UCA Financial Statements 2018-19-1575024120005

University for the Creative Arts Financial Statements for the year ended 31 July 2019 University for the Creative Arts Financial Statements for the year ended 31 July 2019 Contents Page Strategic Report 2-19 Details of Board of Governors 20 Responsibilities and Corporate Governance Statement 21-25 Independent Auditor’s Report 26-27 Consolidated and University Statement of Comprehensive Income 28 Consolidated and University Balance Sheets 29 Consolidated Statement of Cash Flows 30 Consolidated and University Statement of Changes In Reserves 31 Statement of Principal Accounting Policies 32-37 Notes to the Financial Statements 38-58 This document constitutes the annual report Page of 58 University for the Creative Arts Strategic Report The University is a Higher Education Corporation (HEC) and an exempt charity under the terms of the Charities Act 2011 This review summarises the Board’s assessment of how we have delivered our charitable purposes for public benefit and of our overall performance in 2018/19 In preparing this review, the Board of Governors has had regard to the Charity Commission’s guidance on public benefit The University’s Beneficiaries The University’s charitable objects, derived from the Education Reform Act 1988: Section 124, are the advancement of further and higher education (FE and HE) and research Our students are the University’s primary beneficiaries However, our beneficiaries also include employers and businesses within the creative industries sector and beyond; external researchers and members of the public who visit our galleries and the Crafts Study Centre, a specialist museum, charity and research centre on our Farnham campus; and school children, local communities and our alumni who attend educational events organised by the University and make use of its academic facilities We not believe that UCA carries out any activities that could harm its beneficiaries and we are not aware of views amongst others that such harm might arise No serious incidents of material significance were reported in 2018/19 The University’s 10 Year Strategy Since the arrival of its Vice-Chancellor, Professor Bashir Makhoul, in June 2017, the University has sought to build on its activity over the previous five years, which saw it significantly raise its profile and reputation, to pursue a strategic direction that will ensure its resilience and financial stability, as well as enhancing still further its educational offer The University is seeking to build on what it does best, with its focus being set on the broader needs of the creative industries, as exemplified by its creation of a Business School for the Creative Industries – the first of its kind in the UK Pursuit of the two key objectives of recruitment and enhancement will enable the University to invest in its future development, whilst working in partnership with its students and other organisations to co-create the student experience, expansion overseas, and robust recruitment pipelines Following the arrival of the new Vice-Chancellor, a review of the University’s Strategic Plan has taken place This signals a change in the positioning of the University and identifies that it intends to be: • Recognised as a global authority on creative arts, creative technologies and business for the creative industries We will: • • • Grow our student numbers, increasing the profile and reputation of the University nationally and internationally and developing mutually beneficial partnerships, to deliver a sustainable financial position and more resilient organisation Build upon what we well, reviewing our portfolio and ensuring that the activities we undertake are effective, coherent and viable, both educationally and financially Review the use of our resources, including the quality of our estate, to ensure our total offer is attractive to students and provides a meaningful educational experience Modern University of the Year, League Table Performance and TEF In September 2018 UCA was named the Modern University of the Year in The Times and The Sunday Times Good University Guide 2019 In addition to receiving this accolade, the University achieved the following rankings in the Guide’s league table: • • • • Top creative specialist institution Top 10 for teaching quality Top 40 for social inclusion Joint top modern university Page of 58 • Highest climber, up 25 places This was followed later in the year by the news that UCA had also been ranked as the top creative specialist institution in both the Complete University Guide and the Guardian University Guide, with an overall position of 13th amongst all UK universities in the latter table 2018/19 culminated in the University being awarded Gold under the Teaching Excellence and Student Outcomes Framework (TEF), the panel identifying ‘outstanding levels of stretch that ensure all students are significantly challenged to achieve their full potential.’ Open College of the Arts On November 2016, the distance learning provider Open College of the Arts (OCA), became a wholly owned subsidiary of the University OCA is a charitable company limited by guarantee established in 1987 In line with the University’s academic strategy, this new member of the group adds distance learning and online degrees at undergraduate and postgraduate level to UCA’s course portfolio and secures the University’s vision of opening up access to creative arts education at university level to everyone, wherever they are in the UK and beyond UCA has validated all of OCA’s undergraduate and postgraduate qualifications since 2012 This relationship between two long-established creative arts providers means more choice and flexibility for students, providing opportunities for undertaking undergraduate or postgraduate courses to develop their career and/or improve their quality of life OCA’s mission remains “To be at the forefront of student-led creative arts education through innovative open, enhanced, & supported distance learning, for an evolving society.” OCA has an Academic Strategy and complimentary Digital Transformation Strategy which set the agenda for the organisation for the next three years and form an element within UCA’s ten-year Strategic Plan This year OCA has established a corporate annual plan which sets out the work that will be undertaken towards meeting these goals; key objectives include: • • • • • • • • • • • • Deliver an ambitious strategic plan that establishes “UCA Open” whilst maintaining OCA charitable purpose for social impact and widening access to arts education; Conduct reviews of OCA, and OCA functions, to understand and improve organisational alignment within the UCA group; Establish a digital transformation strategy that provides a new student experience, more peer learning support, increased opportunity for community and collaboration, online portfolios and enhanced practice around feedback and assessment; Improve financial, HR and operating processes, with appropriate auditing and control; Embed new marketing, market research and sales approach to improve enquirer conversion and increase enrolments; Implement “projects” for knowledge exchange; Establish a pipeline for external funding and Enterprise to mitigate reduction in grant funding and to diversify income; Improve offers and awards (including short courses, Level foundational studies and wider postgraduate offers); Establish new curriculum and assessment models with a focus on digital assessment; Refresh the curriculum through periodic review in 2020; Introduce Learning Design across all programmes to improve course production; Establish a focus on digital pedagogy, in partnership with UCA Page of 58 Business School for the Creative Industries The Business School for the Creative Industries, established to articulate and support the needs of the creative industries in terms of business professionals, has successfully completed its first full year of operation At its inception, the School commenced delivery of new courses and continued the teaching of others realigned to it from elsewhere in the University – specifically those that already had a focus on business disciplines such as marketing In its first full year, the School successfully implemented the migration of courses, with student satisfaction at least maintained and, in many cases, improving The School was also given its own location within the Epsom campus, which provided it with a good initial opportunity to cohere The new Director of the Business School arrived at UCA in May 2019 and has begun a strategic development review to articulate a full plan for the growth and implementation of the Business School over the next - years The start of this process has been the engagement over the previous months with several external bodies and a wide range of employers within the creative industries to develop an understanding of their needs and requirements for courses The first stage of these new developments will be the proposal of a new School portfolio for 2020/21 entry This development seeks to align the portfolio to the wider UCA portfolio and educational offering, as well as providing an opportunity to meet the ambitious student recruitment targets for the Business School as a whole UCA International College UCA and the Holmes Education Group have jointly agreed to the set-up and operation of the UCA International College (UCAIC) which will be based within the Epsom campus The UCAIC offers a Stage course which articulates into most UCA undergraduate and postgraduate taught courses The courses have been approved by the University and offer students the opportunity to develop their understanding of art and design or business, and to develop their English for Academic Purposes in advance of their choice of undergraduate or postgraduate course The first intake of students arrived in September 2019, and in advance of this UCA and UCAIC worked together to implement an operational model to welcome the students and ensure that the courses support the broad strategic growth objectives of the University Students In 2018/19 the University saw an overall increase in student numbers This was due to significant growth in overseas numbers, especially at postgraduate level, as a result of increased investment, targeted strategic recruitment and new collaborative arrangements, especially within China Overseas numbers have now increased for the sixth year in succession, rising by over 148% since 2013/14 Recruitment to undergraduate and postgraduate programmes has risen by 50% in the last year Postgraduate recruitment alone has almost doubled in one year (+94%) The Home/EU undergraduate (UG) market remains competitive and recruitment has slipped by just -0.7% Postgraduate (PG) numbers at Home/EU level have increased once again on the previous year and more than doubled in the last six years, but this remains a challenging market, with recruitment levels still relatively low There was a decrease in recruitment at pre-degree/further education (FE) level continuing the downward trend over the last six years; this included a sharp decrease in Home/EU numbers, largely due to falling demographics In response to these trends, student recruitment and retention continued to be a priority throughout the year Further demand-orientated portfolio development has also increased the breadth of postgraduate provision in the Business School for the Creative Industries and design-related subjects (Interiors, Graphics and Fashion) and together with the establishment of new collaborative overseas partners has resulted in increased recruitment across all these portfolio areas A drive to increase FE recruitment has led to the introduction of several Extended Diploma programmes to meet increasing local demand at ages 16-19 We expect to see these initiatives bear fruit in the 2019/20 and 2020/21 recruitment cycles Page of 58 Student Numbers (FTE) UCA Category 2018/19* 2017/18 2016/17 2015/16 2014/15 2013/14 Higher Education: Home/EU Undergraduate Home/EU Postgraduate Overseas Undergraduate Overseas Postgraduate Higher Education total 3,977 129 409 208 4,723 4,006 115 303 107 4,531 4,020 114 277 108 4,519 3,981 72 231 88 4,372 3,936 83 204 94 4,317 4,397 64 169 80 4,710 Further Education: Home/EU Overseas Further Education Total 931 40 971 995 38 1,033 1,002 40 1,042 1,104 25 1,129 1,117 43 1,160 1,118 45 1,163 Total Students 5,694 5,564 5,561 5,501 5,477 5,873 *Provisional figures, subject to H i g h e r E d u c a t i o n S t a t i s t i c s A g e n c y ( HESA) student return (31 October 2019) Actual figures available in November 2019 OCA** Category 2018/19 2017/18 Higher Education: Home/EU Undergraduate Home/EU Postgraduate Overseas Undergraduate Overseas Postgraduate Higher Education total 394 88 489 396 86 486 Total Students 489 486 **These figures include all distance learning students (excluding withdrawals) who were studying on a module at any point during the 2018/19 academic year Some of these students will have completed a module during the year and not yet progressed onto a new module but remain within their registration period and so remain registered on the course of study Outreach UCA believes that a diverse community is an essential foundation of creativity The University is committed to providing a range of long-term outreach activities targeted at groups that are under-represented in HE, working collaboratively to raise student attainment in creative areas, including art, design, technology, music and performing arts The University’s policy and practice regarding Widening Participation (WP) in HE is guided by the National Strategy published in 2014 by the Department for Business, Innovation & Skills (BIS) which emphasised the role HE institutions should play in ensuring that “students from disadvantaged backgrounds can access higher education, get the support they need to succeed in their studies and progress to further study and/or employment suited to their qualifications and potential.” The University is fully committed to the Government’s policy to see “a society becoming less stratified by socio-economic class” and is proud of its record on WP Our internal records show in 2018/19, 9.9% (2017/18: 12.4%) of our students came from Low Participation Neighbourhoods (POLAR 3, Ward 1) and 10.8% (2017/18: 13.8%) were in receipt of Disabled Students’ Allowance UCA is committed to delivering sustained and coordinated outreach activity across the South East to a network of wide-reaching partner schools and colleges The University has built partnership agreements with schools and colleges to deliver sustained engagement with appropriate learners, breaking down barriers to enable Page of 58 progression to further and higher education Through these creative partnerships we also provide schools and colleges with access to creative careers tools, resources, events and activities We have offered a range of subject-specific workshops and taster days, and on-campus Easter and Summer School programmes Our WP activities include Saturday Clubs on all four campuses, as well as a developed range of creative workshops delivered both in schools and on campus for all year groups, and an extended mature learners project Our overarching ambition is to ensure an institution-wide commitment to eliminating equality gaps, being systematic in the ways that we this to ensure the opportunities for students when they leave UCA are also equal This commitment is aligned to the work of UCA’s Equality, Diversity & Inclusivity Committee and UCA will support the goals of other strategic stakeholders, such as Arts Council England, to align with the ‘Creative Case for Diversity’, ensuring that creative industries employers are also supporting the agenda for equality and that collectively we develop a more diverse sector Additionally, UCA Students’ Union (UCASU) has identified sector practice at other students’ unions regarding children of asylum seekers and supporting their access to HE, and has stated that this is something that it wishes to support through its work in Medway It has also recognised opportunities for a buddy scheme to be promoted and supported by the SU UCA is a member of the United Kingdom Arts and Design Institutions Association (UKADIA) Widening Participation Group, a partnership of specialist institutions whose attention is focused on supporting specialist arts teachers to raise attainment in under-represented groups and deliver specialist continuing professional development (CPD) workshops and opportunities UCA is also a member of the Care Leavers Progression Partnership in Kent which is committed to improving post-16 experience for children in care and care leavers UCA has a significant commitment to FE, with a population of just under 1,000 students (17% of UCA’s student population), providing 16-18 Extended and Foundation Diplomas in Art and Design These provide an alternative route for students who find it difficult to access the more traditional A Level route or who may not have sufficient confidence or knowledge of the creative arts to determine their choice of HE study at 18 years old Our cohort of 16-18 learners are mainly local to the campuses, providing an opportunity for those who want to stay at home throughout their studies to so These courses provide a vital and strong internal progression route to UCA’s HE provision The Financial Assistance Fund (FAF) is funded by UCA to support Home UG and PG students who may be at risk of not completing their course due to financial hardship Awards are generally given as grants but shortterm loans are also available Eligible students must have taken their full entitlement to any statutory funding and demonstrate a financial need In 2018/19 the University paid £92k to eligible students Following our merger with OCA in November 2016 the University’s part-time and distance-learning offer is now more accessible OCA, as a provider of high-quality HE courses in partnership with the University, has an obligation to encourage attainment and to push the boundaries of WP to ensure that more students than ever before gain qualifications by operating an open access policy and allowing students to complete a UG degree at a pace more suited to demanding and varied domestic circumstances The College population consists entirely of part-time distance-learning students with a forecast headcount of 1,650 enrolments for the 2019/20 academic year Student Experience Learning Environment The University’s Capital Investment Programme (CIP) is updated on a quarterly basis and reviewed by Governors to ensure that it aligns with the agreed estate and infrastructure developments, the academic strategy, and bank covenants Major estate developments which have taken place during 2018/19 are as follows: Canterbury Campus: - Means of Escape upgrades to Blocks D, F, G - £0.20m Epsom Campus: - Kitchen flooring and ventilation upgrades - £0.13m - Courtyard Improvements - £0.40m - Provision of Non-Gender Specific WC’s to Main Building – £0.15m Farnham Campus: - Completion of new Film & Media Centre including Conference Facilities £5.30m Page of 58 Rochester Campus: - New Kiln and Ceramics Room - £0.42m - New Jewellery Workshop including Gemmology and Hammer Room - £0.65m - Completion of design for Courtyard improvements and implementation of new platform lifts to improve accessibility - £0.13m - Provision of new staff accommodation (in Car Park A) - £1.50m - Provision of new infrastructure (electricity, gas and water) supplies to meet growing demand - £0.50m - Provision of a new Hair & Makeup Salon - £0.38m In addition to new build and refurbishment projects the University has completed works on boiler and lift replacements at Farnham and Epsom during the summer of 2019 Student residences at Rochester, Canterbury and Farnham will also continue with their refurbishment and modernisation programmes In addition, works are ongoing by external developers to provide 99 new bedrooms at Bradford House, Epsom by August 2020 Looking forward, the two main estates projects for 2019/20 and beyond will be focussing on: Epsom Campus: Farnham Campus: - the new Business School for the Creative Industries, including ancillary projects - the provision of 252 new student residences and the improvement to the central courtyard for new student support In addition to the Estates developments, the University has invested £1m in its IT infrastructure, digital services and cybersecurity During 2018/19, the University invested £500k into high-end computing facilities to support digital arts and £200k into enhancing the network infrastructure and improving the University’s cybersecurity position An investment of £90k was made to provision the IT Infrastructure and network connectivity for the Film and Media Centre and new Modular Building in car park A and an investment of £110k was allocated to the continued development and enhancement of University digital services including the learning management system, finance system, service management system and library systems The value of this investment is included in the assets in the course of construction and equipment categories within tangible assets Teaching and Learning UCA is a centre of excellence supporting the UK’s world-leading reputation across the full breadth of creative professions at its four campuses and through partnerships UCA prepares students for employment in the creative industries through the provision of intensive, studio-based education supported by staff that are eminent in research and professional practice in their disciplines UCA’s signature pedagogies are enshrined in its creative education strategy offering a distinctive balance of conceptual and critical thinking skills and highly accomplished professional, production and making skills Creative practice is at the core of learning, teaching and assessment practice and the curriculum is designed to be holistic and inclusive, challenging and developmental Courses recognise the diversity of students and their needs so are designed to be inclusive in their support for learning To support teaching staff in their reflective teaching practice, the newly formed Teaching and Learning Development team was formed in March 2019 The new team brings together teacher development and learning development within the newly formed department of Research and Education The team of educational developers now offer a range of educational enhancement tools to support quality teaching and are on hand to meet with course teams looking to address retention and achievement issues To support dispersed teaching and learning communities, the new Creative Education online resource is organised around the TEF categories (Teaching on my course, Assessment and feedback, Academic support, Continuation, Employment or Further Study, Highly skilled employment or further study) Each area now includes case studies, webinars, videos and inclusive teaching materials designed to help busy teaching teams put strategies in place to address teaching and learning issues The team are currently working on the development of their core offer and a three-day course to introduce teaching staff to learning, teaching and assessment practice Page of 58 Careers & Employability The Careers & Employability team deliver a comprehensive range of inclusive services aimed at preparing students and recent graduates for professional success The last year has seen a strong focus on promoting internationalisation, inclusion and wellbeing Effective and relevant employability events have been organised at all campuses jointly with academic course leaders and these have enabled students to engage with prospective creative industry employers and alumni in discipline-specific contexts The highly successful ‘Creative Charge’ career and recruitment fair 2019, was delivered at Epsom jointly with the School of Fashion and was attended by 200+ students and brands including ASOS, River Island, White Stuff, Urban Outfitters, IBM, The Army and many more Popular events at Rochester included ‘Animate your Future,’ organised collaboratively with the Computer Animation Arts Course Leader and a Fashion Design Careers day run with the FD course leader, which attracted graduates as well as current students Two ‘Design your Future’ events were delivered at Canterbury with Graphic Design and at Farnham, a ‘Film Focus’ event offering specialist advice on getting into the film industry was organised with the BA Film Production programme A ‘Take-off’ careers event with industry-led Q&As was also successful SPECTRA (standing for Skilled, Professional, Employable, Commercially Aware, Talented, Resilient, Adaptable) is an innovative programme of workshops and this year has included events on digital identity, freelancing, networking and the wider opportunities for creative graduates Themed weeks were also celebrated which complemented the embedded programme of career initiatives and included an ‘Emerging Artist Week’ at Canterbury Work on embedding careers and employability into the curriculum is progressing significantly across campuses A new careers platform, Job Teaser, was launched and provides students with access to exclusive job vacancies in the UK and abroad, bespoke careers resources and the ability to book appointments with careers advisors A designated career online resource utilises social media networks, including a new UCA LinkedIn Alumni Network Group aimed at supporting alumni and recent graduates in their professional development One-to-one guidance is available through face-to-face appointments or online through Skype Current students also have access to a wide variety of online learning resources via the virtual learning environment (VLE) Mental health and wellbeing have been important themes with the organisation of workshops on confidence and careers resilience An outside speaker, Imogen Dell, author of the ‘Creative Breakdown Insurance’ zine visited each campus to discuss mental health and self-employment These events proved to be greatly appreciated by students Supporting the career development of UCA’s black, Asian and minority ethnic (BAME) students has also been a focus with the launch of a new partnership with Creative Access, an organisation based at ITV studios which works to support young people from BAME backgrounds to secure jobs and paid training in creative companies The team has also been engaged in globalising the careers offer which has involved promoting international work experience and organising workshops aimed at helping international students and at understanding global markets The end of the year saw the team working with the new Head of Education and the Graduate Communications Officer on a UCA Graduate Professional Development Programme for launch in September 2019 The team’s move to Research and Education will provide further opportunities to integrate careers and employability into the curriculum and to enhance the student experience through an increased focus on key themes of internationalisation, inclusion and wellbeing Internationalisation The University is in the process of implementing an Internationalisation Strategy This is designed to enrich the on-campus and in-country (Transnational Education – TNE) experience for students and staff through greater staff and student mobility within our developing partner network, creating reciprocal, richer learning environments; and enhancing programmes through curriculum development adopting a global context Several TNE agreements were signed during 2017/18 for a 2018/19 start These range from progression agreements, articulation agreements and franchise of foundation programmes which lead to subsequent progression to the UK, validation or franchise of UG and PG provision in-country Further discussions are underway with a range of potential partners for a 2019/20 start We have already developed relationships with over 75 potential partners in more than 15 different countries, including China, India, Cyprus, Hong Kong, Pakistan, Singapore, Russia, Malaysia, Taiwan, Iceland and so on Page of 58 Investment has been made into a new International Studies Department, responsible for international student recruitment and support, the development of international collaborative partnerships and the delivery of TNE projects overseas, the delivery of foundation programmes to international students in the UK, pre-sessional and in-sessional English language courses throughout the year, as well as staff and students mobility through Erasmus plus and international partnerships Consideration is being given not only to recruitment, but to the support required to ensure international students have a good experience – this includes through the creation of the new Academic Plan in support of the new University Strategy which reinforces the critical importance of successful internationalisation of the University’s activities and culture The pattern of recruitment is spread across the University’s four campuses to ease requirement on space and accommodation The University believes that creativity is stimulated by cultural diversity and that this is a necessary phase of its intellectual development over the next 10 years Professional Recognition and Accreditation The University has a portfolio of associations with professional, statutory and regulatory bodies These include: Broadcast Journalism Training Council (BJTC), Creative Skillset, British Kinematograph Sound and Television Society, CILECT, the British Academy of Film and Television Arts (BAFTA), Albert, the Higher Education Academy (HEA – see below), the Architects Registration Board (ARB) and the Royal Institute of British Architects (RIBA) The University re-accredited its continuing professional development (CPD) provision for teaching staff with Advance HE in June 2018 Teaching staff can now undergo more flexible taught and experiential routes to teaching qualification and professional recognition through our new Creative Education Professional Development Framework To achieve a teaching qualification, academic staff are offered a fully funded place on our PG Certificate in Creative Education The PGCert is offered as an online experience (rather than a day release model) to fit in with busy teaching schedules Our Creative Education CPD Scheme (D1-D3) provides a route to professional recognition for all experienced teaching staff and now includes a new dialogue route, where a claimant submits a lite submission and is then invited for a dialogue with a specially convened professional recognition panel Since 2016, the University professional recognition scheme has supported over 140 teaching staff to gain teaching qualifications and/or professional recognition Student Retention The University uses the Annual Academic Monitoring (AAM) of courses and the production of the University Quality Report (HE) and the Self-Assessment Report (FE) to examine the student life cycle and track the performance of students across groups with protected characteristics, domiciles and level of study There is a longer time frame on the reporting of retention; the most recent complete dataset refers to the 2017/18 academic year In the last cycle, this analysis resulted in a BAME Achievement Group being established and a focused remit for the Student Access, Wellbeing and Inclusion Group to support stronger outcomes for students and address equality gaps This has resulted in formalised policies for induction and the development of induction activities and a new personal tutoring policy that will provide further support for the retention of students, with particular focus on students at HE level On-course and individualised support for learners is at the heart of our retention strategy in two essential ways: through academic course teams and through Gateway Services (the physical and on-line services that support students) The retention of students has been largely consistent, with a 1% improvement in the largest, undergraduate group • FE – 88% (89% retention in 2016/17) • UG – 92% (91% retention in 2016/17) • PG – 92% (equal to 2016/17 retention) Data taken across the entire population (O/S and Home) at each level The University uses the AAM of courses and the production of the University Quality Report to examine the student life cycle and track the performance of students across groups with protected characteristics In the last cycle, this analysis stimulated revisions to the terms of reference for our quality committees and identified actions for 2017-20 to support retention, achievement and employability of students The Quality Report also stimulated a strategic review of employability in 2017, recognising the need to review employability approaches in the curriculum and within professional services to support stronger outcomes for students and address equality gaps Further initiatives emanating from the Quality Report include a review of the University Credit Page of 58 Notes to the Financial Statements (Continued) 10 Tangible Assets Plant £'000 Assets in the course of Construction £'000 Equipment £'000 Total £'000 77,224 8,956 86,180 3,570 613 (460) 3,723 5,348 9,590 (11,751) 3,187 18,665 14 2,182 (3,161) 17,700 104,807 9,604 (3,621) 110,790 Depreciation At August 2018 Charge for year Disposals At 31 July 2019 15,753 1,294 17,047 2,450 333 (452) 2,331 - 15,802 1,838 (3,161) 14,479 34,005 3,465 (3,613) 33,857 Net book value at 31 July 2019 69,133 1,392 3,187 3,221 76,933 Net book value at 31 July 2018 61,471 1,120 5,348 2,863 70,802 Group Cost At August 2018 Additions at cost Reclassification in year Disposals At 31 July 2019 Freehold Land and Buildings £'000 University Cost At August 2018 Additions at cost Reclassification in year Disposals At 31 July 2019 £'000 £'000 £'000 £'000 £'000 77,224 8,956 86,180 3,570 613 (460) 3,723 5,348 9,590 (11,751) 3,187 18,624 2,182 (3,148) 17,658 104,766 9,590 (3,608) 110,748 Depreciation At August 2018 Charge for year Disposal At 31 July 2019 15,753 1,294 17,047 2,450 333 (452) 2,331 - 15,781 1,825 (3,148) 14,458 33,984 3,452 (3,600) 33,836 Net book value at 31 July 2019 69,133 1,392 3,187 3,200 76,912 Net book value at 31 July 2018 61,471 1,120 5,348 2,843 70,782 Page 44 of 58 Notes to the Financial Statements (Continued) 10 Tangible Assets (continued) Group and University Land & Buildings includes land held at a deemed cost of £21,455k (2018: £21,455k) University Land and buildings transferred at incorporation were financed by exchequer funds, now reflected in Group Reserves Should the University cease to exist as a university, it may be liable, under the terms of the Memorandum of Assurance and Accountability with the OfS, to repay the funds 11 Investments The University has an investment of £1 and £2 respectively in the wholly owned subsidiaries UCA Enterprises Ltd and UCA Ventures Limited, both registered in England and Wales In the period covered by these financial statements these companies have not traded As at November 2016 the University acquired the Open College of the Arts, a charitable company limited by guarantee for nil consideration The principal activity of the organisation is the provision of on-line education and training in the field of arts and crafts and related skills The financial statements of these subsidiaries have been consolidated using the acquisition basis of accounting Details of the subsidiaries will be filed with the Registrar of Companies 12 Trade and other receivables Amounts falling due within one year: Trade receivables Prepayments and accrued income Other receivables Access Funds (Note 24) 2019 Group University £'000 £'000 2018 Group University £'000 £'000 949 1,351 16 581 1,310 16 673 884 13 - 388 863 13 - 2,321 1,912 1,570 1,264 Page 45 of 58 Notes to the Financial Statements (Continued) 13 Creditors: amounts falling due within one year 2019 Group University £’000 £’000 Trade creditors Other Tax Payable & Social Security Other creditors Funds received in advance Access Funds (Note 24) Accruals 14 Creditors: amounts falling due after more than one year Barclays Bank Loan (see Note (1) below) Barclays Bank Loan (see Note (2) below) Restated 2018 2018 Group University £’000 £’000 2,626 924 3,813 880 166 4,598 2,617 902 3,130 880 166 4,418 3,081 720 2,128 860 141 4,552 3,014 698 1,448 860 141 4,399 13,007 12,113 11,482 10,560 2019 Group University £’000 £’000 2018 Group University £’000 £’000 8,736 8,736 5,500 - 5,500 - 8,736 8,736 5,500 5,500 Borrowing facilities are secured and incur variable interest rates Borrowing facilities available are (1) Bank Loan A: A sterling money market facility up to an amount of £11m, for a term ending on August 2022 No amounts were drawn down at the year-end (2018: £5.5m) (2) Bank Loan B: A sterling money market facility up to an amount of £9m, with a final repayment date of 31 July 2026 There was a £8,736k drawn down at the year-end (2018: nil) Page 46 of 58 Notes to the Financial Statements (Continued) 14 Creditors: amounts falling due after more than one year (continued) The repayment of the University’s loans falls due as follows: Loan repayments: - in one year or less - one to two years - two to five years - five years or more Total Loans 2019 £'000 Total Loans 2018 £'000 8,736 5,500 - 8,736 5,500 15 Provisions for Liabilities and Charges Enhanced Pension Defined benefit obligation (note 23) Total pension provision Other Total other £'000 £'000 £'000 £'000 £'000 As at August 2018 Utilised in period Additions in 2018/19 Transfer from income and expenditure 627 (56) - 25,182 (3,067) - 25,809 (3,123) - 58 (29) 12 58 (29) 12 17 6,537 6,554 (29) (29) Actuarial (gain)/loss At 31 July 2019 (2) 586 10,515 39,167 10,513 39,753 12 12 Group and University The enhanced pension provision relates to the estimated liability for enhanced pension arrangements agreed as part of staff severance conditions In 2019, the enhanced pension liability has been recalculated in accordance with guidance issued for the Association of Colleges The principal assumptions for this calculation are: Interest Rate Inflation Rate 2019 2018 2.4% 2.4% 2.8% 2.4% Page 47 of 58 Notes to the Financial Statements (Continued) 16 Endowment Funds Restricted Permanent £’000 58 (2) Restricted Expendable £’000 (1) 2019 Total £’000 64 (3) 2018 Total £’000 171 (107) Endowment Assets at 31 July 2019 56 61 64 Endowment capital Accumulated income Endowment Funds at 31 July 2019 117 (61) 56 5 122 (61) 61 123 (59) 64 Unspent capital grants £’000 Other restricted funds £’000 2019 Total £’000 2018 Total £’000 - 366 366 754 378 (378) - 776 (658) (121) 1,154 (378) (658) (121) 1,001 (1,385) (4) Total restricted comprehensive (expenditure)/income - (3) (3) (388) At 31 July 2019 - 363 363 366 2019 Total £’000 2018 Total £’000 38 132 177 16 35 94 33 195 363 366 Group and University At August 2018 Investment income Transferred to Income & Expenditure Account (Note 5) All Endowment Assets are held as cash in deposit accounts 17 Restricted Reserves Group and University At August 2018 New grants Capital grants utilised Expenditure Transferred to unrestricted reserves Analysis of other restricted funds /donations by type of purpose: Scholarships/Bursaries Research support Study abroad Widening participation General Page 48 of 58 Notes to the Financial Statements (Continued) 18 Lease Obligations At 31 July 2019, the University had total future minimum lease payments in respect of properties, vehicles and IT equipment under non-cancellable operating leases payable as follows: 2019 2018 Group University Group University £’000 £’000 £’000 £’000 Within one year Between two and five years More than five years 3,156 9,824 9,550 3,124 9,811 9,550 3,040 9,016 10,841 3,017 8,992 10,841 22,530 22,485 22,897 22,850 19 Capital Commitments Provision has not been made for the following capital commitments at 31 July 2019: Commitments contracted at 31 July Authorised but not contracted at 31 July 2019 Group University £’000 £’000 2018 Group University £’000 £’000 1,735 4,066 1,735 4,066 5,906 2,681 5,906 2,681 5,801 5,801 8,587 8,587 Page 49 of 58 Notes to the Financial Statements (Continued) 20 Reconciliation of surplus to net cash flow from operating activities (Deficit) for the year 2019 Group University £’000 £’000 Restated 2018 2018 Group University £’000 £’000 (257) (406) (461) (497) 3,465 (5) (666) 1,490 (3,220) 5,802 735 18 3,452 (4) (599) 1,554 (3,220) 5,802 735 18 (91) 2,820 (20) 330 928 (3,842) 5,782 882 - (91) 2,808 (19) 316 1,011 (3,842) 5,782 882 - 203 (94) (378) 203 (94) (378) 76 (57) (457) 76 (57) (457) Total adjustments 7,358 7,477 6,351 6,409 Net cash flow from operating activities 7,101 7,071 5,890 5,912 Adjustments for non-cash items HEFCE funds prepaid Depreciation Loss on Disposal of Asset (Increase) in stock (Increase)/decrease in debtors Increase in creditors (Decrease) in provisions Defined Benefit pension scheme service costs Net interest on Defined Benefit pension liability Enhanced pension interest costs Adjustments for investing or financing activities Interest payable Interest receivable Capital grants received 21 Reconciliation of net cash flow to net change in debt 2019 Group University £’000 £’000 2018 Group University £’000 £’000 Increase in Cash in the Period (Decrease) in endowment asset investments Loan repaid in the year Loan (drawdown) in the year 1,002 (3) 5,500 (8,736) 986 (3) 5,500 (8,736) 2,463 (107) (4,000) 2,507 (107) (4,000) Total change in net debt (2,237) (2,253) (1,644) (1,600) Page 50 of 58 Notes to the Financial Statements (Continued) 22 Analysis of changes in net debt Group Cash at bank and in hand Endowment asset investments Debt due after one year Net cash University Cash at bank and in hand Endowment asset investments Debt due after one year Net cash At August 2018 £'000 Net cash flows £'000 Other noncash changes £'000 At 31 July 2019 £'000 15,635 64 (5,500) 1,002 (3) (3,236) - 16,637 61 (8,736) 10,199 (2,237) - 7,962 £'000 £'000 £'000 £'000 15,339 64 (5,500) 986 (3) (3,236) - 16,325 61 (8,736) 9,903 (2,253) - 7,650 23 Pension Schemes Retirement benefits for employees of the University are provided by defined benefit schemes, which are funded by contributions from the University and employees Payments are made to the Teachers' Pension Scheme (TPS) for academic staff and to Surrey Pension Fund for non-academic staff In 2005/06, Kent based non-academic staff ceased making payments to the KCC Fund and commenced payments to the Surrey Pension Fund The assets and liabilities relating to the Kent staff then employed within the KCC Fund were transferred to the Surrey Pension Fund during 2005/06 These are all independently administered schemes (a) Teachers’ Pension Scheme The Teachers' Pension Scheme (TPS or scheme) is a statutory, unfunded, defined benefit occupational scheme, governed by the Teachers' Pensions Regulations 2010 (as amended), and the Teachers’ Pension Scheme Regulations 2014 (as amended) These regulations apply to teachers in schools and other educational establishments, including academies, in England and Wales that are maintained by local authorities In addition, teachers in many independent and voluntary-aided schools and teachers and lecturers in some establishments of further and higher education may be eligible for membership Membership is automatic for full-time teachers and lecturers and, from January 2007, automatic too for teachers and lecturers in part-time employment following appointment or a change of contract Teachers and lecturers are able to opt out of the TPS The Teachers' Pension Budgeting And Valuation Account Although members may be employed by various bodies, their retirement and other pension benefits are set out in regulations made under the Superannuation Act (1972) and Public Service Pensions Act (2013) and are paid by public funds provided by Parliament The TPS is an unfunded scheme and members contribute on a ’pay as you go ‘basis – contributions from members, along with those made by employers, are credited to the Exchequer under arrangements governed by the above Acts The Teachers' Pensions Regulations 2010 require an annual account, the Teachers' Pension Budgeting and Valuation Account, to be kept of receipts and expenditure (including the cost of pension increases) From April 2001, the Account has been credited with a real rate of return, which is equivalent to assuming that the balance in the Account is invested in notional investments that produce that real rate of return Page 51 of 58 Valuation Of The Teachers' Pension Scheme The latest valuation of the Teachers’ Pension Scheme has now taken place, in line with directions issued by HM Treasury and using membership data as at 31 March 2016 As a result of this valuation TPS employers will pay an increased contribution rate of 23.68% from September 2019 (this includes the administration levy of 0.8%) The timing of the implementation is to align its introduction with employers’ budget planning cycles Until then, employers will pay the current rate of 16.48% A copy of the latest valuation report can be found by following this link to the Teachers’ Pension Scheme website Scheme Changes The arrangements for a reformed Teachers’ Pension Scheme, in line with the recommendations made by Lord Hutton, in particular the introduction of a Career Average Revalued Earnings (CARE) scheme, were implemented from April 2015 In December 2018, the Court of Appeal held that transitional protection provisions contained in the reformed judicial and firefighter pension schemes, introduced as part of public service pension reforms in 2015, gave rise to direct age discrimination and were therefore unlawful The Supreme Court, in a decision made in June 2019, have rejected the Government’s application for permission to appeal the Court of Appeal’s ruling The case will now be referred to an Employment Tribunal for a decision regarding the remedy which will need to be offered to those members of the two schemes who were subject of the age discrimination HM Treasury are clear that the ruling has implications for the other public service schemes, including the Teachers’ Pension Scheme Those implications are currently being considered and any impact on scheme costs is expected to be looked at within the next scheme valuation, which is currently scheduled to be based on April 2020 data and implemented in April 2023 The pension costs paid to TPS in the year amounted to £2,674k (2018: £2,517k) The amount outstanding at the year-end was £204k (2018: nil) FRS 102 Under the definitions set out in The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the TPS is a multi-employer pension scheme The University is unable to identify its share of the underlying assets and liabilities of the scheme Accordingly, the University has taken advantage of the exemption in FRS 102 and has accounted for its contributions to the scheme as if it were a defined-contribution scheme The University has set out above the information available on the scheme and the implications for the University in terms of the anticipated contribution rates Page 52 of 58 Notes to the Financial Statements (Continued) 23 Pension Schemes (continued) (b) Surrey and Kent Local Government Pension Schemes For non-academic staff the University participates in the Surrey County Council and Kent County Council LGPS which are defined benefit statutory schemes, administered in accordance with the Local Government Pension Scheme Regulations 2013 They are contracted out of the State Second Pension They are final salary schemes Active members of the Kent scheme were transferred to the Surrey scheme on April 2006 On 26 October 2018, the High Court handed down a judgment involving the Lloyds Banking Group’s defined benefit pension schemes The judgment concluded the schemes should be amended to equalise pension benefits for men and women in relation to guaranteed minimum pension benefits, “GMP” The Government will need to consider this outcome in conjunction with the Government’s recent consultation on GMP indexation in public sector schemes before concluding on any changes required to LGPS schemes The latest triennial actuarial valuations for the SCC and KCC are dated 31 March 2016 The Schemes have been grouped for the purpose of these notes, and the University’s share of the schemes’ obligations and assets as calculated by the actuaries Hymans Robertson LLP and Barnett Waddingham are shown below The amounts recognised in the Balance Sheet are as follows: Present value of funded obligations Fair value of plan assets Net underfunding in funded plans Present value of unfunded obligations Net Liability 2019 £’000 2018 £’000 133,176 (94,087) 39,089 78 112,480 (87,337) 25,143 39 39,167 25,182 Page 53 of 58 Notes to the Financial Statements (Continued) 23 Pension Schemes (Continued) Analysis of movement in the present value of liabilities: 2019 £’000 2018 £’000 Present value of liabilities at the start of the year Current service cost (net of member contributions) Past service cost (including curtailments) Interest cost on defined benefit obligation Actual member contributions Actuarial gain/(loss) Actual benefit payments 112,519 5,465 334 3,194 987 12,838 (2,083) 109,721 5,779 3,005 971 (5,067) (1,890) Present value of liabilities at the end of the year 133,254 112,519 2019 £’000 2018 £’000 Fair value of assets at the start of the year Return on assets excluding interest Other actuarial loss Interest income on plan assets Actual member contributions Actual employer contributions Actuarial gain/(loss) Actual benefit payments Administrative expenses 87,337 2,323 2,459 987 3,067 (2,083) (3) 78,303 4,461 2,123 971 3,372 (1,890) (3) Fair value of assets at the end of the year 94,087 87,337 Analysis of movement in the fair value of scheme assets: Page 54 of 58 Notes to the Financial Statements (Continued) 23 Pension Schemes (Continued) The amounts charged in Income and Expenditure are as follows: 2019 £’000 2018 £’000 Current service cost Past service cost (including curtailments*) 5,468 334 5,782 - Total operating charge 5,802 5,782 3,194 (2,459) 3,005 (2,123) 735 882 6,537 6,664 Interest cost on defined benefit obligation Interest income on plan assets Net charge to interest and other finance costs Total charge to statement of comprehensive income and expenditure (note 15) *Curtailments arise from early payment of accrued pensions (including augmentations) in respect of any redundancies effected during the year ended 31 July 2019 Within the past service costs, an allowance of £285k has been made for the “McCloud” judgement The amount recognised in Changes in Reserves is as follows: 2019 £’000 2018 £’000 Actuarial (loss)/gain (10,515) 9,528 Total charge to statement of changes in reserves (note 15) (10,515) 9,528 No amounts in respect of pensions were included in the cost of an asset during the year (2018: nil) The Board of Governors will continue to monitor both the affordability and sustainability of the defined benefit pension schemes in the medium to longer term taking account of, among other things, the projected contribution rates based on the triennial valuations carried out by the Schemes' Actuaries and discussions with the Schemes' Trustees The University expects to contribute £2,915,000 to the Local Government Pension Schemes in the next financial year The major categories of Employer Assets as a percentage of Total Employer Assets are as follows: Equities Bonds Property Cash 2019 2018 72% 16% 8% 3% 72% 16% 7% 4% Page 55 of 58 Notes to the Financial Statements (Continued) 23 Pension Schemes (Continued) Principal Actuarial Assumptions at the Balance Sheet date (expressed as weighted averages): Discount Rate Future Salary Increase Rate Future Pension Increase Rate 2019 2018 2.1% 2.7% 2.4% 2.8% 2.8% 2.4% The Actuary of each fund makes assumptions on life expectancy based on the fund’s experience Currently, life expectancy post retirement for current and future pensioners are: Current Pensioners Future Pensioners Males Females 22.5 – 23 years 24.1 – 25.2 years 24.6 – 25.1 years 26.4 – 27.4 years An allowance is included for 25% of future retirements to elect additional tax-free cash up to HMRC limits for pre-April 2008 service and 63% of the maximum tax-free cash for post April 2008 service (c) OCA Defined Contribution Scheme From April 2016 OCA started a defined contribution scheme administered by Royal London Contributions of £37k (2018: £29k) were paid in the year 24 Access Funds 2019 £'000 2018 £'000 Balance unspent/(prepaid) at beginning of year 141 80 Funding council grants – ESFA 119 169 (1) (6) 259 243 Disbursed to Students – ESFA (98) (102) Balance unspent at end of year 161 141 Adjustment Funding Council grants are available solely for students: the University acts only as paying agent The grants and related disbursements are therefore excluded from the Income and Expenditure Account Page 56 of 58 Notes to the Financial Statements (Continued) 25 Related Party Transactions Due to the nature of the University's operations and the composition of the Board of Governors (being drawn from public and private sector organisations) it is inevitable that transactions occasionally take place with organisations in which a member of the Board of Governors has an interest Such interests are required to be disclosed and all transactions involving organisations in which a member of the Board of Governors may have an interest are conducted at arm’s length and in accordance with the University's financial regulations and normal procurement procedures Johnny Luk a Governor is also the Head of Policy and Strategy of Adecco UK & Ireland Limited, a provider of temporary staffing: during the year £19k was paid to the company for the provision of staffing During the year £50k was paid to Canterbury Christ Church University being the contribution to the Kent & Medway Progression project, the spouse of the Vice-Chancellor is the Dean of International at Canterbury Christ Church University During the year £82k was paid to Farnham Maltings Limited for venue hire and other services (2018: £115k): the spouse of the Deputy Vice-Chancellor (Academic Development), is the Chief Executive of Farnham Maltings Limited The University pays a grant to the Student Union, the amount allotted in the year was £392k (2018: £369k) £369k (2018: £369k) was paid during the year and £23k was owing to the Student Union as at 31 July 2019 (2018: nil) A separate charity: the Student Union Sabbatical Officer is the Student Governor of the University The University provides museum space and facilities to The Craft Study Centre, a separate charity A joint agreement exists between the two parties 26 Carrying amount of financial instruments The carrying amounts of the financial assets and liabilities include: Group £’000 2019 University £’000 Group £’000 2018 University £’000 Assets measured at cost less impairment * 18,016 17,335 16,790 16,209 Liabilities measured at amortised cost Liabilities measured at cost less impairment (8.736) (3.575) (8,736) (3,550) (5,500) (3,828) (5,500) (3,767) * Bank overdraft has been offset against cash held at bank as the University has a legally enforceable right to so and the intention to settle on a net basis Page 57 of 58 Notes to the Financial Statements (Continued) 27 Correction of Group prior period error The method of calculating deferred income for foundation and undergraduate students has been corrected within UCA’s subsidiary OCA’s financial statements Previously income was deferred over the average time a student takes to complete a course, however as there is no set time to complete a course, although there is a maximum time, this is not appropriate Instead income is recognised as performance conditions are met, the performance measures are described within the accounting policy for income recognition The Group results have been restated to reflect this correction Previously stated 2018 Prior period adjustment for deferred income Restated 2018 £000 £000 £000 44,433 12 44,445 (473) 12 (461) Creditors: amounts falling due within one year 11,294 188 11,482 Unrestricted reserves 45,236 (188) 45,048 Balance at August 2017 Total comprehensive income/(expenditure) for the year 36,718 (200) 36,518 8,948 12 8,960 Balance as at 31 July 2018 45,666 (188) 45,478 Group Statement of Comprehensive income Tuition fees and education contracts Total comprehensive income for the year Balance Sheet Statement of Changes in Reserves Page 58 of 58 ... its Financial Statements Basis of Consolidation The consolidated financial statements include the University’s wholly owned subsidiaries, Open College of the Arts, UCA Enterprises Ltd and UCA. .. users taken on the basis of these financial statements A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website... through the Mental Health First Aider training programmes Financial Review Summary Financial Statements to 31 July 2019 The Financial Statements for the year ended 31 July 2019 have been prepared