Bucks New University Financial Statement 2017

Financial statement FOR YEAR ENDING 31 JULY 2017

Contents Introduction from the Vice-Chancellor and Chair of Council

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Strategic Report & Public Benefit Statement

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Statement of Corporate Governance 22-23 Statement of Internal Control 24-25 Statement of Responsibilities of the University’s Council

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Report of the Independent Auditor’s to the Council of Buckinghamshire New University

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Consolidated Statement of Comprehensive Income and Expenditure

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Consolidated and University Statement of Changes in Reserves

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Consolidated and University Balance Sheet

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Consolidated Statement of Cash Flows

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Statement of Principal Accounting Policies

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Accounting Estimates and Judgements

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Notes to the Accounts 42-56 Board of Governors and Advisors

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Legal and Administration 58

INTRODUCTION FROM THE VICE-CHANCELLOR AND THE CHAIR OF COUNCIL Last year we proudly celebrated 125 years of providing education in High Wycombe.

We held an anniversary reception at the House of Commons and buried a time capsule containing reminders of student life, our campuses, teaching programmes, and research endeavours to give future students and staff a taste of Buckinghamshire New University in 2017.

It was also a challenging year as we, along with the rest of the sector, adjusted to the increasingly competitive market, changing student demographics and significantly reduced funding from central government.

In response to these challenges, we took steps to begin transforming the University to ensure that our structure and course portfolio are financially sustainable, and that we are providing our students with the best possible student experience.

Our Transformation Programme is about changing and improving the business profile of the University. These changes will continue in the coming year as we adapt the way we work and review what we offer to our current and future students.

We will build on our strengths in applied, practice-based and skills-based learning by looking at new courses, developing our in-year provision, extending our postgraduate offer, and targeting new audiences.

At Bucks we want to give all our students the best experience, creating a learning community where students feel at home, intellectually challenged, supported and where their opinions count and are valued.

In November 2016, Bucks was announced as one of just 18 higher education providers which had successfully bid for project funding from the Higher Education Funding Council for England (HEFCE) for the development of higher and degree level apprenticeships. We are working hard to enhance and develop our relationships with employers across a number of sectors and industries, creating programmes of study which provide the skills they need.

This year 95 percent of our graduates were in work or further study six months after graduating. We are ambitious for all our students and a key focus for the coming year is to boost the numbers who secure graduate-level jobs when they leave us.

As an anchor institution we have an important role to play in the interaction between business and the education sector, and how best to address the current and future skills needs of our region. This year we were delighted to be awarded ÂŁ1.3m funding from Buckinghamshire Thames Valley Local Enterprise Partnership to create a Digital Innovation Hub at University Campus Aylesbury Vale, in partnership with Aylesbury College. It will support business innovation and growth in Bucks and provide small and early-stage highgrowth businesses and entrepreneurs with incubation spaces, advice and support.

The funding will also be used to develop a mobile facility using simulation to showcase our courses at schools and colleges. This initiative is a key part of our social mobility efforts to widen participation in further and higher education among traditionally underrepresented groups.

We continue to take our environmental responsibilities seriously at Bucks and are proud to be ranked seventh from 124 entrants in the higher education sector for carbon reduction in the Brite Green league table and to be one of very few in our sector to hold the Carbon Trust Standard.

The University is a key contributor in the professional communities in which we operate. In the coming year we will continue to build mutually beneficial relationships with our partners to enhance our teaching programmes, and make a difference to the culture and economy of our region and beyond.

We thank our staff, Council members and partners for their continued support during the year, and our students for being such excellent ambassadors for the University.

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Professor Rebecca Bunting Vice-Chancellor

Dr Michael Hipkins Chair of Council

Vision and Values

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Strategic Report & Public Benefit Statement Financial Statement 2016-17

Our strategic plan for 2016-21 In 2015-16 the University launched its new strategic plan for 2016-21 with a vision to be a leading University for professional and creative education and applied research. Our strategy is built around three core priorities: our education offer, the University’s engagement in research and enterprise, and the quality of our people and how we operate.

Bucks continues to play an active role in the regional ‘National Collaborative Outreach Project’ (NCOP) with our partners, The University of Oxford, University of Reading and Oxford Brookes University. A number of projects are run through this ‘Study Higher’ group (building on previous collaborative ventures first entered into under ‘Aimhigher’ from 2003 to 2010). Again, the targets are postcode areas where higher education attendance is lower than average and we work with our partners to cover a wide area promoting higher education and its benefits.

Key to our future success is our commitment to: • being a professional, caring and supportive university, ambitious for our staff and students; • championing equality and fairness, creating opportunities for social mobility; • developing and supporting our staff to meet the challenges the University faces in the increasingly competitive environment in which we operate; • working in partnership with our students to promote student engagement and success;

The University continues to play a leading role in the Buckinghamshire Education and Skills Training (BEST) with our key partners at Aylesbury College and through delivery of courses at University Campus Aylesbury Vale. We also continue to sponsor the Bucks University Technical College in Aylesbury and work closely with other schools and colleges in the county to promote attainment and raise learner aspirations.

• developing a culture where innovation, creativity and enterprise flourish; • ensuring that our infrastructure and administration are effective, efficient and fit for purpose; and maximising the potential of our campuses to support our priorities.

Public Benefit statement Buckinghamshire New University’s primary objective is to benefit students by providing a high quality learning experience that supports academic and professional success and prepares students for relevant professional employment. The public benefit derived from this is much discussed and has been independently evaluated in our recent economic impact analysis (EMSI, 2016) both in terms of skills in the region and aggregated economic benefit from all of our activities.

We make a significant contribution to the public good and economy through our volunteering, charitable works and civic engagement through, for example, chambers of commerce and Business Improvement Districts. We offer our facilities to local organisations, both charged and pro bono, and our students gave more than 9,000 hours of their time to support local charities and organisations in the past year. The experience our students gain and the skills they develop through their volunteering efforts will help them to be better citizens and valued employees when they leave us.

We have an excellent track record in adding value and engaging with students from backgrounds that are typically under-represented in higher education. Our outreach team engages with thousands of learners across the region in school ‘tasters,’ masterclasses and campus visits.

By doing so, we aim to promote the benefits of higher education study in terms of personal growth and expanded opportunity. We work with primary schools to plant the early notion that anyone with talent and drive can go to university. This activity is particularly targeted at schools in areas where take up is low and will often include parents as key influencers.

Our research activities provide public benefit and we strive to be a catalyst in making a positive impact in our region.

We are proud to be a partner in the Buckinghamshire Life Sciences Innovation Centre which will support innovative businesses to develop products focused on health and wellbeing, prevention and public health, and in so doing meet the health needs of our region and improve patient outcomes.

Bucks New University also has a positive impact on the local community and environment through a number of sustainability initiatives which have led to the reduction of our overall energy consumption. We remain on course to hit or exceed our 50% carbon reduction target ahead of the 2020 deadline.

Engagement with later age groups focuses on the range of the University’s offer and the exciting careers that are available with the appropriate qualification. This includes interactive sessions and engagement with existing undergraduate students with the intention of demystifying higher education to pupils who will have had no family contact with it. In addition, guidance on the realities of student funding and the way in which repayments are structured seek to ensure that decisions are made based on the facts rather than some of the distorted messages transmitted by the media.

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Strategic Report & Public Benefit Statement Financial Statement 2016-17

Celebrating our 125th We marked our 125th anniversary in July with a celebration at the House of Commons with special guests including Paralympian and graduate Naomi Riches MBE and High Wycombe MP Steve Baker.

More than 100 dignitaries, business leaders, staff and guests gathered at The State Rooms in Speaker’s House on the banks of the Thames to mark the occasion.

Mr Baker said: “It was a pleasure for me to host a reception at the Houses of Parliament to celebrate the achievements of the University. It has developed into an important educational institution not only for Wycombe but also further afield, winning a number of important awards.”

Naomi, a British adaptive rower, first tried the sport in 2004 while at Bucks New University studying for a degree in Designed Metalwork and Jewellery.

She said: “I am so proud to have graduated from Bucks. The support I received whilst I was there, and during the early years of my rowing career, is part of what set me on the road to success.”

Making a difference Christmas was a little brighter for more than 70 homeless people thanks to kind-hearted students and staff at Bucks.

Bucks Students’ Union urged students and staff to fill ‘homeless hamper’ boxes for the Wycombe Homeless Connection charity, with warm clothing, non-perishable food and any other useful items.

Amy How, Volunteering and Societies Coordinator at the Union, said: “The students have been really inventive, not just putting in warm clothes and food but also items like toothbrushes, toothpaste and wipes. The Feminist Society also included tampons and sanitary towels which are really important. Everyone just put so much thought and effort in to make the appeal such a success.”

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University Vice-Chancellor, Professor Rebecca Bunting, said she was ‘really proud’ of everyone involved.

She added: “Volunteering enables the students to develop team-working, interpersonal skills and personal attributes that will be useful in their professional lives beyond university.”

Strategic Report & Public Benefit Statement Financial Statement 2016-17

Bucks backs the disability arts Bucks will host The National Disability Arts Collection & Archive (NDACA) from April 2018.

The £1 million project will be delivered by the disability arts organisation Shape Arts and bring together 2,500 objects celebrating the history of the disability arts movement.

The project will also see NDACA deliver a multi-media website and catalogue, a series of films, and live events, among other things.

The disability arts movement began in the UK in the late 1970s and continues to the present day. It is the heritage story of a group of disabled people and their allies who broke barriers, helped change the law and made great art and culture along that journey.

The project is also supported by Arts Council England and Joseph Rowntree Foundation and as part of a range of activities nationwide Bucks New University will host a learning wing of NDACA’s digital and physical items in the Library at its High Wycombe Campus.

Brightening up our town A dark underpass between the High Wycombe town centre and University was transformed in May into a colourful mural thanks to students.

The mural, celebrating our 125th anniversary and featuring on both walls of an underpass in the town, was painted by local artist Dan Wilson who completed an Art Foundation Diploma at Bucks in 1993.

His creation is based on a design by Graphic Arts graduate, Will Dover who won a competition inspired and led by Joe Collins, then President of Bucks Students’ Union.

Will’s design included the University’s Gateway building; Rusty Buck – the Bucks Students’ Union’s mascot; the town’s swan crest; the Disraeli monument; the gates at Wycombe

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Wanderers’ ground; Hughenden Manor; a chair to mark the town’s furniture history; Pann Mill; the Golden Ball at West Wycombe; the Frogmoor Fountain of yesteryear; and the rolling Chiltern Hills and River Wye.

Education In our 125th year, the University continued to build on its strengths in applied, practice-based and skillsbased learning which best prepares our students to succeed in their current and future careers and professions. We remain passionate about ensuring that our graduates secure graduate level jobs when they leave us.

At Bucks we want to give our students the best possible experience from their first day with us, creating a learning community where students feel at home, intellectually challenged and supported. We make a wide range of personal development opportunities available to our students from the outset, to both develop skills and attributes for their professional lives and ensure they stand out in the competition for jobs when they leave us.

We work with industry and sector leaders to create courses that develop the skills we know employers demand and which best prepare our students for their chosen careers.

As part of the University’s programme of transformation, we are building on our strengths by creating courses, developing our in-year provision, extending our postgraduate offer, and targeting new audiences.

Continuing to improve the satisfaction of our students and retention are key priorities for the coming year. We were proud that five courses achieved the maximum 100% satisfaction score in the last National Student Survey: BA (Hons) Music and Live Events Management; BA (Hons) Business and Marketing; Foundation Degree (Arts) Policing; Foundation Degree (Arts) Early Years Practice, and Foundation Degree (Science) Assistant Practitioner (Longer Term Care and Care of Older People). We were also delighted to see Bucks Students’ Union ranked sixth of all SUs in the UK. The employment prospects of our graduates improved for the fifth consecutive year with more than 95% in work or study six months after leaving Bucks. The Employability

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HESA Performance Indicator for full-time undergraduate study ranked Bucks in the top 40% of universities in the UK in terms of performance against benchmark. There was more good news with the publication of the Longitudinal Education Outcomes, which analyse graduate salaries one, three and five years after graduation.

Average earnings for our alumni five years after graduation were above the Office of National Statistics median salary for 25-29 years olds in eight out of 10 subject areas.

Strategic Report & Public Benefit Statement Financial Statement 2016-17

Industry guidance for fashion

Learning through virtual reality

Colourful stylist Twinks Burnett made sure third-year fashion students were getting the most out of their final collections in May.

Virtual reality technology which measures eye-movements while patients interact with the environment is being used by psychology students at Bucks New University.

The award-winning Twinks visited Bucks New University go through styling techniques and concept ideas to those in their final year of the BA (Hons) Fashion degree course.

The Virtual Reality Lab, which took six months to complete, includes headsets, dedicated cubicles and eye-tracking facilities, and has been hailed as a ‘giant step forward’ by lecturers.

Fashion designer and course leader Jane Bowler said: “It has been great having Twinks come in and work with the students. She bought a wealth of experience with her and has been really focusing them on their collections and the final details needed to make all the items as successful as they can be.

Head of Psychology, Dr Ciaran O’Keeffe said: “Virtual reality is being more widely employed in psychological therapy, for example the treatment of phobias and pain management.

“Having virtual reality available to our students provides them with a unique opportunity to gain experience of technology used in psychological therapies and allows us to explore environments, behaviours and altered perceptual experiences not possible in a traditional classroom. This has exciting potential for learning, teaching and research opportunities.”

“Retaining strong links within the fashion industry is so important to us as it means that our students can get experiences like this which will prepare them for the world of work.

Equipment includes HTC Vive Virtual Reality Headsets with room-scale tracking technology, which turn the Psychology Lab into a ‘play area’ where people can freely move around a space, giving an immersive experience.

Tobii Pro eye tracking facilities are used to record and quantify eye-movements and gaze to ascertain how people process visual information while they interact with the environment. Five experimental cubicles in the Lab contain Biopac Student Labs, manufactured by BIOPAC Systems Inc, which assess ‘live’ recordings of physiological states including heart rate, electrical activity in the brain, and skin conductance (Electrodermal Activity).

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Strategic Report & Public Benefit Statement Financial Statement 2016-17

Working with the Royal Albert Hall Bucks students led young people in a day of audio and music production and live television experience at the Royal Albert Hall.

The workshop for sixth-formers and further education students gave insights into roles from directing and vision mixing to camera and live sound engineering, at a recording with BBC Introducing, showcasing up-and-coming bands.

Students from the Music and Live Events, Audio and Music Production, and Film and Television Production courses at Bucks New University carried out the work, filming the band Kovic.

Music and Live Events Management staff have regularly supported the Royal Albert Hall’s own workshops in events management for young people at the world-famous venue.

“The Bucks New University student crew is taught and led by experts who have brought a wealth of industry-based knowledge to higher education.”

Stephen Partridge, Head of Media and Creative Industries at Bucks New University, said: “We have a great relationship with the Royal Albert Hall and teaching young people production disciplines is a welcome and natural progression to the work we do. The sixth-formers and further education students witnessed applied curriculum delivery at its best, spanning an array of outside broadcast and live music production roles.

Bucks New University has worked with BBC Introducing for almost three years, with up-and-coming bands and artists regularly recording performances at its High Wycombe Campus which have been shown online and broadcast on BBC Three Counties Radio.

Student gets Dulux opportunity The colour experts at Dulux worked with our Textiles and Surface Design students in December, setting them a brief and asking them to ‘immerse’ themselves in their Colour Futures trends and colour forecast for 2017.

Emily Simpson, Colour and Design Manager at Dulux, said: “Bucks has really great facilities and the students are very experimental, very hands on. They also seem to have very good, technical computer skills as well, so they are really set up here to go out into the industry and work straight away.”

Second-year students presented their work based around colour trends to the Dulux creative team, all hoping to win an internship with the paint brand.

Neesha Lynch was announced the winner with her interpretation of Dulux’s Colour of the Year Denim Drift, using the fabric.

Neesha said: “This has been a great experience.

At University you are usually focused on your own work and what you are doing and this has been a great opportunity to collaborate with a big company that is so well-known. It is also focusing my mind on my career after University.”

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Strategic Report & Public Benefit Statement Financial Statement 2016-17

Psychology partnership with prisons Carol Gaskin, Governor with responsibility for Safer Custody, Healthcare & Segregation at Wormwood Scrubs prison, has played a significant role at Bucks New University since 2014 to support our aims to ensure all graduates are ready for the world of work.

Carol, who received an honorary degree from Bucks in September 2017, has also designed a regular session to introduce our students to a variety of Prison Service occupations where they learn about the merits of a Psychology and Criminology degree in any prison-based career.

She has been working with the Psychology Department to deliver sessions about HM Prisons for our Criminological Psychology and Psychology & Criminology students.

These sessions address issues such as intervention and rehabilitation of offenders, bullying, suicide, rape, substance abuse and mental health in prison.

It is a testament to Carol’s efforts and guidance that a significant number of our graduates go on to secure a position and begin successful careers within HM Prison Service.

Award winning animation A Bucks student who swapped a job in the shopping aisles for computers in the classroom has won a top award for emerging talent in the games and animation industry.

Studios, Boss Alien, and representatives from Playground Games, Edge Case Games, Codemasters, Creative Assembly and Foster & Partners came together to celebrate young talent in the games industry and to meet the 22 gifted student finalists.

Alex Gray, studying BA (Hons) Animation and Visual Effects, was the Animation category winner in the Sumo Digital Rising Star Animation and VFX section of the leading Grads in Games awards, held at the University of Hertfordshire.

The ambitious student, who worked in a supermarket prior to starting his degree, was among four winners from 22 finalists in the industry-leading games development competition, which attracted entries from more than 800 students.

Alex said: “I used the equipment at Bucks New University to create the 36-second piece, a battle clip featuring a figure with weapons, and the skills acquired so far on my degree have helped in my achievement.”

A total of 16 judges from nine leading UK studios and tech companies, including Sumo Digital, nDreams, Imaginarium

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Research The University has set ambitious targets for growth in its research and enterprise income, and also for the excellence of its research. The University has been successful in winning bids for developing new enterprise and research activities over the last 12 months.

The project funding that Bucks New University recieved from (HEFCE) for the development of higher and degree level apprenticeships will help us to enhance our relationships with employers across a number of sectors and provide opportunities to develop and diversify our commercial activities.

The University won a number of bids for research funding including from the Horizon 2020 programme for

WATERSPOUTT, a water purification research project throughout SubSaharan Africa and other resourcepoor countries. Bucks has also received funding to participate in Health Education England’s RePAIR programme which looks at decreasing attrition and improving retention of pre-registration nurses.

Research and enterprise is also at the heart of our curriculum. The University organised a Dragons’ Den event aimed at supporting students and graduates with bright ideas, who pitched at an event to secure between £2,000 and £5,000 in funding.

Students explored the practical aspects of new venture creation by pitching their business ideas to and receiving feedback from the Dragons, a group of business people

experienced in starting, growing and advising small businesses. The participants will develop further their business ideas, some in tandem with their studies, supported by mentorship from experienced business entrepreneurs and advisers.

We continue to focus on boosting our commercial activity by identifying high margin business to business and research activity that provides a sustainable income, improves reputation and importantly supports our teaching and learning activities.

Strategic Report & Public Benefit Statement Financial Statement 2016-17

Innovation at Bucks Experts at Buckinghamshire New University believe a device they designed to carry ventilators on hospital beds could be effectively used widely in the healthcare sector.

The bracket enables the Dräger ventilators used by the University to be easily transported while connected to an oxygen cylinder stored behind. The device has been entirely devised and made at Bucks New University.

The 600mm-wide aluminium and steel device is attached underneath the front of a patient trolley to carry the vital equipment and is being used by Bucks New University DipHE Operating Department Practice students.

Paul said: “It is a straightforward idea but one we feel could be widely adopted in the NHS. There isn’t a simple mechanism like this used on beds in hospitals.”

Paul Wheeler, Senior Lecturer in Perioperative Practice, enlisted the help of Workshop Supervisor Brian Siarey to design and make the device so a ventilator could be stored safely and securely.

Brian Siarey said: “This is an excellent illustration of the know-how, equipment and capabilities we have at the University.”

Students at forefront of Music Census The University has been part of Britain’s first live music census, the UK Live Music Census, which is identifying challenges the industry face, such as rising rates and other issues.

The Census, dubbed ‘Springwatch for live music’ gave a detailed picture of what exactly it means to be venue owner, a musician, and a live music fan in 2017.

A total of 12 first-year BA (Hons) Music and Live Events Management at the University, led by academics Dr Stan Erraught and Paul Fields, visited Oxford to assess the state of live music in the city.

Students visited The Bullingdon, The Catherine Wheel, The Cellar, East Oxford Community Centre, The Half Moon, Jericho Tavern, Oxford Central Library, 02 Academy Oxford, and Truck Store, among others, and spoke to hundreds of gig-goers.

In October 2015, Bucks New University and UK Music, through the Music Academic Partnership, published previous research revealing the vast economic, cultural and social impact of live music to the city of Bristol.

The UK Live Music Census was led by the Universities of Edinburgh, Newcastle and Glasgow.

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people Every member of staff has a key role to play in providing our students with the best possible experience at Bucks.

We value highly our people and the work they do, and we foster a culture based on clarity, openness, respect and a promise to deliver on our commitments.

We actively promote equality at Bucks.

We value diversity and inclusivity and want everyone to be treated with respect whoever they are, however they identify, and whatever characteristics they feel are important to their identity.

We want everyone to feel that they can be who they want to be while they’re working and studying at Bucks.

Over the last year, we have implemented a number of changes to our organisational structure and IT infrastructure to encourage a more flexible and agile approach to the way we work. We can now provide improved responses to our students’ needs, and better support them to persist and succeed both in their studies and after graduation.

The University is also now better placed to exploit new opportunities for growth and to meet the challenges faced by the higher education sector.

We are proud of the many achievements of our students and people during the year, and remain grateful for all that our alumni do to provide opportunities and insight for those that will follow in their footsteps.

Strategic Report & Public Benefit Statement Financial Statement 2016-17

NTF award for nursing lecture A top nursing lecturer was ‘humbled and honoured’ to become part of the National Teaching Fellowship (NTF) with the Higher Education Academy.

Dr Sharon Edwards, senior lecturer in Pre-Qualifying Nursing, has taught at the University for 11 years and is based at the Uxbridge Campus. She believes student learning is a collaboration and supports learning by using students’ own stories of clinical practice.

To gain the accolade, Sharon had to show evidence in three criteria: individual excellence, raising the profile of excellence and developing excellence.

She said: “I like to think that I make a difference. I am grateful for the opportunity to be a teacher and am very proud to receive this award for my work as a senior lecturer. With this award I will continue to champion that all students need the opportunity to

Honorary for Google alumnus The head of creative at internet giant Google was among several high profile alumni and guests to be awarded honorary degrees at Bucks New University in September 2016.

Bucks’ success story Olivier Rabenschlag is now based in Los Angeles having graduated from the University in 2002 with a first class degree in Graphic Design and Advertising, and received an honorary Master’s degree for his outstanding national and international achievements.

Since graduating, he has worked in creative agencies all over the world and became Head of Creative at Google in May 2012.

He said: “At Bucks I made connections for the rest of my life, fellow students and tutors as well as ad agencies all around the world. It’s a very small industry and I think Bucks was like the foundation and I’m still being nurtured by that.”

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learn and fulfil their potential, and this can be achieved if they are taught well.

“I am greatly humbled and honoured to be a part of the NTF community.

My main prize is being a teacher. To be a part of and help students on their educational journey is sufficient reward.”

Strategic Report & Public Benefit Statement Financial Statement 2016-17

Chief nursing officer inspires students

In a lively and passionate presentation Jane said: “Never forget what made you decide you wanted to be a nurse. There will be horrible shifts, distressing days...but remember the good things about being a nurse, the impact you have now as students and in the future.

The Chief Nursing Officer for England, Professor Jane Cummings, told Bucks New University students they were ‘leaders of the future’ during an event to mark International Nurses Day, as part of the University’s 125th anniversary celebrations.

“Nurses are a force for good, we have a massive capability to drive change. Students, you are leaders of the future.”

Jane, who is England’s most senior nurse in the NHS and received an honorary doctorate from Bucks in 2015, was welcomed back to Bucks by Vice-Chancellor Professor Rebecca Bunting as ‘a good friend of the University.’

Centrepiece of Clerkenwell Design Week A pop-up shop for watch and leather goods brand Shinola at Clerkenwell Design Week was created by past and present students from the School of Arts and Creative Industries.

Clerkenwell Design Week took place at various venues around Clerkenwell and the Shinola pop-up shop was on display in St John’s Square, London.

The Bolt, designed by Giles Miller Studio, was manufactured and installed by graduates Phil Hutfield and Freddie Fort, who were assisted by BSc (Hons) Product Design students Cristian Catangiu, Cezar Ciobanu, and Ashin Rai. It consisted of more than 8,000 individual CNC cut wooden pieces and Phil was asked to manufacture and install it due to his previous work with Giles Miller Studio, working to produce a reception desk for the V&A Museum in London.

Dr Lyndon Buck, Principal Lecturer in Product Design, said: “The Bolt for Shinola was a very prestigious project that formed the centrepiece of Clerkenwell Design Week.”

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Strategic Report & Public Benefit Statement Financial Statement 2016-17

Premier League job for graduate BSc (Hons) Sports Science and Coaching Studies graduate Daniel Bedeau is on the ball developing a career as an Academy Analyst at Premier League football club Watford.

The 26-year-old, who graduated from Bucks in 2013, shared his advice with current students.

He said: “Completing the Coaching module gave me an insight of what it is like to work in a professional environment. I also learnt a huge amount from the many industry-related guest lecturers we had.

“At Bucks I also attended a Prozone course in Liverpool which gave me a stepping stone to learn extra skills. I would highly recommend this type of extra-curricular training, and work experience, as it will show future employers that you have taken time out off your own back to further your knowledge and understanding of your chosen career.”

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Strategic Report & Public Benefit Statement Financial Statement 2016-17

Financial review and risks The financial statements presented by the University’s Council comprise the consolidated results of the University and its subsidiary companies and joint ventures (the Group).

The Group companies undertake activities which, for legal or commercial reasons, are more appropriately channelled through a limited company. Where possible subsidiary companies pay their taxable profits to the University under the Gift Aid scheme.

This brings the University share of the total loan balance outstanding to £2.55m, which is being used to pump prime the initial years of operation and to fund investment and growth. By 2022/23 the building at Aylesbury is expected to be operating at full capacity and begin to report a trading and cash surplus and start to repay the working capital injections it has received. This is substantially beyond initial projections and as a prudent measure the University has made a provision in the accounts of £1.36m for the impairment of the loan using a discounted cash flow approach.

Results for the year ended 31 July 2017 This is the second year that the financial statements have been produced following the new FRS 102 financial reporting standard applicable in the UK and Ireland with the first FRS 102 compliant accounts being prepared for 31 July 2016.

Missenden Abbey is a 100% owned subsidiary and provides a centre for adult education, conferences and management training. Turnover continues to operate at similar levels to 2015-16 but with the increasing cost pressures means that the surplus in the year is £0.20m (£0.39m 2015-16) which is gift aided to the University.

Results for the 2016-17 financial year are a consolidated group deficit of £1.42m. This has been a watershed year as the investment in the University’s Transformation Plan starts to impact on the results in response to the reductions in student income; with higher fees for new students helping to offset falling numbers compared to the previous years and the reduction to income from HEFCE. The underlying deficit has been positively impacted by the sale by the University of part of its stock of student accommodation, Hughenden Halls, to Aviva under a transaction that sees the University lease the residences for the next 30 years.

This provided both a gain on sale (£4.6m) and a substantial cash inflow (£12.5m). In addition to covering the majority of the deficit this allowed us to invest in the first stages of our ambitious transformation plans to address the underlying cost efficiency and growth opportunities open to the University. The first manifestation was a Voluntary Severance Scheme, allowing a number of staff to leave the organisation and create headroom to enable the University to position itself for the challenges ahead. The costs of the scheme, amounting to £1.55m, were committed in this financial year with the benefits arising through savings in 2017-18 and ongoing with a payback period of about 12 months. The University also made further investment into an “Apprenticeship Hub” to coordinate the response to this exciting area of development as a key strand in the overall transformation plan. This saw the launch of a number of apprenticeships into the market, continuing investment into further programmes and provision of external lead generation activity.

The implementation of FRS102 necessitated some changes to the calculation and presentation of figures associated with the Local Government Pension Scheme. In this year’s Consolidated Statement of Comprehensive Income and Expenditure (SOCIE) the requirement to fund the administrative expenses of the scheme in year and the net interest cost has seen an in year charge of £1.3m and is at similar levels to 2015-16. The actuarial adjustment in respect of pension schemes now forms part of the total comprehensive income for the year. The actuarial gain which the University has recognised in this financial year (£3.6m) is a reflection of the improvement in bond yields over the second half of the year.

The University has a small number of employees who are members of the USS pension scheme. As the scheme is in deficit and a funding plan agreed, section 28 of FRS102 now requires employers to recognise a liability for the contributions payable to close the funding gap.

Due to changes in staff who are members of the scheme and updated discount rates in 2016-17 there has been a reduction in the provision requirement of £0.08m giving a balance sheet provision of £0.10m.

Full details of the pension schemes liabilities can be seen in notes 18 and 25.

Additionally and with further emphasis on cost efficiency in the face of declining traditional income streams, the University tasked budget holders to save 10% of their current year’s budget which provided further financial benefits of in excess of £4m.

Buckinghamshire Education, Skills and Training (BEST) opened the new campus in Aylesbury Vale in January 2016 and has operated throughout the financial year. This is a joint venture with Aylesbury College with a 50% share being consolidated into these accounts. 2016-17 is the first full year of operation and BEST has made a loss of £1.66m with a £0.83m deficit being consolidated into these accounts.

During the year additional payments as part of the working capital loan agreement have been made to BEST by both partners to the joint venture with the University and Aylesbury College contributing 80/20 respectively.

18

Strategic Report & Public Benefit Statement   Financial Statement 2016-17

19

Strategic Report & Public Benefit Statement Financial Statement 2016-17

Capital projects During the year £2.1m of capital additions were made, the majority of which were to improve IT facilities and infrastructure for staff and students throughout all the campuses. This included the substantial investment in a new ERP system, Business World On! The finance and procurement elements of the system went live for the start of the new financial year 2017-18 and the HR and payroll elements are planned to go live in the first half of the new financial year. This has had a significant impact on ways of working with new electronic workflow, strengthening internal controls and increased efficiency of key processes and reporting.

Cash Flow The cash balance (including short-term deposits) of £23.1m remains healthy and has increased largely due to the sale of the Hughenden Halls and is adequate for future investment commitments. External debt of £0.70m has also been repaid leaving the total amount of debt outstanding at £27.3m; the University intends to finance future capital investment from cash balances as well as continuing to reduce down its outstanding debt. As part of this and reducing the interest cost on the back of healthy cash balances, the University is also in the process of agreeing a repayment of a portion of its longer term loan and replacing it with a “revolving credit facility” providing access to funds should the University require this in the future.

An analysis of Group cash balances versus borrowings over the last six years is shown on the next chart. As part of Barclay’s agreement to the sale of the Hughenden Halls to Aviva and the move to FRS102, the University also agreed to a set of new covenants to be agreed during next year and the basis for reporting for 2017-18. The discussions with the bank have now concluded and a new loan agreement has been put in place. This also provides a waiver in recognition of the technical breach of one of the current banking covenants and under FRS102, the total borrowing has been re-classified as a creditor less than 1 year. The short term cash flow issues that led to the breach have been resolved, the University has significant cash balances and transformation plans are agreed and projects commenced that will positively impact future years.

Moving forwards the University expects that the balance sheet and its reserves position will reduce as investment is made in the transformation plan to offset the decline in traditional revenues. It will start to improve as both long term debt is repaid and the investment in transformation and capital which are underway begin to help improve surpluses through income growth and cost savings. With cash balances forecast to remain healthy during this period, management remain satisfied that the University has adequate resources to continue in operation on a going concern basis.

Balance Sheet and Reserves The balance sheet has experienced an increase in its net assets since 31 July 2016 of £2.18m. The main reasons for this are the gain on the sale of our student accommodation at Hughenden Student Village to Aviva and the reduction in the pension provision requirement due to the increase in the actuarial valuation of the LGPS scheme in particular.

20

Strategic Report & Public Benefit Statement Financial Statement 2016-17

Investment policy and performance Investment limits have been agreed by Council that reflect the credit rating of the relevant counterparty and the period of the deposit. Where there are multiple entities within a single group, individual investments are aggregated to avoid breaching limits. Credit ratings are taken to be the lowest of those assessed by the principal recognised agencies (Moody’s, Fitch and Standard & Poor’s) as applied to the senior debt of the relevant counterparty.

Only sterling deposits or sterling commercial paper with maturities within the limits set out in the next table are eligible: Aggregated Limit 3mths

> 6mths

Up to 1 yr

Barclays

£10m

£5m

£2m

Other Long Term A Rated

£5m

£2m

£1m

At 31 July 2017 there was a total balance of £18m held in deposit accounts. This was split between Handelsbanken (£5m), Santander (£5m), Scottish Widows (£5m) and Lloyds (£3m).

Strategic risks During 2016-17 the University was subject to the HEFCE Memorandum of Assurance and Accountability. It also adheres to the Committee of University Chairs (CUC) Higher Education Code of Governance 2014. As such the governing body must ensure institutional financial health including adopting effective systems of control and risk management which promote value for money, meet mandatory audit requirements, and produce accurate and quality assured institutional data.

In order to ensure that the strategy and its key performance indicators can be achieved the University’s Council also identifies and closely monitors business risks.

Members of the executive team provide regular briefings to the Audit Committee and the University’s Council allowing Governors to monitor the assessment, mitigation and responses to these risks. Further details on the University’s risk management procedures and policies are set out in the statement of corporate governance.

The key strategic risks are listed below –

Student Experience • Failing to provide a good student experience • Failing to maintain academic and governance standards • Failure in reacting to adverse public image and reputational damage

People • Failing to look after our staff via employee wellbeing, productivity and development and scholarship • Failure to provide high quality facilities via lack of investment in the estates infrastructure • Financial performance • Failure to achieve annual recruitment targets • Failure to meet current financial obligations

External Forces • Failing to react appropriately to continued policy uncertainty in the sector • Failing to have a business continuity plan especially for IT • Failure to be resilient to major incidents or security issues

21

Statement of Corporate Governance The following statement is provided to enable readers of the financial statements of Bucks New University to gain a better understanding of the governance and legal structure of the University and covers the period 1 August 2016 to 31 July 2017.

Bucks New University is an independent corporation, established as a Higher Education Corporation under the provisions of the Education Reform Act 1988 and the Further and Higher Education Act 1992. It is an exempt charity as defined under the Charities Act 2011 and is regulated by the Higher Education Funding Council for England (HEFCE), which

is the principal regulator for English higher education institutions that are exempt charities. During 2016-17 The University’s Council, as trustee of the University, continued to have due regard to the Charity Commission’s guidance on public benefit and its supplementary guidance on the advancement of education.

The University conducts its business in accordance with the seven principles identified by the Committee on Standards in Public Life and with the guidance to institutions of higher education provided by the Committee of University Chairs (CUC). The

22

University’s Council is satisfied that it is in compliance with the HE Code of Governance published by CUC in December 2014.

Its objects, powers and framework of governance are set in the Articles of Government. Amendments to these Articles must be approved by the Privy Council. The Articles require the University to constitute a University Council and an Academic Board, each with clearly defined functions and responsibilities, to oversee and manage its activities.

Statement of Corporate Governance Financial Statement 2016-17

University Council

The Remuneration Committee determines the remuneration of the most senior employees, including the Vice Chancellor.

The University’s Council comprises independent and University members appointed under the Instrument and Articles of Government of the University, the majority of whom are non-executive. The roles of Chair and Deputy Chair of the Council are separated from the role of the University’s Vice-Chancellor. The matters specially reserved to the Council for decision are set out in the Articles of the University, by custom and under the Memorandum of Assurance and Accountability with HEFCE. The Council identifies that it has primary responsibilities that it reserves to itself for the ongoing strategic direction of the University, the determination of the educational character and mission of the University, the approval of the annual estimates of income and expenditure, the approval of major developments and the receipt of regular reports from Executive Officers on the day to day operations of its business and its subsidiary companies.

Audit Committee The Audit Committee normally meets four times each year, including a meeting with the external auditors to discuss audit findings. The committee considers the detailed internal audit report findings prepared by the University’s internal audit service, reviews the effectiveness of the systems of internal controls and monitors adherence with regulatory requirements. It reviews the annual financial statements together with the accounting policies. It reviews the system and processes in respect of the preparation and submission of statutory returns to HEFCE and the Higher Education Statistics Agency (HESA).

Overview These committees are composed of independent and external co-opted members of the University’s Council.

The decisions of all these committees are reported formally to the Council. The University’s Council conducts regular effectiveness reviews of itself and its committees. These reviews include an analysis of attendance, work undertaken and the views of members so that changes can be introduced as appropriate during the next cycle. As Chief Executive, the Vice-Chancellor exercises considerable influence upon the development of University strategy, the identification and planning of new developments and the shaping of the University ethos. Members of the Office of the Vice-Chancellor, currently the Deputy Vice-Chancellor, the Director of Finance and Pro-Vice Chancellor, all contribute in various ways to this aspect of the work.

However, the ultimate responsibility to the Council rests with the Vice-Chancellor.

The Council also has responsibility for: • The effective and efficient use of resources, the solvency of the University and the Corporation and for safeguarding their assets; • The employment of those designated by the Council as Senior Employees and their appointment, grading, assignment, appraisal, suspension, dismissal and determination of their pay and conditions of service; • Setting the framework for the employment, including pay and conditions, of all other employees and contractors; • Corporate policies, regulations and procedures to assure the effective governance of the University and to meet statutory and other legal obligations, including an antifraud and anti-corruption policy.

The Council met four times during the year and had several Committees reporting to it, including a Resources Committee, a Remuneration Committee, a Governance Committee and an Audit Committee. All of these Committees are formally constituted with terms of reference and predominantly comprise of lay members of Council, one of whom is the Chair.

In accordance with the Articles of Government of the University, the Academic Registrar & Secretary has been designated Secretary to the University’s Council and in that capacity provides independent advice on matters of governance to all Council members.

Going concern The University’s Council is satisfied that the University has adequate resources to continue in operation for the foreseeable future, and for this reason the Council consider that the accounts of the University should be prepared on a going concern basis. The University has made surpluses in each of the past seven years and has significant cash reserves. Council are also reassured by the position taken

by Barclays in relation to the loan and the waiver provided in relation to the short term issues impacting the 2016/17 covenant test. The budget for 2017-18 is indicating a deficit as the University invests in a transformation programme in response to the challenges in the sector, however medium and long-term cash forecasts demonstrate financial sustainability. Investments in capital projects are carefully reviewed by the Vice-Chancellor’s Strategy group prior to approval. The Council only undertakes such investments with the knowledge that the University will remain solvent, and are likely to add value as a result of the investment.

Academic Board Subject to the overall responsibility of the University’s Council, the Academic Board (Senate) has oversight of the academic affairs of the University and draws its membership entirely from the staff and students of the University. It is particularly concerned with issues relating to the teaching and research work of the University. The Board is chaired by the Vice-Chancellor in her capacity as Head of the Institution.

Resources Committee The Resources Committee recommends to Council the University’s annual revenue and capital budgets, and monitors performance in relation to these approved budgets and key performance indicators. The committee usually meets three times during each academic year.

Governance and Remuneration Committees The Governance Committee considers nominations for vacancies in the Council membership under the relevant Statute and oversees the induction, training and information needs of members of Council.

23

Statement of internal control Financial Statement 2016-17

Statement of internal control The University’s Council acknowledges its responsibility for ensuring that an effective system of internal financial control is maintained and operated by Bucks New University.

The system of internal financial control is based on a framework of regular management information, administrative procedures including the segregation of duties and a system of delegation and accountability. The following controls have been in place all academic year and up to the date of the approval of these financial statements and in particular, they include;

Comprehensive budgeting systems with an annual and three year budget which is reviewed and agreed by Council.

Regular reviews by the University’s Council of periodic and annual financial reports which indicate financial performance against budgets and forecasts.

• Setting targets to measure financial and other performance using KPIs as appropriate.

• Clearly defined capital investment control guidelines.

• The adoption of formal project management disciplines where

24

appropriate.

The University’s Council has established the processes for the identification, evaluation and management of risks the University faces. The University’s Council has responsibility for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives, while safeguarding the public and other funds and assets for which it is responsible. This is in accordance with the responsibilities assigned to the governing body in Instrument and Articles of Government and the Memorandum of Assurance and Accountability with HEFCE.

Statement of internal control Financial Statement 2016-17

The system of internal control is designed to manage rather than eliminate the risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an ongoing process designed to identify the principal risks to the achievement of policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently, effectively and economically.

The University’s Council has responsibility for reviewing the effectiveness of the system of internal control. The following processes have been established;

• The University’s Council meets at regular intervals to consider performance reports, operational plans and the strategic direction of the University.

• The University’s Council receives periodic reports from the Chair of the Audit Committee concerning internal control and requires regular reports from managers on the steps they are taking to manage risks in their areas of responsibility, including progress reports on key projects.

• The Audit Committee provides an oversight of risk management and receives regular reports from the internal audit service, which includes the internal audit service’s independent opinion on the adequacy and effectiveness of the institution’s system of internal control, together with recommendations for improvement.

25

• A system of key performance and risk indicators has been developed which are reported on at each Council meeting.

• A robust risk prioritisation methodology based on risk ranking and cost-benefit analysis has been established and an organisationwide risk register is maintained.

• Procurement procedures are in place that promote economy, efficiency and ensure value for money.

• Effective review processes are in place to provide assurance over the quality and completeness of data management.

Statement of Responsibilities of the University’s Council

26

Statement of Responsibilities of the University’s Council

Statement of Responsibilities of the University’s Council

that the Group will continue in operation.

The University’s Council is responsible for keeping adequate accounting records, which disclose with reasonable accuracy at any time the financial position of the Group, and for ensuring that the financial statements are prepared in accordance with the Instrument and Articles of Government, the Statement of Recommended Practice: Accounting for Further and Higher Education (2015) and other relevant accounting standards.

• The University’s Council has taken reasonable steps to:

In addition, within the terms and conditions of the Memorandum of Assurance and Accountability agreed between HEFCE and the University’s Council, through its designated accountable officer, is required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of Bucks New University and Group and of the surplus or deficit and cash flows for that year.

At Bucks New University the designated accountable officer has been identified as the ViceChancellor. In preparing those financial statements, the University’s Council is required to: • Select suitable accounting policies and then apply them consistently.

• Make judgements and estimates that are reasonable and prudent and state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.

• Prepare the financial statements on the going concern basis unless it is inappropriate to presume

• Ensure that funds from HEFCE and other funding bodies are used only for the purposes for which they have been given and in accordance with conditions which the funding bodies may from time to time prescribe, for example, in the HEFCE Memorandum of Assurance and Accountability.

Financial Statement 2016-17

Dr Michael Hipkins Chair of Council

• Ensure that there are appropriate financial and management controls in place to safeguard public funds from other sources.

• Safeguard the assets of the Group and prevent and detect fraud and other irregularities.

Date

• Secure the economical, efficient and effective management of the University’s resources and expenditure.

Buckinghamshire New University High Wycombe Campus, Queen Alexandra Road, High Wycombe, Buckinghamshire, HP11 2JZ

• In so far as each of the Governors is aware: • There is no relevant audit information of which the University’s auditors are unaware.

• The Governors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

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

27

Report of the Independent Auditor’s to the Council of Buckinghamshire New University

Financial Statement 2016-17

Report of the Independent Auditor’s to the Council of Buckinghamshire New University Opinion We have audited the financial statements of Buckinghamshire New University (the ‘parent university’) and its subsidiaries (the ‘group’) for the year ended 31 July 2017 which comprise the Consolidated and University Statement of Comprehensive Income and Expenditure, the Consolidated and University Statement of Changes in Reserves, the Consolidated and University Balance Sheets, the Consolidated Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102; The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements: • give a true and fair view of the state of the group’s and the parent university’s affairs as at 31 July 2017 and of the group’s and parent university’s income and expenditure, gains and losses, changes in reserves and group’s cash flows for the year then ended; and • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice and the Statement

of Recommended Practice: Accounting for Further and Higher Education published in March 2014.

Basis for opinion We have been appointed as auditor under the Education Reform Act 1988 and report in accordance with regulations made under those Act. 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 group 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.

Who we are reporting to This report is made solely to the University’s Council, as a body, in accordance with paragraph 12.2 of the University’s Articles of Government 2010. Our audit work has been undertaken so that we might state to the University’s Council those matters we are required to state to it in an auditor’s report and for no

28

other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the University and the University’s Council as a body, for our audit work, for this report, or for the opinions we have formed.

Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: • the council’s use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or • the council have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the parent university’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information The Council are responsible for the other information. The other information comprises the information included in the strategic report set out on pages 5 to 19, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information

Report of the Independent Auditor’s to the Council of Buckinghamshire New University

and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion on other matters prescribed by HEFCE’s Memorandum of assurance and accountability dated July 2017 In our opinion, in all material respects: • funds from whatever source administered by the parent university for specific purposes have been properly applied to those purposes and managed in accordance with the relevant legislation;

• funds provided by HEFCE have been applied in accordance with the Memorandum of assurance and accountability and any other terms and conditions attached to them; and • the requirements of HEFCE’s accounts direction have been met.

Responsibilities of Council for the financial statements As explained more fully in the Statement of responsibilities of the Council set out on pages 25 to 26, the Council is responsible for the preparation of the financial statements and for being satisfied they give a true and fair view, and for such internal control as the Council 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 Council are responsible for assessing the group’s and the parent university’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Council either intend to liquidate the group or the parent university or to cease operations, or have no realistic alternative but to do so.

Financial Statement 2016-17

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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our auditor’s report.

Grant Thornton UK LLP Statutory Auditor, Chartered Accountants London Friday 8 December 2017

29

Consolidated Statement of Comprehensive Income and Expenditure

Financial Statement 2016-17

Consolidated Statement of Comprehensive Income and Expenditure – Year Ended 31 July 2017 Year ended 31 July 2017 Consolidated £’000

£’000

£’000

£’000

Tuition fees and education contracts

1

46,905

46,905

48,588

48,588

Funding body grants

2

5,032

5,032

5,769

5,769

Research grants and contracts

3

620

620

718

718

Other income

4

9,247

7,386

10,092

8,232

Investment income

5

107

107

65

64

Donations and endowments

6

-

-

151

151

61,911

60,050

65,383

63,522

Income

Total income

University

Year ended 31 July 2016

Notes

Consolidated

University

Expenditure Staff costs

0

33,152

32,472

33,347

32,702

Fundamental restructuring costs

9

1,552

1,552

-

-

22,978

21,824

23,173

22,022

11

4,436

4,390

4,915

4,861

Interest and other finance costs

8

2,607

2,607'

2,767

2,767

Total expenditure

9

64,725

62,846

64,202

62,352

(2,814)

(2,796)

1,181

1,170

3,580

3,580

(70)

(70)

(781)

-

Other operating expenses Depreciation

(Deficit)/ surplus before other gains losses and share of operating deficit of joint ventures and associates.

Gain/loss) on disposal of fixed assets Share of operating deficit in joint venture

13

(828)

-

Impairment of long term debtor

15

(1,360)

(1,360)

-

-

(1,422)

(576)

330

1,100

-

-

-

-

Taxation

10

(Deficit)/ surplus for the year Actuarial gain/(loss) in respect of pension schemes

25

Total comprehensive income for the year

(1,422)

(576)

330

1,100

3,602

3,602

(12,350)

(12,350)

2,180

3,026

(12,020)

(11,250)

Represented by: Restricted comprehensive income for the year Unrestricted comprehensive income for the year Revaluation reserve comprehensive income for the Attributable to the University All items of income and expenditure relate to continuing activities.

Accompanying notes and policies form part of these financial statements.

30

(198)

(198)

117

118

2,450

3,296

(12,065)

(11,296)

(72)

(72)

(72)

(72)

2,180

3,026

(12,020)

(11,250)

Consolidated and University Statement of Changes in Reserves

Financial Statement 2016-17

Income and expenditure account

Revaluation reserve

Total

Restricted

Unrestricted

£’000

£’000

£’000

£’000

86

25,402

4,625

30,113

118

212

-

330

Other comprehensive income

-

(12,350)

-

(12,350)

Transfers between revaluation and income and expenditure reserve

-

(72)

(72)

-

Release of restricted funds spent in year

-

-

-

-

Total comprehensive income for the year

118

(12,066)

(72)

(12,020)

Balance at 1 August 2016

204

13,336

4,553

18,093

(Deficit)/ surplus from the income and expenditure statement

-

(1,422)

-

(1,422)

Other comprehensive income

-

3,602

-

3,602

(72)

(72)

Balance at 1 August 2015 Surplus from the income and expenditure statement

Transfers between revaluation and income and expenditure reserve Release of restricted funds spent in year

(198)

198

-

-

Total comprehensive Income for the year

(198)

2,450

(72)

2,180

6

15,786

4,481

20,273

Restricted

Unrestricted

Balance at 31 July 2017 University

£’000

£’000

£’000

£’000

86

24,886

4,625

29,597

118

982

-

1,110

Other comprehensive income

-

(12,350)

-

(12,350)

Transfers between revaluation and income and expenditure reserve

-

(72)

(72)

-

Release of restricted funds spent in year

-

-

-

-

Total comprehensive Income for the year

118

(72)

(72)

(11,250)

Balance at 1 August 2016

204

13,590

4,553

18,437

(Deficit)/ surplus from the income and expenditure statement

-

(576)

-

(576)

Other comprehensive income

-

3,602

-

3,602

(72)

(72)

Balance at 1 August 2015 Surplus from the income and expenditure statement

Transfers between revaluation and income and expenditure reserve Release of restricted funds spent in year

(198)

198

-

-

Total comprehensive Income for the year

(198)

3,296

(72)

3,026

6

16,886

4,481

21,373

Balance at 31 July 2017 Accompanying notes and policies form part of these financial statements.

31

Consolidated and University Balance Sheet

Financial Statement 2016-17

Year ended 31 July 2017 University

Consolidated

University

£’000

£’000

£’000

£’000

85,977

84,859

95,546

94,393

Notes

Non-current assets

11

Fixed assets

12

Investments

Year ended 31 July 2016

-

1,036

-

1,036

85,977

85,895

95,546

95,429

16

-

18

-

Current assets Stock

14

Trade and other receivables

15

7,523

7,686

6,002

6,424

Cash and cash equivalents

20

23,146

22,591

13,871

13,115

30,685

30,277

19,891

19,539

Less: Creditors: amounts falling due within one year

16

(36,497)

(36,517)

(10,818)

(10,876)

Net current (liabilities)/assets

(5,812)

(6,240)

9,073

8,663

Total assets less current liabilities

80,165

79,655

104,619

104,092

17

(9,330)

(7,721)

(35,553)

(34,772)

18 & 25

(50,562)

(50,562)

(50,973)

(50,973)

20,273

21,373

18,093

18,347

6

6

204

204

15,786

16,886

13,336

13,590

4,481

4,481

4,553

4,553

20,273

21,373

18,093

18,347

20,273

21,373

18,093

18,347

Creditors: amounts falling due after more than one year Provisions Pension provisions Total net assets Restricted Reserves Income and expenditure reserve - restricted reserve Unrestricted Reserves Income and expenditure reserve - unrestricted

19

Revaluation reserve

Total Reserves

Accompanying notes and policies form part of these financial statements.

The financial statements were approved by the University Council on xx November 2017 and were signed on its behalf on that date by

Professor Rebecca Bunting Vice Chancellor

Dr Michael Hipkins Chair of Council

32

Consolidated Statement of Cash Flows

Year ended 31 July 2017 £'000

Year ended 31 July 2016 £'000

(1,422)

330

11 14 15 16 & 17 18 13

4,436 2 (1,532) 15 1,805 828

4,915 1 2,960 (3,360) 917 781

5 8

(107) 2,607 (3,580) (627) 2,425

(65) 2,767 70 (964) 8,352

10,780 1,550 447 (1,539) 71 (2,028) (164)

734 (1,006) 65 (6,464) (174)

9,117

(6,845)

(1,291) (6) (705) (264) (2,266)

(1,352) (46) (668) (163) (2,229)

9,275

(722)

13,871 23,146

14,593 13,871

Notes Cash flow from operating activities (Deficit)/ Surplus for the year Adjustment for non-cash items Depreciation Decrease in stock (Increase)/ decrease in debtors Increase/ (decrease) in creditors Increase in pension provision contribution Share of operating deficit in joint venture Adjustment for investing or financing activities Investment income Interest payable (Profit)/Loss on the sale of fixed assets Capital grant income Net cash inflow from operating activities Cash flows from investing activities Proceeds from sales of fixed assets Repayment of cash collateral loan from CSV Capital grants receipts Loan to BEST Investment income Payments made to acquire fixed assets Pension Contribution in respect of past service

Cash flows from financing activities Interest paid Interest element of finance lease and service concession payments Repayments of amounts borrowed Capital element of finance lease and service concession payments

Increase/ (decrease) in cash and cash equivalents in the year Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year

20 20

Accompanying notes and policies form part of these financial statements.

33

Financial Statement 2016-17

Statement of Principal Accounting Policies

34

Statement of Principal Accounting Policies Financial Statement 2016-17

The country of incorporation of Buckinghamshire New University is the United Kingdom

Funds the University receives and disburses as paying agent on behalf of a funding body are excluded from the income and expenditure of the University where the University is exposed to minimal risk or enjoys minimal economic benefit related to the transaction.

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements.

Grant funding

The functional currency used in the preparation of the financial statements is GBP Sterling.

The University has adopted the accrual model for government revenue grants.

Basis of preparation

Government revenue grants including funding council block grant and research grants are recognised in income over the periods in which the University recognises the related costs for which the grant is intended to compensate. Where part of a government grant is deferred it is recognised as deferred income within creditors and allocated between creditors due within one year and due after more than one year as appropriate.

These financial statements have been prepared in accordance with the statement of recommended practice ‘SORP: Accounting for Further and Higher Education Institutions 2015’ and in accordance with the new FRS 102 Accounting Standards. The University is a public benefit entity and therefore applies the relevant public benefit requirement of FRS102. The financial statements are prepared in accordance with the historical cost convention.

Grants (including research grants) from non-government sources are recognised as income when the University is entitled to the income and performance related conditions have been met. Income received in advance of performance related conditions being met is recognised as deferred income within creditors on the balance sheet and released to income as the conditions are met.

Basis of accounting The financial statements are prepared under the historical cost convention modified by the revaluation of certain fixed assets.

Going Concern The Board of Governors is satisfied that the University has adequate resources to continue in operation for the foreseeable future and for this reason consider that the accounts of the Group should be prepared on a going concern basis.

Capital grants Government capital grants are recognised in income over the expected useful life of the asset using the accruals method of accounting. Other capital grants are recognised in income when the University is entitled to the funds subject to any performance related conditions being met.

Basis of consolidation The consolidated financial statements include the University and all its subsidiaries for the financial year to 31 July 2017. The results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statement of Comprehensive Income and Expenditure from the date of acquisition or up to the date of disposal.

Intra-group transactions are eliminated on consolidation.

Donations and endowments Non exchange transactions without performance related conditions are donations and endowments. Donations and endowments with donor imposed restrictions are recognised in income when the University is entitled to the funds. Income is retained within the restricted reserve until such time that it is utilised in line with such restrictions at which point the income is released to general reserves through a reserve transfer.

The consolidated financial statements do not include the income and expenditure of the Students’ Union as the University does not exert control or dominant influence over policy decisions.

Donations with no restrictions are recognised in income when the University is entitled to the funds.

Joint ventures and investments in associates are accounted for using the equity method.

Investment income and appreciation of endowments is recorded in income in the year in which it arises and as either restricted or unrestricted income according to the terms other restriction applied to the individual endowment fund.

Income Recognition Income from the sale of goods or services is credited to the Consolidated Statement of Comprehensive Income and Expenditure when the goods or services are supplied to the external customers or the terms of the contract have been satisfied.

Fee income is stated gross of any expenditure which is not a discount and credited to the Consolidated Statement of Income and Expenditure over the period in which students are studying. Where the amount of the tuition fee is reduced, by a discount for prompt payment, income receivable is shown net of the discount. Bursaries and scholarships are accounted for gross as expenditure and not deducted from income.

Investment income is credited to the Statement of Consolidated Income and Expenditure on a receivable basis.

35

Statement of Principal Accounting Policies   Financial Statement 2016-17

Defined Benefit Plan

There are four main types of donations and endowments identified within reserves: 1.

Restricted donations - the donor has specified that the donation must be used for a particular objective.

2.

Unrestricted permanent endowments - the donor has specified that the fund is to be permanently invested to generate an income stream for the general benefit of the University.

3.

Restricted expendable endowments - the donor has specified a particular objective other than the purchase or construction of tangible fixed assets, and the University has the power to use the capital.

4.

Restricted permanent endowments - the donor has specified that the fund is to be permanently invested to generate an income stream to be applied to a particular objective.

Defined benefit plans are post-employment benefit plans other than defined contribution plans. Under defined benefit plans, the University’s obligation is to provide the agreed benefits to current and former employees, and actuarial risk (that benefits will cost more or less than expected) and investment risk (that returns on assets set aside to fund the benefits will differ from expectations) are borne, in substance, by the University. The Group should recognise a liability for its obligations under defined benefit plans net of plan assets. This net defined benefit liability is measured as the estimated amount of benefit that employees have earned in return for their service in the current and prior periods, discounted to determine its present value, less the fair value (at bid price) of plan assets.

The calculation is performed by a qualified actuary using the projected unit credit method. Where the calculation results in a net asset, recognition of the asset is limited to the extent to which the University is able to recover the surplus either through reduced contributions in the future or through refunds from the plan.

Research and Development expenditure Expenditure on Research and Development is written off to the Consolidated Statement of Comprehensive Income and Expenditure in the year in which it is incurred.

Defined Contribution Plan A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement in the periods during which services are rendered by employees.

Maintenance of premises The University has a five-year rolling long-term maintenance plan, which forms the basis of the ongoing maintenance of the estate. The cost of long term and routine corrective maintenance is charged to the Consolidated Statement of Comprehensive Income and Expenditure as incurred for work is not capital in nature.

Employment benefits Short term employment benefits such as salaries and compensated absences are recognised as an expense in the year in which the employees render service to the University. Any unused benefits are accrued and measured as the additional amount the University expects to pay as a result of the unused entitlement.

Foreign currency Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in Surplus or Deficit. Nonmonetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Nonmonetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined.

Tangible fixed assets Fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Certain items of fixed assets that had been revalued to fair value on or prior to the date of transition to the 2015 FE HE SORP, are measured on the basis of deemed cost, being the revalued amount at the date of that revaluation.

Accounting for retirement benefits Retirement benefits for most employees of the University are provided by either the Teachers’ Pension Scheme (TPS) or the Local Government Pension Scheme (LGPS).

Some retirement benefits are provided by Universities Superannuation Scheme (USS) and Scottish Widows Scheme. The TPS, LGPS and USS schemes are defined benefit schemes which are externally funded and contracted out of the State Second Pension (S2P). Scottish Widows is a defined contribution plan.

The USS is a multi-employer scheme for which it is not possible to identify the assets and liabilities to University at members due to the mutual nature of the scheme and therefore this scheme is accounted for as a defined contribution retirement benefit scheme.

A liability is recorded within provisions for any contractual commitment to fund past deficits within the USS scheme.

36

Statement of Principal Accounting Policies Financial Statement 2016-17

Educational stock is not material in relation to the University finances and is therefore charged to the Consolidated Statement of Comprehensive Income and Expenditure when purchased.

Depreciation is provided to write off the cost or valuation less the estimated residual value of the tangible fixed assets by equal instalments over their useful economic life as follows: • Core - 50 to 80 years; • Roofs – 40 years;

Taxation

• Finishes – 30 years;

The University is an exempt charity within the meaning of schedule 3 of the Charities Act 2011 (formerly schedule 2 of the Charities Act 1993) and as such within the meaning of paragraph 1 of schedule 6 to the Finance Act 2010.

Accordingly, the University is potentially exempt from taxation in respect of income or capital gains received within categories covered by sections 478 to 488 of the Corporation Taxes Act 2010 (formerly enacted in section 505 of the Income and Corporation Taxes Act 1988), or section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that such income or gains are applied to exclusively charitable purposes.

• Fixtures and fittings – 20 years; • Mechanical and electrical – 30 years; • Refurbishments of freehold buildings – 30 years; • Refurbishments of leasehold buildings – over the remaining period of the lease; • Minor capital works – 5 years; • Equipment - 5 to 15 years; • Operating lease buyouts – over the remaining useful life of the underlying assets • No depreciation is provided on freehold land

The University receives no similar exemption in respect of Value Added Tax. Irrecoverable VAT on inputs is included in the costs of such inputs. Any irrecoverable VAT allocated to fixed assets is included in their cost.

a. Land and buildings - The University’s buildings are specialised buildings and therefore it is not appropriate to value them on the basis of open market value.

Land and buildings inherited from the Local Education Authority (LEA) are stated in the balance sheet at valuation on the basis of depreciated replacement cost.

Other land and buildings are included in the balance sheet at cost. Freehold land is not depreciated as it is considered to have an indefinite useful life.

The University’s subsidiary companies are subject to corporation tax and VAT in the same way as any commercial organisation.

A review for impairment of a fixed asset is carried out annually for assets with an anticipated useful economic life in excess of 50 years. The useful life of all assets is reviewed if events or changes in circumstances indicate that the carrying amount of the fixed asset may not be recoverable. b. Buildings - Buildings under construction are accounted for at cost, based on the value of architects’ certificates and other direct costs, including associated finance costs, incurred to 31st July. No depreciation is charged on assets in the course of construction. c. Equipment - Equipment, including computers and software, costing less than £5,000 per individual item is recognised as expenditure. All other equipment is capitalised. Capitalised equipment is depreciated over its useful economic life.

Where equipment is acquired with the aid of specific grants it is capitalised and depreciated in accordance with the above policy, with the related grant being credited to a deferred capital grant account and released to Consolidated Statement of Comprehensive Income and Expenditure over the expected useful economic life of the related equipment.

Investments Investments in subsidiary undertakings are recognised at cost less provision for impairment losses.

Stock Stock is held at the lower of cost and net realisable value, and is measured using an average cost formula.

37

Statement of Principal Accounting Policies Financial Statement 2016-17

Cash and cash equivalents

Finance Leases

Cash includes cash in hand, deposits repayable on demand and overdrafts. Deposits are repayable on demand if they are in practice available within 24 hours without penalty.

Leases in which the University assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. Leased assets acquired by way of finance lease and the corresponding lease liabilities are initially recognised at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease.

Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash with insignificant risk of change in value.

Provisions, contingent liabilities and contingent assets

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Provisions are recognised in the financial statements when: a. the University has a present obligation (legal or constructive) as a result of a past event;

Operating leases

b. it is probable that an outflow of economic benefits will be required to settle the obligation; and

Costs in respect of operating leases are charged on a straight-line basis over the lease term. Any lease premiums or incentives are spread over the minimum lease term.

c. a reliable estimate can be made of the amount of the obligation.

Borrowing costs Borrowing costs are recognised as expenditure in the period in which they are incurred.

The amount recognised as a provision is determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.

Accounting for Joint Operations, Jointly Controlled Assets, Jointly Controlled Operations and Investments in Associates

A contingent liability arises from a past event that gives the University a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the University.

Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably.

The University accounts for its share of joint ventures using the equity method.

The University accounts for its share of transactions from joint operations and jointly controlled assets in the Consolidated Statement of Income and Expenditure.

A contingent asset arises where an event has taken place that gives the University a possible asset whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the University.

The University accounts for its investments in associates under the equity method.

Reserves Reserves are classified as restricted or unrestricted.

Contingent assets and liabilities are not recognised in the Balance Sheet but are disclosed in the notes.

Other restricted reserves include balances where the donor has designated a specific purpose and therefore the University is restricted in the use of these funds.

Agency arrangements Funds the institution receives and disburses as paying agent on behalf of a funding body or other body, where the institution is exposed to minimal risk or enjoys minimal economic benefit related to the receipt and subsequent disbursement of the funds, are excluded from the Consolidated Statement of Comprehensive Income and Expenditure of the institution.

Financial Instruments The University only has financial assets and liabilities of a kind that qualify as basic financial instruments. They are initially recognised at transaction value and subsequently measured at their settlement value, as follows: • Cash – cash held • Debtors – settlement amount after any discounts • Creditors – settlement after any trade discounts • Loans – amortised cost • Finance leases – amortised cost

38

39

Accounting estimates and judgements Financial Statement 2016-17

Accounting estimates and judgements

Accounting for Chiltern Student Village

The following accounting judgements are considered critical in applying the University’s accounting policies:

The University is a third member of Chiltern Student Villages (CSV) Ltd, a charitable company whose objects include the advancement of education through the provision of housing and associated services to students of the University and other educational institutions.

Buckinghamshire Education Skills and Training Limited (BEST) The University is in a joint venture arrangement with Aylesbury Vale College and under UK accounting standards has been recognised initially at cost and then adjusted each for the University’s share of its profit or loss.

During 2016-17 the University completed the sale of its student accommodation to Chiltern Student Village Ltd as part of a wider refinancing arrangement with an alternative finance provider. This resulted in the University committing to an operating rental lease of the buildings on the site from Aviva as part of the transaction for a period of 30 years.

In 2015-16 BEST made a loss of over £1.5m with further losses of £1.7m in 2016-17. As a result the University has recognised a provision in its financial statements of c£1.6m as we believe that there is a constructive obligation to fund our 50% of BEST’s losses.

As part of the working capital funding arrangements with BEST the University also provides 80% of its working capital support which is regulated via a signed loan agreement between the two parties and interest charged and recognised within the Statement of Comprehensive Income. At the 2016-17 there was an outstanding debtor of £2.55m. Due to the time it is now expected that the loan will be repaid management have made the decision to make an impairment adjustment to provide against the risk of the non-payment of the loan. The value of the debt has been discounted back to its present value as at 31 July 2017 and an adjustment of £1.36m is reflected within the accounts.

In the arrangements that exist above management have considered two key items in reviewing the application of appropriate accounting treatment:

40

Accounting estimates and judgements Financial Statement 2016-17

Accounting for bad debt provisions

1. Whether or not the University has control over CSV – it is concluded that management has no control over CSV Ltd as it is obliged to act within its objects are not exclusively for the benefit of students of the University, Charity’s trustees are bound by charity law to act within the objects of CSV Ltd regardless of who appoints them. The University does have the right to remove the bank from CSV; however doing so would cause a significantly adverse commercial impact on the entity that this would never take place in practice.

The University has bad debt provisions in respect of student, partnership, commercial and research debts.

The bad debt provision is calculated on a specific basis according to where the student or student sponsor is in the debt collection cycle with the starting policy that all debts greater than 120 days are provided for at 50% and increasing to 100% after 180 days unless there is an agreed payment plan in place. The partnership, commercial and research debt is also calculated on a specific basis according to where debt is in the collection cycle with the starting policy that all debts greater than 120 days are provided for at 50% and increasing to 100% after 180 days unless there is an agreed payment plan in place.

2. Whether the arrangement with Aviva is an operating or finance lease – it has been concluded by management that the arrangement is an operating lease because at the end of the arrangement there is no beneficial financial arrangements with regards to continuing with the lease or the purchase of the asset. The life of the asset is 53 years as opposed to the length of the lease which is 30 years and the NPV of the minimum lease payments is significantly lower than the deemed value of the asset.

41

Notes to the Accounts

Financial Statement 2016-17

Notes to the accounts Year Ended 31 July 2017 1

Tuition fees and education contracts

Consolidated

University

Consolidated

University

£’000

£’000

£’000

£’000

27,638

27,638

30,358

30,358

Notes

Full-time home and EU students Full-time international students Part-time students

222

222

329

329

3,720

3,720

3,466

3,466

15,325

15,325

14,435

14,435

46,905

46,905

48,588

48,588

3,438

3,438

3,685

3,685

349

349

509

509

94

94

3

3

Knowledge Exchange Funding

377

377

608

608

Degree Apprenticeships

147

147

Capital grant

627

627

964

964

5,032

5,032

5,769

5,769

Research councils

-

-

41

41

Research charities

3

3

38

38

617

617

635

635

-

-

4

4

620

620

718

718

Residences and catering

5,232

5,232

5,122

5,122

Missenden Abbey Conference Centre

1,861

Education Contracts

2

Year Ended 31 July 2016

Funding body grants Recurrent grant Higher Education Funding Council Education Funding Agency Skills Funding Agency Specific grants

3

Research grants and contracts

Government (UK and overseas) Industry and commerce Other

4

Other income

384

Student Union and Nurses Reimbursements Other income

5

395

395

1,770

1,770

2,714

2,715

9,247

7,386

10,092

8,232

107

107

65

64

107

107

65

64

151

151

-

-

151

151

Investment income Other investment income

6

1,861 384

Donations and endowments Donations with restrictions

42

Notes to the Accounts

Financial Statement 2016-17

Year Ended 31 July 2017 Consolidated

7

Staff Costs: Salaries Social security costs

Total

Consolidated

University

£’000

£’000

£'000

£'000

24,951

24,297

26,254

25,636

2,532

2,497

2,320

2,284

(83)

(83)

81

81

5,752

5,761

4,692

4,701

33,152

32,472

33,347

32,702

Year ended 31 July 2017

Year ended 31 July 2016

£’000

£'000

202

200

Movement on USS provision Other pension costs

University

Year Ended 31 July 2016

Emoluments of the Vice-Chancellor (Professor Rebecca Bunting) Salary Benefits Pension contributions to the Teachers' Pension Scheme

33

33

235

233

No.

No.

Remuneration of other higher paid staff, excluding employer's pension contributions undertaking business as usual activity: . £100,000 to £109,999

1

1

£110,000 to £119,999

1

1

£130,000 to £139,999

-

1

2

1

No.

No.

£100,000 to £109,999

3

-

£110,000 to £119,999

2

-

£130,000 to £139,999

2

1

7

1

Remuneration of other higher paid staff, excluding employer's pension contributions after the impact of the 2016-17 voluntary severance scheme:

Average staff numbers by major category:

No.

No.

Academic

313

343

Research

14

14

119

93

42

57

187

177

675

684

£’000

£’000

-

-

Management & specialist Technical Other

Compensation for loss of office payable to a senior post-holder: Compensation payable recorded within staff costs

43

Notes to the Accounts

Financial Statement 2016-17

7 Staff Costs (continued) Key Management personnel Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the University. Staff costs include compensation paid to key management personnel. The key management personnel at the University are its senior management team which is headed up by the Vice Chancellor and during this financial year has comprised the Deputy Vice Chancellor, the Pro-Vice Chancellor Research & Enterprise, the Pro-Vice Chancellor Education and the Finance Director.

Year Ended 31 July 2017

Year Ended 31 July 2016

£’000

£’000

799

724

Council Members The University council members are the trustees for charitable law purposes. Due to the nature of the University’s operations and the compositions of the Council, being drawn from local public and private sector organisations, it is inevitable that transactions will take place with organisations in which a member of the Council may have an interest. All transactions involving organisations in which a member of Council may have an interest, including those identified below are conducted at arm’s length and in accordance with the University’s Financial Regulations and usual procurement procedures. In 2016-17 transactions of this nature totalled £0.

No council member has received any remuneration/waived payments from the group during the year (2016 - none) The total expenses paid to or on behalf of 8 council members was £4,059 (2016 - £5,000 to 15 council members). This represents travel and subsistence expenses incurred in attending Council, Committee meetings and Charity events in their official capacity.

44

Notes to the Accounts  

Notes 8

Financial Statement 2016-17

Consolidated

University

Consolidated

University

1,291

1,291

1,352

1,352

6

6

46

46

1

1

Loan interest Finance lease interest (including service concession finance charge) Other interest Net charge on pension scheme

9

25

1,310

1,310

1,368

1,368

2,607

2,607

2,767

2,767

35,839

35,840

40,426

40,425

8,090

8,090

3,844

3,876

Administration and central services

4,383

4,383

4,301

4,410

Premises (including service concession cost)

4,088

2,695

4,129

2,206

531

531

551

551

Research grants and contracts

4,436

4,390

4,915

4,861

Depreciation

2,607

2,607

2,767

2,767

Analysis of total expenditure by activity Academic and related expenditure

Residences, catering and conferences

Interest payable

4,751

4,309

3,269

3,256

Other expenses

64,725

62,845

64,202

62,352

44

35

43

35

10

10

Other operating expenses include: External auditors remuneration in respect of audit services (exclu VAT) External auditors remuneration in respect of FRS102 restatement (exclu VAT) External auditors remuneration in respect of non-audit services (exclu VAT)

1

1

20

20

46

46

48

48

Land and buildings

3,076

3,186

3,194

3,194

Other

6

6

6

6

1,552

1,552

-

-

Internal audit services (exclu VAT) Operating lease rentals

Fundamental restructuring costs

During 2016-17 the University launched a voluntary severance scheme as part of the first phase of transformation. The process concluded on 28 June with impacted staff being informed in mid-July with a leaving date from the University of 31 August.

The above expenses reflects the cost of the severance and any associated pension strain.

10

Taxation Year Ended 31 July 2017

Year Ended 31 July 2016

Recognised in the statement of comprehensive income Current tax Current tax expense

-

-

Adjustment in respect of previous years

-

-

Current tax expense

-

-

Deferred tax Origination and reversal of timing differences

-

-

Reduction in tax rate

-

-

Recognition of previously unrecognised tax losses

-

-

Deferred tax expense

-

-

Total tax expense

-

-

45

Notes to the Accounts

11

Fixed Assets

Financial Statement 2016-17

Freehold Land and Buildings

Leasehold Land and Buildings

Fixtures, Fittings and Equipment

Assets in the Course of Construction

Total

£'000

£'000

£'000

£'000

£'000

Cost or valuation At 1 August 2016

97,586

10,300

17,909

774

126,569

Additions

102

24

368

1,611

2,105

Transfers

196

-

315

(511)

-

Disposals

(9,043)

(60)

(4,816)

(22)

(13,941)

At 31 July 2017

88,841

10,264

13,776

1,852

114,733

At 1 August 2016

17,081

1,972

11,970

-

31,023

Charge for the year

2,503

200

1,733

-

4,436

Disposals

(1,881)

(31)

(4,791)

-

(6,703)

At 31 July 2017

17,703

2,141

8,912

-

28,756

At 31 July 2017

71,138

8,123

4,864

1,852

85,977

At 31 July 2016

80,505

8,328

5,939

774

95,546

96,116

10,300

17,390

774

124,580

100

24

359

1,611

2,094

Depreciation

Net book value

University Cost and valuation At 1 August 2016 Additions Transfers

196

-

315

(511)

-

Disposals

(9,044)

(60)

(4,789)

(22)

(13,915)

At 31 July 2017

87,368

10,264

13,275

1,852

112,759

16,688

1,971

11,528

-

30,187

2,478

200

1,712

-

4,390

Disposals

(1,882)

(31)

(4,764)

-

(6,677)

At 31 July 2016

17,284

2,140

8,476

-

27,900

At 31 July 2017

70,084

8,124

4,799

1,852

84,859

At 31 July 2016

79,428

8,329

5,862

774

94,393

Depreciation At 1 August 2016 Charge for the year

Net book value

At 31 July 2017, freehold land and buildings included £14.45m (2016 - £14.8m) in respect of freehold land which is not depreciated.

Included in the cost of fixed assets is aggregated interest capitalised of £2.6m (2016 - £2.6m)

46

Notes to the Accounts

Financial Statement 2016-17

11 Fixed Assets (Continlued) Consolidated fixtures, fittings and equipment held under finance leases as follows: Year Ended 31 July 2017

Year Ended 31 July 2016

£’000

£’000

1,376

1,376

Cost Accumulated depreciation

(193)

-

Charge for year

(275)

(193)

Net book value

908

1,183

12

Non-Current Investments Other non-current investments consist of:

University £’000

BCUC (Conferences) Limited Share Capital - Dormant

1,822

BCUC (Conferences) Limited Provision for Loss - Dormant

(886)

Missenden Abbey Limited

100 1,036

Within the capital and reserves of BCUC (Conferences) Limted is £628k of called up share capital in BCUC (Services) The University holds a 50 per cent share of Buckinghamshire Education Skills and Training, a company limited by guarantee without share capital. This is a joint venture company owned equally by the Aylesbury College. The arrangement is treated as a joint venture and is accounted for using the equity method, such that 50 per cent of the company’s gross assets and liabilities are incorporated into the consolidated balance sheet of the University and 50 per cent of its net income is reported in the University’s consolidated income and expenditure account.

13

Investments in joint ventures and associate entities

Year ended 31 July 2017 £’000

£’000

Year ended 31 July 2016 £’000

£’000

Income and expenditure account Income Deficit before tax

111

17

(828)

(781)

Balance sheet Fixed assets Current assets

10,041

10,177

85

21 10,126

Creditors: amounts due within one year Creditors: amounts due after more than one year

10,198

(449)

(389)

(11,286)

(10,590) (11,735)

(10,979)

(1,609)

(781)

Share of net assets

Chiltern Student Villages Limited, a charitable company, is an associated entity of the University accounted for under the equity method.

The cost and carrying amount of the investment at 31 July 2017 was nil (2016: £nil). Chiltern Student Villages Limited is a company limited by guarantee and therefore has no shareholders and makes no distributions to its members. As such, in the year ended 31 July 2017 the University’s share of the associate charitable company’s result is nil (2016: £nil).

47

Notes to the Accounts

Financial Statement 2016-17

Year ended 31 July 2017

Year ended 31 July 2016

14

Stock

Consolidated

University

Consolidated

University

£’000

£’000

£’000

£’000

16

-

18

-

16

-

19

-

General consumables

Year ended 31 July 2017 15

Trade and other receivables

Year ended 31 July 2016

Consolidated

University

Consolidated

University

£’000

£’000

£’000

£’000

Amounts falling due within one year: Trade Receivables

4,067

3,923

2,540

2,470

Prepayments and accrued income

2,270

2,246

906

901

-

331

-

497

Amounts due from subsidiary companies Amounts falling due after more than one year:

-

-

1,550

1,550

1,186

1,186

1,006

1,006

7,523

7,686

6,002

6,424

Loan to Chiltern Student Villages Ltd Loan to BEST

Included within amounts falling due after more than one year is an amount of £1.186m from BEST. This is to provide working capital support to the day to day operations of BEST while the business grows and develops - the outstanding loan amount is £2.546m. This support is governed by a signed loan agreement and subject to interest which amounts to £0.036m in 2016-17. Included within the debtor amount above is a £1.36m impairment adjustment to provide against the risk of the non-payment of the loan.

Year ended 31 July 2017 16

Creditors : amounts falling due within one year

University

Consolidated

University

£’000

£’000

£’000

£’000

4,406

4,406

700

700

22,907

22,907

Secured loans Reclassified secured loan

Year ended 31 July 2016

Consolidated

309

Amounts due to subsidiary undertakings Obligations under finance leases

272

272

1,216

1,216

Trade payables

292

283

1,098

937

101

13

1,296

1,188

8,516

8,327

6,508

6,499

3

-

-

-

36,497

36,517

10,818

10,876

Social security and other taxation payable Accruals and deferred income Other creditors

The re-classified secured loan relates to loans which would have been shown in creditors greater than 1 yr but due to a technical breach in a banking covenant, FRS102 requires that the total borrowing has to be classified as a creditor less than 1 year. (See note 17 for further details)

48

Notes to the Accounts

Financial Statement 2016-17

Creditors: amounts falling due within one year (continued) Deferred income Included within accruals and deferred income are the following items of income which have been deferred until specific performance related conditions have been met.

Year ended 31 July 2017 16

(continued)

Year ended 31 July 2016

Consolidated

University

Consolidated

University

£’000

£’000

£’000

£’000

417

417

767

767

Donations Research grants received on account Grant income

56

56

197

197

Other income

3,102

3,006

1,352

1,264

3,575

3,479

2,316

2,228

Year ended 31 July 2017 17

Creditors : amounts falling due within one year

Year ended 31 July 2016

Consolidated

University

Consolidated

University

£’000

£’000

£’000

£’000

6,962

6,962

7,267

7,267

Deferred capital grants Obligations under finance lease Provision for BEST USS Pension Liability Secured loans

658

658

-

-

1,609

-

781

-

101

101

185

185

-

-

27,320

27,320

9,330

7,721

35,553

34,772

Analysis of secured and unsecured loans: 27,313

27,313

700

700

Due between one and two years

-

-

735

735

Due between two and five years

-

-

2,388

2,388

Due in five years or more

-

-

24,197

24,197

27,320

27,320

Due within one year or on demand (Note 16)

Due after more than one year Total secured and unsecured loans

27,313

27,313

28,020

28,020

Secured loans repayable by 2039

27,313

27,313

28,020

28,020

27,313

27,313

28,020

28,020

Amount

Term

Interest

Borrower

Included in loans are the following: Lender

£'000

%

Barclays Bank

27,000

2,039

5.32

University

Barclays Bank

5,000

2,039

0.84

University

49

Notes to the Accounts

18

Financial Statement 2016-17

Provisions for liabilities Defined Benefit

Consolidated

At 1 August 2016 Utilised in year Additions Unused amount reversed in year At 31 July 2017

University

At 1 August 2016 Utilised in year Additions Unused amount reversed in year At 31 July 2017

Total

Obligations

Pensions

(Note 25)

Provisions

£’000

£’000

50,973

50,973

-

-

(411)

(411)

-

-

50,562

50,562

Defined Benefit

Defined Benefit

Obligations

Obligations

(Note 25)

(Note 25)

£’000

£’000

50,973

50,973

-

-

(411)

(411)

-

-

50,562

50,562

Pension Enhancement The assumptions for calculating the provision for pension enhancements on termination under FRS 102 are as follows: Consolidated Discount rate

2.7%

Inflation

2.0%

USS deficit The obligation to fund the historic deficit on the Universities Superannuation Scheme (USS) arises from the contractual obligation with the pension scheme for total payments relating to benefits arising from past performance. Management have assessed future employees within the scheme and salary payments over the period of the contracted obligation in assessing the value of this provision and in the accounts is shown as a creditor greater than 1 year. The prior year figures have been amended in creditors greater than one year above to correctly reflect the nature of the balance.

50

Notes to the Accounts

19

Financial Statement 2016-17

Restricted Reserves Consolidated reserves with restrictions are as follows: Donations

2017

2016

Total

Total

£’000

£’000

£’000

204

204

87

-

-

124

Payment from donations

(198)

(198)

(7)

Total restricted comprehensive income for the year

(198)

(198)

117

6

6

204

2017

2016

Balances at 1 August 2016 New grants New donations

At 31 July 2017

Analysis of other restricted funds /donations by type of purpose:

20

Total

Tota I

£’000

£’000

Scholarships and bursaries

6

8

General

-

196

6

204

Cash Flows

At 31st July

Cash and cash equivalents Notes At 1st August 2016

2017

Consolidated

£’000

£’000

£’000

Cash and cash equivalents

13,871

9,275

23,146

13,871

9,275

23,146

Notes At 1st August

Cash Flows

At 31 July

2016

2017

University

£’000

£’000

£’000

Cash and cash equivalents

13,115

9,476

22,591

13,115

9,476

22,591

51

Notes to the Accounts

21

Financial Statement 2016-17

Capital and other commitments Provision has not been made for the following capital commitments at 31 July 2017: 31 July 2017

31 July 2016

Consolidated

University

Consolidated

University

£’000

£’000

£’000

£’000

1,073

1,073

-

-

1,073

1,073

-

-

Commitments

These commitments include the implementation of a new integrated Finance, HR & Payroll System as well as the completion of works to the roof of the Students Union.

22

Lease obligations Total rentals payable under operating leases: 31 July 2017

31 July 2016

Land and Buildings

Plant and Machinery

Other leases

Total

£’000

£’000

£’000

£’000

£’000

3,182

56

-

3,238

3,187

3,445

50

3,495

3,533

14,655

85

14,740

10,903

82,248

93,125

135

100,483

107,561

Payable during the year Future minimum lease payments due: Not later than 1 year Later than 1 year and not later than 5 year Later than 5 years

82,248

Total lease payments due

100,348

23 Contingent liabilities — Consolidated and University There were no contingent liabilities as 31 July 2017 or 31 July 2016 24 Subsidiary undertakings The subsidiary companies (all of which are registered in England & Wales), wholly-owned or effectively controlled by the University as follows: Company

Principal Activity

Status

Missenden Abbey Limited

A management training complex

100% owned

BCUC (Conferences) Limited

Dormant

100% owned

BCUC (Services) Limited

Operating a lecture theatre complex

100% owned

52

Notes to the Accounts

Financial Statement 2016-17

25 Pension Schemes Different categories of staff are eligible to join one of two main schemes at the University: • Teachers’ Pension Scheme (TPS); for academic employees • Local Government Pension Scheme (LGPS); for non-academic employees There are a very small number of non-academic employees who are also part of the Universities Superannuation Scheme (USS) These schemes are defined benefit schemes contracted out of the State Second Pension (S2P), the assets of which are held in separate trustee administered funds. These are funded by contributions from the University and employees and the accounts reflect the cost of providing these benefits.

If the University ever closes and there is no successor establishment, the Secretary of State becomes the compensating authority.

Teachers’ Pension Scheme (TPS) The Teacher’s Pension Scheme is a statutory, unfunded, defined benefit occupational pension scheme. The Scheme is governed by statutory regulations (currently statutory instruments), these being: The Teachers Pensions Regulations 2010 (as amended) and The Teachers’ Pension Scheme Regulations 2014.

Contributions to the Scheme by employees are set at rates determined by the Secretary of State, taking advice from the Scheme’s Actuary. The balance of funding is provided by Parliament. The Scheme’s administrative expenses are borne by the Scheme employer’s payable as a percentage of pensionable earnings.

Changes to the Scheme Tiered employee contributions (and an increase in the average contribution rate) were introduced for employees from 1 April 2012. The salary bands range from 7.4% to 11.7% in 2016-17; the contribution rates for 2017-18 for each band remain the same, however it has been agreed that there will be an increase in band width for each of the salary bands.

Employer contributions increased on 1 September 2015 from 14.1% to 16.4%. From the same date employers also commenced payment of a 0.08% contribution to cover administration expenses.

Following a competitive tendering exercise, Capita were awarded a new contract to administer the TPS for seven years from 1 October 2011. In November 2014 the contract was extended by three years bringing the contract end date to September 2021.

53

Notes to the Accounts

Financial Statement 2016-17

Scheme Performance The Teachers’ Pension Scheme is valued by the Government Actuary. The last full actuarial assessment of the scheme was at 31 March 2012 in accordance with The Public Service Pensions Directions 2014 with the funding report being published by the Department on 9 June 2014. Actuarial assessments are undertaken in the intervening years between formal valuations using updated membership data for financial reporting purposes.

The latest statement published by the TPS is based on an assessment of the liabilities as at 31 March 2014, with an approximate update to 31 March 2017 to reflect known changes. The principle financial assumptions used are set out in the table below: Assumption

31 March 2017

31 March 2016

Rate of return (discount rate)

2.8%

3.6%

Rate of earnings increases

4.55%

4.20%

Rate of future pension increases

2.55%

2.20%

0.24%

1.37%

Rate of return in excess of: Pension increases (CPI)

Earnings increases -1.70% -0.60% Expected return on assets

n/a

n/a

The actuarial valuation deemed the market value of the scheme’s assets, representing notional investments and estimated future contributions, to be £176.6 billion, with scheme liabilities of £191.5 billion, giving a notional past service deficit of £14.9 billion.

The Teachers’ Pension Scheme is a multi-employer scheme where the share of assets and liabilities applicable to each employer is not identified. The University therefore accounts for these pension costs on a defined contribution basis as permitted by FRS102 paragraphs 28.40 and 28.40A. The employer’s contributions to the Teachers’ Pension Scheme were £2,059,169 (2016: £2,050,039).

Universities Superannuation Scheme (USS) The institution participates in the Universities Superannuation Scheme (the scheme). Throughout the current and preceding periods, the scheme was a defined benefit only pension scheme until 31 March 2016 which was contracted out of the State Second Pension (S2P). The assets of the scheme are held in a separate trustee-administered fund. Because of the mutual nature of the scheme, the scheme’s assets are not hypothecated to individual institutions and a scheme-wide contribution rate is set. The institution is therefore exposed to actuarial risks associated with other institutions’ employees and is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by Section 28 of FRS 102 “Employee benefits”, accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the accounting period. Since the institution has entered into an agreement (the Recovery Plan that determines how each employer within the scheme will fund the overall deficit), the institution recognises a liability for the contributions payable that arise from the agreement to the extent that they relate to the deficit and the resulting expense in the income and expenditure account.

The total cost written back to the profit and loss account is £83,068 (2016: £80,591 charge) as shown in note 7.

The latest available full actuarial valuation of the scheme was at 31 March 2014 which was carried out using the projected unit method.

Since the institution cannot identify its share of scheme assets and liabilities, the following disclosures reflect those relevant for the scheme as a whole.

The 2014 valuation was the third valuation for USS under the scheme-specific funding regime introduced by the Pensions Act 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover their technical provisions. At the valuation date, the value of the assets of the scheme was £41.6 billion and the value of the scheme’s technical provisions was £46.9 billion indicating a shortfall of £5.3 billion. The assets therefore were sufficient to cover 89% of the benefits which had accrued to members after allowing for expected future increases in earnings.

54

Notes to the Accounts

Financial Statement 2016-17

Defined benefit liability numbers for the scheme have been produced using the following assumptions: 2017 2016 Discount rate

2.57%

3.6%

Pensionable salary growth

n/a

n/a

Pension increases (CPI)

2.41%

2.2%

The main demographic assumption used relates to the mortality assumptions. Mortality in retirement is assumed to be in line with the Continuous Mortality Investigation’s (CMI) S1NA tables as follows: Male members’ mortality 98% of S1NA [“light”] YoB tables – No age rating Female members’ mortality 99% of S1NA [“light”] YoB tables – rated down 1 year Use of these mortality tables reasonably reflects the actual USS experience. To allow for further improvements in mortality rates the CMI 2014 projections with a 1.5% pa long term rate were also adopted. The current life expectancies on retirement at age 65 are: 2017 2016 Males currently aged 65 (years)

24.4

24.3

Females currently aged 65 (years)

26.6

26.5

Males currently aged 45 (years)

26.5

26.4

Females currently aged 45 (years)

29.0

28.8

2017 2016 Scheme assets

£60.0bn £49.8bn

Total scheme liabilities

£77.5bn £58.3bn

FRS 102 total scheme deficit

£17.5bn £8.5bn

FRS 102 total funding level

77%

85%

55

Notes to the Accounts

Financial Statement 2016-17

Local Government Pension Scheme (LGPS) The Local Government Pension Scheme (LGPS) is a defined benefit statutory scheme administered in accordance with the Local Government Pension Scheme Regulations 2013 and currently provides benefits based on career average revalued earnings. The administering authority for the Fund is Buckinghamshire County Council.

The Local Government Pension Scheme is valued every three years by a professionally qualified independent actuary using the projected unit method, the rates of contribution payable being determined by the trustees on the advice of the actuary. The next actuarial valuation of the Fund is being carried out as at 31 March 2019 and will set contributions for the period from 1 April 2020 to 31 March 2023.

The table below summarises the minimum employer contributions due from the University to the Fund during this inter-valuation period. The calculation is split between a % contribution of 14.5% (representing the calculated cost of the accrual of future benefits) and an additional monthly amount as set out in the next table: Minimum employer contribution for the period beginning

1 April 2017

1 April 2018

1 April 2019

Percent of payroll 14.5% 14.5% 14.5% Plus monetary amount (£000s) 631 646 662 To assess the value of the Employer’s liabilities at 31 July 2017, the value of the liabilities calculated for the funding valuation as at 31 March 2016 have been rolled forward, using financial assumptions that comply with FRS102.

To calculate the asset share the actuary has rolled forward the assets allocated to the Employer as at 31 March 2016 allowing for investment returns, contributions paid into and estimated benefits paid from the Fund by and in respect of the Employer and its employees. The estimated asset allocation for Buckinghamshire New University as at 31 July 2017 is £60.458m (31 Jul 2016 £51.961m) The pension scheme assets are held in a separate trustee-administered fund to meet long-term pension liabilities to current and former employees. The trustees are required to act in the best interests of the fund’s beneficiaries. The trustees are responsible for setting the investment strategy for the scheme in consultation with professional advisers.

An amount of £164,000 (2016: £179,000) was paid directly by the University in respect of supplementary pension entitlements of employees taking early retirement at the time of incorporation. The pension liability associated with this commitment is valued in line with the assumptions for the LGPS in the sections below.

Assumptions used in calculating the schemes liabilities under FRS102 Demographic assumptions The current mortality rates allow for a long-term rate of improvement in life expectancy of 1.5% p.a. The assumed life expectations from 65 are as below:

56

Notes to the Accounts

2017

2016

2015

2014

Financial Statement 2016-17

2013

Retiring in 20 years: Males

26.1 26.1 26.0 25.8 22.1

Females

28.3 28.5 28.4 28.3 26.0

Retiring Today: Males

23.9 23.8 23.7 23.6 20.1

Females

26.0 26.2 26.1 26.0 24.1

Financial assumptions The financial assumptions used to calculate the results are in the table below.

2017

Salary increases

4.2% 4.0% 4.4% 4.5% 4.8%

Pension increases

2.7% 2.2% 2.6% 2.7% 2.6%

Discount rate applied to scheme liabilities 2.7%

2016

2.6%

2015

3.8%

2014

4.3%

2013

4.7%

These assumptions are set with reference to market conditions at 31 July 2017.

The estimate of the employer’s liabilities is 21 years. The discount rate is the annualised yield at the 21 year point on the Merrill Lynch AA-rated corporate bond yield curve which has been chosen to meet the requirements of FRS102 and with consideration of the duration of the Employer’s liabilities.

Scheme assets and expected rate of return The return on the Fund (on a bid value to bid value basis) for the year to 31 July 2017 is estimated to be 14%. The actual return on Fund assets over the year may be different.

Based on the estimated asset allocation, the Employer’s share of the assets of the Fund is approximately 2%.

57

Notes to the Accounts

Financial Statement 2016-17

The estimated asset allocation as at 31 July 2017 is as follows: Asset breakdown

31 Jul 2017

31 Jul 2016

£’000s % £’000s % Gilts 5,876 10% 6,770 13% Equities 33,765 56% 28,414 55% Other Bonds 7,875 13% 6,317 12% Property 4,460 7% 4,251 8% Cash 2,069 3% 1,714 3% Alternative Assets 660 1% 356 1% Hedge Funds 2,853 5% 2,011 4% Absolute Return Portfolio 2,900 5% 2,128 4% Total

60,458

100%

51,961

100%

Expected return on assets For accounting years beginning on or after 1 January 2015, the expected return and the interest cost will be replaced with a single net interest cost, which will effectively set the expected return equal to the discount rate.

The amounts recognised in the SOCIE are:

Year to 31 Jul 2017

Year to 31 Jul 2016

£’000 £’000 Service cost (3,588) (2,724) Administration expenses (41) (35) Net interest on the defined liability (asset)

(1,303)

(1,368)

Total (Loss) (4,932) (4,127) Negative figures represent costs to the University

Re-measurements in other comprehensive income: Re-measurement of the net assets/ (defined liability)

Year to 31 Jul 2017

Year to 31 Jul 2016

£’000 £’000 Return on Fund assets in excess of interest

5,811

3,311

Other actuarial gains/(losses) on assets 978 Change in financial assumptions (7,258) (15,347) Change in demographic assumptions 869 Experience gain/(loss) on defined benefit obligation

3,202

226

Changes in effect of asset ceiling - Other (540) 3,602

Remeasurement of the net assets/ (defined liability)

58

(12,350)

Notes to the Accounts

Financial Statement 2016-17

Movement in net pension liability during the year:

Year to 31 Jul 2017 Year to 31 Jul 2016 £’000 £’000 Deficit in scheme at beginning of year

(50,973)

(36,959)

Current service costs (3,588) (2,724) Employer contributions paid 1,577 1,744 Unfunded pension payments 164 179 Other finance costs (1,303) (1,368) Settlements/curtailments Administration Expenses (41) (35) Other 540 Remeasurement of the net assets/ (defined liability)

3,602

(12,350)

Net pension liability at end of year

(50,562)

(50,973)

Reconciliation of the movement of the present value of the defined benefit obligation:

Year to 31 Jul 2017 Year to 31 Jul 2016 £’000 £’000 Opening defined benefit obligation (102,934) (83,372) Current service costs (3,588) (2,724) Interest cost (2,659) (3,141) Change in financial assumptions (7,258) (15,347) Change in demographic assumptions 869 Experience loss/(gain) on defined benefit obligation

3,202

226

Estimated benefits paid (net of transfers in)

1,887

1,918

Contributions by scheme participants (703) (673) Unfunded pension payments 164 179 Closing defined benefit obligation (111,020) (102,934)

Analysis of the movement in the fair value of scheme assets:

Year to 31 Jul 2017 Year to 31 Jul 2016 £’000 £’000 Opening fair value of scheme assets

51,961

46,413

Interest on assets 1,356 1,773 Return on assets less interest 5,811 3,311 Other actuarial gains/(losses) 978 Administration expenses (41) (35) Contributions by employer including unfunded

1,741

1,923

Contributions by scheme participants and other employers

703

673

Estimated benefits paid plus unfunded net of transfers in

(2,051)

(2,097)

Closing fair value of Scheme assets

60,458

51,961

59

Notes to the Accounts

Financial Statement 2016-17

History of experience gains and losses: 2017 2016 2015 2014 2013 £’000 £’000 £’000 £’000 £’000 Present value of scheme liabilities 111,020 102,934 83,372 73,150 64,704 Fair value of scheme assets 60,458 51,961 46,413 41,872 39,555 Net liability in balance sheet (50,562) (50,973) (36,959) (31,278) (25,149)

Experience adjustments on scheme liabilities

3,202

226

-

3,653

(72)

Experience adjustments on scheme assets 1,412 (990) 4,142 The University has elected not to restate prior year amounts as permitted by FRS102.The estimated employer contributions to the scheme for the year to 31 July 2017 is £1,741,000.

Sensitivity Analysis The following table sets out a sensitivity analysis on the major assumptions which have been used in the above calculations: Sensitivity Analysis £000s £000s £000s Adjustment to discount rate: +0.1% 0.0% -0.1% Present value of scheme liabilities 108,746 111,020 113,344 Projected service cost 4,154 4,258 4,365 Adjustment to long term salary increase: +0.1%

0.0% -

0.1%

Present value of total obligation 111,292 111,020 110,751 Projected service cost 4,258 4,258 4,258 Adjustment to pension increases and deferred revaluation

+0.1% 0.0% -0.1%

Present value of total obligation 113,070 111,020 109,014 Projected service cost 4,364 4,258 4,154 Adjustment to life expectancy assumptions +1 Year

None

-1 Year

Present value of total obligation 115,069 111,020 107,119 Projected service cost 4,394 4,258 4,126

26 Related party transactions Certain members of the Council are associated with other organisations that may from time to time undertake transactions with the University or its subsidiaries. All such transactions are undertaken on an arm’s length basis and in accordance with the University’s normal terms. No member of the Council has any financial interest in such transactions, nor is such other organisations related parties of the University or its subsidiaries.

As all subsidiary undertakings are wholly owned, the University has taken advantage of the exemption contained in FRS 102 and has therefore not disclosed transactions or balances with entities which form part of the group.

The University is a third member of Chiltern Student Villages Ltd along with Bank of Scotland and European Structured Finance Limited. There is no controlling party. The charitable company was set up in July 2008 for the transfer, development, provision and management of student accommodation at the University. During the year there was the repayment of a loan of £1,550,000 within Trade Debtors (2016: £1,550,000) due to Buckinghamshire New University.

60

The Buckinghamshire New University Students’ Union is an independent organisation largely funded by the University. During the 2016-17 financial year the Union was in receipt of £1.58m of grant funding from the University. At the 31 July 2017, the University had a creditor with the Students’ Union of £2,539 and a debtor of £913.

Board of Governors and Advisors

Financial Statement 2016-17

Board of Governors and Advisors University Council 2017 Independent & Co-opted Council Members Dame Christine Beasley

Independent

(Chair) Resigned 31 August 2016

Dr Michael Hipkins

Independent

(Chair) from 1 September 2016

Jenny Newton

Independent

(Deputy Chair) from 1 September 2016)

Gurdeep Chadha

Independent

Baljit Dhillon

Independent

Dr Maggie James

Independent

Irene Kirkman Independent Dr Lise Llewellyn

Independent

Tim Marshall

Co-opted

Ken McCrea

Co-opted

Anthony Murphy

Independent

Dr Susan Rosser

Independent

Bob Shennan Independent John Smith

Independent

Terri Teasdale Independent Retired 31 July 2017 Anna Crabtree Independent Appointed 1 August 2017 Steve Jordan

Co-opted Specialist to Audit Committee

Appointed 15 February 2017

University Council Members Rebecca Bunting

Vice-Chancellor

Stephen Hoole

Elected Professional Service Employee

Resigned 4 September 2016

Joanne Boardman

Elected Professional Service Employee

Appointed 5 September 2016

Hilary Mullen

Elected Academic Staff

Term of office ended 31 July 2017

Cheryl Pitt

Elected Academic Staff

Appointed 10 October 2017

Lauren Griffiths

Elected Senate Member

Retired 31 August 2016

Sue West

Elected Senate Member

Appointed 1 September 2016

Joseph Collins

President, Students’ Union

Term of office ended 30 June 2017

Ben Parmar

President, Students’ Union

Appointed 1 July 2017

Phillip Wood MBE

Elected Senate Member

Appointed 1 January 2017

Senior Management Team - Current Rebecca Bunting

Vice-Chancellor

Ian Plover

Deputy Vice-Chancellor

Resigned 31December 2016

Nick Braisby

Deputy Vice-Chancellor

Appointed 4 September 2017

Sean Mackney

Pro Vice-Chancellor (Education)

Tim Middleton

Pro Vice-Chancellor (Research & Enterprise)

Resigned 31 July 2017

Tracey Price

Director of Finance

Resigned 28 February 2017

Rod Mercer

Director of Finance

Appointed 1 May 2017

Key Advisers Bankers

Barclays Bank PLC

External Auditors

Grant Thornton UK LLP

Internal Auditors

Kingston City Group Limited

Lawyers

Mills and Reeve LLP

61

Appointed 1 August 2016

Strategic Report & Public Benefit Statement   Financial Statement 2016-17

Legal and Administration University Registered Office: Buckinghamshire New University Queen Alexandra Road High Wycombe Buckinghamshire HP11 2JZ Established by an Act of Parliament as a Higher Education corporation; its University status confirmed by the name change to Buckinghamshire New University in October 2007. Its charitable status is regulated by HEFCE.

Addresses of Key Advisors: Barclays Bank 5 North Colonnade, Canary Wharf, London, E14 4BB Grant Thornton UK LLP Grant Thornton House, 30 Finsbury Square London, EC2A 1AG Kingston City Group Kingston University KH 1009 Kenry House, Kingston Hill Campus, Kingston Hill Kingston upon Thames KT2 7LB Mills & Reeve Monument Place, 24 Monument Street, London, EC3R 8AJ

62