Bucks New University Financial Statements for year ending 31 July 2018

Financial

Statements A year in review

FOR YEAR ENDING 31 JULY 2018

Contents Introduction from the Vice-Chancellor and the Chair of Council

1

Vision and values & Public Benefit Statement

2-3

Our achievements

4-7

Transforming lives

8-11

People matter

12-15

Our impact

16-19

Financial Review & Risks

20-23

Strategic Risks

24-25

Statement of Corporate Governance

26-27

Statement of Internal Control

28-29

Statement of Responsibilities of the University’s Council

30-31

Report of the Independent Auditors to the Council of Buckinghamshire New University

32-33

Consolidated Statement of Comprehensive Income and Expenditure

34

Consolidated and University Statement of Changes in Reserves

35

Consolidated and University Balance Sheet

36

Consolidated Statement of Cash Flows

37

Statement of Principal Accounting Policies

38-42

Accounting Estimates and Judgements

43

Notes to the Accounts

44-60

Board of Governors and Advisors

61

Legal and Administration

62

Introduction from the

Vice-Chancellor and the Chair of Council We have celebrated many successes in the past year including our Silver Award in the Teaching Excellence Framework (TEF), improvements across every category in this year’s National Student Survey (NSS) and moving up the WhatUni rankings. We are proud to be a top 20 UK University for student experience, averaged across the 27 core questions in the NSS, and ranked number one in London for student experience and for teaching quality in the 2019 Good University Guide.

Bucks is also ranked in the top 30 universities for social inclusion in the Good University Guide, a reflection of our proud mission to widen participation, create a diverse community of students, and be an anchor institution in our region.

We are also delighted that, Bucks Students’ Union now ranks as the best in the UK for representing students’ academic interests.

The Union develops many initiatives which support our students to succeed, and help them to develop important skills and experience outside the curriculum. We are very grateful for all that they do for our students.

During the last 12 months we continued to transform the University’s structure, our processes, the courses we offer, and how we deliver them to our students.

We have worked to change the nature and delivery of our course portfolio; reform student assessment; increase revenue from partnerships and commercial services; and launch the Bucks Academic Framework to create a consistent set of standards and expectations for our academic staff.

February saw the first cohort of Foundation Year students at Bucks.

Significant efforts ensured that this offering forms an essential part of our portfolio, and is now available across all courses. We have also worked to be more flexible in the way we deliver our courses to meet the needs of our students. There has also been a notable expansion in both the number of apprenticeships we can deliver, and the range of businesses with whom we work.

The hard work across all these areas has combined to see a promising performance against budget targets.

The contributions of our people during this period of considerable change were very much appreciated, and as a result we are now more agile in responding to the changes in market conditions which affect all institutions.

Partnerships remained a core activity for the University this year. We approved a number of new strategic educational partnerships linked to our Schools’ portfolios to increase student numbers and support widening participation.

Professor Rebecca Bunting Vice-Chancellor

The University was also part of two successful regional funding bids - the £5m MedTech SuperConnector project to turn innovative ideas into products and services that help change lives, and hubs to support business innovation and growth in Bucks.

The University continues to work in partnership with the Students’ Union on initiatives to improve satisfaction, completion rates and employment outcomes.

We care about what our students think, and encourage their feedback. Bucks is proud to be 9th best in the UK for listening to the student voice in the latest NSS. We turn the knowledge we gain from listening into action for positive change.

Dr Michael Hipkins Chair of Council

We want to give all our students the best possible experience from their first day with us, creating a learning community where students feel at home, intellectually challenged, supported, and where their opinions count and are valued.

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

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Vision and values

Buckinghamshire New University Financial Statements 2017-18

Our core priorities from our Strategic Plan 2016-21 are: our education offer, the University’s engagement in research and enterprise, and the quality of our people and how we operate.

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; • 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 have an excellent track record of adding value and engaging with students from backgrounds that are typically under-represented in Higher Education.

We have a highly diverse student community with above average proportions of BAME students (36%); mature students (37%); part time students (38%) and students coming from state schools or colleges (96%). A quarter of our students come from postcodes with low participation rates in higher education, and one-third from areas of deprivation.

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.

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 for pupils who will have had no family experience of 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.

Bucks continues to play an active role in the regional ‘National Collaborative Outreach Project’ (NCOP). 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. With the support of the Local Enterprise Partnership (LEP) and NCOP, we will use a state of the art ‘simulation vehicle’ to promote higher education study across the region through the use of cutting edge ‘simulator’ technology that places participants in virtual environments.

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. In 2018 we have been delighted to welcome Bucks Business First. Having such a key player on campus is a highly visible demonstration of our commitment to business and the region.

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 per cent carbon reduction target ahead of the 2020 deadline.

The University continues to play a leading role in the Buckinghamshire Education and Skills Training (BEST) with our key partners at Bucks College Group and through delivery of courses at University Campus Aylesbury Vale. We also continue to support 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.

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at a gl We strive to help our students reach their full potential and achieve their ambitions

A

TOP

20

15

university for student experience (averaged across the 27 core questions – NSS 2018)

Bucks improved across every category in the 2018 What Uni league table based on student feedback

of all UK universities for providing the best learning community; feeling part of a community of staff and students; giving opportunities to apply knowledge; assessment and feedback; and providing good advice when students make study choice.

(NSS 2018)

Bucks ranks 29th for social inclusion in the Good University Guide reflecting our proud mission to transform lives; widen participation; and our diverse student community.

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Eight courses achieved 100 per cent satisfaction score in the 2018 NSS.

Buckinghamshire New University Financial Statements 2017-18

Our achievements:

lance

Teaching quality and satisfaction

We were also one of only 21 UK institutions (out of 132) to rise by nine places in the 2019 Good University Guide.

Students’ Union

We’re proud that Bucks Students’ Union is number one in the UK for representing students’ academic interests.

TEF Silver Award in recognition of our teaching excellence.

Bucks ranked number one in London and 16th in the UK for teaching quality (out of 130 institutions) in the 2019 Good Univerity Guide.

We care about what our students think, and encourage their feedback

Bucks is proud to be 9th best in the UK for listening to the student voice.

Bucks ranks 37th (out of 132) for the highest graduate salaries in the UK.

(NSS 2018)

(2019 Good Univerity Guide)

(NSS 2018)

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Our

achievements We have celebrated many achievements during the year. Here are just some of the successes of which we are proud Bucks scoops silver We celebrated achieving a Silver Award in the Teaching Excellence Framework (TEF) 2018 in June.

The TEF Panel reviewed the submission by Bucks and concluded that we deliver high quality teaching and learning, consistently exceeding rigorous national quality requirements for UK higher education, and with most students achieving excellent outcomes. It also highlighted the University’s strong performance against its benchmarks for student satisfaction; rates of continuation; and progression to employment or further study for full-time students.

Professor Nick Braisby, Deputy Vice-Chancellor, said: “Throughout our 125-year history, it has been our mission to transform students’ lives and our success in doing so for our richly diverse student body is amply demonstrated in our TEF submission.”

Future is green for Bucks In October we received a Brite Green Top 10 University Carbon Reduction Award for our efforts in reducing carbon emissions.

The University Carbon Report showed that Bucks has reduced its emissions by 48 per cent since 2005, and is in the top ten performers among 127 higher education institutions.

Figures released by sustainability strategy consultancy Brite Green revealed Bucks is 7th in the HE sector for carbon reduction. The University is also one of very few in the sector to hold the Carbon Trust Standard.

Projects to reduce the University’s carbon footprint include: lighting systems with presence and absence detection, and daylight dimming; installation of solar panels; efficient ventilation systems; and use of electric vans for post-delivery and maintenance staff.

Alastair Jack, Sustainability and Energy Manager, said: “With new carbon reduction projects being undertaken each year, we are on course to hit our own 50 per cent carbon reduction target several years early.”

Top of the charts – NSS & Whatuni Bucks New University made the top 40 in WhatUni’s annual ranking of UK universities thanks to student feedback on the TripAdvisor-style site for prospective students.

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Bucks has improved across every category following the survey of students in November.

The results highlights include: 39th University of the Year; 27th for Course and Lecturers; 8th best Students’ Union; 22nd for Student Support; and 27th for Giving Back.

The 2018 National Student Survey was also cause for celebration.

Results, released in July, showed that the University has improved its performance

across every one of the 27 questions posed to students.

Bucks is now a top 20 UK University for student experience and 9th University in the UK for listening to the student voice. The University improved its average performance by five per cent across all questions, outperforming the average across the sector by four per cent.

Buckinghamshire New University Financial Statements 2017-18

Our Students' Union makes a difference both inside and outside our walls This year Bucks Students’ Union ranked number one Students’ Union for representing students’ academic interests in the 2018 National Students’ Survey, and placed 8th in the WhatUni league table earlier in the year.

Tristan Tipping, Chief Executive Officer of Bucks Students’ Union, said: “We have a first-rate team who are committed to our values and seemingly have unlimited reserves of creativity, drive and passion.”

Just some examples of the great work they do to support our students and our wider community include the annual ‘homeless hamper’ boxes which were distributed by a local charity to more than 70 homeless people in our town and the annual puppy room to help students relax during exam periods.

The Students’ Union organised the event in February with Hearing Dogs for Deaf People, based in Saunderton, High Wycombe, to boost students’ and staff's mental health and raise funds for the charity.

Katie Grundy, puppy training instructor from the charity, said: “It’s a great experience for the dogs to come in and meet lots of new people, learn how to greet politely and not jump up. It helps so much with their training.”

In the same month, kind-hearted students braved rainy conditions to spread some cheer through a SMILE Campaign for Student Volunteering Week.

The students put a smile on the faces of passers-by at the University’s High Wycombe Campus, Wycombe Railway Station and in the town centre by handing out free Fairtrade flapjacks, bananas and teas and coffees.

Home of landmark swimming and education partnership High Wycombe was selected to become a national swimming Performance Centre in July by Swim England, the national governing body for swimming.

Working in partnership with Wycombe District Swimming Club (WDSC) and Buckinghamshire New University, the

Swim England Performance Centre will give talented young swimmers the opportunity to stay in the sport while continuing their education.

Wycombe District Swimming Club is based at Wycombe Leisure Centre, and students will be able to pursue a range of degrees at the University.

Dr Paul Morgan, Head of School for Human and Social Sciences, said: “Talented swimmers can now have the best of both worlds by receiving high standard training from WDSC and our support to help them reach their academic potential. We look forward to helping them to succeed both in and out of the pool.”

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Transforming lives

Throughout our 126-year history we have changed lives through employment-focused and skills-based teaching which enables students from a wide range of backgrounds to realise their ambitions. We create the conditions for our students to reach their full potential and succeed in their chosen careers and professions.

Our TEF submission demonstrated that we have a richly diverse university community. We are also producing some of the best outcomes in the sector in areas including the acquisition of employment skills, working effectively with others, and being innovative and creative. Bucks is amongst the top institutions for the extent to which students say their courses connect learning to real-world problems or issues.

We achieve this by creating a learning community with small class sizes, highly interactive teaching and focused employment-related studies. The excellent academic support we provide is the bedrock of our students’ success.

Some of our students may have previously struggled with school-work or life’s circumstances but they get an academic boost at Bucks, achieving better rates of highly skilled employment than predicted by our entry tariff. This is testament to the hard work and dedication of our people who help students to achieve their full potential, and take great pride in their progress and achievements. Here are just some of their success stories.

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Buckinghamshire New University Financial Statements 2017-18

Fashion students get on the world catwalks It was Zimbabwean roots and crafts of tribe women which made Nyasha Mabhunu’s fashion collection the colourful fusion that featured at African Fashion Week London (AFWL).

The 23-year-old, who graduated in September, was one of more than 100 designers with connections to Africa to show their collections at Freemasons’ Hall, London, in August.

Nyasha said: “My collection was inspired by my identity, where I come from in Zimbabwe, and from a tribe called Mandebele. The women there handmade some of the beautiful beads I used in my collection.”

Fellow fashion student Adam Bystrzycki showed his work at FashionClash, the Netherlands’ four-day fashion festival in July after winning a top spot.

Adam, 23, who graduated with a first-class honours degree in Fashion in September, gained a slot at the prestigious festival due to his work on live briefs as part of his course at Bucks.

He said: “After months of preparation, it was the moment when I finally saw my collection on the catwalk, with music, lighting and a big audience. It was a really unforgettable experience.”

Also this year, textile students welcomed back CEO of luxury brand Tengri, Nancy Johnston, for the second year – and this time she bought a CNN camera crew with her.

Filming a documentary about sustainable fibres, Nancy looked at students’ work using Yak fibre that would possibly be incorporated into future designs for the label.

‘I travelled 1,300 miles to chase my dream’ Picking up a camcorder when he was just a boy led Kevin Kohjus to the brave decision to leave his home country to follow his dream of studying film-making.

The 20-year-old first year BA (Hons) Film and TV Production student said the lure of learning at Bucks made leaving home worth it.

After contacting Dream Foundation Estonia, which helps students to study abroad, Kevin learned more about Bucks and its great facilities.

He said: “Thanks to clearing, I got in to the University only two weeks before the term began. My life just went crazy from that moment on. It was a bit of a bombshell for my family and friends. It was an emotional time but I just knew the best times of my life were waiting for me. It’s a challenge, jumping out of your comfort zone, but you’ll learn a lot about yourself.

“It is experience and wisdom that will remain with you for the rest of your life.

The University is a good opportunity to build a foundation for your career and valuable time making contacts, acquaintances and friends. It’s an adventure!”

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bucks.ac.uk Alumnus comes back to inspire students Bucks graduate and award-winning director and motion designer Neil Coxhill says Bucks changed his life by changing his mindset.

Now Director of Motion at Amazon Media Group, Neil came back to University to speak to current students in January.

The 38-year-old graduated in BA (Hons) Graphics and Advertising from Bucks New University in 2001 and has directed projects for the likes of Sir Elton John, Dazed, Wonderbra, Transport for London and The Guardian.

Neil said: “One of the key things I told students was to see the challenge in every opportunity and be flexible enough to react to it. The biggest things I gained at Bucks was changing my mindset and how I should tackle problems and find a creative solution.”

Ahead of the apprenticeship shift Bucks New University was one of the first to deliver Registered Nurse Degree Apprenticeships in December - based on its existing award-winning preregistration nursing programme.

The degree apprenticeship, which welcomed its first cohort in March, supports employers to develop their nursing or healthcare staff towards registration with the Nursing and Midwifery Council - as either adult, child or mental health nurses.

Karen Buckwell-Nutt, Head of Nursing and Allied Health, said at the time: “This

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option will offer a clear and structured career progression not only to those who already work within healthcare, whether that be the NHS, care homes or the community, but for those wishing to start their career.”

and 6. Buckinghamshire College Group will deliver the Level 3 and 5 apprenticeships over the course of one year, with Bucks New University focused on the two-year Level 6 programme.

Bucks New University and Buckinghamshire College Group also put a successful bid together to deliver an apprenticeship programme for Buckinghamshire Fire and Rescue Service.

Steve Dewhurst, Director of Strategic Planning and Apprenticeships, said: “This is a great example of a regional collaboration offering quality training and formal recognition of skills and expertise. We look forward to working with such an important organisation within our county.”

The new apprenticeship programme means fire service personnel take up Leadership and Management apprenticeships at Levels 3, 5

Buckinghamshire New University Financial Statements 2017-18

Students organise big fundraising events More than 3,000 flooded through the gates of the very first deaf, dog, and familyfriendly music festival, organised by Bucks New University students and Hearing Dogs for Deaf People in May. SubWoofers was held at Hearing Dogs for Deaf People’s site in Saunderton and music lovers turned out en masse to enjoy the bank holiday sunshine, live music, fairground rides, food and drink, and special screenings of Oscar-winning short film The Silent Child.

Michele Jennings, Chief Executive of Hearing Dogs for Deaf People & Hearing Link said: “We are delighted that so many people came along to enjoy the first SubWoofers family music festival. It was the largest event we have ever held at The Grange, and both our team and the team from Bucks New University did a brilliant job organising such an enjoyable day.”

This followed the success of December’s Winter Wonderland at the High Wycombe Campus.

Hundreds visited the concourse for the festive treat organised by first-year BA (Hons) Music & Live Event Management students and other members of the University community.

Graduate Elizabeth building Social Work career Studying a degree in Social Work at Buckinghamshire New University helped Elizabeth Njenga progress from working as a support worker to a position as a social worker with vulnerable adults.

Elizabeth, who graduated with a 2:1 in BSc (Hons) Social Work in 2017, is a Newly-Qualified Social Worker (NQSW) and a committee member for the British Association of Social Workers (BASW).

She returned to Bucks for the BASW England Student and Newly Qualified Social Worker (NQSW) Conference, 'Excellence in Social Work: Employment and Theory', which welcomed more than 200 people.

Elizabeth, who is undertaking an Assisted and Supported Year in Employment (ASYE), working with adults, said: “Studying as a mature student at Bucks paved the way for me to become a qualified social worker after previously working as a support worker for over 14 years.

“I am very much enjoying the role as it is something I had wanted to do for a long time and, thanks to my qualification from Bucks New University, I have been able to achieve this.”

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People matter We take great collective pride in all that the University staff and students have achieved during the year.

The new Bucks People Strategy for University staff is focused on ensuring Bucks is a place where our people develop and thrive; their recognition is valued and rewarded; and all are united by a supportive culture which puts the student experience at the heart of all that we do.

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Buckinghamshire New University Financial Statements 2017-18

First for scientist accolade Simulation & Skills Facilities Team Leader Samantha McCormack became the first simulation technician to be awarded the Registered Scientist Recognition (RSci) through the Association for Simulated Practice in Healthcare.

The Science Council accolade is an independent recognition of achieving and maintaining the standards required to join the global community of professional scientists.

Samantha has led the way at Bucks New University in the art of ‘moulage’, the skilled art of applying mock, and often gorily realistic, injuries for training purposes, to stop its nursing students getting a nasty shock when they start life on the wards.

Samantha said: “I was delighted to be awarded the Registered Scientist Recognition from the Science Council and I am especially proud to be the first simulation technician to have received it.”

Sam has been very busy – apart from the RSci, she was also awarded a Distinction Masters in Medical and Healthcare Simulation after three years of part-time study and working full time.

Joseph enjoys take-off in pilot career Travel and Aviation graduate Joseph McCrudden gained his wings as a First Officer and is looking forward to his career taking off.

Joseph, 24, graduated in BSc (Hons) Air Transport with Commercial Pilot Training in 2016, and is enjoying training, where his experience had so far included flying a Boeing 737.

Along with 21 new Captains and 13 other First Officers, Joseph was presented with his Wings by his employer, Ryanair, at a ceremony at its Dublin offices.

Joseph said: “I still have a lot to experience and learn but working in the aviation industry is certainly what I expected.”

Speaking about studying at Bucks New University, he said: “What stands out more than anything from the course was the extra-curricular mentoring sessions organised by our course tutor.''

“Current airline pilots from different companies often carried out visiting talks and visits, and these often included graduates from Bucks New University, which was fantastic.''

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bucks.ac.uk Ad duos are the best thing since sliced bread The well-known Warburtons’ advert featuring Bolton’s funny man Peter Kay was the dreamchild of Bucks New University alumnae Gina Ramsden and Freya Harrison.

The 24-year-olds, who graduated in 2015, have been a creative team since meeting at Leeds College of Art, and then followed each other to Bucks for a BA (Hons) Creative Advertising.

Freya said: “It took a long time to craft the script and get it Peter Kay-ready but we were involved in every part of the process from casting, to location, to costume to even dance choreography. Being on set shooting the ad was a crazy experience but we loved every second.”

Ad duos continued to shine at Bucks when third-year BA (Hons) Creative Advertising students Kat Piziurny and Kinga Kraczkowska won a D&AD New Blood 2018 industry award for their work with Adidas in May. The Bucks New University duo were asked to work to a live brief to design an advertising campaign for the top sports brand.

This lead to the creation of Run for Your Life, a mental health awareness campaign aimed at young people living in big cities.

Pictures courtesy of Warburtons and WCRS

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Pictures courtesy of Warburtons and WCRS

Buckinghamshire New University Financial Statements 2017-18

World Cup wins for Bucks The players on the pitch took centre stage in the World Cup. But, behind the scenes, many talented minds created a buzz, promoted coverage and used incredible technology – and some of those kicked off their careers at Bucks New University.

Jamie Cross is the Creative Director at BBC Creative and he’s a BA (Hons) Music Industry Management & Marketing graduate.

To promote World Cup coverage, his team created eye-catching ads using 227,000 metres of thread to make more than 600 unique frames of tapestry.

A degree from Bucks New University could take you anywhere.

In Craig Ward’s case – New York! He graduated from our BA (Hons) Graphic Design and Advertising course in 2003 and coowns agency Gallo Ward in Manhattan and was commissioned

by Nike to design a custom typeface for the Football Association’s 2018 World Cup kit.

It’s not just our graduates making the most of World Cup opportunities – Scott Ramsell was pitchside for the England match against Panama using his skills from our BA (Hons) Audio and Music Production course. He made sure the referees could communicate with video assistant referees 260 miles away in Moscow, as a Referee/VAR Audio Engineer, linking up referees with video assistant referees.

Abigail balances motherhood and university Having a university like Bucks on your doorstep has so many benefits, not least saving on living costs if you can still live at home.

Some people think university is an impossibility for many reasons, but Bucks gives them the chance to turn their dream of a degree into reality.

Abigail Wright’s proud twin boys, sixyear-old Jack and Liam, watched the 23-year-old graduate from BSc (Hons) Accounting and Finance in September.

The valedictorian, from Aylesbury, secured a graduate associate job with Grant Thornton before she graduated and said: “As a young single parent, I never thought university would be possible, but thanks to Bucks I was able to realise my dream. Bucks does not just welcome you to learn, it offers so much more. It gives you a community, it offers a welcoming and nurturing environment so that you always feel like you have a place.”

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Our impact Our growing enterprise and applied research activities will also play a key role in curriculum development, as all academic teams extend and deepen their connections with business and employers. In turn this will help to give our graduates an edge, and also the opportunity to gain valuable experience through consultancy projects, professional development and research. We are ambitious for our students and provide opportunities to ensure they stand out in the competition for jobs when they leave us.

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Buckinghamshire New University Financial Statements 2017-18

Turning ideas into reality Bucks New University became part of a new £5m government-funded project, led by Imperial College London, to rapidly translate new medical technologies into clinical solutions to help change lives.

The investment, made through Research England’s Connecting Capability Fund, will support the MedTech SuperConnector (MTSC) – an ambitious

programme which challenges early career researchers to turn their discoveries into new diagnostic tools, medical devices and digital healthcare solutions.

Bucks New University will supply researchers to the MTSC project, and share its expertise of industry, clinical practice and public health. Researchers will benefit from the University’s stateof-the-art equipment including clinical

simulation and virtual reality laboratories, along with technology which enables the rapid creation of prototypes.

Bucks New University is one of seven partner institutions working with Imperial on the MTSC project: Queen Mary University of London, the Francis Crick Institute, Royal College of Art, Royal College of Music, Institute of Cancer Research, and Royal Veterinary College.

Bringing First World War to life Buckinghamshire New University and Wycombe District Council launched ‘The Heritage Trail’ website for High Wycombe in October, navigating points of interest from the Great War. BSc (Hons) Computing and Web Development graduates Robert Hucks and Devon Van Der Berg led a six-month project, putting together the online trail.

Robert, who graduated from the University in 2017, said: “It is great to see something we worked so hard on become a reality and I hope it is enjoyed by many people in High Wycombe.”

The website sees a soldier, played by Bucks New University graduate and actor Liam Burton, take history buffs around places of significance in the town from the 1914-1918 conflict and includes films, photos and commentaries.

Bucks New University Vice-Chancellor, Professor Rebecca Bunting, said: “We are so proud to be involved in this wonderful project for High Wycombe, given our roots in the town over the last 126 years. I felt privileged to be involved in the launch and to see how our students and staff have brought an idea to life that will benefit the whole community.”

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bucks.ac.uk Olympic athletes prepare for success at Bucks

Dmytro Chumak undergoing a series of tests to assess their capabilities.

The Human Performance Laboratory at the University featured in a series of films in March on the Olympic Channel about the anatomy of a top athlete.

Dr Maria Konstantaki, Course Leader in BSc (Hons) Sport and Exercise Science, said: “It was an amazing opportunity to be involved in delivering fitness tests to Olympic athletes and seeing their extraordinary performance capabilities first hand.

The Anatomy of an Athlete programmes, filmed at Bucks, featured French figure skater Mae Meite, Canadian ice hockey player Jennifer Wakefield, and Ukrainian weightlifter

“The programme was commissioned by the International Olympic

Real-world scenarios for students Improved patient safety was the driving force behind the use of hightech innovative room partitions for students.

DipHE Operating Department Practice students benefit from the immersive surroundings created by the partitions.

The University is using the partitions to create the impression that students are working in an anaesthetic room or inside an ambulance in an emergency situation.

Course Leader Shane Roadnight said: “We want to give our students an experience as close as possible to scenarios they will encounter in the real world. In our case the screens are ideal for projecting images which give the illusion that students are occupying a space in various specialised venues within the operating department or in an ambulance.

“We use it daily as an interactive tool and it has changed the way we teach things, meaning we can effectively turn one room into two or three and meaning scenarios can be played out in real-time.”

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Committee (IOC)’s Olympic Channel and it has now aired worldwide, meaning maximum exposure of our University to an international audience.”

“The films are wonderfully produced and they showcase the University’s Human Performance Lab, the staff and the athlete’s performance in their individual sport. We feel proud to have contributed to filming of such a worthwhile series.”

Buckinghamshire New University Financial Statements 2017-18

Helping dementia patients with innovative simulation The University scooped the Teaching Innovation of the Year Award for its training with dementia simulation at the Student Nursing Times Awards 2018 in April.

Sam McCormack, Simulation and Skills Team Lead, Rachel Cabral, Senior Lecturer, and Kelly Milligan, Simulation and Skills Technician, picked up the award at the ceremony at the London Hilton.

Sam said: “We are absolutely thrilled. To date, 550 of our nursing students have experienced the simulation thanks to our academic and professional service employee colleagues.

Bucks was nominated eight times across four categories in the annual awards which recognise institutions that offer high standards of academic and practical teaching, and excellent resources.

“The simulation aims to ensure students develop holistic skills in early recognition, understanding the impact of, and working with individuals and families where dementia is a key factor. At Bucks we pride ourselves on employmentfocused and skills-based teaching and it’s brilliant this has been recognised with the award.”

Praise for Macmillan-funded course at Bucks Macmillan healthcare professionals learnt leadership, management and negotiation skills during a six-month ‘Evidenced Based Workplace Learning’ course.

The course, helping healthcare professionals improve the cancer services they run, was delivered by the University and funded by Macmillan Cancer Support.

A total of seven Macmillan nurses and three other healthcare professionals learnt about project management and implementing change, before presenting ideas on how to achieve this to health trust managers and senior Macmillan professionals.

Staff who completed the course, either as a standalone module or as part of an undergraduate or postgraduate qualification, were employed by a number of different organisations including Buckinghamshire Healthcare NHS Trust and Royal Berkshire NHS Foundation Trust.

Course Leader Mary Williams, Senior Lecturer in Cancer and Palliative Care, and a former Macmillan palliative care nurse, said the course aimed to improve care for cancer patients and their loved ones.

19

bucks.ac.uk

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 channeled through a limited company. Where possible subsidiary companies pay their taxable profits to the University under the Gift Aid scheme.

Results for the year ended 31 July 2018

20

Results for the 2017-18 financial year are a consolidated group deficit of £4.5m. At the end of last year the University had just commenced its Transformation Plan and after the first full year, the impact is now starting to be seen through improving results in helping to stabilise and grow student income against reduced funding through educational contracts with the Department of Health and Social Care following the changes to the funding for Nursing and reduced overall funding body grants. The changes were largely forecast and total income ended the year on budget with a change to the mix of income between our own provision, the investment in and resulting growth of new apprenticeship programmes and higher income from the growth with new and existing partners. The underlying deficit has also been positively impacted by the receipt of the residual retention and gain on sale by the University of part of its stock of student accommodation, Hughenden Halls, to Aviva in 2016/17.

Transformation was not just about income and also includes activities to address the underlying cost efficiency of the University. Following on from the Voluntary Severance Scheme in 2016/17 the University is seeing the savings and more being delivered through staff cost reductions of £2.5m year on year with further, smaller scale restructures happening in the year.

Plans for a final phase of restructuring

within the Transformation Plan are currently being developed and the University has engaged Tribal to provide insights versus the benchmark sets.

Additionally and with further emphasis on cost efficiency in the face of declining traditional income streams, the University had tasked budget holders to save 10% of their current year’s budget and at year end this and more had been achieved, delivering a cost improvement in excess of £4.5m (excluding restructuring cost).

Buckinghamshire Education, Skills and Training (BEST) opened the new campus in Aylesbury Vale in January 2016. This is a joint venture with Bucks College Group with a 50% share being consolidated into these accounts.

During the 2017-18 financial year, BEST has made a loss of £1.52m with a £0.76m deficit being consolidated into these accounts (£1.66m loss, £0.83m consolidated in 2016-17). 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 Bucks College Group contributing 80/20 respectively. This brings the University share of the total loan balance outstanding to £3.93m (£2.55m in 2016-17), which is being used to pump prime the initial years of operation and to fund investment and growth. In the next twelve months the approximate amount of funds required will be £1m. By 2025-26 the building at Aylesbury is expected to be operating close to 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 that forecast at the end of last year so as a prudent measure the University has made a provision in the accounts of £3.93m for the full impairment of the loan. The University acts as guarantor to the lease on the building BEST occupies.

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 2016-17 but with the increasing cost pressures means that the surplus in the year is £0.11m (£0.2m 2016-17) which is gift aided to the University.

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 2016-17.

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 £9.2m (£3.6m in 201617) is a reflection of the changes in financial assumptions and improved investment performance.

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 2017-18 there has been a reduction in the provision requirement of £0.05m giving a balance sheet provision of £0.05m (£0.1m in 2016-17).

Full details of the pension schemes liabilities can be seen in notes 18 and 26.

Buckinghamshire New University Financial Statements 2017-18

CONSOLIDATED UNIVERSITY INCOME 2017-18

3% 10%

2%

Tuition Fees

55%

1%

Education Contracts

20%

Funding Body Grants

8%

Research Grants & Contracts

1%

Residences & Catering

10%

Missenden Abbey Conference Centre

3%

Student Union & Nurses Reimbursements

1%

Other Income

2%

1% 55%

8%

20%

CONSOLIDATED UNIVERSITY EXPENDITURE 2017-18

4%

5%

8% 1% 7% 52% 8% 15%

Academic related

52%

Administration & Central Services

15%

Premises

8%

Residences, Catering & Conferences

7%

Research Grants & Contracts

1%

Depreciation

8%

Interest Payable

4%

Other expenses

5%

21

bucks.ac.uk Capital projects During the year £1.4m 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 final elements of the substantial investment in a new ERP system, Business World On! The finance and procurement elements of the system went live at the start of the new financial year 2017-18 and the HR and payroll elements went live in the first half of the 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. There was also initial spend on the Student Connect project to implement a new student management system in 2019/20.

Cash Flow The cash balance (including short-term deposits) of £20.6m remains healthy. External debt of £4.4m has been repaid leaving the total amount of debt outstanding at £22.9m (£27.3m in 2016-17); the University intends to finance future capital investment from cash balances as well as continuing to reduce its outstanding debt. As part of this and reducing the interest cost on the back of healthy cash balances, the University has repaid a portion of its longer term loan and replaced 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 five years is shown on the next chart.

During and at the end of the year the University achieved all of the new banking covenants on the institution. This arose as part of Barclays agreement to the sale of the Hughenden Halls to Aviva in 2016-17 and the move to FRS102, whereby the University agreed to a set of new covenants during the year and a revised loan agreement is now in place. This also provided a waiver in recognition of the technical breach of one of the previous banking covenants at the end of the last financial year and the majority of the borrowing has now been transferred back to the category, creditors greater than 1 year. As part of the covenant management the University also placed £3m on short term investment with the bank prior to the year end, an arrangement that will stay in place until the start of 2019/20. The University has significant cash balances and transformation plans are being delivered and projects commenced that will positively impact future years.

Balance Sheet and Reserves The balance sheet has strengthened with an increase in net assets since 31 July 2017 of £4.7m. The main reason for this is the reduction in the pension provision requirement due to the increase in the actuarial valuation of the LGPS scheme in particular.

Moving forwards the University expects that the balance sheet and its reserves position will reduce as further 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 operational existence for the foreseeable future. For this reason it continues to adopt the going concern basis in preparing the accounts.

22

Buckinghamshire New University Financial Statements 2017-18

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. A financial institution is deemed to be an individual institution if it is registered separately with the FCA (Financial Conduct Authority) and treated as an individual institution for the purposes of the Financial Services Compensation Scheme (FSCS). Therefore different institutions within the same banking group may get individual banking licenses. 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

£3m

Other Long Term A Rated

£5m

£2m

£1m

At 31 July 2018 there was a total balance of £17.5m held in deposit accounts. This was split between Handelsbanken (£5m), Santander (£5m), Barclays (£3m) and Lloyds (£4.5m).

23

bucks.ac.uk

Strategic risks During 2017-18 the University was subject to Annex C of the Office for Students Terms and Conditions of Funding, Audit Code of Practice (March 2018) , and also adheres to the Committee of University Chairs (CUC) Higher Education Code of Governance. 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.

In 2017/18, the process for risk assessment was amended, incorporating organisational changes at the University, and ensuring that the assessment and management of risk at a local level supports and informs the assessment of risk at the strategic level. Internal auditors carrying out a review of the risk management framework following these changes considered that controls provided substantial assurance that associated risks material to the achievement of the University’s objectives are adequately managed and controlled.

Further details on the University’s risk management procedures and policies are set out in the statement of corporate governance.

Strategic risks each fall into one or more of four risk areas, namely financial sustainability, compliance, reputation and organisational effectiveness, and are listed below: • Failure to control costs, grow income and invest in the future • Failure to recruit to targets for student numbers • Failure to deliver student success outcomes, including retention and completion targets • Programmes do not deliver key graduate attributes, employment skills and experience opportunities • Provision fails to meet academic standards • Failure to support and oversee quality and student experience or meet targets for income generation and outputs for research and enterprise through our partnerships • Failure to meet income targets and delivery of strategy for growth in research and enterprise activity • Failure to deliver the organisational change set out in the people strategy • Failure to deliver value for money, high quality services and facilities • Failure to ensure the safety and security of staff

24

Buckinghamshire New University Financial Statements 2017-18

25

bucks.ac.uk

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 2017 to 31 July 2018.

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. The University is regulated by the Office for Students (OfS) since 1 April 2018 which is the principal regulator for English higher education institutions that are exempt charities, previously it was regulated by the Higher Education Funding Council for England (HEFCE). During 2017-18 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 University’s Council is satisfied that it is in compliance with the HE Code of Governance published by CUC in December 2014, revised June 2018.

26

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.

University Council The University’s Council comprises of 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 Terms and Conditions of funding for higher education institutions with the OfS. 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.

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 anti-fraud and anti-corruption policy.

The Council met six 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. Additionally the Council Advisory Group met to monitor progress of the University’s Transformation Programme.

Buckinghamshire New University Financial Statements 2017-18

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.

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

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, the OfS 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.

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 forecasts and projections, taking account of reasonably possible changes in performance, show that the University will be able to operate within the level of its current facilities. The Council have a reasonable expectation that the University has adequate resources to continue in operational existence for the foreseeable future. The University prepares budgets and forecasts on an annual basis and operates an ongoing 5 year forecast sustainability review in line with OfS guidance. The going concern position of the University has been considered for a period of greater than 12 months from the date of approval of the Financial Statements. Detailed cash flow forecasts covering the same period have been prepared and the University is satisfied that it can meet its day to day working capital needs out of cash and liquid investments. Council is not aware of any material uncertainties which would prevent the University from continuing as a going concern. The University therefore continues to adopt the going concern basis in preparing its financial statements.

27

bucks.ac.uk 28

Statement of Internal Control

Buckinghamshire New University Financial Statements 2017-18

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 and the University’s Council confirms it has reviewed the effectiveness of these arrangements.

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 processes are established to review the adequacy and effectiveness of the University’s system of internal control: • Kingston City Group (‘KCG’) provides internal audit services for the University. KCG provides an annual opinion on the adequacy and the effectiveness of internal controls and risk management across the University, in accordance with Annex C of the Office for Students Terms and Conditions of Funding, Audit Code of Practice (March 2018) • The Audit Committee receives regular reports from the internal audit service, including its independent opinion on the adequacy and effectiveness of the University’s system of internal control, together with recommendations for improvement.

• Oversight by Resources Committee of matters relating to resource allocation, forward planning, effectiveness and value for money.

• 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.

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

• Clear definitions of the responsibilities of, and the authority delegated to, senior officers of the university.

The Internal Auditor, Kingston City Group, identified weaknesses and inefficiencies in the internal procedures and processes in their Internal Audit Reports dated 31 May 2018.

The weaknesses, which were present in Payroll, HR (Human Resources) and Financial Processes and Systems areas, have been strengthened by the University by implementing recommendations from the Internal Auditor.

• Council receives regular reports from the Audit Committee on internal control and the business of the Committee.

• There is a comprehensive budgeting system with an annual and three year budget which is reviewed and agreed by Council.

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 Terms and conditions of funding for higher education institutions with the OfS. 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 Audit Committee provides an oversight of risk management.

• Regular meetings between senior managers and Service Leaders to review progress and issues arising from operational activities, and similar meetings between the Director and Heads of Departments in relation to academic developments.

29

bucks.ac.uk 30

Statement of Responsibilities of the University’s Council

Buckinghamshire New University Financial Statements 2017-18

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.

Within the Terms and Conditions of funding for higher education institutions with the OfS and the University’s Council, through its designated accountable officer, the University 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 Vice-Chancellor. In preparing those financial statements, the University’s Council is required to:

The University’s Council has taken reasonable steps to: • Ensure that funds from HEFCE, the OfS 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 Terms and Conditions of funding for higher education institutions with the OfS. • 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.

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

In so far as each of the Governors are aware:

• Select suitable accounting policies and then apply them consistently.

• There is no relevant audit information of which the University’s auditors are unaware.

• 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.

• 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.

• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in operation.

Dr Michael Hipkins Chair of Council

1 December 2018 Buckinghamshire New University High Wycombe Campus, Queen Alexandra Road, High Wycombe, Buckinghamshire, HP11 2JZ

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.

31

bucks.ac.uk

Report of the Independent Auditors 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 2018 which comprise Consolidated Statement of Comprehensive Income and Expenditure, Consolidated and University Statement of Changes in Reserves, Consolidated and University Balance Sheets, Consolidated Cash Flow 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 2018 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.

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

We have been appointed as auditor under the Education Reform Act 1988 and report in accordance with regulations made under that 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.

The Council are responsible for the other information.

The other information comprises the information included in the annual report set out on pages 1 to 31, other than the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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.

Who we are reporting to

We have nothing to report in this regard.

Basis for opinion

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. Our audit work has been undertaken

32

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 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.

Buckinghamshire New University Financial Statements 2017-18

Report of the Independent Auditors to the Council of Buckinghamshire New University (continued) Opinion on other matters prescribed by the Office for Student’s (‘OfS’) Terms and conditions of funding for higher education institutions (issued March 2018) and the OfS’s accounts direction (issued July 2018)

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

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, the OfS have been applied in accordance with the relevant terms and conditions, and any other terms and conditions attached to them, and

Grant Thornton UK LLP Statutory Auditor, Chartered Accountants London 1 December 2018

• the requirements of the OfS’s accounts direction (issued June 2018) have been met.

Responsibilities of the Council for the financial statements As explained more fully in the Statement of Responsibilities of the Council set out on pages 30 to 31, 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.

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.

33

Buckinghamshire New University Financial Statements 2017-18

Consolidated Statement of Comprehensive Income and Expenditure Year Ended 31 July 2018 Year ended 31 July 2018 Notes Consolidated University £'000 £'000

Year ended 31 July 2017 Consolidated University £'000 £'000

Income Tuition fees and education contracts Funding body grants Research grants and contracts Other income Investment income

1 2 3 4 5

42,926 4,688 727 8,865 129

42,926 4,688 727 7,102 128

46,905 5,032 620 9,247 107

46,905 5,032 620 7,386 107

57,335

55,571

61,911

60,050

6 7 7 10&11 8

30,694 212 20,678 4,463 2,628

29,834 212 19,804 4,416 2,628

33,152 1,552 22,978 4,436 2,607

32,472 1,552 21,825 4,390 2,607

7

58,675

56,894

64,725

62,846

(1,340)

(1,323)

(2,814)

(2,796)

220 (759) (2,573)

220 (2,573)

3,580 (828) (1,360)

3,580 (1,360)

(4,452)

(3,676)

(1,422)

(576)

-

-

(4,452)

(3,676)

(1,422)

(576)

9,157

9,157

3,602

3,602

4,705

5,481

2,180

3,026

7 4,770 (72) 4,705

7 5,546 (72) 5,481

(198) 2,450 (72) 2,180

(198) 3,296 (72) 3,026

Total income Expenditure Staff costs Fundamental restructuring costs Other operating expenses Depreciation Interest and other finance costs Total expenditure Deficit before other gains losses and share of operating deficit of joint ventures and associates.

Gain on disposal of fixed assets Share of operating deficit in joint venture Impairment of long term debtor

13 15

Deficit before tax Taxation

9

Deficit for the year Actuarial gain in respect of pension schemes Total comprehensive income for the year Represented by: Restricted comprehensive income for the year Unrestricted comprehensive income for the year Revaluation reserve comprehensive income for the year Attributable to the University

26

-

-

All items of income and expenditure relate to continuing activities.

Accompanying notes and policies on pages 38 to 60 form part of these financial statements.

34 | 31

Buckinghamshire New University Financial Statements Buckinghamshire New2017-18 University Financial Statements 2017-18

Consolidated and University Statement of Changes in Reserves

Year Ended 31 July 2018

Consolidated

Income and expenditure account Restricted Unrestrict £'000 £'000

Revaluation reserve

Total

£'000

£'000

4,553

18,093

Balance at 1 August 2016

204

13,336

Deficit from the income and expenditure statement Other comprehensive income Transfers between revaluation and income and expenditure reserve Release of restricted funds spent in year

(198)

(1,422) 3,602 72 198

(72) -

(1,422) 3,602 -

Total comprehensive income for the year

(198)

2,450

(72)

2,180

Balance at 1 August 2017

6

15,786

(Deficit)/ surplus from the income and expenditure statement Other comprehensive income Transfers between revaluation and income and expenditure reserve Received of restricted funds in year

7

(4,452) 9,157 72 (7)

(72) -

(4,452) 9,157 -

Total comprehensive income for the year

7

4,770

(72)

4,705

13

20,556

4,409

Income and expenditure account Restricted Unrestrict £'000 £'000

Revaluation reserve

Balance at 31 July 2018

University

13,590

4,481

20,273

24,978

Total

£'000

£'000

4,553

18,347

Balance at 1 August 2016

204

Deficit from the income and expenditure statement Other comprehensive income Transfers between revaluation and income and expenditure reserve Release of restricted funds spent in year

(198)

(576) 3,602 72 198

(72) -

(576) 3,602 -

Total comprehensive income for the year

(198)

3,296

(72)

3,026

Balance at 1 August 2017

6

16,886

(Deficit)/ surplus from the income and expenditure statement Other comprehensive income Transfers between revaluation and income and expenditure reserve Received of restricted funds in year

7

(3,676) 9,157 72 (7)

(72) -

(3,676) 9,157 -

Total comprehensive income for the year

7

5,546

(72)

5,481

13

22,432

Balance at 31 July 2018

4,481

4,409

21,373

26,854

Accompanying notes and policies on pages 38 to 60 form part of these financial statements.

35 | 32

Buckinghamshire New University Financial Statements 2017-18

Consolidated and University Balance Sheet as at 31 July 2018 As at 31 July 2018 Notes

Consolidated £'000

As at 31 July 2017

University £'000

Restated Consolidated £'000

Restated University £'000

Non-current assets Intangible assets Fixed assets Investments

10 11 12

2,519 80,367 82,886

2,519 79,288 1,036 82,843

1,726 84,251 85,977

1,726 83,133 1,036 85,895

Current assets Stock Trade and other receivables Investments Cash and cash equivalents

14 15 16 21

20 5,620 3,000 20,621 29,261

5,895 3,000 19,972 28,867

16 7,523 23,146 30,685

7,686 22,591 30,277

Less: Creditors: amounts falling due within one year

17

(10,680)

(10,735)

(36,497)

(36,516)

18,581

18,132

(5,812)

(6,239)

101,467

100,975

80,165

79,656

18

(31,924)

(29,556)

(9,330)

(7,721)

19 & 26

(44,565)

(44,565)

(50,562)

(50,562)

24,978

26,854

20,273

21,373

13

13

6

6

20,556 4,409 24,965

22,432 4,409 26,841

15,786 4,481 20,267

16,886 4,481 21,367

24,978

26,854

20,273

21,373

Net current assets/(liabilities) Total assets less current liabilities 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 Revaluation reserve Total Reserves

20

Accompanying notes and policies on pages 38 to 60 form part of these financial statements.

Restated to separate our intangible assets from fixed assets.

The financial statements were approved by the Governing Body on 19 November 2018 and were signed on its behalf on 1 December 2018 Nick Braisby Acting Vice-Chancellor

Dr Michael Hipkins Chair of Council

36

Buckinghamshire New University New University FinancialBuckinghamshire Statements 2017-18

Financial Statements 2017-18

Consolidated Statement of Cash Flows Year Ended 31 July 2018 Year ended 31 July 2018 £'000

Year ended 31 July 2017 £'000

(4,452)

(1,422)

10 & 11 15 14 15 18 26 13

4,463 2,573 (4) 715 652 1,816 759

4,436 1,360 2 (2,892) 15 1,805 828

5 8

(129) 2,628 (220) (678) 8,123

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

232 562 (1,387) 129 (1,384) 120 (3,000) (4,728)

10,780 1,550 447 (1,539) 71 (2,028) (164) 9,117

(1,256) (21) (4,371) (272) (5,920)

(1,291) (6) (705) (265) (2,267)

(2,525)

9,275

23,146 20,621

13,871 23,146

Notes Cash flow from operating activities Deficit for the year Adjustment for non-cash items Depreciation Impairment loss on BEST Loan (Increase)/decrease in stock Decrease/ (increase) in debtors Increase 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 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 Increase in current investments

16

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 (Decrease)/increase 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

21 21

The University has taken advantage of the exemption under paragraph 1.12 of FRS102 for qualifying entities from preparing its own cash flow statement.

Accompanying notes and policies on pages 38 to 60 form part of these financial statements.

37

bucks.ac.uk 38

Statement of Principal Accounting Policies

Buckinghamshire New University Financial Statements 2017-18

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

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

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

Basis of preparation These financial statements have been prepared in accordance with the statement of recommended practice ‘SORP: Accounting for Further and Higher Education Institutions 2015’,the requirements of the OfS’s accounts direction (issued June 2018) and in accordance with the FRS 102 Accounting Standards. The University is a public benefit entity and therefore applies the relevant public benefit requirement of FRS102.

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

Going Concern The University’s forecasts and projections, taking account of reasonably possible changes in performance, show that the University will be able to operate within the level of its current facilities. The Council have a reasonable expectation that the University has adequate resources to continue in operational existence for the foreseeable future. The University prepares budgets and forecasts on an annual basis and operates an ongoing 5 year forecast sustainability review in line with OfS guidance. The going concern position of the University has been considered for a period of greater than 12 months from the date of approval of the Financial Statements. Detailed cash flow forecasts covering the same period have been prepared and the University is satisfied that it can meet its day to day working capital needs out of cash and liquid investments. The Council is not aware of any material uncertainties which would prevent the University from continuing as a going concern. The University therefore continues to adopt the going concern basis in preparing its financial statements.

Basis of consolidation The consolidated financial statements include the University and its subsidiaries for the financial year to 31 July 2018.

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. Intragroup transactions are eliminated on consolidation.

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.

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

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.

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.

39

bucks.ac.uk Grant funding The University has adopted the accrual model for government revenue grants.

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.

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.

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.

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.

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

40

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.

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.

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.

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.

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. Non-monetary 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.

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.

Buckinghamshire New University Financial Statements 2017-18

Defined Benefit Plan Defined benefit plans are postemployment 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.

Defined Contribution Plan A defined contribution plan is a postemployment 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 Consolidated Statement of Comprehensive Income and Expenditure in the periods during which services are rendered by employees.

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.

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.

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; • Finishes – 30 years; • 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. 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.

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.

Intangible fixed assets Intangible fixed assets are stated at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is provided to write off the cost or valuation less the estimated residual value of the intangible fixed assets by equal instalments over their useful economic life.

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 fair valuation method. 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.

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.

41

bucks.ac.uk Taxation 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.

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.

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

Cash and cash equivalents 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.

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

Short Term Investments Short term investments comprise bank deposits which are not repayable within 24 hours.

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

42

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

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

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.

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.

Finance Leases 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.

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.

Operating leases 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.

Borrowing costs

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

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

Agency arrangements

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

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

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.

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

Reserves Reserves are classified as restricted or unrestricted.

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.

Buckinghamshire New University Financial Statements 2017-18

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

Buckinghamshire Education Skills and Training (BEST) The University holds a 50% share of Buckinghamshire Education Skills and Training (BEST), a company limited by guarantee without share capital. This is a joint venture company owned equally by the University and Bucks College Group. The arrangement is treated as a joint venture and is accounted for using the equity method, such that 50% of the company’s gross assets and liabilities are incorporated into the consolidated balance sheet of the University and 50% of its net income is reported in the University's consolidated income and expenditure account. In 2017-18 BEST made a loss of £1.5m. As a result the University has recognised a provision of £0.8m in the financial statements, the total provision held is £2.4m in 2017-18 (2016-17 £1.6m). Details are in notes 13 and 18.

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 Consolidated Statement of Comprehensive Income and Expenditure. During the year additional payments as part of the working capital loan agreement have been made to BEST. This brings the University share of the total loan balance outstanding to £3.93m (£2.55m in 2016-17). By 2025-26 the building at Aylesbury is expected to be operating close to 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 that forecast at the end of last year so as a prudent measure the management have made the decision to make an impairment adjustment in the accounts of £3.93m.

Accounting for Chiltern Student Village

Accounting for bad debt provisions

The University is a third member of Chiltern Student Villages Ltd (CSV), 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.

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 between 120 and 180 days overdue are provided for at 25%, 181 to 365 days overdue are provided at 50% and any greater than 365 days provided for at 100% unless there is an agreed payment plan in place.

During 2016-17 the University completed the sale of its student accommodation to CSV 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 the arrangements that exist above management have considered two key items in reviewing the application of appropriate accounting treatment:

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 between 120 and 180 days overdue are provided for at 25%, 181 to 365 days overdue are provided at 50% and any greater than 365 days provided for at 100%.

1. Whether or not the University has control over CSV – it is concluded that management has no control over CSV 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 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 such that this would never take place in practice.

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.

43

Buckinghamshire New University Financial Statements 2017-18

Notes to the Accounts

for the year ended 31 July 2018

1

2

Tuition fees and education contracts Full-time home and EU students Full-time international students Part-time students Education contracts Apprenticeship fee income

Funding body grants Recurrent grant Higher Education Funding Council for England Education and Skills Fundings Agency Specific grants Knowledge Exchange Funding Degree Apprenticeship Capital grants released in year

Year ended 31 July 2018 Consolidated University £'000 £'000 28,023 28,023 344 344 2,613 2,613 11,737 11,737 209 209 42,926 42,926

Year ended 31 July 2017 Consolidated University £'000 £'000 27,638 27,638 222 222 3,720 3,720 15,325 15,325 46,905 46,905

Year ended 31 July 2018 Consolidated University £'000 £'000

Year ended 31 July 2017 Consolidated University £'000 £'000

3,353 285

3,353 285

3,438 443

3,438 443

387 663 4,688

387 663 4,688

377 147 627 5,032

377 147 627 5,032

Grants from the Education Funding Agency and the Skills Funding Agency received in 2017 have been combined to provide the comparator for the Education and Skills Funding Agency which was formed from the two agencies.

Year ended 31 July 2018 Consolidated University

3

Research grants and contracts Research councils Research charities Government (UK and overseas) Industry and commerce Other

£'000 1 12 55 3 656 727

£'000 1 12 55 3 656 727

Year ended 31 July 2018 Consolidated University

4

Other income Residences and catering Missenden Abbey Conference Centre Student Union and Nurses Reimbursements Other income

£'000 4,968 1,833 513 1,551 8,865

£'000 4,858 513 1,731 7,102

Year ended 31 July 2018 Consolidated University

5

44

Investment income Other investment income

£'000 129 129

£'000 128 128

Year ended 31 July 2017 Consolidated University

£'000 3 617 620

£'000 3 617 620

Year ended 31 July 2017 Consolidated University

£'000 5,232 1,861 384 1,770 9,247

£'000 5,232 384 1,770 7,386

Year ended 31 July 2017 Consolidated University

£'000 107 107

£'000 107 107

| 43

Buckinghamshire New University Buckinghamshire New2017-18 University Financial Statements Financial Statements 2017-18

Notes to the Accounts for the year ended 31 July 2018

6

Staff Costs

Year ended 31 July 2018 Consolidated University £'000 £'000

Salaries Social security costs Movement on LGPS provision Movement on USS provision Other pension costs Total

22,676 2,344 1,816 (53) 3,911 30,694

Year ended 31 July 2017 Consolidated University £'000 £'000

21,887 2,296 1,816 (53) 3,888 29,834

24,951 2,532 1,888 (83) 3,864 33,152

24,297 2,497 1,888 (83) 3,873 32,472

Year ended 31 July 2018 £'000 205 34 239

Year ended 31 July 2017 £'000 202 33 235

Details of restructuring costs are set out in note 8.

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

A comparison of total pay using a bespoke benchmarking group of both post 92 HEIs and the 10 closest post-92 institutions by income the Vice Chancellor’s remuneration was 5% below the median rate of the post-92 HEIs and 8.8% below the median rate for post 92 institutions with similar income to the University.

Performance – The committee reviewed the performance of the Vice Chancellor against the previously discussed and agreed objectives and acknowledged that it had been a challenging year. A number of objectives were achieved during the year and as a result a 2% increase was approved in line with the general pay increase recommended for all roles within the University. The Vice Chancellor’s remuneration does not include performance-related payments.

The Vice-Chancellor, Professor Rebecca Bunting, will leave the University on 31 December 2018.

Pay ratio distribution – comparison of median all staff total salary compared to the total pay of the Vice Chancellor within the University. This was 5.78 compared to a sector average ratio of 7 for Higher Education Institutions in England using the salary data from HESA 2016/17 Remuneration ratio distribution – comparison of median all staff total remuneration compared to the total pay of the Vice Chancellor within the University. This is 6.11 in 2017/18 Remuneration of other higher paid staff, excluding employer's pension contributions undertaking business as usual activity:

£100,000 to £104,999 £105,000 to £109,999 £110,000 to £114,999

Number 1 1 2

Number 1 1 2

In 2017 remuneration after the impact of the 2016-17 voluntary severance scheme, excluding employer's pension contributions comprised the following: £100,000 to £104,999 3 staff; £110,000 to £114,999 1 staff; £115,000 to £120,000 1 staff; £135,000 to £139,999 1 staff; £140,000 to £144,999 1 staff.

Average staff numbers by major category : Academic Research Management & specialist Technical Other

Number 294 11 102 64 159 630

Number 313 14 119 42 187 675

45 | 44

Buckinghamshire New University Financial Statements 2017-18

Notes to the Accounts for the year ended 31 July 2018 6

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 includes 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 Education and the Finance Director. In 2016-17 the team also included the Pro Vice-Chancellor Research & Enterprise.

Key management personnel compensation

Year ended 31 July 2018 £'000 601

Year ended 31 July 2017 £'000 643

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 arms length and in accordance with the University's Financial Regulations and usual procurement procedures. In 2017-18 transactions of this nature totalled £0 (2016-17 nil).

No council member has received any remuneration/waived payments from the group during the year (2017 - none).

The total expenses paid to or on behalf of 4 council members was £510 (2017 - £4,059 to 8 council members). This represents travel and subsistence expenses incurred in attending Council, Committee meetings and Charity events in their official capacity.

7 Analysis of total expenditure by activity Academic and related expenditure Administration and central services Premises Residences, catering and conferences Research grants and contracts Depreciation Interest payable Other expenses Other operating expenses include: External auditors -Audit (excluding VAT) External auditors-non-audit (excluding VAT) Internal audit services (excluding VAT) Operating lease rentals Land and buildings Other Fundamental restructuring costs

Year ended 31 July 2018 Consolidated University £'000 £'000

Year ended 31 July 2017 Consolidated University £'000 £'000

30,527 8,920 4,711 4,037 750 4,463 2,628 2,639 58,675

30,527 8,916 4,711 2,312 750 4,416 2,628 2,634 56,894

35,839 8,090 4,383 4,088 531 4,436 2,607 4,751 64,725

35,839 8,090 4,383 2,697 531 4,390 2,607 4,309 62,846

47 8 41

37 8 41

44 1 46

35 1 46

3,463 5 3,468

3,463 5 3,468

3,076 6 3,082

3,186 6 3,192

212

212

1,552

1,552

During 2017-18 as part of the transformation programme the University completed minor restructure of the schools junior management in April 2018 and of the technical resources team in June 2018. The 2018 expenses reflect the cost of the severance and any associated pension strain.

46 | 45

Buckinghamshire University Buckinghamshire New New University Financial Statements Financial Statements2017-18 2017-18

Notes to the Accounts for the year ended 31 July 2018 Year ended 31 July 2018

8 Interest and other finance costs Loan interest Finance lease interest Net charge on pension scheme

Consolidated £'000

1,256 24 1,348 2,628

Year ended 31 July 2017

University £'000

1,256 24 1,348 2,628

Consolidated £'000

1,291 6 1,310 2,607

University £'000

1,291 6 1,310 2,607

9 Taxation As explained in the accounting policies, the University is potentially exempt from taxation because of its charitable status and no taxation on income or capital gains is payable for 2017-18 or 2016-17.

10 Intangible Fixed Assets Consolidated and University

Cost or valuation At 1 August 2017 Additions Transfers At 31 July 2018 Depreciation At 1 August 2017 Charge for the year At 31 July 2018

Restated Networked Application Software £'000 664 1,726 2,390

Restated Assets in the Course of Construction £'000 1,726 375 (1,726) 375

Restated Total £'000 1,726 1,039 2,765

246 246

-

246 246

Net book value At 31 July 2018

2,144

375

2,519

At 31 July 2017

-

1,726

1,726

| 46

47

Buckinghamshire New University Financial Statements 2017-18

Notes to the Accounts

for the year ended 31 July 2018 11 Fixed Assets Consolidated

Cost or valuation At 1 August 2017 Additions Transfers Disposals At 31 July 2018

Freehold Land and Buildings £'000

Leasehold Land and Buildings £'000

Fixtures, Fittings and Equipment £'000

Restated Assets in the Course of Construction £'000

Restated Total £'000

88,841 140 126 89,107

10,264 10,264

13,776 13 (135) 13,654

126 191 (126) 191

113,007 344 (135) 113,216

Depreciation At 1 August 2017 Charge for the year Disposals At 31 July 2018

17,703 2,404 20,107

2,141 195 2,336

8,912 1,618 (124) 10,406

-

28,756 4,217 (124) 32,849

Net book value At 31 July 2018

69,000

7,928

3,248

191

80,367

At 31 July 2017

71,138

8,123

4,864

126

84,251

University

Cost and valuation At 1 August 2017 Additions Transfers Disposals At 31 July 2018 Depreciation At 1 August 2017 Charge for the year Disposals At 31 July 2018 Net book value At 31 July 2018 At 31 July 2017

48

Freehold Land and Buildings £'000

Leasehold Land and Buildings £'000

Fixtures, Fittings and Equipment £'000

Restated Assets in the Course of Construction £'000

Restated Total £'000

87,368 140 126 87,634

10,264 10,264

13,275 13 (17) 13,271

126 185 (126) 185

111,033 338 (17) 111,354

17,284 2,381 19,665

2,140 195 2,335

8,476 1,596 (6) 10,066

-

27,900 4,172 (6) 32,066

67,969

7,929

3,205

185

79,288

70,084

8,124

4,799

126

83,133

At 31 July 2018, freehold land and buildings included £14.45m (2017 - £14.45m) in respect of freehold land and is not depreciated.

Included in the cost of fixed assets is aggregated interest capitalised of £2.6m (2017 - £2.6m) Group and University fixtures, fittings and equipment include assets held under finance leases as follows: Year ended 31 Year ended 31 July 2018 July 2017 £'000 £'000 Cost 1,376 1,376 Accumulated depreciation (468) (193) Charge for year (275) (275) Net book value 633 908 | 47

Buckinghamshire New University Financial Statements 2017-18

Buckinghamshire New University Financial Statements 2017-18

Notes to the Accounts

for the year ended 31 July 2018 12 Non-Current Investments Other non-current investments consist of :

University £'000

BCUC (Conferences) Limited Share Capital - Dormant BCUC (Conferences) Limited Provision for Loss - Dormant Missenden Abbey Limited

1,822 (886) 100 1,036

Within the capital and reserves of BCUC (Conferences) Limited is £628k of called up share capital in BCUC (Services) Limited.

13 Investment in joint venture and associate entities The University holds a 50% share of Buckinghamshire Education Skills and Training (BEST), a company limited by guarantee without share capital. This is a joint venture company owned equally by the University and Bucks College Group. The arrangement is treated as a joint venture and is accounted for using the equity method, such that 50% of the company’s gross assets and liabilities are incorporated into the consolidated balance sheet of the University and 50% of its net income is reported in the University's consolidated income and expenditure account.

Income and expenditure account

Year ended 31 July 2018 £'000 £'000

Year ended 31 July 2017 £'000 £'000

Income

124

56

Deficit before tax

759

828

Balance sheet Fixed assets Current assets

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

Share of net assets

9,969 10

10,041

9,979

(218) (12,129)

85 10,126 (449)

(12,347) (2,368)

(11,286) (11,735) (1,609)

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 2018 was nil (2017: £nil). Chiltern Student Villages Limited is a company limited by guarantee and has no shareholders and makes no distribution to its members. As such, in the year ended 31 July 2018 the University's share of the associate charitable company's result is nil (2017: £nil).

49

Buckinghamshire New University Financial Statements 2017-18

Notes to the Accounts for the year ended 31 July 2018 14 Stock

General consumables 15 Trade and other receivables

Amounts falling due within one year: Trade Receivables Prepayments and accrued income Amounts due from subsidiary companies Amounts falling due after more than one year: Loan to BEST Impairment of BEST Loan

Year ended 31 July 2018 Consolidated University £'000 £'000 20 20

-

Year ended 31 July 2018 Consolidated University £'000 £'000

Year ended 31 July 2017 Consolidated University £'000 £'000 16 16

-

Year ended 31 July 2017 Consolidated University £'000 £'000

3,388 2,232 -

2,987 2,198 710

4,067 2,270 -

3,923 2,246 331

3,933 (3,933) 5,620

3,933 (3,933) 5,895

2,546 (1,360) 7,523

2,546 (1,360) 7,686

Included within amounts falling due after more than one year is an amount of nil (2016-17 £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. This support is governed by a signed loan agreement and subject to interest which amounts to £67k (2016-17 £36k).

Included within the debtor amount above is a £3.93m (2016-17 £1.36m) impairment adjustment to provide against the risk of the non-payment of the loan.

16 Current Investments

Short term deposits

17 Creditors : amounts falling due within one year

Secured loans Reclassified secured loan Amounts due to subsidiary undertakings Deferred capital grants Obligations under finance leases Trade payables Social security and other taxation payable Accruals and deferred income Other creditors

Year ended 31 July 2018 Consolidated University £'000 £'000 3,000 3,000

3,000 3,000

Year ended 31 July 2018 Consolidated University £'000 £'000 603 733 484 1,551 666 6,117 526 10,680

603 314 733 484 1,456 660 5,974 511 10,735

Year ended 31 July 2017 Consolidated University £'000 £'000 -

-

Year ended 31 July 2017 Consolidated University £'000 £'000 4,406 22,907 709 272 292 101 7,807 3 36,497

4,406 22,907 309 709 272 282 13 7,618 36,516

The re-classified secured loan in 2017 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 required that the total borrowing had to be classified as a creditor less than 1 year. The loans were renegotiated in 2017-18 and further details are included in note 18.

50

| 49

Buckinghamshire New University Buckinghamshire New University Financial Statements 2017-18 Financial Statements 2017-18

Notes to the Accounts for the year ended 31 July 2018 17

Creditors : amounts falling due within one year (continued) Deferred income Included with 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 2018 Consolidated University £'000 £'000 Research grants received on account Grant income Other income

18

2,624 2,624

2,624 2,624

Year ended 31 July 2017 Consolidated University £'000 £'000 417 56 3,102 3,575

417 56 3,006 3,479

Creditors : amounts falling due after more than one year Year ended 31 July 2018 Consolidated University £'000 £'000 Deferred capital grants Obligations under finance lease Provision for BEST USS Pension Liability Secured loans

6,822 381 2,368 50 22,303 31,924

6,822 381 50 22,303 29,556

Year ended 31 July 2017 Consolidated University £'000 £'000 6,962 658 1,609 101 9,330

6,962 658 101 7,721

USS deficit The obligation to fund the past 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 USS scheme and salary payment over the period of the contracted obligation in assessing the value of this provision.

Lorem ipsum

The assumptions for calculating the provision for the obligation to fund the deficit for the USS scheme are: Discount rate Salary inflation Analysis of secured and unsecured loans:

Due within one year or on demand (Note 17)

Consolidated 2.16% 2.00%

Year ended 31 July 2018 Consolidated University £'000 £'000

Year ended 31 July 2017 Consolidated University £'000 £'000

603

603

27,313

27,313

Due between one and two years Due between two and five years Due in five years or more Due after more than one year

623 2,111 19,569 22,303

623 2,111 19,569 22,303

-

-

Total secured and unsecured loans

22,906

22,906

27,313

27,313

Secured loans repayable by 2039

22,906

22,906

27,313

27,313

22,906

22,906

27,313

27,313

Lender Barclays Bank

Amount £'000 22,906

Term 2039

Interest rate % 5.32

Borrower University

The University has a flexible facility with Barclays to drawn down up to £3.8m until November 2022 at a rate of LIBOR + 0.28%. There was no draw down against this facility at 31 July 2018.

51 | 50

Buckinghamshire New University Financial Statements 2017-18

Notes to the Accounts for the year ended 31 July 2018 19

Provisions for liabilities Consolidated and University

At 1 August 2017 Utilised in year Additions Unused amounts reversed in year At 31 July 2018

Defined Benefit

Total

Obligations (Note 24) £'000

Pensions Provisions £'000

50,562 (5,997) 44,565

50,562 (5,997) 44,565

Pension enhancement The assumptions for calculating the provision for pension enhancements on termination under FRS 102, are as follows: Consolidated 2.7% 1.5%

Discount rate Inflation 20

Restricted Reserves Consolidated reserves with restrictions represent scholarships and bursaries and are as follows:

21

2018 Total £'000

2017 Total £'000

Balances at 1 August 2017

6

204

Received/(Payment) from donations

7

(198)

At 31 July 2018

13

6

Cash and cash equivalents At 1 August 2017 £'000 Consolidated Cash and cash equivalents

University Cash and cash equivalents

Cash Flows £'000

At 31 July 2018 £'000

23,146

(2,525)

20,621

23,146

(2,525)

20,621

22,591

(2,619)

19,972

22,591

(2,619)

19,972

52 | 51

Buckinghamshire New University Financial Statements 2017-18 Buckinghamshire New University Financial Statements 2017-18

Notes to the Accounts for the year ended 31 July 2018 22 Capital and other commitments Provision has not been made for the following capital commitments: 31 July 2018 Consolidated University £'000 £'000 Commitments contracted for

2,085 2,085

2,085 2,085

31 July 2017 Consolidated University £'000 £'000 1,073 1,073

1,073 1,073

These commitments include the implementation of a new U4 Student Management System and CRM system.

23 Lease obligations Total rentals payable under operating leases: 31 July 2018 Land and Plant and Buildings Machinery £'000 £'000 Payable during the year Future minimum lease payments due: Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years Total lease payments due

3,445

50

31 July 2018 Total

31 July 2017 Total

£'000

£'000

3,495

3,238

3,535

54

3,589

3,495

14,449 78,923 96,907

34 88

14,483 78,923 96,995

14,740 82,248 100,483

Total rentals payable under finance leases: 31 July 2018 £'000 279

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

31 July 2017 £'000 272

287

279

87 653

374 925

24 Contingent liabilities There were no contingent liabilities as at 31 July 2018 or 31 July 2017.

25 Subsidiary undertakings The subsidiary companies (all of which are registered in England & Wales), wholly-owned or effectively controlled by the University, are as follows: Company Missenden Abbey Limited

Principal Activity A hotel and management training complex

Status 100% owned

BCUC (Conferences) Limited

Dormant

100% owned

BCUC (Services) Limited

The operation of a lecture theatre complex

100% owned

Thames Valley Training & Development Ltd

Dormant

100% owned

53 | 52

26 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 Teachers’ 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 2017-18; the contribution rates for 2018-19 for each band remain the same, the salary bands will increase in line with the change in the Consumer Prices Index.

Employer contributions remain static at 16.40%, with a charge equivalent to 0.08% of their pensionable salary costs to cover administration expenses. Pension payments were reviewed in accordance with the Scheme regulations, and were increased by 1.0% from 10 April 2017 (2016-17: 0.0% increase).

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. The Department is currently undertaking a project to define the administration model post September 2021.

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 2016, with an approximate update to 31 March 2018 to reflect known changes. The principle financial assumptions used are set out in the table below:

Assumption

31 March 2018

31 March 2017

Rate of return (discount rate)

2.55%

2.80%

Rate of earnings increases

3.95%

4.55%

Rate of future pension increases

2.45%

2.55%

0.10%

0.24%

(1.35)%

(1.67)%

n/a

n/a

Rate of return in excess of: Pension increases (CPI) Earnings increases Expected return on assets

54

Buckinghamshire New University Financial Statements 2017-18

Note 26 continued 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 is £1,865,857 in 2017-18 (2016-17: £2,059,169).

Universities Superannuation Scheme (USS) The institution participates in the Universities Superannuation Scheme (the scheme). The scheme is a hybrid pension scheme, providing defined benefits (for all members), as well as defined contribution benefits. The assets of the scheme are held in a separate trustee-administered fund.

Because of the mutual nature of the scheme, the assets are not attributed 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 wholly 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 £53,436 (2017 £83,068 write back) as shown in note 6.

The latest available full actuarial valuation of the Retirement Income Builder section of the scheme was at 31 March 2014 which was carried out using the projected unit method. The valuation as at 31 March 2017 is underway but not yet completed.

Since the institution cannot identify its share of Retirement Investment Builder section of the 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. These figures will be revised once the 2017 Scheme Valuation is complete.

Defined benefit liability numbers for the scheme have been produced using the following assumptions:

Discount rate

2018

2017

2.64%

2.57%

n/a

n/a

2.02%

2.41%

Pensionable salary growth Pension increases (CPI)

The main demographic assumption used relates to the mortality assumptions. These assumptions have been updated for the 31 March 2018 accounting position, based on updated analysis of the Scheme’s experience carried out as part of the 2017 actuarial valuation. The mortality assumptions used in these figures are as follows:

Mortality base table

2018

2017

Pre-retirement: 71% of AMC00 (curation 0) for males and 112% of AFC00 (duration 0) for females.

98% of SAPS S1NA ‘light YOB unadjusted for males.

Post retirement:

99% of SAPS S1NA ‘light’ YOB with a -1 year adjustment for females.

96.5% of SAPS S1NMA ‘light; for males and 101.3% of RFV00 for females.

Future improvements to mortality

CMI_2016 with a smoothing parameter of 8.5 and a long term improvement rate of 1.8% pa for males and 1.6% for females.

CMI_2014 with a long term rate of 1.5% pa.

55

Note 26 continued The current life expectancies on retirement at age 65 are: 2018

2017

Males currently aged 65 (years)

24.5

24.4

Females currently aged 65 (years)

26.0

26.6

Males currently aged 45 (years)

26.5

26.5

Females currently aged 45 (years)

27.8

29.0

2018

2017

Scheme assets

£63.6bn

£60.0bn

Total scheme liabilities

£72.0bn

£77.5bn

£8.4bn

£17.5bn

88%

77%

FRS 102 total scheme deficit FRS 102 total funding level

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 Percent of payroll Plus monetary amount (£000s)

1 April 2017

1 April 2018

1 April 2019

14.5%

14.5%

14.5%

631

646

662

To assess the value of the Employer’s liabilities at 31 July 2018, 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 2018 is £63.195m (31 Jul 2017 £60.458m) 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 (2017: £164,000) 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.

56

Buckinghamshire New University Financial Statements 2017-18

Note 26 continued Assumptions used in calculating the schemes liabilities under FRS102 Financial assumptions The financial assumptions used to calculate the results are in the table below.

2018

2017

2016

2015

2014

Salary increases

3.85%

4.2%

Pension increases

2.35%

2.7%

4.0%

4.4%

4.5%

2.2%

2.6%

2.7%

Discount rate applied to scheme liabilities

2.65%

2.7%

2.6%

3.8%

4.3%

These assumptions are set with reference to market conditions at 31 July 2018.

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.

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: 2018

2017

2016

2015

2014

Retiring in 20 years: Males

26.3

26.1

26.1

26.0

25.8

Females

28.4

28.3

28.5

28.4

28.3

Males

24.0

23.9

23.8

23.7

23.6

Females

26.1

26.0

26.2

26.1

26.0

Retiring Today:

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 2018 is estimated to be 6%. 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%.

The estimated asset allocation for Buckinghamshire New University College as at 31 July 2018 is as follows: Asset breakdown

31 Jul 2018

31 Jul 2018

31 Jul 2017

31 Jul 2017

£'000s

%

£'000s

%

1,357

2%

5,876

10%

Equities

33,217

53%

33,765

56%

Other Bonds

14,620

23%

7,875

13%

4,771

7%

4,460

7%

Gilts

Property Cash

2,941

5%

2,069

3%

Alternative Assets

6,289

10%

660

1%

Hedge Funds

-

n/a

2,853

5%

Absolute Return Portfolio

-

n/a

2,900

5%

63,195

100%

60,458

100%

Total

57

Note 26 continued Re-measurements in other comprehensive income: Re-measurement of the net assets/ (defined liability)

Return on Fund assets in excess of interest Other actuarial gains/(losses) on assets

Year to 31 Jul 2018

Year to 31 Jul 2017

£'000

£'000

2,232

5,811

-

978

6,925

(7,258)

Change in demographic assumptions

-

869

Experience gain/(loss) on defined benefit obligation

-

3,202

Changes in effect of asset ceiling

-

-

9,157

3,602

Change in financial assumptions

Re-measurement of the net assets/ (defined liability)

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:

Service cost Administration expenses

Year to 31 Jul 2018

Year to 31 Jul 2017

£'000

£'000

(3,856)

(3,588)

(56)

(41)

Net interest on the defined liability

(1,344)

(1,303)

Total Loss

(5,256)

(4,932)

Year to 31 Jul 2018

Year to 31 July 2017

Negative figures represent costs to the University Movement in net pension liability during the year:

Deficit in scheme at beginning of year Current service costs Employer contributions paid Unfunded pension payments Other finance costs Settlements/curtailments Administration Expenses Remeasurement of the net assets/ (defined liability) Net pension liability at end of year

58

£'000

£'000

(50,562)

(50,973)

(3,572)

(3,588)

1,932

1,577

164

164

(1,344)

(1,303)

(284)

-

(56)

(41)

9,157

3,602

(44,565)

(50,562)

Buckinghamshire New University Financial Statements 2017-18

Note 26 continued Reconciliation of the movement of the present value of the defined benefit obligation: Year to 31 Jul 2018

Year to 31 Jul 2017

£'000

£'000

Opening defined benefit obligation

(111,020)

(102,934)

Current service costs

(3,572)

(3,588)

Interest cost

(2,962)

(2,659)

6,925

(7,258)

Change in financial assumptions Change in demographic assumptions

-

869

Experience loss/(gain) on defined benefit obligation

-

3,202

Estimated benefits paid (net of transfers in)

3,610

1,887

Past service costs, including curtailments

(284)

-

Contributions by scheme participants

(621)

(703)

164

164

(107,760)

(111,020)

Year to 31 Jul 2018

Year to 31 Jul 2017

Unfunded pension payments Closing defined benefit obligation Analysis of the movement in the fair value of scheme assets:

£'000

£'000

60,458

51,961

Interest on assets

1,618

1,356

Return on assets less interest

2,232

5,811

Opening fair value of scheme assets

Other actuarial gains/(losses) Administration expenses Contributions by employer including unfunded Contributions by scheme participants and other employers

-

978

(56)

(41)

2,096

1,741

621

703

Estimated benefits paid plus unfunded net of transfers in

(3,774)

(2,051)

Closing fair value of Scheme assets

63,195

60,458

History of experience gains and losses: 2018

2017

2016

2015

2014

£'000

£'000

£'000

£'000

£'000

107,760

111,020

102,934

83,372

73,150

63,195

60,458

51,961

46,413

41,872

(44,565)

(50,562)

(50,973)

(36,959)

(31,278)

Experience adjustments on scheme liabilities

-

3,202

226

-

3,653

Experience adjustments on scheme assets

-

-

-

1,412

(990)

Present value of scheme liabilities Fair value of scheme assets Net liability in balance sheet

The employer contributions to the scheme for the year to 31 July 2018 is £2,096,000.

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Note 26 continued Sensitivity Analysis The following table sets out a sensitivity analysis on the major assumptions which have been used in the above calculations:

Sensitivity Analysis Adjustment to discount rate: Present value of scheme liabilities Projected service cost Adjustment to long term salary increase: Present value of total obligation Projected service cost Adjustment to pension increases and deferred revaluation Present value of total obligation Projected service cost

£000s

£000s

£000s

+0.1%

0.0%

-0.1%

105,551

107,760

110,016

3,257

3,338

3,422

+0.1%

0.0%

-0.1%

107,949

107,760

107,571

3,338

3,338

3,338

+0.1%

0.0%

-0.1%

109,831

107,760

105,731

3,422

3,338

3,256

Adjustment to life expectancy assumptions

+1 Year

None

-1 Year

Present value of total obligation

111,726

107,760

103,939

3,444

3,338

3,235

Projected service cost

On 26 October 2018 the High Court ruled that Guaranteed Minimum Pensions (GMPs) must be equalised between men and women and that past underpayments must be corrected. HM Treasury have confirmed that the judgement does not impact on the current method used to achieve equalisation and indexation in public service pension schemes. As this is very early stages there is no information as to the exact effect on the deficit.

27 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 are 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.

The Buckinghamshire New University Students’ Union is an independent organisation largely funded by the University. During the 2017-18 financial year the Union was in receipt of £1.45m (2016-17 £1.58m) of grant funding from the University. At the 31 July 2018, the University had a creditor with the Students’ Union of £2,228 and a debtor of £67,390.

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Buckinghamshire New University Financial Statements 2017-18

Board of Governors and Advisors University Council 2018 Independent & Co-opted Council Members Dr Michael Hipkins Independent Chair Jenny Newton Independent Deputy Chair to 31 July 2018 Gurdeep Chadha Independent Baljit Dhillon Independent Dr Maggie James Independent Irene Kirkman Independent (Deputy Chair from 1 August 2018) 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 Anna Crabtree Independent Appointed 1 August 2017 Steve Jordan

Co-opted Specialist to Audit Committee

Renewed 1 August 2018 for 1 year

University Council Members Rebecca Bunting Vice-Chancellor Leaving December 2018 Cheryl Pitt

Elected Academic Staff

Appointed 10 October 2017

Sue West Elected Senate Member Resigned 28 February 2018 Vacant (At year End)

Elected Senate Member

Phillip Wood MBE

Elected Senate Member

Joanna Boardman

Elected Professional Services Employee

Appointed 1 August 2018

Ben Parmar

President, Students’ Union

Resigned 30 June 2018

Lauren O’Shea

President, Students’ Union

Appointed 1 July 2018

Senior Management Team - Current Rebecca Bunting Vice-Chancellor Leaving December 2018 Nick Braisby Deputy Vice-Chancellor Appointed 4 September 2017 Acting Vice- Chancellor and accountable officer 1 December 2018

Sean Mackney Pro Vice-Chancellor (Research, Enterprise and External Relations) Rod Mercer Director of Finance

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Key Advisers Bankers External Auditors Internal Auditors Lawyers

Barclays Bank PLC Grant Thornton UK LLP Kingston City Group Limited Mills and Reeve LLP

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 the Office for Students.

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 upon Thames KT2 7LB Mills & Reeve Monument Place 24 Monument Street London EC3R 8AJ

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