholder engagement completed as part of their initial social value analysis, RTW will conduct evaluative analyses of its SROI on an annual basis, with a view to consultancy and/or creation of a digital product. 2.3 New Programmes During the reporting period the company designed and implemented two new programmes. These programmes had minimal lead in time and were expected to be fully operational at short notice. These were: Community Renewal Fund Airdrie Central Community Engagement Project - This project was funded from the UK Government to prepare for the introduction of the UK Shared Prosperity Fund. The project began in February 2022 and delivered a place- based engagement service to people who are unemployed, economically inactive or in insecure or unstable work who reside in Ward 9 – Airdrie Central. The project supported the local community through piloting a new approach of concentrated and intense engagement, pre-employability and personal development activities, on their doorstep. The project demonstrated innovative practice and was aligned with the Community Renewal Fund Investment Priority of ‘supporting people into employment.’ The project ended on 31st December 2022. Tailored Training Programme – This programme was funded by the Council through its Local Employability Partnership No One Left behind Phase 2 grant funds from the Scottish Government. The programme began in April 2022 and was aimed at providing a vocational / industry training and brokerage package to residents who faced redundancy or had been made redundant. In addition to this the programme also delivers a personalised case management option to allow participants to access support to overcome barriers in relation to identifying and accessing training. Further support is provided to enable participants to secure Fair Work. The programme will continue beyond the reporting period until 30th June 2023. 2.4 Activities with Schools Routes to Work Ltd continues to support in the delivery of the Pathways Programme led by Education & Families and the company has also been carrying out a range of support to 11 North Lanarkshire secondary schools, supporting young people to access vocational certified training and employability skills training. This training is designed to engage the young people on their first steps to their employability pathway focused on the next steps to achieve a successful future with 80 young people achieving a recognised SQA or industry specific qualification.
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2.5 Hybrid Working The Company recognises the importance of helping employees to balance their work and home lives by offering flexible working arrangements and have introduced a Hybrid working policy from November 2022, on a trial basis. It will be reviewed in the second half of the operational year 2023 – 2024. The aims of this policy are to increase the rate of retention, reduce absence, attract new talent, promote work-life balance and reduce stress and travel costs. In supporting employees with providing flexible working this will also improve the Company’s efficiency, productivity and competitiveness. 2.6 NHS Demonstrator Programme The company piloted a partnership programme with NHS Lanarkshire and North Lanarkshire Council Employability Team to provide long term unemployed residents access to a 6-month paid work placement within various NHS roles. The result was that 16 long term unemployed residents commenced a placement with 5 securing permanent employment with the NHS, 3 undertaking temporary roles with the NHS, 1 securing employment out with the NHS and a further 2 awaiting outcomes of interviews to secure an NHS permanent post. Therefore, the programme is on track to achieve 73% positive outcome rate. Financial Performance Q2 2021/22 to Q3 2022/23 Public Accountability Obligations 2.7 To satisfy the Council’s duty to ensure the organisation delivering employment and training services on its behalf is financially sound, the Council’s Section 95 Officer maintains appropriate and proportionate processes and procedures for scrutinising Routes to Work’s financial performance. 2.8 The Council’s Legal Agreements with Routes to Work specify the financial information which must be submitted to the Council including an annual business plan, quarterly management accounts, audited financial statements etc. to enable Financial Solutions to assess and report any financial risk likely to arise as a result of the Council using Routes to Work to deliver these services. 2.9 The Council expends revenue resources annually with Routes to Work to deliver services which assist the Council in achieving its priority outcomes therefore has a duty to ensure this money is being properly used to deliver both the Council’s and Routes to Work objectives. 2.10 Financial Outturn to 31st March 2022 The Financial outturn to 31 March 2022, per the Annual Accounts and approved at the AGM on 9 November 2022, reports a break-even position which is a favourable movement of £0.043m against budget. There was a significant impact on income against budget due to COVID19 which was offset by corresponding underspends in expenditure. Further details on the Financial Outturn to 31 March 2022 is outlined in Appendix 2. For financial year 2022/23, the Council approved revenue spend equating to £4.099m. This represents 96% of the organisations budgeted income of £4.249m with the balance of income of £0.150m being primarily generated through other trading activities.
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Forecast Financial Performance to 31 March 2023 2.11 The outturn to 31 March is projected to be on budget at an operational deficit of £0.111m. A detailed comparison of projected outturn to the 2022/23 Budget are provided in Appendix 2. Balance Sheet at 31 December 2022 2.12 Key balances are set out in Appendix 4 to provide members with an update on the overall financial standing of the company, as at 31 December 2022, along with the comparator figures as at 31 March 2022. The acid test ratio which is the ratio of liquid assets to liabilities is 2.90 to 1 which indicated that the company has positive liquidity. However, there are some concerns regarding cash balances as noted in section 2.13 below. Projected Cash flow to 30th June 2023 2.13 The cashflow for the year projected at 31st December 2022 to 30th June 2023 is attached per Appendix 5. However, this position excludes the traditional advance payment from NLC against core activity. Clarification is being sought with regards to funding for 2023/24 as cashflow projections beyond June 2023 are currently unavailable. Cash balances for the reported period vary from a high of £0.672m to a low of £0.062m throughout the year. 3. Measures of success 3.1 Routes to Work Ltd. continue to provide an effective employability service on behalf of the Council to support unemployed and underemployed residents of North Lanarkshire. 4. Supporting documentation 4.1 Appendix 1 Routes to Work – Q2 2021/22 to Q3 2022/23 Operational Performance 4.2 Appendices 2 - 5 Routes to Work – Q2 2021/22 to Q3 2022/23 Financial Performance Janie O’Neill Chief Officer for Education (South)
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☒ No ☒ If Yes, please provide a brief summary of the impact? The activities of Routes to Work Ltd are aimed at improving economic outcomes for residents of North Lanarkshire and play a role in reducing inequality. If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The financial performance of Routes to Work is closely monitored by the council’s Section 95 Officer and the financial performance as detailed above, along with other key financial information presented in the report. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk ☐ No ☐
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Yes 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Routes to Work maintain a detailed risk register which is presented to each Board meeting. In terms of the Council, the risk of Routes to Work and the wider employability programmes being deemed non-compliant with external funders is present. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☒ No ☐ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services. Within all Council employability programmes veterans are immediately eligible for support alongside other priority groups.
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APPENDIX 1 Routes to Work – 2021/22 Q2 – Q4 Operational Performance Employability Programme Indicator Target Outcome/Purpose 2021/22 Q2 – Q4 Target 2021/22 Q2 – Q4 Actual Blue Red Amber Green Comments North Lanarkshire’s Working Employability Pipeline (European Social Fund) The number of job entries Job entries secured 622 502 R This is the Council’s main EU funded employability programme which from September 2018 became an all-age programme. This programme also supports the Education and Families Pathways Programme. Sustainment in Employment In work 26 weeks after starting employment 70% 76% B Employability Fund (Skills Development Scotland Starts Engaged on programme 60 59 A The contract was awarded by SDS for coverage across 2 Local Authority areas. Most Training Providers closed their operations for many months due to Covid, therefore training was extremely limited, this affected the full delivery of the contract. Qualifications Accredited qualification 41 28 R Job Starts Entered employment – 4 weeks 42 45 B Sustainment Sustained in work at 26 weeks 44 35 R No one Left Behind (NOLB) Number of starts Engaged on programme 146 143 A This funding from Scottish Government. Delivery is available to enhance support to specific groups and this service is for people aged 50+, the BAME community and people with a mental health issue. Number of Job Entries Job Entries secured 77 65 R 26-week sustainment Jobs sustained at 26 weeks 76% 81% B Number of starts Engaged on programme 97 53 R
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Parental Employment Support Fund Number of Job Entries Job Entries secured 39 71 B Funding from the Scottish Government to support employed and underemployed parents who may be at risk of poverty. 26-week sustainment Jobs sustained at 26 weeks 70% 73% G Young Persons Guarantee Programme (YPG) Achieved qualification Accredited qualification 162 105 R Funding from the Scottish Government to protect young people aged 16 -24 years from the economic impact of COVID -19 by offering them the opportunity of a job, apprenticeship, further or higher education, training programme or volunteering. Targeting particularly excluded groups of 16-24 yr olds. Entered FE/HE/Training Moved into full time education or training programme 30 13 R Job entries (including MA’s) Job entries secured 257 174 R Commenced Volunteering Moved onto a volunteering programme 15 0 R Sustainment Post destination sustained at 26 weeks 70% 80% B Routes to Work – 2022/23 Q1 – Q3 Operational Performance Employability Programme Indicator Target Outcome/Purpose 2022/23 Q1 – Q3 Target 2022/23 Q1 – Q3 Actual Blue Red Amber Green Comments North Lanarkshire’s Working Employability Pipeline (European Social Fund) The number of job entries Job entries secured 663 470 R This is the Council’s main EU funded employability programme which from September 2018 became an all-age programme. This programme also supports the Education and Families Pathways Programme to September 2022. Sustainment in Employment In work 26 weeks after starting employment 70% 68% A Employability Fund (Skills Qualifications Accredited qualification 12 5 R The contract was awarded by SDS for coverage across 2 Local Authority areas. Most Training
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Development Scotland Job Starts Entered employment – 4 weeks 9 13 B Providers closed their operations for many months due to Covid, therefore training was extremely limited, this affected the full delivery of the contract. Sustainment Sustained in work at 26 weeks 9 26 B No one Left Behind (NOLB) Number of starts Engaged on programme 115 85 R This funding from Scottish Government. Delivery is available to enhance support to specific groups and this service is for people aged 50+, the BAME community and people a mental health issue. Number of Job Entries Job Entries secured 47 56 B 26-week sustainment Jobs sustained at 26 weeks 76% 71% R Parental Employment Support Fund Number of starts Engaged on programme 81 85 B Funding from the Scottish Government to support employed and underemployed parents who may be at risk of poverty. Number of Job Entries Job Entries secured 56 56 G 26-week sustainment Jobs sustained at 26 weeks 70% 69% A Young Persons Guarantee Programme (YPG) Achieved qualification Accredited qualification 54 79 B Funding from the Scottish Government to protect young people aged 16 -24 years from the economic impact of COVID -19 by offering them the opportunity of a job, apprenticeship, further or higher education, training programme or volunteering. Targeting particularly excluded groups of 16-24 yr olds. This programme also supports the Education and Families Pathways Programme from October 2022. Entered FE/HE/Training Moved into full time education or training programme 6 8 B Job entries (including MA’s) Job entries secured 113 121 B Commenced Volunteering Moved onto a volunteering programme 3 0 R Sustainment Post destination sustained at 26 weeks 70% 75% B Community Renewal Fund Registration Engaged on programme 156 201 B Funding from the UK Government to help local areas prepare for the introduction of the UK Shared
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Achieved Qualification Accredited qualification 47 46 A Prosperity Fund. The aim was to support project proposals that align with long-term strategic plans for local growth, target people most in need and support community renewal. Entered FE/HE/Training Moved into full time education or training programme 16 14 R Job Searching Engaged in job searching activities 12 38 B Life Skills Improved life skills 49 65 B Engaging with benefit system Accessing benefits 5 1 R Job Entries Job entries secured 24 49 B Tailored Training Solutions (NOLB Grant Funding Programme) Registration Engaged on programme 48 22 R Funded from Scottish Government the North Lanarkshire Employability Grant Programme aims to support unemployed people to move towards and into work. It is a new initiative which recognises that to help local people to develop the skills and confidence employers are looking for we all need to work together at a local level to provide the best possible services to those who need them most Qualifications Accredited qualification 38 10 R Job Starts Entered employment – 4 weeks 32 1 R Key: - B - Blue (above threshold) ≥5% of target G - Green (within threshold and on target) = to or + 5% of target A - Amber (within threshold but below target) R - Red (below threshold) ≤ 5% of target
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Appendix 2 Routes to Work Limited Outturn to 31 March 2022 Income & expenditure 2021/22 2021/22 2021/22 Commentary Revised Annual Budget - COVID Outturn to 31 March 2021 Revised Budget vrs Outturn £'000 £'000 £'000 Income from NLC ESF Pipeline 2,764 2,296 468 No one left behind 153 164 (11) Prospects for Parents 103 125 (22) National Training Transition Fund (NTTF) 52 41 11 Youth Enhanced Care Worker 625 369 256 CRF 0 68 (68) 0 0 0 Total Income from NLC 3,697 3,063 634 Skills Development Scotland 149 145 4 DWP Kickstart 225 365 (140) Development Income 24 16 8 Other Income 371 281 90 Total Incoming Resources 4,466 3,870 596 There was an under-recovery in income due to the continuing impact of COVID19 coupled with delays in start dates for new projects. Under-recovery was offset by corresponding underspends within expenditure. Expenditure: Charitable Activities (4,509) (3,870) (639) Total Resources Expended (4,509) (3,870) (639) The underspend in expenditure was due to the continuing impact of COVID19 and delays in start dates for new projects.This was predominantly offset by a corresponding under-recovery in income. Operational surplus / (deficit) (43) 0 (43)
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Appendix 3 Routes to Work Limited Projected Outturn to 31 March 2023 Income & expenditure 2022/23 2022/23 Year to date 2022/23 2022/23 Commentary Variance Budget vrs Projected Outturn Budget Budget Actual Variance Projected Outturn to 31 March 2023 Variance Budget vrs Projected Outturn £'000 £ £ £ £'000 £'000 Income from NLC ESF Pipeline 2,886 2,139 1,837 (302) 2,886 0 No one left behind 188 141 126 (15) 188 0 Prospects for Parents 208 153 126 (27) 208 0 Youth Enhanced Care Worker 407 300 275 (25) 407 0 CRF 291 291 338 47 291 0 TTS 119 88 36 (52) 119 0 Total Income from NLC 4,099 3,112 2,738 (374) 4,099 0 Skills Development Scotland 14 14 21 7 14 0 DWP - Kickstart 60 60 56 (4) 60 0 Development Income 12 9 5 (5) 12 0 Other Income 64 47 54 7 64 0 Total Incoming Resources 4,249 3,242 2,874 (368) 4,249 0 Expenditure: Charitable Activities (4,360) (3,324) (2,890) 433 (4,360) 0 Total Resources Expended (4,360) (3,324) (2,890) 433 (4,360) 0 Operational surplus / (deficit) (111) (81) (16) 65 (111) 0
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Appendix 4 Routes to Work Limited Overall Financial Standing - Balance Sheet as at 31 December 2022 Balances/ Indicator 31 March 2022 31 December 2022 Variance Commentary £ £ £ Fixed Assets 4,566 933 3,633 Net Book Value of ICT equipment has reduced since 31st March 2022 due to end of life of assets. Current Assets: Trade Debtors 63,087 11,573 51,514 Movement in trade debtors due to improvements in payment processes. Prepayments 486,492 522,803 (36,311) Movement is a result of increased grant claims. Bank / Cash 870,693 1,046,788 (176,095) Increase largely attributed to receipt of ESF grant funding in advance from NLC. This is matched by an increase in current liabilities below. 1,420,272 1,581,165 (157,259) Current Liabilities: Creditors inc. Advanced payments, VAT & other taxes (371,930) (545,681) 173,751 Increase within creditors balances as a result of the ESF advanced payment from NLC reflected by an increased bank/cash balance above. (371,930) (545,681) 173,751 Defined scheme pensions liabilities 16,000 16,000 0 FRS102 actuarial valuation Net Asset / (Liabilities) 1,068,908 1,052,416 16,492 Financed by Reserves:- Designated Reserves 350,380 325,457 24,923 Reduction in reserves is due to the utilisation of the following funds: Future Development, Knowledge Transfer Partnership ,Office Dilapidations and Strategic Growth. Unrestricted funds 803,308 704,547 98,761 Decrease is offset by a correlating increase in restricted funds Unrestricted Pension Fund 16,000 16,000 0 Restricted Funds (100,780) 6,413 (107,193) Increase is offset by a correlating decrease in unrestricted funds Total Reserves 1,068,908 1,052,416 16,492
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Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 £860,476 £1,225,991 £1,008,020 £852,682 £1,258,552 £960,767 £671,700 £566,208 £487,337 £475,237 £390,166 £61,566