Combat Stress Annual Report and Accounts 2016 by Combat Stress

Annual Report and Accounts 2016 Ex-Services Mental Welfare Society Company registered in England and Wales No 256353, Charity No 206002, Charity Scotland No SC038828

Painting is one of the many activities veterans can enjoy as part of occupational therapy. This piece of artwork was painted by Vince, a veteran who undertook a residential treatment programme at our Surrey treatment centre 2

Our year in numbers Our funding Voluntary income is the main source of our funding. In our last ﬁnancial year this came to a total of

£7.5M

Where does the money go?

How many we help

6,000 MORE THAN 6,000 VETERANS ARE REGISTERED WITH US FOR SUPPORT

10,000

OVER THE PAST FIVE YEARS WE HAVE HAD ALMOST 10,000 REFERRALS (2,472 IN THE LAST YEAR)

FOR EVERY £1 WE SPEND:

83p 15p 2p

is spent on veteran treatment and support

9,572

OUR 24-HOUR HELPLINE WAS CONTACTED 9,572 TIMES DURING THE YEAR

is spent on fundraising is spent on raising awareness and improving access

Veterans from recent conflicts are seeking help earlier AFGHANISTAN VETERANS on average seek treatment 2.1 years after leaving service

FOR EVERY £1 WE SPEND ON FUNDRAISING, WE RAISE £3

IRAQ VETERANS on average seek treatment 4.4 years after leaving service

OTHER CONFLICTS VETERANS the average is 12 years

WE ARE CURRENTLY SUPPORTING 1,317 VETERANS OF THE AFGHANISTAN CONFLICT AND 1,486 FROM THE IRAQ CONFLICT. 1,061 VETERANS WERE DISCHARGED DURING 2015/16

PTSD Intensive Treatment Programme (ITP) those 94% ofundertaking

our PTSD ITP complete it (comparable programmes in the USA have only a 66% completion rate) veterans who 87% ofcompleted our

PTSD ITP saw a reduction in their PTSD symptoms*

Raising awareness OVER 1,000 PIECES OF MEDIA COVERAGE THIS YEAR 60,000 ‘LIKES’ ON FACEBOOK (up 28%) 33,572 TWITTER FOLLOWERS (up 34%) 1,624 LINKEDIN FOLLOWERS (UP 57%)

* Refers to a one year follow-up study of veterans who completed the PTSD ITP between 2012 and 2014.

Contents Page 5

Introduction from our Chief Executive

Page 6

Introduction from our Chair of Trustees

Page 7

Vision, Mission, Values and Aims

Page 8

Strategic Report

Page 9

Developing integrated community, outpatient and inpatient services

Page 14 Improving the evidence base of therapeutic practice Page 17

Sustaining our financial base

Page 33 Auditor’s Report Page 33 Independent auditor’s report to the Members Page 34 Financial Statements Page 34 Consolidated Statement of Financial Activities Page 35 Consolidated and Charity Balance Sheets Page 36 Consolidated Cash Flow Statement Page 37 Notes to the Financial Statements

Page 55 Legal and Administrative Information

Page 20 Developing an appropriate brand and image culture to deliver excellence Page 22 Future plans Page 27 Financial review Page 29 Principal risks and uncertainties Page 30 Our employees Page 30 Public benefit, policies and governance Page 32 Statement of Trustees’ responsibilities

“Phoning Combat Stress was the best thing I ever did - it changed my life around.” Reservist Christopher who received treatment from Combat Stress

Introduction

Sue Freeth, Chief Executive

As the ďŹ rst female Chief Executive of Combat Stress, I am incredibly proud to have the responsibility for leading the organisation and reporting our results for the year 2015/16. We are supporting veterans with complex mental health problems against a backdrop of political and economic uncertainty. Inside this report you will ďŹ nd an insight into our work and how we are improving the wellbeing of veterans with psychological injuries. Demand continues to grow and over the past ďŹ ve years we have had almost 10,000 veteran referrals. After more than a decade of war in Iraq and Afghanistan, we are seeing a growing number of younger veterans coming forward for assistance.

For the second year running, we have had to use our reserves to enable the charity to meet this increased demand. Since I joined Combat Stress in January 2016, we have increased the momentum to expand our fundraising and contracting income to meet this demand. We are also exploring further measures to generate a more flexible, responsive and viable delivery model to achieve a sustainable basis by 2017 and to return our reserves to a more comfortable level. Working together with our employees, the veterans we serve and through a growing number of partnerships, we will deliver a sustainable service for this group of veterans who so need our support.

Lieutenant General Andrew Graham CB CBE, Chair of Trustees

Five years ago, Combat Stress set out to make its services more accessible to veterans who need mental health treatment. We have made great progress in our strategic aims and we are very proud of what has been achieved. It is with considerable sadness that we report on the death of our former Chief Executive, Commodore Andrew Cameron, in the spring of 2016 after a long period of ill health. Andrew was appointed Chief Executive in 2011 and retired in summer 2015, after four years of dedicated service to Combat Stress. Andrew continued the development of our community presence to help improve access for veterans to our services â&#x20AC;&#x201C; for example with the introduction of our 24-hour Helpline and services in the local community. 6

I would like to take this opportunity to thank Peter Poole for acting as interim Chief Executive before we welcomed Sue Freeth to this position in January 2016. Sue brings a wealth of charitable and veteran sector leadership experience to the position. The Combat Stress Trustees and I are committed to work with Sue and the senior leadership team to reduce costs and increase income to ensure that we can meet the future needs of an increasing number of veterans.

Vision, Mission, Values and Aims Our Vision That veterans will be able to live free from the harmful effects of psychological injuries.

Our Mission To provide timely, effective clinical treatment and welfare support to veterans who suffer from psychological injuries. To realise this we must: • • • •

Be accessible to those who need help Be expert at what we do and be recognised as such Work in partnership with others Raise awareness of veterans’ needs

Our Values • Putting veterans at the centre of our work • Aspiring to achieve excellence in everything we do • Fostering a culture of respect and integrity

Our Strategic Aims From 2012 to 2017 we are focused on the strategic aims below: 1. Developing integrated community, outpatient and inpatient services 2. Improving the evidence base of therapeutic practice 3. Sustaining our financial base 4. Developing an appropriate brand and image culture to deliver excellence

Through these aims we have developed our services to respond to the changing needs of veterans and increased demand for our help.

Strategic Report Review of 2015/16

Overview This year has seen a greater demand for our services with more veterans seeking help than ever before and a reduction in voluntary and other income which has resulted in a deficit for the year. This has forced us to use some of our reserves so we can meet the increased demand.

Veterans supported during the year We have seen a fourfold increase in the number of ex-service men and women seeking help for mental health conditions in the last 20 years. The length of time before veterans seek help after leaving the Services has reduced by 50%. At the end of March 2016, we had more than 6,000 veterans registered with us for support. Veterans from the Northern Ireland campaign remain the largest group but we are seeing an increase in the numbers who have served in Afghanistan and Iraq (34% and 24% increase on last year respectively). These veterans are approaching us for help two and four years respectively after leaving the military. We anticipate that numbers of veterans seeking help for mental health issues will continue to increase. To address the demand and make best use of the available funds, we have introduced new ways of working to improve accessibility, reduce waiting times and focus on recovery.

34%

The charity and the veterans we help are grateful for your support

increase in support on last year for veterans who served in Afghanistan

Developing integrated community, outpatient and inpatient services More veterans interact with us in the Community than through our residential treatment programmes. Our new Community Service model was launched on 1 October 2015 to reduce waiting times for accessing treatment and increasing our capacity. The new look Community Service has three main points of difference: Referrals and triage nurses Three referrals and triage nurses are now in place to liaise with veterans wishing to access help from Combat Stress. Through the new triage system, we have improved the first experience a veteran has when they contact us; simplified our registration process; reduced waiting times; and increased the number of contacts which convert into successful treatment. This has enabled us to reach more veterans more quickly so we can start treatment sooner and increase the likelihood of successful treatment outcomes.

â&#x20AC;&#x153;The main difference Iâ&#x20AC;&#x2122;ve noticed about the new way of working in the Community is the number of veterans I can see each day has increased. It really has made a huge difference to the number I am able to support.â&#x20AC;? Rebecca Hankins, Community Psychiatric Nurse

Community Team staff The focus and make-up of our 15 regional Community Teams have been changed to concentrate on assessing veterans and supporting their recovery. We have added an occupational therapist to each team to deliver the effective support and treatment veterans need. It is the first time occupational therapy has been incorporated into our Community programme.

Clare Giblett, one of our referrals and triage nurse co-ordinators

Community clinics We have partnered with The Royal British Legion in 2015/16 to use some of their Pop-In Centres for Community clinic appointments and group sessions. Additional sites are being located this year to offer more Community clinics closer to where veterans live. The Community review in our North Region will be completed in summer 2016.

Other developments National plan This year we have introduced a national programme to provide a consistent range of structured treatment programmes across the UK. This has enabled veterans to access a place on a programme more easily and rapidly (places are offered on the first available programme regardless of location). We have treated 430 veterans during the year on our PTSD Intensive Treatment, Anger Management and Stabilisation Programmes combined (an increase of 37% from last year).

37%

increase in veterans undertaking our residential treatment programmes* Our six-week PTSD Intensive Treatment Programme continues to perform well with a completion rate of 94%. We are primary Care Quality Commission registered and the National Health Service England PTSD specialist treatment provider for veterans. The funding for our PTSD Intensive Treatment Programme has been renewed by the NHS, with a contract for another year now in place. Community psychiatrists and psychologists Last year we introduced psychiatric outpatient clinics to some Community clinics to increase access for veterans to this kind of support. Previously psychiatrist appointments were only available at our treatment centre outpatient clinics. This year we plan to increase the locations where this is available. We are also piloting trauma-focused therapy in the Community. A psychologist in Northern Ireland is already in post and we plan to recruit more in the other nations within the UK. The pilot will help us review and understand the factors that determine the most beneficial method of treatment for veterans, either in the Community or in a residential setting.

94% Dr Manveer Kaur, Senior Clinical Psychologist 10

of veterans undertaking our PTSD Intensive Treatment Programme complete it

*Refers to our PTSD Intensive Treatment Programme, Anger Management Programme and Stabilisation Programme only

Veteran and supporter Stu. After getting support through our Helpline, Stu was able to get his life back on track

Substance Misuse Case Management Service A significant number of veterans with mental health issues are unable to effectively engage in treatment due to their misuse of drugs or alcohol. Our Substance Misuse Case Management Service is a first-ofits-kind project. Veterans with drug and alcohol problems find it hard to access mental health treatment so we have placed our specialist mental health nurses and practitioners in existing services and partnered with other organisations to ensure our service is highly visible to veterans. We now have relationships in place with organisations across the UK. Combat Stress’ specialist nurses and practitioners work closely with existing substance misuse services run by the NHS and charities. For the greatest access, our nurses are co-located in services which reach a large number of veterans. This includes an opiate-prescribing clinic in Glasgow, and a substance misuse service at Queen Alexandra’s Hospital in Portsmouth. Over the past year, we have received 253 referrals to the service, leading to 206 assessments being completed, and 88 veterans being discharged following successful treatment. Art Therapy In November 2015 the Art Therapy team was presented with a prestigious commendation at the Royal Society for Public Health’s Arts and Health Awards. In February, we piloted an Art Therapy two-week programme that provided group and individual sessions, as well as viewing exhibitions and participating in art workshops with staff at The Lightbox in Woking, Surrey. 12

A bid for research funding has been submitted for a joint project in conjunction with the British Association of Art Therapists and Canterbury Christ Church University to run and evaluate Art Therapyfocused interventions at our treatment centres. Helpline Our 24-hour Helpline continues to provide a vital service to veterans, their families and serving men and women. It is also a good signposting route to organisations other than ours who can support veterans. During 2015/16 our Helpline was contacted 9,572 times with evenings and nights particularly busy.

“The Helpline was a lifeline to me – there was always someone to talk to.” Stu, veteran and supporter On average our Helpline is contacted

797 times per month

Reserve Forces Liaison Team For the past five years the Reserve Forces Liaison Team has offered support and guidance about mental health, as it affects reservists, to the military chain of command. Reservists spend the majority of their time as civilian employees, often with organisations that know little about military service. With this in mind we have widened the work of the team to include that same support and guidance to civilian employers. Pilot Peer Support Programme Recognising how much veterans informally support each other, have a shared sense of respect and trust, and value support from their peers, we introduced a pilot Peer Support Programme in Scotland. In partnership with Mindspace College in Perth, three veterans who had completed their treatment at Hollybush House and been successfully discharged undertook a 26-week peer support worker training course.

treatment centre and Community staff. This has helped ensure we provide the best possible care and improve the veteransâ&#x20AC;&#x2122; experience whilst ensuring confidentiality and security of their records.

â&#x20AC;&#x153;I can see the difference I make by simply having a chat with someoneâ&#x20AC;? Tommy, veteran and Peer Support Worker

Equipped with the skills to help them recognise mental health issues in others, they now provide help and advice to other veterans during their recovery journey. The pilot has been a great success and we plan to extend and expand the Peer Support Programme across Scotland and to the rest of the UK when funding is available. Patient Administration System During 2015/16 we completed the implementation of Carenotes, our new patient administration system. All clinical and welfare teams have been trained in the use of the system and digital patient records are now accessible by approved

Veteran and Peer Support Worker Tommy 13

Improving the evidence base of therapeutic practice Research is vital to help us deliver the most effective clinical services and over the past year we have continued to evaluate treatment outcomes and collect information on veterans with PTSD. The appointment of Kingâ&#x20AC;&#x2122;s College Senior Clinical Lecturer Dr Dominic Murphy as research lead at Combat Stress in 2014 has significantly enhanced our ability to publish quality, peer-reviewed papers, evidenced by the volume and quality of our research output. We use the latest standard psychometric measures to assess mental health and wellbeing outcomes. The measures are central to ensuring that we are providing the highest standard of mental health treatment. Nine different research papers have been submitted for publication this year, providing significant insight into our veterans and their clinical needs as well as treatment outcomes.

9 research papers submitted for publication this year

Examples from our research work in the last year include: 20-year referral paper This landmark publication1 explored patterns of referrals over a 20-year period to our treatment centres from veterans who had been deployed to a range of conflicts including Iraq, Afghanistan, the Falklands, the First Gulf War and Northern Ireland. This research showed the time that veterans took to contact us for help more than halved from 24 years in 1994 to just under 12 years in 2014. The sharpest increase in demand for treatment came from those who were deployed in Iraq and Afghanistan, who seek help four and two years respectively after leaving the Armed Forces. Developing our knowledge of referral patterns helps us to project the number of veterans who are likely to come forward for assistance in the coming years. Traumatic Brain Injury study In the first study of its kind in the UK, research2 found the rate of Traumatic Brain Injury amongst veterans seeking help for mental health conditions was unexpectedly high. The research, conducted jointly by Combat Stress and The Disabilities Trust Foundation, explored the link between brain injury and mental health conditions, observing significant associations between reporting a brain injury and suffering from depression and problems with anger. In response, a pioneering new pilot project has been launched to provide community-based support to veterans with brain injuries. The results of this project will be published next year and used to help us to develop our clinical services for veterans with brain injuries.

published in International Journal of Emergency Mental Health and Human Resilience 17 (3), 652 â&#x20AC;&#x201C; 658 2

published in Psychology Research, 11 (5)

Veteran Don who received our help after tours of duty in Northern Ireland, Kuwait, Iraq and Bosnia

Predictor paper This research3 analysed outcomes from the six-week residential PTSD Intensive Treatment Programme to assess which veterans achieve the most from the programme. With this understanding we plan to further explore the possibility of delivering some of the programme for some veterans through our Community Service to enable us to use our residential treatment centres for those veterans who need them most. Our research programme has helped us to better understand the needs of our veterans. Results have been used to further develop and improve our clinical treatment programmes to ensure we deliver the best and most appropriate help to veterans with mental health conditions.

â&#x20AC;&#x153;The involvement of the British Army in the Northern Ireland conflict was the UKâ&#x20AC;&#x2122;s largest military commitment since the Second World War and much of this was frontline action. As a result we still expect many more Northern Ireland veterans to seek help from us.â&#x20AC;? Dr Walter Busuttil, Director of Medical Services, Combat Stress

published in Psychology Research 2015;8 (5), 441-451

Supporter Charlie Johnston after running the London Marathon â&#x20AC;&#x201C; one of the many events where our supporters raise vital funds 16

Sustaining our financial base 2015/16 was a difficult year generally for the voluntary sector with sharpened public, political and media scrutiny of charitable fundraising activity. We are confident that our procedures for contacting and engaging supporters reflect best practice and are in accordance with the regulations. Sue Freeth was appointed as Chief Executive in January 2016. She brings a wealth of charitable and veteran sector leadership experience. She was Director of Operations at The Royal British Legion (TRBL) for 11 years where she led the transformation of their welfare services, was a member of the MoD Defence Recovery Group and a lay member of the National Health Service England Armed Forces Clinical Reference Group. Robert Marsh also re-joined the charity as Director of Fundraising. Robert achieved significant increase in income generation and brand awareness during his tenure as Director of Fundraising between 2005 and 2011. Since his appointment in October 2015, he has strengthened the Fundraising Department with several new appointments including two new Trusts and Foundations Managers. We hugely value our supporters. This year we introduced a new ‘supporter promise’ to outline our commitments to them, the foundations on which we engage with them, and to provide reassurance about the way we work. We have also streamlined our communications to supporters and have reduced the frequency of our mailings while maintaining the level of voluntary income generated.

Our Christmas Appeal raised £169,000 including Gift Aid. During 2015/16 we launched a new major donor initiative to engage with high net worth individuals. The Benefactor programme already has 17 Benefactors, with three of these making multi-year commitments, vital in helping us to plan better for the future. So far the programme has raised over £132,000 including Gift Aid. Trusts and Foundations is our biggest voluntary funding stream and highlights from this year include: • £1.5m grant from The Royal British Legion. Split over three years, this grant funds occupational therapists in the Community for the first time. • £180,000 grant from Comic Relief. Split over two years, the grant funds our anti-stigma activity around mental health and enables our Communications Department to increase awareness of veterans’ mental health and the services we provide for veterans. • £150,000 funding from the Armed Forces Covenant Fund. This funding is split over three years and supports our delivery of Community Services in Northern Ireland.

£132,000 raised by our Benefactor programme

Our Festival of Carols helps raise valuable funds

We have continued to develop strong corporate partnerships. BAE Systems is our largest corporate supporter and we are very grateful for their commitment of £150,000 over three years to help fund the new patient administration system which launched in July 2015. Thales UK continued to work with us by sponsoring a second very popular and thought-provoking Military Mind Symposium. Last year we ran a successful programme of events. Our relationship with JSL Productions and the Battle Proms series continued – we remain the only charity supported at the five concerts. This year £45,000 was raised from bucket collections, merchandise sales and donations, the highest amount recorded in all the years we have been the charity partner. Hundreds of our supporters have also been running miles to raise money for us by taking part in 18

events like the London Marathon or the Marathon des Sables and this year the highest ever total of £163,000 was raised including Gift Aid. We have expanded the range of Combat Stress merchandise available through our online shop. Merchandise sales generated a £29,000 profit. The Communications Department has continued to raise our profile through advertising, PR and social media activity. Increased media and online coverage supported fundraising campaigns and raised awareness of Combat Stress and our services among target audiences including veterans, politicians and healthcare professionals. We have undertaken a significant amount of work to analyse the cost of our treatment programmes at a granular level to help inform contracts, future commissioning and funding bids.

In the interests of good governance, and to provide assurance on our internal controls, we have appointed RSM Risk Assurance Services LLP as our internal auditors. An internal audit strategic plan has now been approved which identifies a cycle of internal audit to be carried out covering all relevant areas over the coming five years.

£163,000 raised by hundreds of supporters running for us

This will give the Trustees and our donors assurance that all of our resources are being used effectively and efficiently. We have identified cost reductions in all areas of activity including: • Investment manager and pension administrator services were tendered during 2015/16 resulting in significant savings. • An energy savings investigation has identified possible savings of £50,000 per year.

£29,000 profit raised by merchandise sales

• We have also reduced costs on cleaning, mobile phones and printing.

Combat Stress at a Battle Proms concert 19

Developing an appropriate brand and image culture to deliver excellence Mental health has a growing national profile and we have concentrated on promoting our brand image and messages to key audiences so that we raise awareness of Combat Stress and veterans’ mental health. Since January 2016, the Communications Department has reported directly to the Chief Executive enabling the team to better support the work of all parts of the organisation. We have also brought a number of communications functions in-house to optimise the use of resources. TH E MAGA ZIN E OF TH E VE TE R ANS' M E NTAL H E ALTH CHARIT Y

COMBATSTRESS combatstress.org.uk

Spring 2016

TOP TIPS FOR FANTASTIC

Veteran Tommy Addison explains the beneﬁts of being a Peer Support Worker

FUNDRAISING

ROAD TO RECOVERY A Veteran tells his story on the difference Combat Stress has made to him

In June 2015 we held an employee conference, bringing together colleagues from treatment centres, Community Teams and Head Office. The aim was to engage, inspire and motivate our employees, bringing our values to the forefront of our work. We launched a new bi-annual publication in February 2016 Combat Stress Magazine. This replaces the former publications Combat Stress News and In Touch. The new magazine for supporters and veterans aims to be more engaging and personal with a focus on telling the stories of our veterans and supporters and showing the impact of our work and the vital services we provide. Combat Stress continues to be the first port of call for journalists seeking comment on the mental health of veterans. Senior managers and directors received media training to help them communicate and build a greater understanding of veterans’ mental health and the important work we do. Over the past year there has been substantial media coverage especially for our research paper publications including the 20-year referral paper. Media exposure is vital to help raise awareness of mental health and the services we provide for veterans.

WELCOME

MEET OUR NEW CHIEF EXECUTIVE OUT IN THE COMMUNITY

MIND OVER MATTER

A fresh approach to working with Veterans

Understanding mindfulness

FUNDRAISING

A MARATHON EFFORT

N E WS • S U P P O R T • F U N D R AI S I N G

Our new bi-annual publication 20

“I can’t emphasise enough how much of a difference their help has made to my life. It really was a lifesaver.” Veteran Greg who received treatment from Combat Stress and told his story in our magazine

In total over 1,000 pieces of media coverage were secured, with a reach of 122 million people. Coverage was generated in major media outlets such as BBC One (The One Show), ITV (Good Morning Britain), British Forces Broadcasting Service and Women’s Weekly. Our engagement rates on social media have also increased. During this financial year, Twitter followers increased to 33,572 (an increase of 34% on last year), Facebook ‘likes’ have increased to over 60,000 (an increase of 28%) and we had a 57% increase in LinkedIn followers. Following the general election, we contacted every MP to provide a comprehensive overview of our work to ensure new MPs were aware of the important role we play. We have also supported a number of MPs to lead House of Commons debates discussing services which aim to improve military mental health outcomes.

33,572 Twitter followers (an increase of 34%)

60,000 Facebook ‘likes’ (an increase of 28%)

57%

increase in LinkedIn followers

TV presenter Ore Oduba interviewing Carly, one of our veteran’s daughters, for BBC One’s ‘The One Show’

Future Plans In the coming year we will develop a new strategic plan to take us to our Centenary in 2019. We will use all the available published data on veterans’ needs to help shape our road map for the future. Our vision of veterans living free from the harmful effects of psychological injuries is unlikely to change but how we achieve it has to be under continuous review.

Developing integrated community, outpatient and inpatient services During the coming year we will continue to develop Carenotes, our patient administration system, rolling out a mobile tablet version so that employees working remotely and from The Royal British Legion hubs can access and add to digital clinical records in real time. Alongside this, and as part of our continued commitment to Information Governance, we are working to gain cyber security accreditation through the ‘Cyber Essentials’ scheme. We plan to undertake a review of our welfare service to reduce overlap with other organisations. The introduction of a female-only cohort for our PTSD Intensive Treatment Programme is being explored. A low number of women access our treatment programmes (versus the expected number) and we feel a female-only cohort may help increase attendance. We plan to evaluate our pilot Peer Support Programme to explore how to introduce this nationwide in 2016/17. 22

We are reviewing the future of our Helpline to provide a more efficient, reliable 24-hour service – a vital requirement in this time of increasing demand. We will review and resubmit a bid for extending funding for the Reserve Force Liaison Team as current funding ends in March 2017. We are collaborating with others on a bid for the ‘Veterans Gateway’ to provide a single information access point for veterans. As a member of Contact, the military mental health group, we are involved in the Royal Foundation’s ‘Heads Together’ campaign which seeks to change the conversation on mental health.

Improving the evidence base of therapeutic practice Our research will continue to focus on enhancing our understanding of our veterans in more detail. A study looking at the needs of veterans with PTSD is already underway. The results will help us to plan more accurately and offer specific services to certain groups. One particular area of focus is veterans seeking help who were involved in conflicts before the Gulf War – there is limited research about their needs yet they make up a substantial proportion of those we see. We expect to publish the findings from this research towards the end of 2016. We are undertaking a research project relating to Northern Ireland veterans. To date there has been only one study undertaken into the needs of veterans from this conflict still living in Northern Ireland. Our research will look to assess if this group has different needs and therefore requires a different clinical service.

A paper highlighting the rate of alcohol and drug misuse amongst veterans has been accepted for publication. Insights from this are being used to develop our Substance Misuse Case Management Service and will help inform the evidence base on veterans’ patterns of substance misuse and their use of medical services.

Sustaining our financial base We are taking active steps to increase our fundraising income alongside further measures to manage costs, with the objective to significantly reduce the deficit in 2016/17 and breaking even in 2017/18. We are reviewing all areas of our fundraising activity to ensure our future income exceeds our expenditure. Our aim is to restore our level of reserves to six months budgeted unrestricted expenditure (see reserves policy on page 31). At a national level we are submitting significant new bids to the Armed Forces Covenant Fund and ex-services organisations who recognise the increasing need for our services.

We plan to increase and develop our major donor programme by securing more Benefactors as well as developing opportunities for project-based funding for this supporter group. We have already put in place additional regional fundraising capacity to help veterans and supporters raise funds locally and to seek opportunities for funding from local community organisations. For Trusts and Foundations, our emphasis will be to cement relationships with existing funders whilst also increasing new approaches in order to meet our targets. We are introducing a new way of working with corporate partners to help optimise the relationship for all parties involved. Legacies are a valuable source of income for us and work has already started to refresh our legacy materials. We expect to introduce this within the first half of the 2016/17 financial year.

We will continue to develop our strategic partnerships with other military charities and companies to develop new ways of working together to support veterans on their recovery journey. Our own journey towards marking our Centenary in 2019 has already begun. We have started to engage with corporate supporters to help make this a spectacular fundraising event commemorating 100 years of our care for veterans. We plan to launch a Centenary Appeal in advance of 2019.

Combat Stress is proud to be involved in the Royal Foundation’s ‘Heads Together’ campaign

We plan to review our governance and the structure of our committees. We are also reviewing and revising the organisational Key Performance Indicators to provide us with a more effective suite of performance measures. Finally, we will implement a new Human Resources (HR) database to improve the efficiency of HR processes and the quality of HR data.

Developing an appropriate brand and image culture to deliver excellence Veterans’ mental health looks likely to become a major legacy issue of the conflicts and campaigns of the 20th and early 21st Centuries. We will maintain the progress made in raising the profile of veterans’ mental health, Combat Stress and the services we offer to veterans. We will continue to highlight the growing demand for our services and the issue of veterans’ mental health needs which are expected to continue to increase in the coming years. We will strengthen our digital presence through a redesigned website which will be more accessible and engaging for our supporters and veterans. Our aim is to establish a community of supporters, healthcare professionals, veterans and advocates committed to raising awareness of veterans’ mental health.

“I really can’t stress enough how amazing the Combat Stress team is. You have all helped one way or another to bring our family back together. You’ve all supported my dad through a really dark time and given him the opportunity to have a second chance at life.” Carly, daughter of veteran Don who received treatment from Combat Stress

Occupational Therapist Technician Tessa Lovett with a veteran

Two of our supporters running the British London 10k 26

Financial review In recent years we have invested considerable time and resources in transforming our services to deliver effective clinical treatment through which veterans have the best chance of regaining a fulfilling life for themselves and their families. As the leading UK charity dealing with veterans' mental health, we must do all we can to attract more income at a time when more veterans than ever before are seeking our help. To meet the increase in demand for our services, we have drawn on our reserves this year to fund some of our costs, resulting in a loss of ÂŁ4.4m. However, our results at the start of 2016/17 are beginning to show

and the online donations being received.

improvement. Our objective is to significantly reduce the deficit in 2016/17 and return to a break-even position by 2017/18.

In 2015/16 we achieved our treatment targets and we continue to work on how we can maximise our bed occupancy to absorb the increase in demand.

We have sufficient levels of retained reserves to see us through a temporary shortfall. However, this excess of expenditure over income is not a sustainable position in the longer term and we are taking active steps to increase our fundraising. We have increased our capacity to submit significant new bids for funding from grant providers. We are planning new events to provide more opportunities for building support from corporate and high net worth donors. We have increased our online presence on social media and this is already increasing awareness of the work we do

We are confident that our supporters, both new and existing, appreciate how important our services are to ex-members of the UK Armed Services. We are very grateful to our many donors and supporters and we know they will continue to work tirelessly in their fundraising efforts and dig deep to ensure our services will continue for many years to come.

Income and expenditure since 2006 ÂŁ000â&#x20AC;&#x2122;s 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000

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2,000

2016

Income

Expenditure

Voluntary income

Cost of generating funds

Activites for generating funds

Expenditure on charitable activities

Charitable activites

Capital expenditure

Other incoming resources

INCOMING RESOURCES Our total incoming resources for the year were £13.0m [2014/15: £15.0m]. The last two years have seen a decline in our income. We have built and improved our services to provide the most effective mental health treatment available to veterans in the UK, at a time when there is increasing demand and need for our services.

During 2015/16 we also experienced a fall in our statutory funding. The amount received from NHS England was £3.25m [2015: £2.71m]. We received £1.22m from NHS Scotland [2015: £1.22m]. The amount we received from the Ministry of Defence, through Veterans UK, was once again lower this year at £67k [2015: £658k]. Together with other sources of income this resulted in total income from clinical services of £4.8m compared with £5.2m in the previous year.

the years from 2010/11 to 2014/15 resulting from the ‘Enemy Within Appeal’, funding from the LIBOR fines and from the Poppies at the Tower of London installation. Unfortunately, these large sources of income have not been sustained in 2015/16 and we are actively looking at new ways to increase our income in order to meet the increased demand. We are appealing to new and existing donors to help us raise sufficient funds to cover the costs of our services.

We benefitted from a number of large grants and donations in

Group Income

7,000 6,011

6,000

2015/2016 2014/2015

5,503 5,200

5,000

4,791

4,000

3,000

1,862

2,000 1,372

1,000

589

759

579 288

Donations

Statutory Grants

RESOURCES EXPENDED Total resources expended for 2015/16 were £16.6m [2014/15: £17.0m] with 85% being spent on veteran treatment and support, raising awareness and improving access [2014/15: 84%]. The amount we are spending on our charitable activities has increased almost threefold over the last ten years from £5.2m in 2005/06 to £14.1m in 2015/16. We are providing more effective treatment to more veterans but it is costly to do so and requires high calibre, qualified clinical staff and we must compete with the 28

Legacies

Charitable Activities

Trading Activities

NHS and private health providers to attract new employees. The use of agency staff is increasing, not just for the NHS, but within all healthcare organisations due to staff shortages and difficulties in recruitment. We are working diligently to keep these agency costs to a minimum but there has been an increase in these costs in the last year. Our staff costs have also risen due to the increases in pension costs brought about by the auto-enrolment regulations. Staff costs now comprise 67.7% of our total costs [2014/15: 65.5%] as shown in Note 9 on page 45. We always strive to do more with less and we operate rigorous financial planning to be as efficient

447

547 53

Investment Income

Other Income

and effective with our resources as possible. We continue to review all of our costs to identify areas where there may be cost saving opportunities. During the year we carried out tender exercises which led to savings in investment management fees and pension administration costs. We also negotiated new contracts leading to savings in phone, printing and cleaning costs. We have protected the amount spent on raising funds as we believe it is vital to ensuring our future sustainability. Our fundraising costs represent 14.9% of total expenditure, which is in line with the sector average for a charity of our size.

Principal risks and uncertainties Combat Stress aims to achieve a culture where risk management is everyone’s business, embedded in the core processes, systems and business. The Board of Trustees has overarching responsibility for managing risk. However, the authority to develop and oversee risk management arrangements, and how they are being managed and mitigated, has been delegated to the Audit and Risk Management Committee which meets four times each year. This committee also reports on anything that threatens or adversely affects the accomplishment of Combat Stress aims and objectives, its assets, the reliability of its records and information, its compliance with all relevant laws, regulations, policies and its governing document. Responsibility has been further delegated to the individual committees of Combat Stress to manage risk and implement such internal or external controls as are appropriate to their respective spans of control. The Chairs of each committee make regular reports to the Board. The risk management system is formalised. A Risk Register captures the risks faced by Combat Stress and identifies the committee responsible for managing each one. It is based on an ongoing process designed to: •

•

Identify those risks most likely to impact on the realisation of Combat Stress aims, objectives and policies;

with the Charity Commission’s list of internal financial controls in all material respects, though significant risks arise in the following areas: •

•

Service quality and delivery: Through service governance there is the requirement to ensure that the service provided is of the highest standard, which requires an adequate mix of skills in order to deliver best practice; Employee welfare: Combat Stress has a duty to protect its employees but there is risk to the physical and mental health of those staff working with veterans. We have comprehensive supervision, support and protection procedures and policies in place to reduce the possibility of problems occurring; Funding: diversification of income streams such that Combat Stress is less dependent on fees received for the treatment of war pensioners whose disablement qualifies them for funding by the Ministry of Defence (Veterans Agency); and Demand for services: The increasing demand for our services is such that it might exceed resources and the ability to deliver those services.

The Trustees have responsibility for ensuring that Combat Stress has an appropriate system of controls, financial and otherwise. They are also responsible for safeguarding the assets of Combat Stress and for taking reasonable steps for the prevention and detection of fraud and other irregularities, and to provide reasonable assurance that: •

Combat Stress is operating efficiently and effectively;

Evaluate the likelihood of those risks being encountered and the impact should this occur; and

•

Its assets are safeguarded against unauthorised use or disposition;

Manage and prioritise actions to mitigate them efficiently, effectively and economically.

•

Proper records are maintained and financial information used within Combat Stress or for publication is reliable; and

•

Combat Stress complies with relevant laws and regulations.

As part of the risk management process, major risks have been reviewed and actions taken in mitigation. Combat Stress complies

The systems of internal control are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. They include: •

An annual budget approved by the Trustees;

•

Regular consideration by the Trustees of financial results, variance from budgets and nonfinancial performance indicators;

•

Delegation of authority and segregation of duties;

•

Identification and management of risks; and

•

Development of a regular independent internal audit cycle to visit different areas of the business and comment on the policies, processes and controls implemented by the executive.

Clinical and service-related incidents are reported to the Director of Operations and serious incidents to the Medical Services Committee, the Board of Trustees and externally through the appropriate mechanisms. All incidents undergo full investigation and where required, have follow-up actions. During 2015/16 a new internal audit function was set up with RSM LLP being appointed as the internal auditors. The first area of work undertaken early in 2016 was a review of risk awareness and risk management procedures. The Trustees have received recommendations including setting up a new internal Risk Management Group which was put in place at the start of 2016/17. Other recommendations will be implemented during 2016/17 to improve the risk management processes still further. The internal auditors have also recently reviewed the governance arrangements at Combat Stress, although the report and recommendations were not completed until the new financial year. The Trustees are keen to ensure that Combat Stress has decision making structures and skills within its governance arrangements

which provide the flexibility and rigour required for a modern charity.

Our employees EQUALITY AND DIVERSITY Combat Stress takes every practicable step to ensure that individuals are treated equally and fairly and that decisions on recruitment, selection, training, conditions of work, promotion, career, management and every other aspect of employment are based solely on objective criteria.

EMPLOYEE INVOLVEMENT The flow of information to employees has been maintained by our internal newsletter. Members of the management team regularly visit treatment centres and discuss matters of current interest and concern to the business with employees. Over the last year we have focused on a number of areas to ensure that we recruit and retain the best staff. These included: •

A national Managers’ Conference focused on increasing internal communication, encouraging sharing of good practice and enhancing leadership skills;

•

An Employee Conference aimed at increasing the knowledge of Combat Stress activities and plans and providing the opportunity to share key messages with staff;

•

A change in the focus of appraisals from competency to contribution – there is now more focus on overall performance rather than skill sets which provides increased understanding of individual roles and the ability to recognise individual contributions;

•

The Combat Stress Employee Forum was launched in 2015 to provide a framework for discussion and consultation on matters affecting employees. The Forum also works to ensure we deliver services in accordance with our vision, mission and values.

REMUNERATION POLICY AND PRACTICES Combat Stress employs people whose skills and competencies are in demand throughout the healthcare and charity sectors. For all posts, except the executive team, our policy is to pay at the NHS salary scale rates plus 2.5%. The additional uplift recognises that the NHS makes a larger pension contribution for its employees. As an essential cost cutting measure for 2016/17 we have temporarily reduced the uplift that we pay on NHS pay rates to 1.5%. The remuneration of the Chief Executive and Directors is determined by the Remuneration Committee. A market review was carried out in January 2015 and as a result, an independently benchmarked pay spine for the Executive Director posts was introduced. This scale places the salaries of the executive team in the median quartile for the charity sector. Combat Stress operates a defined contribution pension scheme, to which all eligible employees are auto-enrolled. Anyone who does not qualify automatically may opt to join. The minimum employee contribution level was 2% of basic salary in 2015/16 and is currently 3% in 2016/17 in line with the auto-enrolment requirements. The employee contribution is matched by the organisation. Staff may opt to make higher contributions, which we will match up to a maximum of 10%.

Public benefit, policies and governance PUBLIC BENEFIT Whilst evaluating the public benefit provided by Combat Stress, the Trustees have referred to the Charity Commission’s general guidance. When reviewing our aims and objectives and in planning future activities the Trustees consider whether or

not there are identifiable public benefits, what they are, how they are related to the aims, and how they are balanced against any detriment or harm. Combat Stress aims to be accessible to all veterans who need help. To achieve this, Combat Stress will work with whoever is most appropriate to ensure that the right support and care are given at the right time, in the right place, by the right people. In this context, our work demonstrates clear and significant public benefit through its specialist help for veterans. We help veterans on their recovery journey so they are able to integrate more fully back into society, maximising their mental, physical and social capabilities. Combat Stress is increasingly acknowledged within the medical profession and the NHS as the specialist in the treatment of veterans suffering from complex Service-related mental illness. Combat Stress also has the respect of the serving and ex-service communities. By continuing to raise awareness of combat-related psychological injury within the Armed Forces and society at large the cost to society as a whole is reduced. By successful campaigning and education, Combat Stress contributes to a better understanding of mental health in the country as a whole and particularly in the Armed Forces. By working in partnership with the NHS, other service charities, statutory agencies and the media, we are now seeing a growing understanding of the needs of those with hidden injuries.

INVESTMENT POLICY AND RETURNS Under the Memorandum and Articles of Association, Combat Stress has the power to make any investment that the Trustees see fit. The investment policy and performance are regularly reviewed and the investment policy has been confirmed during the course of the year.

During the year Combat Stress held its investment portfolio in the Cazenove Charity Multi-Asset Fund. The investment objective is to preserve the capital in real terms over a three year period with a total return target of the Consumer Price Index (CPI) plus 4.5%. The portfolio should be sufficiently diversified so as to reduce risk.

for the last year from our reserves. We have sufficient levels of retained reserves to be able to cover this shortfall but in order to restore levels of general reserves to more than six months budgeted unrestricted expenditure, we are taking active steps to optimise our fundraising and rationalise our expenditure wherever possible.

During 2015/16, sale proceeds of £2,892k were generated from the disposal of investments. These withdrawals from the portfolio were required to fund the shortfall of income over expenditure during the year. This, together with a decline in the stock market values, led to a 30% reduction in the market value of our investment portfolio to £8,573k at 31 March 2016 [2015: £12,248k]. The income yield of £447k [2015: £547k] together with the capital losses of £(783k), represents a total negative return for the year of - 3% [2015: positive return of 6.9%]. The increase in the CPI for the year was 0.3% [2015:0%].

We have chosen to protect planned investment in our communications and fundraising activities to generate the income needed.

Cash balances totalling £6k [2015: £1,384k] were held by the investment manager at year end.

RESERVES POLICY Combat Stress operates on the basis of a long-term commitment to registered veterans. The Trustees believe the level of free reserves (that is those funds not tied up in fixed assets, designated and restricted funds) should be more than six months budgeted unrestricted expenditure. This level has been set to ensure that our services for veterans are protected from the risk of disruption due to lack of funds, whilst at the same time ensuring we do not retain income for longer than necessary. The general reserve, excluding pension scheme reserve, at 31 March 2016 stood at £6.29m representing 4.7 months budgeted unrestricted expenditure [2015: £9.38m, or 7.7 months]. Restricted and designated funds are held for specific purposes, as detailed in note 22. As explained on page 27, to meet the increase in demand for our services, we have funded some expenditure

Most importantly, we have started to develop a new strategic planning cycle which will set out new ‘smart’ objectives, clarify the resources required to deliver them and the income needed for the next three years through to our Centenary in 2019. The actuarial valuation of the ExServices Mental Welfare Society 1974 Pension & Life Assurance Scheme 31 March 2016, as required by FRS 102, showed a funding deficit of £0.26m [2015: deficit of £0.345m]. The date of the last triennial actuarial valuation was 30 September 2014. As a result of this valuation, a new Recovery Plan commenced from June 2015 to address the deficit over 3.5 years, through the payment of £150,000 per year. Following a consultation with active members the Scheme was closed to future accrual on 31 March 2013. Details of the Scheme are disclosed in Note 18 of the accounts.

GOVERNANCE The Ex-Services Mental Welfare Society is a charitable company limited by guarantee. It was incorporated on 11 May 1931 and is governed by Memorandum and Articles of Association which were revised on 14 November 1991 and then amended by resolution on 21 September 2006, 20 September 2007 and 17 July 2008. This governing document states that the objects of the charity are “to provide, establish and maintain recuperative homes, hospitals, sanatoria, schools of training, clubs, workshops and other centres, for

all ranks of all branches of HM Forces, including the Merchant Navy, suffering from war psychoses and neuroses.” The charity operates throughout the United Kingdom. The Board of Trustees is responsible for selecting and recommending suitable Trustees for election to office at the annual general meeting. A maximum of fifteen Trustees are elected, each of whom serve for an initial period of three years. One third of the Trustees shall retire from office at each Annual General Meeting. The retiring Trustees are those who have been longest in office since the last election, but do not include ex-officio members of the Board of Trustees. A retiring Trustee is eligible for re-election and may serve a maximum of two consecutive terms of three years unless there is an extenuating reason for their retention approved by the Company in General Meeting, or they are elected to the position of Chairman, Vice Chairman or Honorary Treasurer. The Board of Trustees is empowered to appoint a Trustee to fill a casual vacancy until the next Annual General Meeting. There is no age limit imposed on Trustees. The Trustees are the Directors for the purposes of company law. New Trustees are inducted through a process of briefings by the Chairman and executive management, and new trustee starter packs. They are provided with information relating to Combat Stress governance and operation. The induction process includes a visit to a treatment centre and the Head Office at Tyrwhitt House, and a Trustee might also accompany a member of the Community Team to visit veterans. Ongoing training and relevant charity and mental healthcare updates are provided and visits to treatment centres are encouraged. The Board of Trustees meets four times a year and has appointed committees with responsibility for finance, fundraising, audit and risk management, medical services, remuneration and nominations. A further committee is responsible for stewardship of the closed defined

benefit pension scheme. The Board delegates management of day-today activities to the Chief Executive and a team of Executive Directors.

Statement of Trustees’ responsibilities The Trustees (who are also Directors of Combat Stress for the purposes of company law) are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Company law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of the affairs of Combat Stress and of the incoming resources and application of resources, including the income and expenditure of Combat Stress for that period. In preparing these financial statements, the Trustees are required to: •

Select suitable accounting policies and then apply them consistently;

•

Observe the methods and principles in the Statement of Recommended Practice (SORP), “Accounting and Reporting by Charities” (FRS 102) (Revised 2015);

•

Make judgements and estimates that are reasonable and prudent;

•

State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•

Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.

The Trustees are responsible for keeping proper accounting records 32

that disclose, with reasonable accuracy at any time, the financial position of Combat Stress and enable them to ensure that the financial statements comply with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. They are also responsible for safeguarding the assets of Combat Stress and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the Trustees are aware: •

There is no relevant audit information of which the charitable company’s auditor is unaware; and

•

The Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

The Board of Trustees approved this Trustees report and Strategic Report on 1 September 2016

A J N Graham Chairman

Independent auditor’s report to the Members of Ex-Services Mental Welfare Society We have audited the financial statements of the Ex-Services Mental Welfare Society for the year ended 31 March 2016 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the charity’s Trustees and members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and the Charities and Trustee Investment (Scotland) Act 2005. Our audit work has been undertaken so that we might state to the charity’s Trustees and members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s Trustees and members as a body, for our audit work, for this report, or for the opinions we have formed.

RESPECTIVE RESPONSIBILITIES OF TRUSTEES AND AUDITOR As explained more fully in the Statement of Trustees’ Responsibilities, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. We have been appointed as auditor under section 44(1)(c) of the

Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with regulations made under those Acts. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council’s (FRC’s) Ethical Standards for Auditors.

SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS A description of the scope of an audit of financial statements is provided on the FRC’s website at www.frc.org.uk/auditscopeukprivate.

financial statements are prepared is consistent with the financial statements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion: •

The parent charitable company has not kept proper and adequate accounting records or returns adequate for our audit have not been received from branches not visited by us; or

•

The parent charitable company financial statements are not in agreement with the accounting records or returns; or

•

Certain disclosures of Trustees’ remuneration specified by law are not made; or

•

We have not received all the information and explanations we require for our audit.

OPINION ON FINANCIAL STATEMENTS In our opinion the financial statements: •

Give a true and fair view of the state of the group’s and the parent charitable company’s affairs as at 31 March 2016 and of the group’s incoming resources and application of resources, including its income and expenditure, for the year then ended;

•

Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•

Have been prepared in accordance with the requirements of the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and regulations 6 and 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).

OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the Trustees’ Report, incorporating the Strategic Report, for the financial year for which the

Donald Bawtree, Senior Statutory Auditor For and on behalf of BDO LLP, Statutory Auditor Gatwick United Kingdom Date: 12 September 2016 BDO LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006. BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Consolidated Statement of Financial Activities (incorporating an Income and Expenditure Account) for the year ended 31 March 2016 Unrestricted Funds

Restricted Funds

Totals Totals 2015 2016 Restated

Note

£’000

Donations and legacies

5,627

1,837

7,464

8,632

Charitable activities

4,791

5,200

Income from:

Trading activities

288

579

Investments

447

547

11,205

1,838

13,043

14,961

2,465

2,682

Clinical services

9,310

334

9,644

9,659

Community services

2,821

596

3,417

3,590

303

269

Other Total income Expenditure on: Raising funds Charitable activities

Helpline Raising awareness and improving access Substance Misuse Case Management Service Total expenditure

Net income / (expenditure) before transfers and investment losses

298

417

465

390

12,384

1,743

14,127

14,325

14,849

1,743

16,592

17,007

(3,549)

(2,046)

(3,644)

Net gains/(losses) on investments Net income / (expenditure) Transfers between funds

253

(783)

(4,427)

(4,332)

345

(69)

(345)

436 (1,610)

Other recognised gains / (losses): Actuarial gains/(losses) on defined benefit pension scheme Net movement in funds

(4,151)

(250)

(69)

(453)

(4,401)

(2,063)

Reconciliation of funds: Fund balances brought forward at 1 April Fund balances carried forward at 31 March

19,927

4,238

24,165

26,228

15,776

3,988

19,764

24,165

The notes on pages 37 to 54 form part of these financial statements. All activities relate to continuing operations. There are no gains and losses for either the current or prior years other than those recognised above. All items in the Statement of Financial Activities would appear in the Income and Expenditure Account with the exception of the realised and unrealised gain/(loss) on investments. There is no difference between the net incoming resources before other recognised gains and losses and their historical cost equivalents.

Consolidated and Charity Balance Sheets at 31 March 2016 Group Notes

2016

Charity 2015

2016

Restated

2015 Restated

£’000

9,754

9,951

9,754

9,951

Fixed assets Tangible assets

Investments

Total fixed assets

8,579

13,632

8,579

13,632

18,333

23,583

18,333

23,583

1,027

1,305

1,135

1,401

Current assets Stock Debtors

Cash at bank and in hand

1,684

1,586

1,632

1,523

Total current assets

2,770

2,930

2,767

2,924

(1,079)

(2,003)

(1,076)

(1,997)

Liabilities Creditors: amounts falling due within one year

Net current assets Net assets excluding pension liability Defined Benefit Pension Scheme Liability

Total net assets

1,691

927

1,691

927

20,024

24,510

20,024

24,510

(260)

(345)

(260)

(345)

19,764

24,165

19,764

24,165

6,554

9,726

6,554

9,726

The funds of the charity: Unrestricted income funds General fund Defined benefit pension scheme reserve

(260)

General fund, excluding pension scheme reserve Investment revaluation reserve Designated funds Restricted income funds Total charity funds

(345)

(260)

(345)

6,294

9,381

6,294

9,381

583

1,545

583

1,545

8,899

9,001

8,899

9,001

15,776

19,927

15,776

19,927

3,988

4,238

3,988

4,238

19,764

24,165

19,764

24,165

The notes on pages 37 to 54 form part of these financial statements. The Financial Statements were approved by the Board of Trustees on 1 September 2016 and signed on its behalf by:

AJN Graham Chairman

R Ward Honorary Treasurer

Company Limited by Guarantee Registered in England and Wales No 256353

Charity Registration No England and Wales 206002 Charity Registration No Scotland SC038828

Consolidated Statement of Cash Flows and Charity Statement of Cash Flows for the year ended 31 March 2016 Group 2016

Charity 2015

2016

Restated

2015 Restated

£’000

(4,304)

(1,334)

(4,293)

(1,385)

Cash flows from operating activities: Net cash provided by (used in) operating activities Cash flows from investing activities: Dividends, interest and rents from investments

447

547

447

547

Purchase of property, plant and equipment

(315)

(643)

(315)

(643)

Proceeds from sale of investments

2,892

(247)

Net cash provided by (used in) investing activities

3,024

(318)

3,024

(318)

Change in cash and cash equivalents in the reporting period

(1,280)

(1,652)

(1,269)

(1,703)

Cash and cash equivalents at the beginning of the reporting period

2,970

4,622

2,907

4,610

Cash and cash equivalents at the end of the reporting period

1,690

2,970

1,638

2,907

Purchase of investments

Reconciliation of net income / (expenditure to net cash flow from operating activities

Group 2016

Charity 2015

2016

Restated Net income / (expenditure) for the reporting period (as per the Statement of Financial Activities)

2015 Restated

£’000

(4,401)

(2,063)

(4,401)

(2,063)

Adjustments for: Depreciation charges

512

439

512

439

(Gains) / losses on investments

783

(436)

783

(436)

453

Actuarial gains / (losses) on defined benefit pension scheme Dividends, interest and rents from investments

(447)

(547)

(447)

(547)

Loss / (profit) on the sale of fixed assets (Increase) / decrease in stocks

(20)

(Increase) / decrease in debtors

278

757

266

693

Increase / (decrease) in creditors

(924)

167

(921)

184

Pension scheme costs under FRS 102 – employer contribution

(163)

(100)

(163)

(100)

Pension scheme costs under FRS102 - interest movements Net cash provided by (used in) operating activities

Analysis of cash and cash equivalents

9 (4,304)

(8) (1,334)

Group

9 (4,293)

(8) (1,385)

Charity

2016

2015

2016

2015

£’000

1,684

1,586

1,632

1,523

1,384

1,690

2,970

1,638

2,907

Changes in net funds during the year Cash at bank and in hand Notice deposits (less than 3 months) 36

Notes forming part of the Financial Statements for the year ended 31 March 2016 1. ACCOUNTING POLICIES a. Basis of preparation

The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value. The financial statements have been prepared in accordance with the Statement of Recommended Practice (SORP), “Accounting and Reporting by Charities” applicable to charities in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 and the Charities Act 2011 and UK Generally Accepted Practice as it applies from 1 January 2015.

Reconciliation with previous Generally Accepted Accounting Practice (GAAP)

In preparing the accounts, the trustees have considered whether in applying the accounting policies required by FRS 102 and the Charities SORP (FRS 102) a restatement of comparative items was needed. At the date of transition, in applying the requirement to recognise liabilities arising from employee benefits, a liability was recognised in respect of employee entitlement to paid annual leave. The initial liability was £119k and this figure increased to £157k for 2015. There are no other adjustments requiring a restatement of funds as at 1 April 2015. Two further adjustments were made to the allocation of governance costs and pension costs as detailed in note 7. In accordance with the requirements of FRS 102, a reconciliation of opening balances and net movement in funds is provided in note 7. The Financial Statements are prepared on the going concern basis which assumes that Combat Stress will continue in operational existence for the foreseeable future. The Board of Trustees have considered the working capital and cash flow requirements and consider that the current and forecast cash resources are sufficient to cover the working capital requirements of the charity for at least 12 months.

b. Basis of consolidation

The charity has one wholly owned subsidiary, Combat Stress Trading Limited, which is registered in England. Consolidated Financial Statements for the group, being Ex-Services Mental Welfare Society (Combat Stress) and Combat Stress Trading Limited have been prepared on a line by line basis in the Statement of Financial Activities and Balance Sheet.

c. Company status

The Ex-Services Mental Welfare Society, known as Combat Stress, is a company limited by guarantee. The directors of the company are the members of the Board of Trustees named on page 55. In the event of Combat Stress being wound up, the liability in respect of the guarantee is limited to £1 per member.

d. Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objects of Combat Stress and which have not been designated for other purposes. Designated funds comprise unrestricted funds that have been set aside by the Board of Trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements. Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised for particular purposes. The cost of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

e. Incoming resources

All incoming resources are included in the Statement of Financial Activities when Combat Stress is legally entitled to the income, and the amount can be quantified with reasonable accuracy. The following specific policies apply to categories of income: • Legacies Legacies are recognised as income when notification of entitlement has been received by Combat Stress, a grant of probate has been issued, the amount of the legacy can be estimated with reasonable certainty and the likelihood of receiving the income is judged to be probable. No value is included where the legacy is subject to a life interest held by another party.

1. ACCOUNTING POLICIES (CONTINUED) • Donated services and facilities Gifts donated for resale are included as income when they are sold. Donated assets and services are included at the value to Combat Stress where this can be quantified. No amounts are included in the financial statements for services donated by volunteers. • Conduit funds Combat Stress acts as agent for other organisations and receives funds on their behalf in respect of registered veterans. These funds are not recognised as income and are excluded from the Statement of Financial Activities and Balance Sheet. • Grants received which are to be utilised over more than one year In accordance with the Charities Statement of Recommended Practice, Combat Stress recognised £2m grant funding for the Substance Misuse Case Management Service in the year of receipt (2013/14) as a restricted grant. The income was received in advance of the expenditure on the activity funded by the grant but the charity had entitlement to this funding with the timing of the expenditure being within the discretion of the charity. Therefore, the incoming resources were not deferred but the unspent monies are carried forward as a restricted fund balance to be expended in future years.

f. Resources expended

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with use of the resources. Expenditure is allocated as follows: i. Cost of generating funds Fundraising costs are those incurred in seeking voluntary contributions and do not include the costs of disseminating information in support of the charitable activities. ii. Clinical Services This represents all direct expenditure incurred in the running of treatment centres, including related payroll, office and other costs. A proportion of central support costs is allocated on the basis set out in note 6. iii. Community services Costs represent the direct expenditure on Community services and a proportion of central support costs allocated on the basis set out in note 6. iv. Helpline This represents the direct cost of providing the 24-hour Helpline and a proportion of central support costs allocated on the basis set out in note 6. v. Raising awareness and improving access This represents the direct costs of publicising and promoting our services directly to veterans, their families and medical health professionals. It includes a proportion of central support costs allocated on the basis set out in note 6. vi. Substance Misuse Case Management Service This represents the direct cost of providing the Substance Misuse Case Management Service and a proportion of central support costs allocated on the basis set out in note 6.

g. Tangible fixed assets

Tangible fixed assets are stated at cost less depreciation and provision for impairment. Only items over £1,000 are capitalised. Repairs are written off as incurred. Depreciation is provided from the month following the date assets are brought into use, to write down cost to estimated residual value over the estimated useful life by equal annual instalments, as follows: Freehold property Furniture and equipment Computer equipment Computer software – patient administration system Plant 38

40 years 5 years 3 years 6 years 10 years

1. ACCOUNTING POLICIES (CONTINUED) h. Investments

Investments are stated at fair value (bid price). Unrealised gains and losses arising on the revaluation of investments are, together with the realised gains and losses arising on the sale of investments, shown in the consolidated statement of financial activities as net gains/(losses) on investments.

i. Pension costs

Pension costs and the pension provision for the defined benefit scheme are calculated on the basis of actuarial advice and are charged to the statement of financial activities on a basis to spread the costs over the employeesâ&#x20AC;&#x2122; working lives. Pension costs for the defined contribution scheme are charged to the accounts on an accruals basis in accordance with FRS 102 and SORP 2015. A pensions reserve has been created within unrestricted funds in compliance with SORP 2015. Details of the pension schemes are disclosed in note 18 to the accounts.

j. Leases

Rentals applicable to operating leases are charged to the Statement of Financial Activities over the period in which the cost is incurred.

k. Employee benefits

Expenditure is recognised for all employee benefits resulting from their service to Combat Stress during the period. A liability has been included for the cost of annual leave to which employees are entitled at the reporting date that has yet to be paid.

l. Financial instruments

The group and parent financial instruments comprise fixed asset investments measured at fair value through profit or loss and other financial assets which comprise cash, group debtors, and other debtors and financial liabilities which comprise trade creditors, and other creditors, measured at amortised cost.

2. RESULTS OF THE PARENT CHARITY

Charity total incoming resources Charity resources expended Transfers between funds Charity net incoming resources (Loss)/gain on investment assets Actuarial gain/(loss) on defined benefit scheme

Unrestricted

Restricted

Total 2016

Total 2015 Restated

£’000

11,148

1,838

12,986

14,893

(14,792)

(1,743)

(16,535)

(16,939)

345 (3,299)

(345) (250)

(3,549)

(2,046)

(783)

436

(69)

(453)

(4,401)

(2,063)

Charity net movement in funds

(4,151)

(250)

Funds balance brought forward

19,927

4,238

24,165

26,228

Funds balance carried forward

15,776

3,988

19,764

24,165

The total incoming resources figure for the Charity excluding the subsidiary includes the gift aid donation from Combat Stress Trading Limited of £29,242 (2015/16: £382,134). This will result in no tax having to be paid on the net profits. As permitted by section 408 of the Companies Act 2006 no separate Statement of Financial Activities is presented in respect of the parent company.

3. VOLUNTARY INCOME Group voluntary income

Donations Statutory grants Legacies

Unrestricted

Restricted

Total 2016

Total 2015

£’000

4,257

1,246

5,503

6,011

589

759

1,370

1,372

1,862

5,627

1,837

7,464

8,632

The voluntary income in 2015 was £8,632k of which £7,320k was unrestricted and £1,312k was restricted.

Charity voluntary income

Donations Statutory grants Legacies

Unrestricted

Restricted

Total 2016

Total 2015

£’000

4,286

1,246

5,532

6,393

589

759

1,370

1,372

1,862

5,656

1,837

7,493

9,014

The voluntary income in 2015 was £9,014k of which £7,702k was unrestricted and £1,312k was restricted. The charity’s voluntary income includes a donation from the subsidiary trading company of £29k (2015: £382k).

Certain legacies had been notified to Combat Stress as at 31 March 2016 but have not been included in the accounts as they do not meet the criteria to enable them to be measured or the entitlement is not yet certain. None are considered to be material but their combined value is estimated to be £106k (2015: £300k).

3. VOLUNTARY INCOME (CONTINUED) The details of government (statutory) grants received were as follows: Purpose

Total 2016

Total 2015

£’000

Victims and Survivors Service – Northern Ireland

Grant to fund the Community Team working with victims of the conflict in Northern Ireland

101

Welsh Assembly

Grant to fund part of the Community services in Wales

Scottish Executive

Grant from the Scottish Government to fund part of the Community services in Scotland

200

Armed Forces Covenant Fund

Two year grant for 2014/15 and 2015/16 to fully fund the costs of the Helpline.

288

Armed Forces Covenant Fund

This government funding equated to the amount of VAT paid in relation to the sale of Ceramic Poppies at the Tower of London installation.

183

589

759

The statutory grants received in 2015 of £759k comprised of £183k unrestricted and £576k restricted. None of the above grants have any unfulfilled conditions or contingencies.

4. INCOMING RESOURCES FROM CHARITABLE ACTIVITIES (GROUP AND CHARITY) Unrestricted

Restricted

Total 2016

Total 2015

£’000

658

4,554

3,959

170

583

4,791

5,200

Activities undertaken directly £’000

Allocated support costs £’000

Total 2016 £’000

Total 2015 Restated £’000

2,175 58 32 2,265

200 200

2,375 58 32 2,465

2,540 68 74 2,682

8,149 2,927 291 263 442 12,072 14,337

1,495 490 12 35 23 2,055 2,255

9,644 3,417 303 298 465 14,127 16,592

9,659 3,590 269 417 390 14,325 17,007

Clinical services Ministry of Defence – Veterans Agency fees Contract funding Performance related grant

The income from charitable activities in 2015 of £5,200k was all unrestricted.

5. TOTAL GROUP RESOURCES EXPENDED

Cost of generating funds Cost of generating voluntary income Cost of trading activity Investment management fees Charitable activities Clinical services Community services Helpline Awareness raising and improving access Substance Misuse Case Management Service

Expenditure on the cost of generating funds in 2015 of £2,682k was all unrestricted. Expenditure on charitable activities in 2015 was £14,325k of which £12,313k was unrestricted and £2,012k was restricted.

5. TOTAL GROUP RESOURCES EXPENDED (CONTINUED) Total 2016

Total 2015

£’000

Audit fee – trading company

Audit fee – pension scheme

Resources expended included:

Audit fee – charity

Operating leases

224

261

Depreciation

512

439

Human Information Resources Technology

2016 Total

Other accountancy and VAT services

6. SUPPORT COSTS 2015/16 Allocations:

Activities for generating funds Clinical services Community services

Finance

Management Governance

£’000

200

233

165

133

439

525

1,495

148

157

490

Helpline

Awareness raising and improving access

Substance Misuse Case Management Service

408

245

197

652

753

2,255

Human Information Resources Technology

2015 Total Restated

2014/15 Allocations:

Finance

Management Governance

£’000

101

212

Clinical services

359

154

368

415

1,373

Community services

135

128

472

Activities for generating funds

Helpline

Awareness raising and improving access

Substance Misuse Case Management Service

638

116

230

549

597

2,130

Basis of allocation The support costs expenditure is allocated on the following bases:

Finance costs

On the basis of the value of direct costs incurred by each activity.

Human resource costs

On the basis of full time equivalent numbers of employees directly employed in each activity.

Information technology

On the basis of the number of employees directly employed in each activity.

Management costs

On the basis of the full-time equivalent number of employees directly employed in each activity.

Governance

On the basis of the full-time equivalent number of employees directly employed in each activity.

7. FRS 102 RESTATEMENT These financial statements comply with the Charities SORP (FRS 102) which became effective on 1 January 2015 and which has therefore been applied for the first time. The SORP requires comparative information to be restated on a like-for-like basis and this has led to a number of adjustments to the figures presented for the year ended 31st March 2015. The following reconciliations detail the differences between the funds and the net movement in funds previously presented and the amounts as restated to comply with the Charities SORP (FRS 102).

Funds as at 1 April 2015 reconciliation:

Funds as at 1 April 2014 as previously stated Holiday pay accrual Funds as at 1 April 2014 under the Charities SORP (FRS 102)

Funds as at 31 March 2015 reconciliation:

Funds as at 31 March 2015 as previously stated Holiday pay accrual Funds as at 31 March 2015 under the Charities SORP (FRS 102)

2014/15 net movement in funds reconciliation:

2014/15 net movement in funds as previously stated Holiday pay accrual Funds as at 31 March 2015 under the Charities SORP (FRS 102)

Group and Charity Unrestricted

Restricted

Total

£’000

21,641

4,706

26,347

(119) 21,522

(119)

4,706

26,228

Group and Charity Unrestricted

Restricted

Total

£’000

20,084

4,238

24,322

(157) 19,927

(157)

4,238

24,165

Group and Charity Unrestricted

Restricted

Total

£’000

(1,557) (38) (1,595)

(468)

(2,025) (38)

(468)

(2,063)

FRS 102 requires recognition of the cost of all employee benefits to which employees have become entitled during the period. This has necessitated a provision for an accrual for the value of annual leave and other holiday allowances that staff are entitled to at 31 March. Combat Stress operates a holiday year which runs from January to December. There are two other significant restatements, which do not affect funds or net movement in funds: a.

2014 expenditure comparatives have been restated under the Charities SORP (FRS 102) for £240k of governance costs, which were previously disclosed separately on the Statement of Financial Activities. Under the Charities SORP (FRS 102) governance costs are included under support costs and allocated across the other categories of expenditure.

In line with FRS 102, the defined benefit pension scheme valuation uses different methods and assumptions from those used previously in FRS 17. This has led to an increase of £51k in expenditure and a corresponding reduction in the actuarial loss on the defined benefit scheme.

The allocation of expenditure, including support costs, is shown overleaf, as previously stated and as restated to comply with the Charities SORP (FRS 102). 43

7. FRS 102 RESTATEMENT (CONTINUED) Activities undertaken directly

Allocated support costs

Total 2015 Restated

£’000

2,329

211

2,540

Cost of trading activity

Investment management fees

2,471

211

2,682

8,286

1,373

9,659

Cost of generating funds Cost of generating voluntary income

Charitable activities Clinical services Community services

3,118

472

3,590

Helpline

258

269

Awareness raising and improving access

379

417

Substance Misuse Case Management Service

365

390

12,406

1,919

14,325

14,877

2,130

17,007

Activities undertaken directly

Total Allocated 2015 support costs As previously stated

£’000

2,325

193

2,518

Cost of trading activity

Investment management fees

2,467

193

2,660

8,210

1,211

9,421

Community services

3,111

416

3,527

Helpline

258

269

Awareness raising and improving access

378

412

Substance Misuse Case Management Service

366

389

12,323

1,695

14,018

230

240

15,020

1,898

16,918

Number

£’000

Number

£’000

Cost of generating funds Cost of generating voluntary income

Charitable activities Clinical services

Governance

8. TRUSTEE EXPENSES AND DONATIONS Out of pocket expenses were reimbursed as follows. 2016 Travel and sundry expenses

2015

No members of the Board of Trustees received any remuneration or emoluments in respect of services during the year (2015: £Nil), nor had any beneficial interest in any contract with Combat Stress during the year. The total amount of donations received from Trustees during the year was £15k (2015: £12k). 44

9. STAFF COSTS 2016

2015

£’000

9,097

9,052

Social security costs

887

898

Redundancy and termination payments

120

Wages and salaries

Pension costs

479

512

Decrease in pension provision

(163)

(100)

817

703

11,237

11,141

Other costs

Emoluments for employees above £60,000 2016

2015

Number

Between £60,001 - £70,000

Between £70,001 - £80,000

Between £80,001 - £90,000

Between £90,001 - £100,000

Between £100,001 - £110,000

Between £110,001 - £120,000

Between £150,001 - £160,000

Between £160,001 - £170,000 **

**1

Between £180,001 - £190,000

**In 2015 the emoluments for the previous Chief Executive in this pay band included compensation for loss of office. The highest paid Director is the Medical Services Director, a Consultant Psychiatrist, who leads the research and design of the treatment programmes. It is important that we have a leading expert in the field of veterans mental health for this post. The total amount of remuneration and benefits received by the Chief Executive and Directors for the year was £654k (2015: £731k). During the year none of the Executive Directors received any benefits that were not available to all other employees. Benefits provided to all staff include matched contributions of up to 10% into the Group Personal Pension Scheme, childcare voucher scheme, cycle to work scheme and free car parking.

Pension contributions for employees above £60,000 Defined contribution scheme

2016

2015

Number

£’000

Number

£’000

Number

FTE*

Number

FTE*

212

179

204

176

The number of employees including bank and casual staff, analysed by function was: 2016 Clinical services Community services Substance Misuse Case Management Service

2015

Fundraising and communications

Management and administration

316

281

314

282

* FTE = Full Time Equivalent 45

10. TANGIBLE FIXED ASSETS FOR USE BY THE GROUP AND THE CHARITY Assets in the course of construction £’000 Asset cost At 1 April 2015 Additions Disposals Transfers At 31 March 2016 Accumulated depreciation At 1 April 2015 Charge for period Disposals At 31 March 2016 Net book values At 1 April 2015 At 31 March 2016

Plant

Total

£’000

856 44 672 1,572

84 84

13,475 315 13,790

Freehold IT projects Furniture and property in progress Equipment £’000 £’000 £’000

8 2 10

12,113 8 12,121

414 261 (672) 3

2,943 297 3,240

576 207 783

5 8 13

3,524 512 4,036

8 10

9,169 8,881

414 3

280 789

79 71

9,951 9,754

The value of Freehold Property above includes an amount of £1.75m which is represented by a restricted fund. Details are provided in Note 15 below.

11. INVESTMENTS Fixed asset investments

Group and Charity 2016 £’000

2015 £’000

Investments at start of the period

13,632

14,879

Less cash held by investment manager

(1,384)

(3,289)

Market value at start of the period

12,248

11,590

247

Additions at cost

(2,892)

Disposal proceeds

(25)

9,356

11,812

Net investment gain / (loss)

(783)

436

Market value at end of period

8,573

12,248

1,384

8,579

13,632

8,573

12,248

7,990

10,704

583

1,544

Cash held by investment manager Analysis of investments held at end of the period Schroders Charity Multi Asset Fund Historical cost of listed investments at end of period Unrealised gains / (losses) The cash held by the investment manager is held for cash management purposes.

12. DEBTORS

Fees Accrued income Income tax recoverable VAT recoverable Other debtors Prepayments

Group 2016 £’000 38 755 21 1 24 188 1,027

Charity 2015 £’000 129 1,069 27 9 71 1,305

2016 £’000 37 755 21 134 188 1,135

2015 £’000 129 1,069 27 105 71 1,401

13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group

Charity

2016

2015 Restated

2016

2015 Restated

£’000

Trade creditors

390

542

387

541

Other taxes & national insurance

256

275

256

271

Accruals & deferred income

149

438

149

437

Accrued holiday pay

150

157

150

157

134

282

134

282

264

1,079

2,003

1,076

1,997

Pension fund Sundry creditors Fee refund payable

14. CAPITAL AND FINANCIAL COMMITMENTS Group and Charity 2016

2015

£’000

103

199

190

Total commitments under non-cancellable leases – total payments due over lease term: In less than one year In two to five years In later years

147

389

15. GROUP AND CHARITY CONTINGENT LIABILITIES In 2011/12 restricted funding of £3.5m was received from Help for Heroes for refurbishment and to extend the facilities at Tyrwhitt House as follows: • • • • •

the refurbishment and extension to the Welfare Block the extension to the Activities Centre the extension of Tyrwhitt House – the “Living Zone” the reorganisation of the ground floor of Tyrwhitt House including the construction of a new main entrance other associated work including professional fees and expenses for design and project management, infrastructure, external works, furnishings and equipment

If Combat Stress disposes of Tyrwhitt House or ceases to make use of it in accordance with its charitable objects then for a period of ten years from 31 March 2011 funding shall be repayable on reducing terms calculated as a proportion of the period yet to expire. The remaining value of the restricted fund at 31 March 2016 is £1.75m (2015: £2.1m).

16. TAXATION The company is a charity within the meaning of Para 1 Schedule 6 Finance Act 2010. Accordingly the company is potentially exempt from taxation in respect of income or capital gains within categories covered by Chapter 3 of Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. No tax charge arose in the year. The subsidiary company makes qualifying donations of all taxable profit to the charity. No corporation tax liability arises in the accounts. 47

17. TRADING SUBSIDIARY The charity has one wholly owned trading subsidiary, Combat Stress Trading Limited, which is registered in England and Wales (Company registration number 07839816). The company was incorporated on 9 November 2011 and started to trade on 1 April 2013. The following is a summary of the assets and liabilities at 31 March 2016. 2016

2015

112,856

101,630

(112,855)

(101,629)

Net assets at 31 March Current assets Current liabilities Share capital

Combat Stress Trading Limited’s issued share capital comprises one £1 ordinary share, which is held by the charity. During the year the directors of the trading company, who were all executive directors of the charity, were as follows: Sue Freeth (appointed 3 February 2016) Peter Poole (appointed 26 February 2014, resigned 3 February 2016) Robert Marsh (appointed 19 October 2015) Andrew Cameron (resigned 31 March 2015) Tim Brawn (resigned 22 September 2015) The Company Secretary throughout the year was Victoria Reynolds who was also the Company Secretary of the charity and the Director of Finance, Information Management and Governance. The main source of income for the company has been the sale of merchandise, such as Christmas cards, clothing and badges and the sale of promotional material bearing the Combat Stress logo, which in 2015 included the royalties received for use of the Combat Stress logo and name during the Poppies at the Tower installation. An agreement is in place between Combat Stress and the trading subsidiary such that the profits are gifted annually to Combat Stress. 2016

2015

2,075

370,102

Sale of merchandise and event income

90,213

85,046

Total turnover

92,288

455,148

Royalty income

Cost of sales

(50,902)

Gross profit

41,386

Administrative costs

(12,144)

Profit for the year

29,242

382,134

(29,242)

(382,134)

Gift aid donation to Combat Stress Retained profit for the year

(65,781) 389,367 (7,233)

18. PENSION COSTS Group and Charity

2016

2015

£’000

£’000 Restated

Defined benefit scheme

163

200

Defined contribution scheme

316

312

479

512

18. PENSION COSTS (CONTINUED) Defined contribution scheme The defined contribution scheme is a Group Personal Pension Scheme provided by Royal London. Employee contributions into the scheme are matched by Combat Stress up to a maximum of 10% of basic salary. Ex-Services Mental Welfare Society 1974 Pension & Life Assurance Scheme Combat Stress (the “Employer”) operates a defined benefit pension arrangement called the Ex-Services Mental Welfare Society 1974 Pension and Life Assurance Scheme (the “Scheme”). The scheme was closed to new entrants on 31 August 2000 and closed to future accrual on 31 March 2013. The Scheme provides benefits based on final salary and length of service on retirement, leaving service or death. The Employer expects to contribute £150,000 to the Scheme during the year to 31 March 2017. The Scheme is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the Scheme is carried out at least once every three years to determine whether the Statutory Funding Objective is met. As part of the process the Employer must agree with the trustees of the Scheme the contributions to be paid to address any shortfall against the Statutory Funding Objective. The most recent comprehensive actuarial valuation of the Scheme was carried out as at 30 September 2014. The results of that valuation were updated by an independent qualified actuary to 31 March 2016 allowing for cashflows in and out of the Scheme and changes to assumptions over the period. Explanation of amounts in the financial statements The amounts recognised in the Balance Sheet at 31 March are as follows: 2016

2015

£'000

Present value of scheme obligations

(12,114)

(12,975)

Fair value of scheme assets

11,854

12,630

Net defined benefit liability at 31 March

(260)

(345)

The amounts recognised in the Statement of Financial Activities (SoFA) over the year are as follows: 2016

2015

£'000

£'000 Restated

Current service cost

Administration costs

Interest on liabilities

396

516

(387)

(524)

Interest on assets Past service cost

Settlement cost

(8)

Remeasurements over the year:

Loss / (gain) on scheme assets in excess of interest

2016

2015

£'000

£'000 Restated

572

(165)

Experience losses / (gains) on liabilities

756

Losses / (gains) from changes to demographic assumptions

Losses / (gains) from changes to financial assumptions Changes in effect of asset ceiling Total remeasurements

(503)

591 49

18. PENSION COSTS (CONTINUED) Reconciliation of assets and Defined Benefit obligation Analysis of changes in the present value of the defined benefit obligations and fair value of assets Present value of defined benefit obligation 2016 £’000

2016

Net (Asset) / Liability Recognised in the Balance Sheet 2016

2015 Restated £’000

£’000

516 (524) (100) -

2016

2015

UK equities

Overseas equities

11%

10%

Bonds

12%

14%

12,316 516 (613) 756 12,975

12,630 387 163 (754) (572) 11,854

£’000

2015 Restated £’000

345 396 (387) (163) (503) 572 260

Scheme liabilities at the start of the year Current service cost Interest cost Interest on scheme assets Employer contributions Members contributions Benefits received / (paid) Changes to financial assumptions Return on plan assets less interest Scheme liabilities at the end of the year

12,975 396 (754) (503) 12,114

2015 Restated £’000

Value of Scheme Assets

12,316 524 100 (613) 303 12,630

453 345

Assets The major categories of assets as a percentage of total assets are:

Asset category

Annuities

61%

59%

Property

Other assets

Cash

Total

100%

The actual return on the Scheme’s assets over the period to the Review Date was £(185,000). The Scheme has no investments in the Charity or the Group or in property occupied by the Charity or the Group. Actuarial assumptions The principal assumptions used to calculate the Scheme’s liabilities include: 2016

2015

Discount rate

3.35% p.a.

3.10% p.a.

Retail Prices Index (RPI) inflation

3.20% p.a.

3.15% p.a.

Pensionable salary increases

3.20% p.a.

3.15% p.a.

Increases to pension in payment at 5% or RPI if less, subject to a minimum of 3% pa

3.65% p.a.

3.60% p.a.

90% S1PXA

Mortality projections

CMI 2012 with a long term rate of 1.5% (males)/ 1.0% (females)

Tax free cash

Members will commute 20% of their pension for a cash lump sum on retirement

Mortality base table

19. RELATED PARTY TRANSACTIONS A payment of £7,500 (2014/15: £7,500) was made during the year for a subscription to The Confederation of Service Charities, Cobseo, of which the Chief Executive of Combat Stress serves as a Board member by virtue of their position at Combat Stress. Advantage has been taken of exemption under FRS 102 not to disclose balances with or transactions between Combat Stress and Combat Stress Trading Limited which have been eliminated on consolidation.

20. ANALYSIS OF NET ASSETS BETWEEN FUNDS Group Fund balances at 31 March 2016 are represented by: Restricted Designated Investment Funds Funds Revaluation reserve

General Funds

Total

£’000

Tangible fixed assets

1,750

7,999

9,754

Investments

1,500

900

583

5,596

8,579

738

2,032

2,770

Current liabilities

(1,079)

Defined benefit pension scheme liability

(260)

3,988

8,899

583

6,294

19,764

Restricted Designated Investment Funds Funds Revaluation reserve

General Funds

Total

Current assets

Charity Fund balances at 31 March 2016 are represented by:

£’000

Tangible fixed assets

1,750

7,999

9,754

Investments

1,500

900

583

5,596

8,579

738

2,029

2,767

Current liabilities

(1,076)

Defined benefit pension scheme liability

(260)

3,988

8,899

583

Current assets

6,294

19,764

21. DISCLOSURE OF FUNDING In addition to those funders mentioned in note 22, funding is acknowledged under the terms and conditions of the following grants and donations: Funder

Purpose

ABF The Soldiers’ Charity ABF The Soldiers’ Charity Scotland Help for Heroes Irish Ex-Services Trust Royal Air Force Benevolent Fund

Community services and residential treatment Residential treatment in Scotland Community services Community services in Northern Ireland Community services and residential treatment for ex-RAF personnel Unrestricted Community services in Scotland Community services in Northern Ireland Unrestricted Community services in SE England Community services in Northern Ireland Travel for veterans and staff

Royal Navy and Royal Marines Charity Scottish Government (Section 10 Grant) Seafarers UK Trinity House Tudor Investments Victims & Survivors Service Northern Ireland Virgin Trains

Funding Received £'000 200 20 49 70 121 60 200 43 62 60 101 40 51

22. STATEMENT OF CHANGES IN RESERVES Statement of changes in reserves 2015/16

At 1 April 2015 Restated £’000

General reserves Investment revaluation reserve Defined benefit pension scheme asset / (liability) Designated funds Fixed asset fund Audley Court project Audley Court landscaping Tyrwhitt House project IT development fund Property maintenance fund Total unrestricted funds Restricted funds Treatment centres: Audley Court Hollybush House Tyrwhitt House Community services Community occupational therapists Helpline Reservists Improving access Clinical services Substance Misuse Case Management Service Patient administration system Peterborough veterans Veterans Hardship Fund Grounds Property – Audley Court Property – Hollybush House Property – Tyrwhitt House Total restricted funds Total funds

Income Expenditure

Gains/ (Losses)

Transfers

At 31 March 2016

£’000

11,205 -

(15,003) 154

(783) (69)

626 (179) -

7,851 100 100 500 200 250 19,927

11,205

(14,849)

(852)

148 (100) (50) (100) 345

3 3 7 2 19 197 15 3 1,872

9 203 21 404 483 287 1 45 18 213

(12) (206) (28) (406) (75) (303) (114) (45) (21) (466)

15 2 2,100 4,238 24,165

100 10 11 33 1,838 13,043

(50) (2) (1) (11) (1) (2) (1,743) (16,592)

9,726 1,545 (345)

(852)

5 (350) (345) -

6,554 583 (260)

7,999 50 500 200 150 15,776

408 3 84 15 1,619 50 3 9 47 1,750 3,988 19,764

Statement of changes in reserves

•

General (Free) Reserves: these are funds which are available for general use and are not designated or restricted to particular purposes.

•

Investment Revaluation Reserve: this represents the excess of the market value of investments over their historical cost at the balance sheet date.

•

Defined Benefits Pension Scheme liability: this represents the actuarial deficit calculated under the requirements of FRS 102. At 31 March 2016 the valuation of the pension scheme showed a deficit of £260k (2015: deficit of £345k).

22. STATEMENT OF CHANGES IN RESERVES (CONTINUED) Designated Funds: Total net transfers of £102k during the year from designated funds to general reserves (2015: £796k) reflects the release of amounts previously designated by the Trustees for the specified purposes below: •

•

Fixed Asset Fund: this represents the net book value of fixed assets, less amounts represented by restricted funds, and reflects the fact that the reserve value is tied up in property and assets and therefore the funds cannot be spent on operational activity. Audley Court, Tyrwhitt House and Hollybush House Project Funds: these are designated funds which have been set aside for planned capital work. Landscaping work at Audley Court is currently underway and is expected to be completed during 2016/17. IT Development Fund enables Combat Stress to undertake planned development of the Information Technology infrastructure and database software. The IT Development Fund has been set aside to complete the implementation of the patient administration system within the community teams, to purchase and implement a new HR system, an intranet and to re-develop the website, all of which are expected to be completed during 2016/17. The Property Maintenance Fund is to ensure that sufficient funds are set aside for any unforeseen major property issues and to provide a sinking fund for regular, but costly maintenance, such as internal and external redecoration. It is expected that redecoration costs may result in these funds being required within the next two years.

Restricted funds: • • •

• • •

•

• • •

Treatment centres: These funds have been received for use within the specific treatment centres. Community services: These funds represent donations or grants which have been received for regional Community services. Community occupational therapists: £1.5m has been donated by The Royal British Legion over three years commencing in 2015/16 to pay for the salary costs, line management and administration of the occupational therapists based in The Royal British Legion Pop-In Centres in England and Wales. Helpline: This represents grant funding for running the Helpline and was received from Armed Forces Covenant (LIBOR Panel) in 2014/15. Reservists: This funding is from the Duke of Westminster’s Foundation and funds our work with those who have served in the Territorial Army or Reservists. Improving Access: This funding has been provided by Comic Relief to address stigma issues and to work to improve knowledge of the mental health problems encountered by veterans so that ex-service personnel are informed about our services and can access them more easily. Clinical Services: this represents two donations, one from BAE Systems which goes towards the costs of the Head of Psychological Therapies, and the other from the Cabinet Office Young Philanthropist Syndicate which is to fund EMDR (Eye Movement and Desensitisation Reprocessing) Therapy. Substance Misuse Case Management Service: This funding has been provided by the Ministry of Defence Armed Forces Covenant Team from the fund set up from collection of penalties incurred by banks for LIBOR fixing. The funding of £2m is to run a UK wide multi-year project providing a case management service for those veterans with substance misuse disorders who may also have underlying mental health issues. Substance Misuse Case Management Service: The Big Lottery have committed funding of £629k to provide substance misuse case management services in Scotland over 3 years commencing in 2014/15. £213k of this was received in 2015/16 (2014/15: £225k). Patient administration system: BAE Systems Plc are providing funding of £150k over 3 years to help pay for the new patient administration system (Carenotes). Peterborough veterans: £5k has been received from a local supporters group to help provide additional help to veterans living in the Peterborough area. Veterans’ Hardship Fund: £10k has been received from The Royal Armoured Corp War Memorial Benevolent Fund to help pay for veterans’ travel if they are unable to attend treatment due to financial hardship. The qualifying criteria and governance structure for this fund is being developed so that it may be applied for and distributed on an equitable basis for those veterans of ex-Royal Armoured Corps in need of the support. Property – Audley Court: This fund comes from a number of funders and is to be used on building improvements at Audley Court. Property – Hollybush House: This fund comes from a number of funders and is to be used on building improvements at Hollybush House. Property – Tyrwhitt House: This restricted funding is detailed in Note 15 above. The transfer of £350k from the restricted fund to general reserves reflects the release of the restriction for 2015/16. 53

22. STATEMENT OF CHANGES IN RESERVES (CONTINUED) Statement of changes in reserves 2014/15

Income Expenditure

Gains/ (Losses)

Transfers

At 31 March 2015

£’000

General reserves 10,619 Investment revaluation reserve 1,106 Defined benefit pension scheme asset / (liability) Designated funds 18. PENSION COSTS (CONTINUED) Fixed asset fund 7,297 Audley Court project 400 Audley Court landscaping Hollybush House project 500 Tyrwhitt House project 350 IT development fund 500 Property maintenance fund 750 Total unrestricted funds 21,522

13,067 -

(15,103) 108

436 (453)

1,143 3

13,067

(14,995)

(17)

554 (300) 100 (500) 150 (300) (500) 350

133 53 15 4 2,036

11 223 239 548 288 250 88 7 225

(8) (220) (232) (679) (269) (106) (88) (8) (389)

3 3 7 2 19 197 15 3 1,872

15 2,450 4,706 26,228

15 1,894 14,961

(13) (2,012) (17,007)

15 2 2,100 4,238 24,165

Restricted funds Treatment centres: Audley Court Hollybush House Tyrwhitt House Community services Helpline Reservists Improving access Clinical services Substance Misuse Case Management Service Property – Audley Court Property – Hollybush House Property – Tyrwhitt House Total restricted funds Total funds

At 1 April 2014 Restated

(17)

(350) (350) -

9,726 1,545 (345)

7,851 100 100 500 200 250 19,927

Legal and Administrative Information PATRON

HRH Prince of Wales KG KT GCB OM AK QSO PC ADC

PRESIDENT

General Sir Peter Wall GCB CBE DL

* R A

Nominations

Medical Services

Fundraising

Remuneration

Name Role TRUSTEES Lieutenant General AJN Graham CB CBE Chair of Trustees P Allen Air Commodore D Amroliwala OBE MA MBA FCIPD Colonel P Baxter R JM Green OBE MA Deputy Chair J Hughes CBK Melville LLB DIP LP NP TEP WS M Molesworth-St Aubyn DL Major M Morrissey FSCI A Pollitt OBE MA A SG Smith FCA BA (Hons) J Sobieraj R Thompson OBE FInstF Dr S Walton BSc MSc PhD CPsychol CSci Cdir FRSA FIoD Colonel R Ward Honorary Treasurer Professor Sir SC Wessely MA BM BCh MSc MD FRCP FRCPsych FMedSci FKC EXECUTIVE MANAGEMENT S Freeth BA MBA Chief Executive (appointed 04.01.2016) Lieutenant Colonel P M Poole MEB MILT Chief of Staff (from 04.01.2016), Interim Chief Executive (to 04.01.2016) Dr W Busuttil MBChB MPhil MRCGP FRCPysch Director of Medical Services R L W Marsh BSc MSc Director of Fundraising V Reynolds FCCA Director of Finance, Information Management & Governance J Shannon MA RMN ADEP Director of Operations N Styles MSc MCIPD Director of Corporate Management

Audit & Risk Management

Finance

The members of the Board of Trustees are directors of the charitable company under The Companies Act and are also its Trustees for the purposes of charity law. They are collectively referred to as the Trustees. Those who served on the main board and the charityâ&#x20AC;&#x2122;s committees, supported by members of the Executive during the year and since the year-end were:

X X* X* X X

X X

X X X X X X X* X* X*

X X

X X X

X X

X X X

X X

Committee Chair Retired/resigned as a Trustee on 22 September 2015 Appointed as a Trustee on 22 September 2015 55

Chief Executive

Sue Freeth BA MBA

Company Secretary

Victoria Reynolds FCCA

Registered Office

Tyrwhitt House Oaklawn Road Leatherhead Surrey KT22 0BX

Auditors

BDO LLP 2 City Place Beehive Ring Road Gatwick West Sussex RH6 0PA

Internal Auditors

RSM Risk Assurance Services LLP 25 Farringdon Street London EC4A 4AB

Bankers

National Westminster Bank plc City of London Office PO Box 12258 1 Princes Street London EC2R 8PA The Royal Bank of Scotland plc 1 Redheughs Avenue Edinburgh EH12 9JN

Investment Managers

Cazenove Capital Management 12 Moorgate London EC2R 6DA

Solicitors

Rradar Limited 13 Waterside Business Park Livingstone Road Hessle HU13 0EG Brodies LLP 2 Blythswood Square Glasgow G2 4AD

Thank you Combat Stress is sincerely grateful for all donations, which make a real difference to the veterans we support. In particular we would like to thank the following who have contributed £10,000 or more to our work: ABF The Soldiers’ Charity BAE Systems Plc BAE Systems, Warton The Bay Tree Charitable Trust BFBS - Big Salute Big Lottery Fund Mark Bisset The Lee Bonsall Memorial Fund City Veterans Network Comic Relief The Corporation of Trinity House Covenant Fund Mr and Mrs R Crabtree Crown Cash & Carry, Ruislip Arthur and Truda Draper’s Trust Fund Gwyneth Forrester Trust Frank Ross Ltd Malcolm and Rosie Glaister Goldman Sachs Gives The David and Claudia Harding Foundation Help for Heroes Historic Royal Palaces Irish Ex Service Trust JCA Group JSL Productions Dr and Mrs J D Olav Kerr’s Charitable Trust (No2) The Beatrice Laing Trust Leicester Cathedral James Molloy Museums & Galleries Ltd Network Rail Oak Foundation Poppyscotland

This list is in alphabetical order and is not reflective of total giving.

Miss M B Reekie’s Charitable Trust Queen Mary’s Roehampton Trust Royal Air Force Benevolent Fund Royal Armoured Corps War Memorial Benevolent Fund The Royal British Legion The Royal Edinburgh Military Tattoo (Charities) Ltd The Royal Navy and Royal Marines Charity The John Scott Charitable Trust Scottish Government Seafarers UK ShareGift Charles Skey Charitable Trust Support The Heroes The Swire Charitable Trust Tudor Foundation Victims & Survivors Service The Walker Trust WARpaint

We are also very grateful to all those who left us a legacy in their Will – this year we received 48 legacies for over £475,000 in total.

Moshe Price, Clinical Psychologist at our Hollybush House treatment centre 57

Contact us Combat Stress Tyrwhitt House Oaklawn Road Leatherhead Surrey KT22 0BX General enquiries: 01372 587 000 Email: contactus@combatstress.org.uk Helpline: 0800 138 1619 Website: combatstress.org.uk • • • • •

Facebook: facebook.com/CombatStress Twitter: @CombatStress Instagram: @CombatStress YouTube: youtube.com/user/CombatStressCharity LinkedIn: linkedin.com/company/combat-stress

Ex-Services Mental Welfare Society THIS REPORT HAS BEEN PRINTED ON FSC ACCREDITED PAPER

Company registered in England PLEASE RECYCLE

and Wales No 256353, Charity No 206002, Charity Scotland No SC038828