Groundwork Annual Report and Financial Statement 2016/17 by Ben Leach

THE FEDERATION OF GROUNDWORK TRUSTS

ANNUAL REPORT AND FINANCIAL STATEMENTS 2016/17 The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

ABOUT GROUNDWORK UK CHANGING PLACES, CHANGING LIVES Groundwork builds better, greener lives in the places that need it most across the UK. We provide training and create jobs, reduce energy and waste, re-connect people with nature and help communities transform their neighbourhoods. We are focused on changing places and changing lives until everywhere is vibrant and green, every community is strong enough to shape its own destiny and everyone can reach their potential. Groundwork operates as a federation, harnessing the passion, skills and experience of more than 1,000 employees and more than 100 volunteer trustees across the UK. In 2016/17 the Groundwork federation delivered projects and programmes to a value of some £84 million. Groundwork UK is the central body of Groundwork, responsible for the brand, systems and agreements that hold the federation together. We add value to Groundwork’s local activities by building the organisation’s profile, developing relationships with national partners, funders and commissioners, unlocking resources and managing programmes and contracts. We act as Groundwork’s national voice in the outside world and help all parts of Groundwork share the benefits of being in a federation by providing opportunities to share knowledge and learn from good practice. Groundwork UK is registered as a company and charity under the name The Federation of Groundwork Trusts, denoting its status as the membership body for Groundwork Trusts. This report outlines the activity, priorities and financial position of Groundwork UK and sits within the wider narrative about Groundwork’s collective achievements which can be found in our federation impact report.

CONTENTS Chairman’s statement................................................................................................................. 4 Governance.................................................................................................................................. 5 Objectives and public benefit................................................................................................... 7 Strategic report............................................................................................................................ 8

Overview...................................................................................................................... 9

Activity highlights.................................................................................................... 10

Our plans for the future......................................................................................... 17

Financial performance............................................................................................ 19

Principal risks and uncertainties........................................................................... 22

Statement of trustees’ responsibilities................................................................................. 23 Independent auditor’s report................................................................................................. 24 Statement of financial activities............................................................................................ 25 Charity balance sheet.............................................................................................................. 26 Cash flow statement................................................................................................................ 27 Notes forming part of the financial statements................................................................. 28 Advisers .................................................................................................................................... 43 Board of Trustees, Committees and Executive Team....................................................... 44

The Federation of Groundwork Trusts operating as Groundwork UK Charity registration no. 291558 Company registration no. 01900511 Registered office: Lockside, 5 Scotland Street, Birmingham B1 2RR Tel: 0121 236 8565 Email: info@groundwork .org.uk www.groundwork.org.uk

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

CHAIRMAN’S STATEMENT Groundwork is a changing organisation in the midst of a changing world. The political, economic and social context within which we operate feels unstable. As the impacts of climate change continue to emerge, the natural systems that underpin everything we do feel equally unstable. One thing that doesn’t change is that those who feel the brunt of this instability are those who have least resilience – people with limited resources, limited choice and living in places with poor access to services and poor local environments. One thing our work over the last 36 years has taught us is that within every community, however challenged, there are deep wells of pride and passion and a latent community spirit. As we have seen time and again over the last twelve months this community spirit quickly comes to the fore in times of adversity. Groundwork exists to unlock this power and potential within communities and to channel it into practical projects that help people improve their neighbourhoods, improve their own prospects and improve understanding of the need to live more sustainably. In order to fulfil our own potential as an agent of change in society we need to change as an organisation. Groundwork grew organically – and on demand – from a single project in North West England to a national network and international movement. Our structures and ways of working have served us well but now need to evolve to ensure we can deliver maximum impact where it’s most needed while remaining agile enough to respond to a fluid and complex governance and funding environment. Locked-in spending cuts, partial devolution, ongoing public sector transformation and new forms of social finance make this a challenging time for service delivery charities. We need to consolidate our commercial capabilities – ensuring our skilled people are supported to win and manage contracts at scale – while increasing the visibility of our charitable cause – unlocking new private and voluntary income so that we can deliver our services in the communities that need it most. The last year has seen Groundwork UK – like all parts of Groundwork – preparing for this journey of change without losing focus on its primary function – to develop and deliver programmes that bring benefits for communities now while helping them prepare better for the challenges that lie ahead. This has been a year of strong performance by our national team, delivering a number of high profile, high value and high impact programmes while strengthening our reserves position. Our plans for the year ahead will allow us to build Groundwork’s visibility and reinforce our credibility as an effective, mission-driven organisation with national reach but a deep understanding of and commitment to local communities. I’d like to thank Groundwork staff in our national office and across the country for their passion and creativity, our volunteer trustees who continue to give their time and talents to our organisation and all of the funders and partners who have helped us deliver so much impact in local communities in the last twelve months. We look forward to renewing those relationships - and building new ones - in the year ahead.

Graham Hartley, Chairman 26 September 2017

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

GOVERNANCE REGISTRATION NUMBERS Charity Registration Number 291558 Company Registration Number 01900511

STRUCTURE Groundwork UK is the operating name of The Federation of Groundwork Trusts, a charity and a company limited by guarantee. The governing documents are its Memorandum and Articles of Association, which were last amended by written resolution on 11 December 2009.

MEMBERS Membership of Groundwork UK comprises Groundwork Trusts. Groundwork Trusts are organisations which are registered charities and companies limited by guarantee with similar objects to Groundwork UK but delivering in a specific geographical area. A membership agreement sets out our internal roles, relationships and behaviours and the whole of Groundwork operates to a single, common strategy, which is overseen by our Board of Trustees.

BOARD OF TRUSTEES The Board of Trustees comprises the trustees of Groundwork UK in accordance with the Charities Act 2011, who are also the Directors of the company in accordance with the Companies Act 2006. Each Groundwork region or nation appoints one member to serve on the Board of Trustees. All appointed members must be trustees of Groundwork Trusts. A number of independent trustees are co-opted by the Board to broaden its skills base or to benefit from specialist expertise. We take our governance responsibilities very seriously, recognising the need to ensure as much of our resource as possible is expended on delivering our charitable mission while ensuring our organisation is strong, well-managed and financially viable in the long term. New trustees are provided with an induction to the organisation which includes a specific focus on their role and responsibilities as a trustee. Trustees are responsible for ensuring sound organisational systems, processes and policies are maintained and embedded in the way Groundwork UK is managed. This includes policies governing our fundraising standards, our investments and our responsibilities to our staff,

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

volunteers and beneficiaries. We pay particular attention to issues of Health & Safety, Safeguarding and Information Security and maintain comprehensive business continuity arrangements. We undertake skills audits of our Board to ensure we have access to the expertise needed to run our business efficiently, effectively and safely. The work of our Board is supported by four subcommittees: Groundwork UK Committee - supports our fundraising and business development processes, oversees the management of programmes and contracts for which Groundwork UK is the accountable body, ensures appropriate management of risk and governs the operational and financial performance of our organisation Groundwork UK Audit Committee – oversees our audit process and reviews our Annual Report and Financial Statements independently of the Groundwork UK Committee Federation Executive Team – executives from each Groundwork Trust support the Board with the formulation of strategy for the whole of Groundwork, overseeing the operational and financial performance of Groundwork Trusts and supporting change management Chairs’ Committee - assists with appointments to the Board, selection of the Chair and appointment of senior staff at Groundwork UK. Groundwork UK’s Senior Management Team is led by the Chief Executive and includes experienced staff members responsible for financial and business management, business development, communications and fundraising and programme management. This team is fully accountable to the Board and its Committees. It operates through delegated powers outlined in our financial regulations and provides regular reports on financial and operational performance and risk management.

RELATIONSHIPS WITHIN GROUNDWORK Groundwork is a federation of independent charities, each working under a common brand to a common strategy. This strategy sets the direction, milestones and targets which influence operational decision-making across all parts of Groundwork and against which executives hold each other to account.

Within this strategic framework Groundwork Trusts make their own decisions about the project work they develop and deliver. The federation strategy supports this local decision-making by focusing on those areas of development and delivery where there is a need or an opportunity for Groundwork to act collectively in order to achieve maximum benefit for the communities it serves. Groundwork UK delivers services and activities to support Groundwork Trusts by building brand and profile, generating income for local delivery and supporting quality and impact. Groundwork UK is held to account for its performance by its members. Each Groundwork Trust signs a membership agreement which sets down the obligations of Trusts to Groundwork UK and to each other and the services and standards Groundwork UK will deliver on behalf of the federation.

RELATED PARTY TRANSACTIONS Each Groundwork Trust is an independent charity with similar aims to Groundwork UK. Each Trust is therefore responsible for its own management and administration, and for developing and delivering projects that meet its objectives and core purposes. The appointed trustees of Groundwork UK are, by definition, also trustees of Groundwork Trusts. However, the SORP determines that a charity is not necessarily related to another charity simply because a particular person happens to be a trustee of both. Groundwork Trusts are therefore not considered to be related parties under the definition of the SORP and transactions between Groundwork UK and Groundwork Trusts do not require separate disclosure. Groundwork UK has considered the other disclosure requirements of the SORP and believes that there are no other related party transactions except for those between itself and its wholly owned subsidiary companies, as listed on page 35.

Young people take part in Groundworkâ&#x20AC;&#x2122;s Youth Summit

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

OBJECTIVES AND PUBLIC BENEFIT Groundwork UK’s charitable objectives are set down in its Memorandum of Association and date from the interpretation of charitable activities when they were drafted in 1985, as amended at annual general meetings and by written resolution. They commit Groundwork UK to delivering and promoting regeneration and sustainable development as follows. • To conserve, protect and improve the physical and natural environment anywhere in the United Kingdom and Republic of Ireland. • To improve quality of life by providing welfare, recreation or leisure facilities. • To advance public education in environmental matters. • To promote urban or rural regeneration in areas of social and economic deprivation through: »» the relief of poverty and unemployment »» providing education, training or work experience for people who are unemployed »» delivering financial assistance, technical assistance, business advice or consultancy in order to help people get back to work »» creating training and employment opportunities by providing work space, buildings and land »» maintaining or improving public amenities such as footpaths and cycle ways

»» educating the public in how to protect and improve the environment. • To promote the efficiency and effectiveness of charities in helping them deliver their objectives by providing information, advice and assistance. Groundwork UK’s trustees have referred to the Charity Commission’s general guidance on Public Benefit when reviewing the organisation’s objectives and planning future activities. In particular, the trustees consider how planned activities will contribute to the charitable objectives set out above. Further details about the impact of Groundwork UK’s activities during 2016/17 can be found on the following pages. Our work at Groundwork UK sits within the wider context of the projects, programmes and services delivered by the whole Groundwork federation. Each independent Groundwork Trust determines its own priorities and has its own charitable objectives. Groundwork operates to a collective strategy which binds all federation members to a clear set of overarching goals in support of these objectives. Our work is designed to address the needs of all sections of the community and we provide equal access to our services regardless of race, gender, disability or sexual orientation. For further details about our work visit www.groundwork.org.uk

»» the preservation of buildings or sites of historic or architectural importance »» reclaiming derelict land for use as open space »» providing public health facilities and schemes to promote healthier living »» alleviating anti-social behaviour and supporting crime prevention. • To promote sustainable development for the benefit of the public by: »» preserving, conserving and protecting the environment »» promoting the prudent use of natural resources »» improving quality of life in socially and economically disadvantaged communities »» promoting sustainable means of achieving economic and social growth and regeneration The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

GROUNDWORK UK STRATEGIC REPORT FOR THE YEAR ENDED 31 MARCH 2017 The Board of Trustees presents its report for the year ended 31 March 2017. This includes: statements about our organisation (page 2), governance and our objectives (pages 5-7), our financial and operational review for the year (page 9-16), our plans for the future (page 17) and details of our Board of Trustees, senior staff and advisers (pages 43 and 44).

Alleyway transformed by Groundwork and corporate partner MSD in Trafford

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

1. OVERVIEW 2016/17 has been another year of positive performance for Groundwork UK. Against a challenging and turbulent political and funding backdrop we have maintained the quality and impact of our programmes, helping Groundwork Trusts around the country deliver nearly 2,700 projects and providing grants and support to some 4,700 charities, community groups and schools. We have secured and mobilised some valuable and strategically important pieces of work including new relationships with HS2 and Sport England and have continued to meet the expectations of our major partners and clients including Tesco and DCLG. Managing partnerships and distributing grants continues to be at the heart of our work. In the last year we have concluded our work to support and learn from 12 local community partnerships funded by the Big Lottery Fund’s Communities Living Sustainably initiative and mobilised a very different but equally complex partnership as part of the Big Lottery Fund’s EU-funded Building Better Opportunities (BBO) programme. BBO is one of a number of programmes we are managing aimed at helping young people develop their potential and play a more active role in their local community. In the last year this has included helping more young people benefit from the National Citizen Service, piloting ‘enterprise camps’ and supporting young people to become ‘green leaders’ by leading projects to improve their local environment. Support from the Esmée Fairbairn Foundation is enabling us to add value to these activities and to help more community groups harness the talents of young volunteers. Community groups across the UK have benefited from the grants we have distributed on behalf of Tesco, OneStop, Clarion Housing and DCLG and we were delighted to be selected in a competitive procurement process to be the grant management partner for HS2 Ltd, which will enable us to support communities and businesses disrupted by the construction works. Our work to increase Groundwork’s profile continues to be a high priority. Media mentions of Groundwork have significantly exceeded target, helped by extensive local press coverage related to the Tesco Bags of Help programme. Our social media following is also growing

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

rapidly, with particular progress being achieved in enthusing a new generation of supporters through our Groundwork Youth campaign. We are making steady progress with the development of an expanded business supporter base and during the year have rebooted our longstanding partnership with United Utilities, continued to benefit from the fundraising activities of PwC staff and provided volunteering opportunities for a range of businesses including M&S, GVA and Network Rail. We continue to manage our operations in a way that minimises management cost while ensuring that we operate safely and to the highest quality. We exceeded our financial forecasts for the year, thanks to our ongoing focus on reducing overhead costs and the strong performance of our programmes and investments, helping us make progress against our strategy of building reserves. We achieved high levels of staff and stakeholder satisfaction and continued to improve our systems and processes, in particular in respect of information security. We have reviewed our asset management strategy during the course of the year in order to maximise the value of our properties and investments while ensuring management processes don’t detract from our core business and are in line with our values and sustainable development policy. Our Lockside property in Birmingham continues to provide a cost-effective base for our national operations and has increased in value, which helps to offset the continuing rental liability of our property in Manchester. A key element of our work in the year has been to support and drive ongoing processes of change across the Groundwork federation. Our national perspective gives us a good understanding of the range of skills and capacity across the organisation and the potential for Groundwork to deliver even greater impact in even more communities through new forms of consolidation and collaboration. As more communities feel the brunt of ongoing service reductions and increased vulnerability we know it’s our duty to fashion a Groundwork capable of deploying its skills and resources more flexibly and consistently to meet that need.

2. ACTIVITY HIGHLIGHTS This has been a year of good performance for Groundwork UK. We have met or exceeded the majority of targets we set ourselves in our annual business plan, brought a number of pieces of work to a successful conclusion and established some important new relationships. We helped Groundwork Trusts access £2.5m of funding to support their delivery in local communities and distributed £32m in grants to help local groups improve their neighbourhoods. Set out below are some of the ways in which our national activities have added value to Groundwork’s local delivery programmes in support of Groundwork’s collective strategy for 2020.

2.1 CREATING BETTER PLACES The last 12 months have seen an ongoing debate about the future of public services and the quality of life in local communities. Local authority budget cuts have seen many services scaled back or stopped altogether. Whilst political debate has focused on the funding crisis in the NHS and adult social care, the real brunt of the cuts has been felt in non-statutory, ‘neighbourhood services’ – those that support culture, community and the environment. Whilst we accept the inevitability that, if communities want to retain many of the services and facilities they value they will have to organise and volunteer to maintain them, we continue to make the case for a stronger support infrastructure to ensure that all people of all backgrounds and ages have the opportunity to get involved in making their local areas more sustainable and resilient. As part of this mission to help communities secure the resources and support they need to bring about change, we have continued to grow our portfolio of grant distribution activities. The Department of Communities and Local Government’s Community Rights programme is designed to give people a greater say in what happens to the buildings, services and land in their area. Groundwork UK is providing grant administration services across the Community Rights initiative and during year 2 of the three year programme we administered over 900 grants to a value in excess of £4.3m, achieving a satisfaction rating of 95% from grant recipients.

2016/17 was the first full year of running for the Tesco Bags of Help programme, which enables Tesco customers to decide which community projects should benefit from the funds raised through the sale of single use carrier bags. During the year 5,273 project applications were assessed, of which we were able to fund over 2,000 to a value of over £28m. This meant we could help over 500 schools, 700 registered charities, 150 sports clubs and over 200 local community groups realise their plans to improve their local areas. 350 projects have already been completed benefiting more than 1.5 million people. We also celebrated the first anniversary of the One Stop Carriers for Causes programme. During the year we have given out £500k in grants to a range of projects from scout groups to schools and hospices. We awarded our first flagship grant to fund a new library for a village school created from a barge. Clarion is the largest housing group in the country and Groundwork UK manages its Community Grants Programme, awarding funds of up to £5,000 to support projects which primarily benefit its residents. Last year nearly £125k was awarded to 34 projects ranging from children’s craft sessions and family fun days to community orchards and healthy eating and gardening clubs. In South Tyneside funds were used by the Bright Futures organisation to tackle high levels of anti-social behaviour and crime in partnership with Northumbria Police. The project engaged vulnerable girls and young women in positive activities to help their social development while offering free advice on sexual health, substance misuse and smoking. Groundwork UK has, in particular, played a lead role in the national conversation about the future of funding for parks and green spaces, working alongside a network of partner organisations to highlight the benefits of good green infrastructure in terms of community wellbeing and climate change adaptation but also highlighting innovative ways of reducing maintenance costs and generating alternative revenue sources. We have particular expertise in engaging businesses in action to improve and manage local environments. Through our partnership with United Utilities in North West England we completed seven projects in local areas impacted by the company’s capital investment programme, creating a positive social impact for over 10,000 people across all age groups. Among the facilities improved or

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

created were an accessible community fishing area in Darwen, a new play area in Ennerdale in Cumbria and a number of environmental enhancements in the Davyhulme area of Manchester. In addition, we have continued to work with United Utilities to develop social impact reporting, employability opportunities and new approaches to the management of river catchment areas in partnership with the Environment Agency. We have also engaged a wide range of companies in volunteering and fundraising to support local community action. Our longstanding partnership with M&S saw volunteers helping to improve a number of open spaces as part of the company’s Spark Something Good initiative. This included working alongside Groundwork’s community gardener on the Mobile Garden City, a temporary ‘meanwhile garden’ created on a plot of land in the Queen Elizabeth Olympic Park. Elsewhere staff from GVA have been giving their time to help create dementia-friendly

gardens as part of our national partnership with Learning Through Landscapes and graduates from Deutsche Bank and civil service fast-streamers helped us launch our first national Go Green for Groundwork day. As we attempt to find new models for building the resilience and sustainability of local neighbourhoods in light of ongoing spending reductions, learning from good practice – and from mistakes – is going to be crucial. 2016/17 saw the culmination of our five-year programme of learning and support as part of the Big Lottery Fund’s Communities Living Sustainably initiative. This produced valuable insights into how communities can drive action on energy efficiency, food growing, flood resilience and behaviour change and led to the production of toolkits, ‘how to guides’ and a range of learning reports which have been widely disseminated to other community groups, funders and public bodies.

Green for Go! – a community allotment project in Leeds

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

CREATING BETTER PLACES VALUE AND IMPACT 2016/17 to unlock over

to support

235,000

7,000

days of voluntary action to improve local communities

to improve and maintain

1,100 open spaces...

LAST YEAR, WE HELPED GROUNDWORK...

community organisations to carry out projects

...covering over

to plant

13.5m

13,000

square metres of land

new trees

GROUNDWORK IN ACTION: GROWING NEIGHBOURHOODS WITH BAGS OF HELP Middlesbrough organisation Streets Ahead was awarded Tesco Bags of Help funding to run their ‘Growing Neighbourhoods’ initiative, a project that aimed to improve the Gresham area of the town by transforming alleyways into blooming gardens for residents as a solution to anti-social behaviour. Improving the look of the alleys meant dealing with other problems first. Community workers helped local residents tackle issues ranging from rubbish dumping to drug dealing and then made sure the right relationships were in place with the council to ensure the project could go ahead and stood the best chance of success. Four alleyways have so far been transformed with more on the way. Each has been deep-cleaned with a hose down from the fire brigade before being issued with planters, garden plants and tools from a local garden centre. Residents have fitted benches and now have a place for relaxation, play and good old-fashioned neighbourliness. In one alley a group of women now have tea together every morning while in another residents have agreed rotas for tasks like bleaching the communal bins. Kim May from Streets Ahead said, “The tales we are getting from the alleys are really positive, people are getting to know their neighbours. What’s been really useful is that residents who have had their alleys done have got involved in talking to new residents, suggesting how they might tackle problems.” “We’ve got less tipping, and when it happens it’s being reported much quicker now there’s a champion who knows it’s their role to take the lead. We’ve seen drug dealing nipped in the bud… and people are not as frightened of going in the alley to empty their bins. Many people just didn’t know who was living next door or around the corner, and having a communal space is changing that.”

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

2.2 IMPROVING PEOPLE’S PROSPECTS In order for our local communities to flourish we need to ensure that more people can access economic opportunity and find fulfilling work. We continue to support Groundwork Trusts by generating resources and identifying good practice aimed at helping young and old develop their confidence and personal networks, reengage in learning, achieve qualifications or develop their employment prospects. Our aim is both to maximise the opportunities for Groundwork’s local projects and programmes to be built into the delivery of government-funded programmes in skills and employment support while generating additional resources to enable us to provide a more comprehensive support service for all those who need help. Progress is a £2.8m programme funded by the European Social Fund and the Big Lottery Fund as part of its Building Better Opportunities (BBO) initiative which was secured and mobilised in the last year. Through this programme we aim to support 840 of the most vulnerable unemployed or economically inactive young people across Coventry and Warwickshire to progress into employment, apprenticeships, training or to re-engage with education. We are managing a partnership of local delivery organisations providing tailored, one-to-one support to young people through a dedicated Progress Coach for up to 12 months. Our goal is to move 30% of participants into education or training, 20% into employment and 30% into active job search while ensuring that all those involved benefit from increased confidence, self-esteem and wellbeing. Progress is one of a number of BBO programmes being managed by Groundwork across England.

Where possible we link the support we provide to students and jobseekers with practical activities aimed at bringing about tangible improvements in local neighbourhoods. Groundwork’s local Green Teams are a good example of this win-win as experienced supervisors support participants through qualifications in horticulture, landscaping and construction while delivering contracted work for councils, housing associations, schools and businesses. For the last three years we have benefited from the support of PwC whose staff have been undertaking challenges to fundraise for Green Teams via the PwC Foundation. Thanks to these efforts £40k was awarded to eight projects across the country. This helped us offer bursaries to young people to improve their employment prospects and in total supported the achievement of more than 130 qualifications. Having the capacity, expertise and flexibility to test innovative models for helping people overcome their barriers to employment has always been part of Groundwork’s offer. As employment rates rise and those remaining on benefit have more complex or significant barriers in terms of health, disability or a lack of basic skills, this test and learn ethic will only become more important. Groundwork UK was one of the first organisations to be supported by the government’s Careers and Enterprise Company to pilot programmes designed to prepare young people for work, tackle disadvantage, and increase collaboration between employers and education providers. We have supported Groundwork Trusts operating in disadvantaged areas of Sheffield, Lancashire and Tees Valley to pilot ‘Enterprise Camps’ – a mixture of oneto-one mentoring and residential experiences aimed at unlocking the entrepreneurial spirit within participants. The programme has engaged with over 100 NEET young people with half of those completing the programme now engaged in learning, work or self-employed.

GROUNDWORK IN ACTION: ALISHA When Alisha was referred to Groundwork she was quiet, very anxious, depressed, lacking in motivation and didn’t really speak to people. Her OCD was pronounced and she suffered from an eating disorder, with her food intake minimal and controlled. Alisha had a driving licence and a car, but would not drive because of lack of confidence and anxiety. Groundwork’s coaches focused on helping Alisha set her own realistic targets. These started with small steps, such as driving to the end of the road, having a drink of water or tea whilst in the team room, and allowing herself to take part in messy activities. Alisha took part in a residential workshop and decided that she wanted to help other people overcome their anxiety by becoming an outdoor activities instructor. Groundwork helped Alisha find a work placement at an indoor climbing centre in Warrington, which led to an offer of a part time job and then an apprenticeship at an outward bound centre, which she has completed with a 100% attendance record. Alisha still has some problems with anxiety, depression and OCD. However, she says all these are greatly reduced to the point that they don’t now have a significant effect on her life. She helps to keep them in check by volunteering with Groundwork to support other young people.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

IMPROVING PEOPLE’S PROSPECTS VALUE AND IMPACT 2016/17

LAST YEAR, WE HELPED GROUNDWORK...

to progress

2,160

people into education, training or employment

to coach learners of all ages to secure more than

4,000 qualifications

GROUNDWORK IN ACTION: LUKE After a shaky start in life, Luke became homeless at 17 and dropped out of college. His key worker at the supported house where he was living suggested he enrol in Groundwork’s Enterprise Camp, where he was given the opportunity to grow in confidence, communicate with his young peers and tutors and tap into his entrepreneurial skills. Through the programme, Luke was given the opportunity to pitch his business idea of becoming a full-time magician to a number of successful business leaders through a ‘Dragon’s Den’ competition. He then began to find opportunities to show off his tricks further, including schools and college careers fairs and a local small business networking event. Since leaving the course Luke has set up his own business account, created his own business cards to support his networking and even set up his own website, with a little continued help from Groundwork. Luke - AKA ‘Quantum Fluke’ - said: “Thanks to Groundwork I can now chase my dream of becoming a full-time magician. This is something I never would have thought would happen - going up to strangers and having the confidence to talk to them and show them tricks. They have changed my life forever.”

to support children in

1,265 schools

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

2.3 PROMOTING GREENER LIVING AND WORKING Building more sustainable communities means not just changing places and changing lives but also changing behaviours. As the impacts of climate change begin to be felt, for example by those suffering the traumatic aftereffects of flooding, and as we see more people suffering from environmental injustice, such as poor air quality, lack of fresh food or unaffordable fuel bills, we realise that more sustainable living is not just an environmental imperative but a social one too. Through our projects we help individuals, households and whole organisations think and act differently to reduce waste, conserve natural resources and cut carbon emissions, not just protecting our natural ecosystems for future generations but helping to improve people’s health, wellbeing and living standards now. Funding from the British Gas Energy Trust enabled us to support Groundwork’s Green Doctors – professional advisers on energy and water efficiency - to support people living in cold homes and suffering associated health risks in nine target communities in northern England and Wales. 2,400 Green Doctor consultations were delivered in a mix of urban and rural communities, providing advice and support that can change lives but also building an evidence base to support future commissioning. On average nine practical energy saving measures were installed in each household including energy monitors, power downs, draught excluders and personal warmth items such as blankets, hats and gloves. Last year saw the development and launch of our national campaign to inspire and motivate more young people to become champions of greener living and practical community action. Green Leaders is a programme funded by the Big Lottery Fund as part of their national Our Bright Future initiative. It will help up to 900 14-19 year olds living in disadvantaged communities in six areas of England to be better prepared for adult life by leading projects that better prepare their neighbourhoods for environmental change. In our first year we engaged 347 young people in a range of practical projects with the potential to benefit 25,000 people, from improving a pocket park in Northampton to setting up a social enterprise to sell ‘upcycled’ materials in Manchester. We also developed a Green Leaders Plus personal development programme as a way of helping some young people extend and deepen their leadership and campaigning skills.

Solar panels being fitted as part of a Communities Living Sustainably project

mobilise young volunteers. Groundwork Youth has an ambitious target of reaching 100,000 young people with a positive message around social action, motivating 10,000 to demonstrate a commitment to their local environment, and supporting 100 young people to become advocates of Groundwork nationally and locally. It will also provide support for 1,000 green space community groups to engage more effectively with young people in their areas through a programme of resources, training and practical support. Whilst the initiative is still in its early stages, social media support for Groundwork Youth has grown rapidly and our call for Young Green Ambassadors and Youth Advisory Board members to shape and steer the programme and its associated campaigns has generated a high level of interest.

Thanks to funding from the Esmée Fairbairn Foundation we have been able to launch a programme that will enable us to trial new approaches to engaging young people and also help more grass roots community groups attract and

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

GREENER LIVING & WORKING VALUE AND IMPACT 2016/17 to provide energy and water efficiency advice to

66,800 households

to provide advice and practical solutions to avoid

41,000 tonnes of CO2 emissions

LAST YEAR, WE HELPED GROUNDWORK...

to support nearly

2,650

businesses to operate more sustainably

to divert nearly

8,000

tonnes of waste from landfill

GROUNDWORK IN ACTION: SUBHAN 16 year-old Subhan from Greater Manchester struggled to fit in growing up and didn’t have many friends. Feeling very alone when he left school and struggling to get a job, Subhan admits he hit rock bottom. He slowly started to make positive changes in his life when he was encouraged to join his local youth centre where he was able to meet new people and learn more about the community he was living in. He gradually felt more comfortable talking about his feelings and understanding that he wasn’t the only one who felt anxious or alone. Through the youth centre Subhan became aware of Groundwork’s Green Leaders project which he credits with unleashing the inner activist inside himself. He is now an established Green Leader in the local community and alongside his peers regularly spends time cleaning up and improving the places that matter to him and those around him. Speaking about the programme, Subhan said: “I remember I was walking along and it was a nice sunny day. I saw all these tall trees and they were right above me and all you see is spirals and patterns and it’s really beautiful. You look at them and think – ‘that tree has probably experienced harsher stuff than I have’ - but the tree is there and it’s still standing and you remember that you can do the same. I want my community to get better. It’s about turning up on the day and doing it and keeping your word. So one day when we grow up and come back you feel like you’ve made this place a better place. I’m a Green Leader with Groundwork and I’m proud.”

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

3. OUR PLANS FOR THE FUTURE Groundwork was born in the early 1980s at a time of political turbulence, social division and painful recession. The original business case for the first Groundwork project was clear about the context. “Operation Groundwork is being launched at a time when public and private resources are scarce – indeed the design of the project stems from the need to devise new ways of achieving social and economic objectives when money is tight.” Our plans for the future recognise the fact that, whatever the political backdrop, public spending will continue to decline due to cuts which are ‘locked in’, local politicians will be focused on ensuring statutory services such as adult social care are protected and transformed and national politicians will be pre-occupied with all-consuming talks to exit the EU. For the past few years Groundwork UK has been working to help the whole of Groundwork evolve its business model to ensure it can continue supporting communities and those who are most vulnerable while reducing reliance on public sector grants and contracts. The nature of the markets in which we operate means that we need increased scale in our operations and an ability to withstand financial – and sometimes reputational – risk. We also need a strong financial platform which will enable us to be selective about the kind of contract delivery that best aligns with our ethics and values. In order to achieve this we need to diversify our income base so that we generate more revenue through enterprise and traded activity but also learn to unlock a higher level of voluntary income and philanthropic investment. In turn this will need our cause to be more compelling, our brand to be more visible and our organisational structures simpler to navigate. The Groundwork 2020 strategy that we agreed as a federation in 2015 continues to guide the national activities of Groundwork UK. It commits us to finding new and more effective ways of creating better places, improving people’s prospects and promoting greener living and working in the communities that need it most. It also challenges us to look at the way we’re organised and led to ensure we’re helping as many people as possible and maximising the resources we invest in front line delivery.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Our plan for the year ahead retains the three core objectives we have been delivering against for the last 12 months: • to generate income to support local delivery of Groundwork’s mission by securing and managing grants, contracts and donations and building the capability of the federation to deliver high quality services • to build Groundwork’s visibility and credibility in order to support national and local fundraising and development activity • to manage Groundwork UK’s programmes and assets effectively and efficiently to ensure strong and responsive national functions. To achieve these objectives we will: • build on our current base of programmes to extend our work as a third sector grant management body, channelling resources and providing support to local community groups to improve their areas, including developing our new relationships with HS2 Ltd and Sport England. • continue to secure and manage contracts and grants that enable us to support local delivery by Groundwork Trusts, with a specific focus on supporting young unemployed people, helping vulnerable households reduce their outgoings through practical support around energy and water efficiency and providing a professional support infrastructure to enable communities to improve their surroundings • grow our relationships with responsible businesses by extending volunteering and fundraising activities and working as a strategic partner to deliver social value alongside contract outcomes • develop a new set of messages and campaigns aimed at presenting a more coherent voice and image to partners and other target audiences, supported by a network of influential ambassadors • deliver our Groundwork Youth campaign as a way of engaging young people as ambassadors, providing better pathways for them to extend their volunteering and supporting community groups to be more ‘young people friendly’

• continue to be at the forefront of public and political debate about the role of communities in managing local services and finding new models of management and maintenance for our vital green infrastructure • manage our assets and investments effectively and ethically to support our mission and our financial viability • drive change, consolidation and growth across our federation to ensure we make the most of our people’s specialisms and more communities are served by a strong and skilled Groundwork organisation. Everything we do will be underpinned by our values, which inform the way we work and behave. We will be environmentally aware and focused on communities in

need. We will be collaborative, show integrity and strive for quality in everything we do. Our decisions, actions and operations will also be guided by our sustainable development policy, which sets out how we aim to contribute to creating a strong and just society living within environmental limits. All of our planning is designed to ensure we have the resilience and flexibility as an organisation to cope with a changing and challenging context while focusing on the development of new programmes of work that contribute to our mission and express our values. This will mean a greater variety of income sources, investment in our communications capabilities, effective and efficient performance on our portfolio of programmes and contracts, active management of our costs and assets and a continued commitment from our volunteer trustees to support and champion our work.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

4. FINANCIAL PERFORMANCE Groundwork UK’s income for 2016/17 totalled £34 million (2016 £5 million), with an unrestricted surplus of £268k. This includes an increase in the valuation of our Lockside property in Birmingham of £161k. The underlying operating surplus of £107k exceeded budget by £21k In addition to the above income, we received funds and distributed grants totalling £4 million, funds which we distribute but which are not included in our stated turnover. Our financial strategy has three clear and linked strands as follows: • to minimise our overhead costs to ensure discretionary spending is focused on supporting front line delivery and generating more income • to achieve an operating surplus so that we can meet our Reserves Policy and increase the strength of our balance sheet • to use this increased financial strength to withstand unexpected challenges ahead and to invest in the capability we need to diversify our income streams and ensure the quality of our provision.

4.1 RESERVES In line with this financial strategy our trustees have agreed that we should aim to hold 12 months operating costs (c £1 million) in liquid reserves. We believe this is appropriate for the following reasons: • to absorb short term set-backs such as loss or delays in funding • to provide the working capital required to finance retrospective programme funding which can result in considerable timing differences between expenditure and receipt of funds • to cover the cost of investing in staff training and development to develop new and improved services for Groundwork • to cover the cost of developing new services, such as improved communications, research and quality and business information systems

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

• to set aside funds for capital assets such as ICT equipment and for properly equipping our properties • to provide funding to cover any unforeseen downturn in activity, allowing alternative activity to be generated and/or a planned down-sizing of our staff team. The above needs for reserves have to be balanced against the following factors: • the need to be seen as a responsible charity by the Charity Commission, our partners and funders, our member Trusts within Groundwork and the communities we serve • the need to avoid the creation or retention of unnecessary surpluses for which there is no future planned requirement or that bear no relation to our charitable aims. Our level of free liquid reserves at the end of 2016/17 stands at £540k, which represents net current assets less restricted funds and less designated funds expected to be used in the next financial year. Our general fund reserve does not include designated funds which have been set aside to support development, or restricted funds which represent advance payments by funders held by Groundwork UK pending distribution of grants or completion of project work. Designated funds total £236,322 (2016: £281,457). At the end of the financial year, unrestricted reserves, excluding designated reserves, totalled £1,539,888 (2016: £1,272,041) and restricted reserves totalled £223,537 (2016: £417,776). We continue to make prudent use of our designated funds to invest in future development. This includes £65k to support our drive to increase our brand recognition with a view to developing our fundraising capabilities, £151k to underpin the systems, skills and capacity we need to manage our operations effectively and £20k to facilitate change management across our federation. It is anticipated that all designated funds will be spent over the next two to three years. Restricted funds can only be used in accordance with agreements reached with funders relating to programmes of work and therefore do not form part of the general reserves that are under the control of the trustees. These

funds will all be distributed during 2017/18. The future movements on any such restricted funds reflect the longterm nature of Groundwork UK’s programme activity and in no way reflects on the organisation’s financial efficiency or performance.

4.2 INVESTMENTS The majority of the programme funds obtained by Groundwork UK are provided against specified projects for particular needs and are therefore of a restricted nature. This funding is substantially obtained for the distribution of grants or payments to Groundwork Trusts and other delivery partners acting as subcontractors, who are responsible for delivering local project activity. Therefore, any funds that are built up in advance of expenditure need to be kept as liquid as possible, whilst making every effort to maximise any available investment return. Cash that is unrestricted in nature and is not required in the short term, which is regarded as six months, is considered for long term investment. In 2010 our trustees decided to invest these funds with Barings Asset Management Ltd in a managed fund arrangement with a target to deliver an annual return of 5% above the Consumer Prices Index. Regular progress meetings are scheduled with Barings to monitor performance. Despite the turbulent economic and political backdrop, last year our investments performed strongly with a gross return of 11% (compared to -3.2% in the previous year). The value of units in the fund has grown by 34% since the initial investment. All of these funds can be converted into cash without notice or penalty, should there be an immediate need for liquid funds. We have reviewed the investment appetite of our trustees and consider that the current focus on protecting our capital from the volatility of the stock market while targeting steady, long-term growth, remains the most appropriate strategy. We continue to keep the relationship with our fund manager under review and, during 2017/18, will review the option of switching to a fund with a stronger ethical management approach in line with our sustainable development policy.

4.3 GRANT MAKING POLICY Groundwork UK’s key activities are in part achieved through a programme of grants distributed to community organisations, Groundwork Trusts and other delivery organisations. Such grants are considered to be in the nature of performance related grants and are recognised in these financial statements to the extent that the projects which they are funding have been completed. All grant programmes have specific guidelines, criteria and priorities with a formal process of approval.

4.4 PRINCIPAL FUNDING SOURCES The major sources of funding during the last year are set out below. • Private sector grants and contracts – £32.1 million (£2.4 million in 2015/16) This includes funds provided by businesses, charitable trusts and foundations to support local community activities. The significant increase in income reflects our management of large grant programmes. The major source of these funds during 2016/17 have been Tesco Bags of Help (£28.5 million), OneStop Carriers for Causes, PwC, British Gas Energy Trust and United Utilities. • Public sector grants and contracts - £1.9 million (£2.3 million in 2015/16) This includes funding secured to deliver programmes and services on behalf of government departments, public bodies and lottery distributors. Major funders during 2016/17 included the Big Lottery Fund and the Department of Communities and Local Government.

4.5 EXPENDITURE ON CHARITABLE OBJECTIVES In line with the objectives set in our Groundwork 2020 strategy and the Groundwork UK business plan, our expenditure in the year was directed towards the following activities. • Grants to community groups - £30 million providing resources to enable local communities to deliver projects aimed at improving their neighbourhoods •

Programme delivery (excluding grants and fundraising) - £2.4 million providing funding to support front line delivery by Groundwork Trusts and other partner organisations

•

Programme management - £1.1 million ensuring the needs of our partners and funders are met while learning from Groundwork’s delivery to influence future programmes

• Fundraising - £290k generating resources to support local delivery and enhance national programmes and campaigns •

Supporting our federation - £128k providing systems and services to enable Groundwork Trusts to communicate effectively, share knowledge and collaborate

• Running Groundwork UK – £313k ensuring Groundwork UK is effective and flexible and generating maximum revenue from its assets and investments.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

4.6 KEY PERFORMANCE INDICATORS

Priorities for action

A number of key performance indicators are presented to our trustees on a quarterly basis to measure levels of stakeholder satisfaction and performance against funders’ targets on specific programmes. These are compared to target levels of performance outlined in the business plan.

Having spent considerable time focusing on our own activities and behaviours as an organisation, our next priority is to use our status as a service provider, programme manager and grant distributor to influence the actions of others. Our Birmingham office is home to a number of other organisations and hosts a range of external meetings and events. We will find creative ways of getting a message across to all who use our facilities about the benefits of environmentally responsible practice. We will look to incorporate sustainable development into the due diligence work we undertake with partners engaged in our programmes of work and explore the potential to signpost our grant recipients to resources and support to help them deliver their projects and wider activities in a way that minimises harm and delivers positive environmental outcomes.

Monthly management accounts track progress against our business plan targets and reforecasts to the year end are made monthly. A key performance indicator is the amount of income secured as a percentage of forecast salaries and operating costs. This informs year end forecasts based on prior years’ experience.

4.7 SUSTAINABLE DEVELOPMENT REPORT Groundwork’s charitable mission is to promote sustainable development – helping communities and individuals develop the understanding and capability to take action and make choices that deliver social equity and economic prosperity while recognising the need to live within the earth’s finite natural resources. In order to have credibility as an organisation we need to demonstrate that the principles of sustainable development underpin the way we go about our work. Our sustainable development policy commits us to reporting on how these principles are integral to the way we plan and manage our operations, support our employees and utilise our resources. Areas of progress Over the last 12 months we have made significant strides in ensuring that environmental responsibility is central to the way we behave in our workplace. Staff-led initiatives have promoted sustainable travel, eating less meat and volunteering in the local community. Our campaign to minimise waste has resulted in us sending zero waste to landfill and we are also working towards Workplace Wellbeing accreditation. We continue to prioritise ethical suppliers in our purchasing arrangements for utilities, catering, cleaning and promotional materials and have commissioned a review to assess the scope for managing our investments in a way which aligns more fully with our ethical policy and values.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

5. PRINCIPAL RISKS AND UNCERTAINTIES The Board of Groundwork UK fully accepts its responsibilities under the Charity Commission’s Statement of Recommended Practice (SORP) for ensuring that the major risks to which the charity is exposed are identified and reviewed, and that there are systems in place to mitigate them. Major risks are those that have a high probability of occurring and would, if they occurred, have a severe impact on either operational performance or achievement of purpose, or could damage Groundwork’s reputation. Groundwork UK’s Board of Trustees, through its delegated Committee structure, regularly monitors the development and operation of Groundwork UK’s risk management process. The process, which operates as both a top-down and bottom-up mechanism, is designed to enable trustees to conclude whether the major risks to which the charity is exposed have been identified and reviewed, and that systems have been established to mitigate these risks. All of Groundwork UK’s major programmes are managed on a risk basis with individual risk registers used both as management and reporting tools. Groundwork UK’s senior management team has, with support from trustees, undertaken the following: • reviewed the main, high impact generic risks • established a comprehensive risk register of all the significant risks which might impact on Groundwork UK’s core purposes and key objectives • established a bottom-up and top down process of risk identification, assessment, mitigation and monitoring for all likely risks • produced a detailed quarterly Committee report setting out the action designed to eradicate or mitigate the risks identified • developed a comprehensive business recovery plan designed to ensure continuity of Groundwork UK’s operations in the event of a crisis or disaster situation. Following review by Committee, a quarterly report is prepared for the Board identifying the major risks on which trustees should concentrate action at the highest level. The major areas of potential risk, for which we have active and specific mitigation strategies in place, are as follows:

• ongoing change processes in the wider Groundwork federation consuming management time and impacting on our ability to promote a consistent national offer to partners and funders • an unexpected withdrawal of funding from a major partner, for example due to failure to meet targets, or a significant clawback of funding as a result of programme audits, particularly in respect of EU-funded programmes • poor delivery quality by one of our local partners or the inappropriate use of funds by a grant recipient undermining our reputation and compromising future business development • a major personal incident (e.g. in relation to Health & Safety or Safeguarding) occurring on a local project delivered through a programme for which Groundwork UK acts as the accountable body or prime contractor • non-compliance with data security requirements by our staff or subcontractors or our systems being affected by a significant cyber attack. Groundwork UK recognises that risk management is an essential part of good business practice and an effective mechanism of good governance. The Board is committed to ensuring that risk management processes are embedded throughout the organisation, and that these processes are used to help identify at an early stage issues that affect performance or achievement of purpose. However, the Board recognises that a risk management system can only seek to manage rather than eliminate risk of failure, and that it should therefore be only one of the tools that the Board uses to provide effective control and management of the administration of the charity.

5.1 FINANCIAL INSTRUMENTS Groundwork UK’s financial risk management objective is broadly to seek to make neither profit nor loss from exposure to currency or interest rate risks. Its policy is to finance fixed assets and working capital through a mixture of retained reserves and bank borrowing. Groundwork UK does not use hedge accounting. Its policy is to finance fixed assets through borrowings for a term broadly expected to match the useful economic lives of the assets. The charity also has an arrangement with its bankers such that no interest is payable if sufficient cash funds are held in its accounts.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The Trustees are responsible for preparing the Strategic Report, the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Trustees to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charity for that period.

FUNDRAISING PRACTICE The Trustees are committed to ensuring that Groundwork UK generates funds to support its work in a way that meets our own ethical standards and industry good practice. We are registered with the Fundraising Regulator and have updated our fundraising policy in line with the code of fundraising practice. We confirm that: • we do not use professional fundraising agencies or commercial participators to raise funds on our behalf • potential donors are invited to make general donations to Groundwork UK or to a particular project that is highlighted

In preparing these financial statements, the Trustees are required to:

• we have had no complaints regarding our fundraising activities during the year.

• select suitable accounting policies and then apply them consistently

EVENTS AFTER THE YEAR END

• make judgements and accounting 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 • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business. The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity’s transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

There are no material post year end matters that affect the financial statements.

DISCLOSURE OF INFORMATION BY THE TRUSTEES TO THE AUDITOR Each of the Trustees has confirmed that, so far as they are aware, there is no relevant audit information of which Groundwork UK’s auditor is unaware, and that they have taken all the steps that they ought to have taken as a trustee in order to make themselves aware of any relevant audit information and to establish that Groundwork UK’s auditor is aware of that information.

Signed on behalf of the Board of Trustees

Graham Hartley Chairman 26th September 2017

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE FEDERATION OF GROUNDWORK TRUSTS (OPERATING AS GROUNDWORK UK)

We have audited the financial statements of The Federation of Groundwork Trusts (operating as Groundwork UK) for the year ended 31 March 2017 which comprise the statement of financial activities, the balance sheet, the 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 members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charity’s 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 members as a body, for our audit work, for this report, or for the opinions we have formed.

RESPECTIVE RESPONSIBILITIES OF TRUSTEES AND AUDITORS 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 auditor under the Companies Act 2006 and report in accordance with that Act. 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.

• 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.

OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the trustees’ report, which includes the strategic report, for the financial year for which the financial statements are prepared is consistent with the financial statements and the strategic report and the trustees’ report have been prepared in accordance with applicable legal requirements. Based on our knowledge and understanding of the charity and its environment obtained during the course of the audit we have identified no material misstatements in the strategic report and trustees’ report.

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 requires us to report to you if, in our opinion: • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or • the financial statements are not in agreement with the accounting records and 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.

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.

OPINION ON FINANCIAL STATEMENTS In our opinion the financial statements: • give a true and fair view of the state of the charity’s affairs as at 31 March 2017 and of the incoming resources and application of resources, including the income and expenditure, for the year] then ended;

Kyla Bellingall (Senior Statutory Auditor) for and on behalf of BDO LLP, Statutory Auditor Birmingham, United Kingdom Date: BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

THE FEDERATION OF GROUNDWORK TRUSTS (GROUNDWORK UK)

The Federation of Groundwork Trusts (Groundwork UK) STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2017 Statement of financial activities for the year ended 31 March 2017 2017

2017

2016

Restricted Funds

Total

3,206,644 195,790 183,192

34,639 -

30,769,415 -

34,639 33,976,059 195,790 183,192

25,715 4,682,172 181,774 201,674

_________

3,585,626 _________

34,639 _________

30,769,415 _________

34,389,680 _________

5,091,335 _________

(59,774)

(262,233) (30,701,421)

(289,562) (34,298,765)

_________

(3,564,899) _________

(59,774) _________

(30,963,654) _________

(34,588,327) _________

(5,379,051) _________

146,620 _________

_________

146,620 _________

(10,946) _________

167,347 _________

(25,135) _________

(194,239) _________

(52,027) _________

(298,662) _________

20,000

(20,000)

187,347

(45,135)

(194,239)

80,500

________

Note

Income from Donations and Legacies Charitable activities Other trading activities Investments

2 3 2 2

TOTAL

2017

Unrestricted Funds General £

Designated Funds

Expenditure on Raising funds Charitable activities

4 5

TOTAL Net gains (loss) on investments Net income / (expenditure)

(27,329) (3,537,570)

Transfers between funds Net income / (expenditure) after transfers

(366,648) (5,012,403)

(52,027)

(298,662)

80,500

42,000

_________

267,847

(45,135)

(194,239)

28,473

1,272,041

281,457

417,776

1,971,274

2,227,936

_________

1,539,888 _________

236,322 _________

223,537 _________

1,999,747 _________

1,971,274 _________

Other recognised gains Gains on revaluation of Fixed assets for charity’s own use

Net movement in funds

(256,662)

Reconciliation of funds Fund balances brought forward

Fund balances carried forward

Income and expenditure derive from continuing operations. The charitable company has no other recognised gains or losses other than those passing through the statement of financial activities. The notes on pages 28 to 42 form part of these financial statements.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

THE FEDERATION OF GROUNDWORK TRUSTS (GROUNDWORK UK) The Federation of Groundwork Trusts (Groundwork UK) CHARITY BALANCE SHEET AT 31 MARCH 2017

Charity balance sheet at 31 March 2017

Company number 01900511 Fixed assets Tangible assets Investment property Investments

Current assets Investments Debtors Cash at bank

Creditors: amounts falling due within one year

Note

2017 £

9 9 10

11 12

Net current assets

2017 £

2016 £

912,219 897,500 5 _________

845,880 817,000 5 _________

1,809,724

1,662,885

937,486 4,482,721 4,252,632 _________

844,677 653,616 2,748,860 _________

9,672,839

4,247,153

(8,857,533) _________

(3,198,745) _________

Total assets less current liabilities

2016 £

815,306 _________

1,048,408 _________

2,625,030

2,711,293

Creditors: amounts falling due in more than one year

(557,029)

(634,765)

Provisions for liabilities

(68,254) _________

(105,254) _________

Net assets

Reserves Unrestricted funds: General funds Designated funds Investment property revaluation

1,999,747 _________

1,971,274 _________

18 18 18

1,342,388 236,322 197,500

1,155,041 281,457 117,000

Restricted funds

223,537 _________

417,776 _________

1,999,747 _________

1,971,274 _________ th

These financial statements were approved by the Board of Trustees and authorised for issue on 26 September 2017 and were signed on its behalf by:

Graham Hartley Chairman th

Date: 26 September 2017 The notes on pages 28 to 42 form part of these financial statements.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

THE FEDERATION OF GROUNDWORK TRUSTS (GROUNDWORK UK)

The Federation of Groundwork Trusts (Groundwork UK) CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2017 Cash flow statement for the year ended 31 March 2017 Note 2016/17 ÂŁ

2015/16 ÂŁ

1,430,165

1,075,793

183,192 (26,689) (5,160)

201,674 (24,751) (4,995)

1,581,508

1,247,721

(77,736) (77,736)

Change in cash and cash equivalents in the reporting period

1,503,772

1,169,985

Cash at the beginning of the reporting period Cash at the end of the reporting period

2,748,860 4,252,632

1,578,875 2,748,860

Movement in Cash

1,503,772

1,169,985

Cash flows from operating activities Net cash provided by (used in) operating activities

Cash flows from investing activities Dividends, interest and rents from investments Purchase of Investments Purchase of property, plant and equipment Net cash provided by (used in) investment activities Cash flows from financing activities Repayments of borrowing Net cash provided by (used in) financial activities

The notes on pages 28 to 42 form part of these financial statements.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

THE FEDERATION OF GROUNDWORK TRUSTS (GROUNDWORK UK)

NOTES FORMING PART OF THE FINANCIAL Trusts STATEMENTS FOR THE The Federation of Groundwork (Groundwork UK)YEAR ENDED 31 MARCH 2017 Notes forming part of the financial statements for the year ended 31 March 2017

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

Basis of preparation The financial statements have been prepared under the historical cost convention and comply with the Companies Act 2006. The financial statements have been prepared in accordance with applicable Accounting Standards and comply with the requirements of the Statement of Recommended Practice, "Charities SORP (FRS 102)â&#x20AC;?. The results of acquisitions are accounted for from the relevant date of acquisition under the acquisition method of accounting. Accounting policies are supplemented by estimation techniques where judgement is required in measuring the value of income and expenditure and of assets and liabilities. The onerous lease provision at Fourways House has been calculated based on the estimation for future expenditure against potential future income. The building valuation at Lockside Scotland Street has been valued based on a professional surveyorâ&#x20AC;&#x2122;s opinion

Grants and other income Revenue and capital based grants are credited to the statement of financial activities in the year in which they are received or become receivable under the terms of a grant agreement. Where grants are considered to be performance related, income is recognised to the extent that the services outlined in the funding agreement had been performed by the year end. Where income has been received but the related services had not been performed by the year end, the balance is carried forward as deferred income. Donations are accounted for on a cash received basis. Rental income is recognised in the period to which it relates. Incoming resources have been allocated between the key strategic areas of activity on a basis consistent with the allocation of expenditure (note 1(d)).

Grants payable Grants offered to Groundwork Trusts and other organisations are typically paid in stages, with stage payments dependent upon the submission of claims detailing the work that has been completed. Claims which fall due within the year, which relate to work completed before the year-end, have been accrued for if they had not been paid during the year.

Expenditure All expenditure is accounted for on an accruals basis and has been listed under headings that aggregate all the costs related to that activity. Where costs cannot be directly allocated they have been allocated to activities on a basis consistent with the use of resources. Costs of generating funds relate to the cost of external promotion and publicity to raise the profile of the charity and its objectives and costs associated with bids for funding. Direct costs of charitable activities are those costs, which have been expended on delivery programmes. Support costs have been allocated to the key strategic areas of activity on the basis of the percentage of staff time spent on each of these areas.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Funds Unrestricted funds are those which are available for use at the discretion of the Board of Trustees in furtherance of the general objectives of the charity. The Board may, at its discretion, set aside unrestricted funds for specific future purposes and these are referred to as Designated Funds. Where such funds are no longer required for the intended purposes they are released back to general unrestricted reserves. Restricted funds are those which can only be used for purposes specified by the donor, or which have been raised under the terms of a specific bid. Expenditure under the terms of the grant agreement is shown as restricted expenditure.

Depreciation Tangible fixed assets are stated at cost less provision for depreciation. Depreciation is calculated so as to write off the cost less the estimated residual value of tangible fixed assets by equal annual instalments over their estimated useful economic lives as follows: Leasehold buildings Office equipment Computer equipment

50 years 4 years 3 years

Pensions The company contributes to two defined contribution schemes. Contributions are charged to the statement of financial activities as they become payable.

Operating leases Rentals paid under operating leases are charged to the statement of financial activities on a straight-line basis over the life of the asset.

Provisions Provisions for future liabilities are recognised when the charity has a legal or constructive obligation that can be reliably estimated and for which there is an expectation that payment will be made.

Current asset investments Investments held are valued at market value. Unrealised gains and losses on the revaluation of investments are recognised in the statement of financial activities.

Investment Properties and Revaluation of Fixed Assets The Charities SORP (FRS 102) requires that mixed use properties should be split between tangible fixed assets and investment property. Our property is valued on a fair value basis and has been split 50/50 based on two of the four floors being available to let. Going forward, an adjustment will be made each year end based on current fair value

Estimates and Judgements The property valuations referred to above are based on professional opinion of fair value from an RCIS qualified valuer at Savills (UK) Ltd, chartered surveyors. The property is valued at fair value, which is the price that would be received to sell an asset or transfer a liability in an orderly transaction by willing participants at the measurement date. The valuerâ&#x20AC;&#x2122;s have determined that fair value is the value of the building and car park for residential use In addition, an estimate has been made by management on liabilities associated with an onerous lease on our Fourways House property in Manchester. The estimate is made based on expected future outgoings less secured income to the end of the lease in 2020. Grants payable includes ÂŁ7.3 million of committed expenditure to grant recipients on our Tesco Bags of Help programme and One Stop Carriers for Causes programme. These grants had not been paid across to award winners at the year end but are all expected to be paid in the first half of 2017-18. Included in this amount is ÂŁ2.8 million of committed awards that is due to be received from Tesco in September 2017 29

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Incoming resources Incoming resources

Voluntary income Donations and gifts Grants for central costs

Other Trading Activities Rental income Membership Fee

Investment income Dividends Bank interest

2017 Unrestricted £

2017 Designated £

2017 Restricted £

2017 Total £

2016 Total £

34,639

25,715

_________

34,639 _________

_________

34,639 _________

25,715 _________

206,821 135,100

196,785 145,800

_________

341,921 _________

_________

341,921 _________

342,585 _________

26,689 10,372

24,751 16,112

_________

37,061 _________

_________

37,061 _________

40,863 _________

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Incoming resources Incoming resources from charitable activities

Income on projects was provided by: Central government Local authorities Public/lead agencies Private sector National Lottery Other

Income was allocated to: Programme delivery Programme management Federation support Running Groundwork UK

2017 Unrestricted £

2017 Designated £

2017 Restricted £

2017 Total £

2016 Total £

122,951 434,247 1,568,542 1,080,904 _________

_________

,29,488,300 1,281,115 _________

122,951 434,247 31,056,842 1,281,115 1,080,904 _________

183,877 24,900 1,129,437 1,886,315 919,678 537,965 _________

3,206,644 _________

_________

30,769,415 _________

33,976,059 _________

4,682,172 _________

3,062,104

29,382,483

32,444,587

4,260,777

103,325 11,998

991,457 115,125

1,094,782 127,123

280,930 46,822

29,217 _________

_________

280,350 _________

309,567 _________

93,643 _________

3,206,644 _________

_________

30,769,415 _________

33,976,059 _________

4,682,172 _________

2017 Designated £

2017 Restricted £

2017 Total £

2016 Total £

12,189 15,140 _________

_________

116,963 145,270 _________

129,152 160,410 _________

190,906 175,742 _________

27,329 _________

_________

262,233 _________

289,562 _________

366,648 _________

For definitions of the above categories, see pages 18 and 19

Cost of Raising funds 2017 Unrestricted £ Staff costs Other costs

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Charitable activities

Expenditure on projects related to the following activities: Programme delivery Programme management Federation support Running Groundwork UK

Expenditure on projects comprised: Programme delivery Programme management Federation support Running Groundwork UK

Analysis of Grants : Creating Better Places Improving Peoples Prospects Promoting Greener Living and Working

2017 Unrestricted £

2017 Designated £

2017 Restricted £

2017 Total £

2016 Total £

3,378,114

57,080

29,317,553

32,752,747

4,558,668

113,988 13,236

1,926 224

989,266 114,871

1,105,180 128,331

302,490 50,415

32,232 _________

544 _________

279,731 _________

312,507 _________

100,830 _________

3,537,570 _________

59,774 _________

30,701,421 __________

34,298,765 __________

5,012,403 _________

Grants Payable

Support Costs

Total 2017

Total 2016

Other direct costs of activities £

29,037,329

2,765,297

950,122

32,752,748

4,558,668

978,810 113,773

93,310 10,835

32,060 3,723

1,105,180 128,331

302,490 50,415

277,056 _________

26,385 _________

9,065 _________

312,506 _________

100,830 _________

30,407,968 _________

2,895,827 _________

994,970 _________

34,298,765 _________

5,012,403 _________

Grants to Institutions

Grants to Individuals £ -

Grant Support Costs £ 962,338 29,148

£ 29,410,669 890,824

£ 30,373,007 919,972

106,475

3,484

109,959

_________

994,970 _________

31,402,938 _________

30,407,968

________

Total

Note:£28m has been granted under the Tesco Bags of Help programme. The maximum grant on this programme is £12k 2017 £

Support costs are analysed as follows: Staff costs Temporary staff and recruitment Legal and professional Travel and subsistence Training and meetings IT support Other costs

2016 £

489,552 449 38,144 23,352 20,225 185,884 237,364 _________

465,939 10,240 48,882 19,490 22,405 126,852 239,910 _________

994,970 _________

933,718 _________

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Employees The average monthly number of employees during the year, analysed by category, was as follows.

Programmes Management and administration Fundraising and publicity

The aggregated cost of these persons was as follows:

Wages and salaries Social security costs Pension costs (see note 20)

2017 Number

2016 Number

25 5 4 _________

21 5 3 _________

34 _________

29 _________

2017 £

2016 £

1,049,010 102,215 170,503 _________

975,386 93,060 132,772 _________

1,321,728 _________

1,201,218 _________

The emoluments of employees (excluding pension contributions) over £60,000 per annum are disclosed in £10,000 bands as follows. 2017 2016 £ £ £60,000 - £70,000 £70,000 - £80,000 £80,000 - £90,000

2 1

1 -

_________

The key senior management personnel of the charity are the Chief Executive Officer, Director of Finance and Corporate Services, Director of Partnerships and Programmes and the Head of Contracts with a total cost in 2017 of £298,303 (2016 - £258,348). Total contributions under defined contribution schemes on behalf of these higher paid employees were £15,490 (2016 - £10,559).

Transactions with trustees No trustees received any remuneration for services performed on behalf of the company. The accounts include £450 worth of trustee donations. During the year ended 31 March 2017 12 trustees (2016 - 8) received reimbursed travel and subsistence expenses amounting in total to £5,280 (2016 - £3,515).

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Net incoming resources Net incoming resources for the year is stated after charging: Auditor's remuneration: - Audit - parent company - Other services Depreciation Rentals payable under operating leases: - Equipment - Land and buildings

2017 £

2016 £

14,400 19,320

14,400 2,350 21,318

1,641 105,391 _________

1,594 100,569 _________

Premiums of £6,132 (2016 - £6,925) were paid on a professional indemnity policy to protect the charity and trustees from loss arising from the neglect or defaults of trustees. 9

Tangible assets

Long leasehold land and buildings £

Office and computer equipment £

Total £

1,097,933 80,500 _________

782,118 5,160 _________

1,880,051 5,160 80,500 _________

1,178,433 _________

787,278 _________

1,965,711 _________

280,933

753,239

1,034,172

Charged for the year

_________

19,320 _________

At 31 March 2017

280,933 _________

772,559 _________

1,053,492 _________

897,500 _________

14,719 _________

912,219 _________

817,000 _________

28,880 _________

845,880 _________

Cost or Valuation At 1 April 2016 Additions Revaluation Reserve At 31 March 2017 Depreciation At 1 April 2016

Net book value At 31 March 2017 At 31 March 2016

Investment property

Cost or Valuation At 1 April 2016 Revaluation Adjustment At 31 March 2017

Long leasehold land and buildings £ 817,000 80,500 _________ 897,500 _________

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Investments held as fixed assets

Cost At 1 April 2016 Additions

Shares in subsidiary undertakings ÂŁ 5 _________ 5 _________

At 31 March 2017

Nature of business registration

Country of Registration

Class of shares held

Proportion

Groundwork Trade Association Ltd

Dormant

England (Company No. 3852899)

Ordinary

100%

Groundwork Enterprises Ltd

Dormant

England (Company No. 2403588)

Ordinary

100%

Groundwork UK Ltd

Dormant

England (Company No. 7422194)

Ordinary

100%

Groundwork North West Ltd

Dormant

England (Company No. 7422282)

Ordinary

100%

Groundwork NW Ltd

Dormant

England (Company No. 7421271)

Ordinary

100%

The Crime Concern, Marks and Spencer, Groundwork Partnership ("Youthworks")

Dormant

England (Company No. 2969695)

Guarantee

100%

Groundwork in the North West

Dormant

England (Company No. 7030519)

Guarantee

100%

Groundwork South East

Dormant

England (Company No. 7182954)

Guarantee

100%

Name

35 The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Net assets

Retained surplus for the year

2017 £

2016 £

2017 £

2016 £

4,000 25,002 1 1 1 _________

_________

Subsidiary undertaking Groundwork Trade Association Ltd Groundwork Enterprises Ltd Groundwork UK Ltd Groundwork North West Ltd Groundwork N W Ltd Youthworks Groundwork in the North West Groundwork South East

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Current asset investments

Cost At 1 April 2016 Income reinvested dividend Net profit on revaluation At 31 March 2017

Listed investments £ 844,677 26,689 66,120 _________ 937,486 _________

Note: Net gains (Losses) shown in the SOFA on Page 23 includes a £80,500 gain on investment property (note 9) 12

Debtors

Grants receivable Other debtors Prepayments and accrued income

2016 £

1,469,956 4,689 3,008,076 _________

587,569 1,324 64,723 _________

4,482,721 _________

653,616 _________

2017 £

2016 £

77,736 944,129 74,179 58,157 7,277,578 425,754 _________

77,736 2,046,392 45,199 178,224 415,180 436,014 _________

8,857,533

3,198,745

_________

Creditors

Bank loans Grants due and payable Social security and other taxes Other creditors Accruals Deferred income (note 15)

2017 £

Creditors: amounts falling due in more than one year 2017 £ Bank loan

1 year 2 to 5 years > 5 years

Bank loans

2016 £

557,029 _________

634,765 _________

77,736 233,208 246,085

77,736 233,208 323,821

_________

557,029 _________

634,765 _________

_________

Bank loan relates to mortgage loan, secured over Groundwork UK’s leasehold property in Birmingham (Lockside), being repaid by monthly instalments. Interest is charged on the outstanding amount at 2.75% over the banks' base rate. The charity has an arrangement with its bankers such that no interest is payable if cash funds are held with its bankers in excess of loan amounts. 37 The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Deferred income Movements in deferred income during the year were as follows: Balance at 1 April 2016

Programmes

Transferred to deferred income

Balance at 31 March 2017

436,014

(10,260)

425,754

Net incoming resources as shown in the Statement of Financial Activities result from the following:

Programmes

Income received

Transferred to deferred income

Income

34,399,940

(10,260)

34,389,680

Deferred income relates to income received for programmes with delivery in the next year.

Provisions for liabilities Charity

Onerous lease £

At 1 April 2016 Additions Utilised

105,254 35,000 (72,000) _________

At 31 March 2017

68,254 _________

The provisions relate to an onerous lease provision on Groundwork UK’s Fourways House premises in Manchester. During prior years the charity reduced its usage of the building on which it has a lease which runs until 2020. The provision represents any rent and service charges due to be paid less any expected amounts receivable from sub-letting the property.

Analysis of net assets at 31 March 2016

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Analysis of net assets at 31 March 2016 Unrestricted funds £

Restricted funds £

Total £

845,880 817,000 5 630,632 (634,765) (105,254) _________

417,776 _________

845,880 817,000 5 1,048,408 (634,765) (105,254) _________

1,553,498 _________

417,776 _________

1,971,274 _________

Unrestricted funds £

Restricted funds £

Total £

223,537

Tangible fixed assets Investment property Investments Net current assets Long term creditors Provisions

Analysis of net assets at 31 March 2017

Tangible fixed assets Investment property Investments Net current assets Long term creditors Provisions

Statement of funds Unrestricted funds

At 1 April 2015 Income Expenditure Property Revaluation Transfers At 31 March 2016

912,219 897,500 5 591,769 (557,029) (68,254) _________

_________

912,219 897,500 5 815,306 (557,029) (68,254) _________

1,776,210 _________

223,537 _________

1,999,747 _________

Designated fund £

Revaluation reserve £

General fund

Total

339,726 (82,421) 24,152

75,000 42,000

1,026,288 3,964,010 (3,853,105) 84,000 (66,152)

1,441,014 3,964,010 (3,935,526) 84,000 _________

281,457 _________

117,000 _________

1,155,041 _________

1,553,498 _________

Designated fund £

Revaluation reserve £

General fund

Total

281,457 34,639 (59,774)

117,000

1,155,041 3,732,246 (3,564,899)

Statement of funds Unrestricted funds

At 1 April 2016 Income Expenditure Property Revaluation Transfers At 31 March 2017

(20,000) ________

_________

20,000 _________

1,553,498 3,766,885 (3,624,673) 80,500 _________

236,322 _________

197,500 _________

1,342,388 _________

1,776,210 _________

80,500

The designated fund represents funds allocated for the development of new programme activities. Restricted funds The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

At 31 March 2017

236,322 _________

197,500 _________

1,342,388 _________

1,776,210 _________

The designated fund represents funds allocated for the development of new programme activities. Restricted funds

Restricted funds comprise performance related grants as follows.

Balance at 1 April 2015 Programmes

786,922 _________

Balance at 1 April 2016 Tesco Bags of Help Programme Other Programmes

417,776 _________ 417,776 _________

Incoming resources

Resources expended

1,127,325 _________

Incoming resources

28,511,853 2,257,562 _________ 30,769,415 _________

Balance at 31 March 2016

(1,496,471) _________

Resources expended

417,776 _________

Balance at 31 March 2017

28,511,853 (2,451,801) __________ (30,963,654) _ ________

223,537 _________ 223,537 _________

Restricted funds are only available for expenditure in accordance with the funders' directions.

Restricted funds include the following Big Lottery Fund grants.

Balance at 1 April 2015 Target Wellbeing Communities Living Sustainably Total

Total

Expenditure

Balance at 31 March 2016

405,974 199,088

37,065 371,606

(443,039) (488,226)

82,468

_________

605,062 _________

408,671 _________

(931,265) _________

82,468 _________

Balance at 1 April 2016 Big potential Advanced Building Better Opportunities Communities Living Sustainably

Income

Expenditure

Balance at 31 March 2017

93,254

(93,254)

700,368

(597,562)

102,806

82,468 _________

147,390 _________

(229,858) _________

_________

82,468 _________

941,012 _________

(920,674) _________

102,806 _________

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Commitments under operating leases As at 31 March 2017, the charity had total commitments under non-cancellable operating leases as set out below. 2017 £

Within 1 Year 1-2 years 2-5 years

2016 £

100,702 100,569 75,427

100,702 100,569 175,995

276,698

377,266

Pensions During the year ended 31 March 2017 Groundwork UK paid contributions into a defined contribution scheme. The total charge to the defined contribution scheme amounted to £170,503 (2016 - £132,772). There were no contributions either pre-paid or outstanding at the year end or the previous year end.

Related party transactions At the year end a balance of £4,000 (2016 - £4,000) was owed to Groundwork Trade Association Limited, a wholly owned subsidiary of the company.

Reconciliation of net income to net cash flow from operating activities 2017 £ Net expenditure for the reporting period (as per the SOFA) Adjusted for: Net (gains) loss on investments Depreciation charge Investment Income (Increase) / Decrease in debtors Increase / (Decrease) in creditors Increase / (Decrease) in provisions Net cash provided by / (used in) operating activities

2016 £

(52,027)

(298,662)

(146,620) 19,320 (183,191)

10,946 21,318 (201,674)

(3,829,105) 5,658,788 (37,000) _________

1,165,594 439,019 (60,748) _________

1,430,165

1,075,793

_________

Grants payable All grants payable relate to institutional grants paid to Groundwork Trusts, delivery partners and community groups. The detailed breakdown of all grant payments is available on request from the company's principal address.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Acknowledgements Groundwork UK would like to thank all its funders. In particular substantial major contributions were received from the following organisations. £

Big Lottery Fund and ESF Building Better Opportunities Grant Big Lottery Fund Grant - Big Potential Advanced British Gas Energy Trust Careers & Enterprise Fund

700,368 74,580 159,710 72,943

Clarion Housing Group

115,155

Dept for Communities and Local Government

122,951

DHL UK Foundation

102,801

Education Funding Agency

8,108

Esmée Fairbairn Foundation

75,000

HS2 Limited

61,585

Learning Through Landscapes

52,054

Locality

215,859

NCS Trust

134,825

One Stop Stores

493,916

Price Waterhouse Coopers Royal Society of Wildlife Trusts Tameside Metropolitan Council Tesco PLC United Utilities

53,954 306,723 10,000 28,554,713 141,786

Financial Instruments The Group's and Company's financial instruments may be analysed as follows:

Financial assets Financial assets measured at fair value through profit or loss Financial assets that are debt instruments measured at amortised cost Financial liabilities Financial liabilities measured at amortised cost Derivative financial instruments designated as hedges of variable interest rate risk

2017 £'000

2016 £'000

1,795,005 9,672,839 _________ 11,467,839

1,634,005 4,247,153 _________ 5,881,153

8,857,533

3,198,745

________ 8,857,533

________ 3,198,745

Financial assets measured at fair value through profit or loss comprise fixed asset investments in unlisted company shares and current asset investments in a trading portfolio of listed company shares. Financial assets measured at amortised cost comprise cash, trade debtors, other debtors, amounts owed by joint ventures and associated undertakings. Financial liabilities measured at amortised cost comprise convertible loan stock, irredeemable preference shares, bank loans and overdrafts, trade creditors, other creditors and accruals. Information regarding the company’s exposure to and management of credit risk, liquidity risk, market risk, cash flow interest rate risk, and foreign exchange risk is included in the Trustees’ report.

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

Advisors ADVISORS Auditor BDO LLP Two Snowhill Birmingham B4 6GA Bankers The Co-operative Bank plc PO Box 82 118-120 Colmore Row Birmingham West Midlands B3 3BA HSBC 114 High Street Stourbridge West Midlands DY8 1DZ Scottish Widows Bank plc PO Box 12757 67 Morrison Street Edinburgh EH3 8YJ Solicitors Anthony Collins Solicitors LLP 134 Edmund Street Birmingham B3 2ES Bates, Wells & Braithwaite 2-6 Cannon Street London EC4M 6YH Investment Managers Baring Asset Management Limited 155 Bishopsgate London EC2M 3XY

43 The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

THE BOARD OF TRUSTEES The Board of Trustees The trustees (who are the directors of the company in accordance with the Companies Act 2006) on the date of approval of this report, or who served as trustees at any time during the year reported on, are as follows. Appointed trustees

Country/Region

First appointed

Last appointed

Stuart Baker

Yorkshire & the Humber

November 2007

AGM 2014

Tony Berry

North West

August 2012

AGM 2015

Jenny Bradley

South

June 2015

AGM 2015

Ian Brown

North East

March 2016

AGM 2016

June Campbell

West Midlands

September 2014

AGM 2015

Bryn Davies

Wales

December 2013

AGM 2014

Wendy Golland

East Midlands

September 2014

AGM 2014

Mike Master

East

September 2008

AGM 2014

Alan Smith

London

June 2014

AGM 2014

December 2013

AGM 2014

August 2015

AGM 2015

Steve Harvey

December 2013

AGM 2014

Geoff Howsego

June 2012

AGM 2015

Erica Zimmer

March 2013

AGM 2013

Retired/resigned

Co-opted trustees Kate Culverhouse Graham Hartley

Chair

Retired Sept 2016

Company Secretary Paul Viles Committees of the Board Chairs' Committee

Chair â&#x20AC;&#x201C; Graham Hartley

Federation Executive Team

Chair - Steve Harvey

Groundwork UK Committee

Chair - Geoff Howsego

Audit Committee

Chair - Mike Master

Chief Executive Graham Duxbury

The Federation of Groundwork Trusts Annual Report and Financial Statements 2016/17

GROUNDWORK

2020 WE HAVE SET OURSELVES THE FOLLOWING TARGETS BY 2020

1 MILLION DAYS OF VOLUNTARY ACTION TO IMPROVE LOCAL COMMUNITIES

100,000

2,500

PEOPLE HELPED TO REDUCE THEIR ENERGY AND WATER USE

OPEN SPACES LOOKED AFTER OR IMPROVED

15,000 PEOPLE PROGRESSING INTO TRAINING OR EMPLOYMENT

5,200

10,000

YOUNG PEOPLE MORE MOTIVATED TO LEARN AND ACHIEVE