safer communities, healthier lives
Crime Reduction Initiatives Annual Report and Accounts
For the year ended 31st March 2012
www.cri.org.uk Char ity Registration Number: 1079327 (England and Wales), SC039861 (Scotland). Company Registration Number: 3861209 (England and Wales)
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About CRI CRI is a health and social care charity working with individuals, families and communities across England and Wales that are affected by drugs, alcohol, crime, homelessness, domestic abuse, and anti-social behaviour. Our projects, delivered in communities and prisons, encourage and empower people to regain control of their lives and motivate them to tackle their problems.
safer communities, healthier lives
Some facts‌ Every day CRI is working to improve the lives of 32,000 people.
Re-arrest rates for CRI criminal justice service users are one-third lower than the national average for similar services.
CRI is contacted by service users 2.75 million
times each year.
67% of offenders who enter drug treatment with CRI are no longer offending after 12 weeks.
75% of young people who enter treatment with CRI stop using all drugs.
88% of offenders who complete CRI treatment cease offending.
20% of the successful outcomes for drug-related interventions nationally involve CRI clients. CRI receives 7% of the treatment budget.
CRI also produces an annual Impact Report providing details of our success and impact with our beneficiaries. This can be viewed at www.cri.org.uk.
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Contents
Page Trustees/Directors & General Information 2-3 Trustees’ Annual Report 4-14 Independent Auditors’ Report 15 Statement of Financial Activities 16
Balance Sheet 17 Cash Flow Statement 18
Accounting Policies 19-20 Notes to the Accounts 21-39
Vision
Values
CRI enables people to make the positive changes necessary to lead independent and purposeful lives and create safer, healthier communities.
Focus
- on the service user as the way to achieve positive change for the individual and the community at large.
Empowerment - so that service users can reach their full potential and achieve their ambitions.
Social Justice
- a shared commitment as individuals and as an organisation.
Respect
- for each person we engage, without reservation or judgement.
Passion
- driven by innovation and determination - to bring about the safest, healthiest outcomes for individuals and communities.
Vocation
- our work is more than a job.
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Trustees/Directors The Trustees/Directors who served during the year and at the date of approval of the accounts were: David Gregson (Chair) Nicholas Reeves BA, FCMI, FInstLM, MEPS, MICPEM (Vice Chairman) Sir David Calvert-Smith Paul Fallon Hilary Jackson (appointed 27 June 2012) Deborah Loudon MA (Oxon), FCIPD Andrew Marsden BSc (Hons), DUniv, FCIM, FRSA Professor Kate Moss LLB (Hons), MPhil (Cantab), PhD (resigned 15 July 2011) Moira Nangle Chris Newell (retired 14 September 2011) Roger Perkin MA (Cantab), FCA Professor Mike Pringle Varinder Singh FCA, FCCA (retired 14 September 2011) Jacob West BA (Hons), MPP
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General Information Co-opted Advisors Pravin Kapadia BSc (Econ) (Hons) (retired 23 May 2012) Ernie Poku MBA (resigned 9 November 2011) Sarah Williams MEng ACA (appointed 14 March 2012) Dermot Heffernan ACA (appointed 25 July 2012) Vice Presidents The Right Hon. The Lord Lloyd of Berwick PC P. Hopkinson JP OBE The Hon. Mr Justice Cazalet David Bowerman JP DL CBE The Hon. Mr Justice Bennett Sir Peter Woodhead KCB Chief Executive David Royce BSc, CQSW, MBA Charity Number England and Wales 1079327 Scotland SC039861 Company Number 3861209 (England and Wales) Registered and Principal Office Tower Point 44 North Road Brighton BN1 1YR Auditors Kingston Smith LLP Chartered Accountants Devonshire House 60 Goswell Road London EC1M 7AD
Bankers Barclays Bank PLC Sussex & Gatwick Team Business Banking PO Box 165 Crawley West Sussex RH10 1YZ Financial Advisors Skerritt Consultants Ltd 23 Coleridge Street Hove BN3 5AB Solicitors Bates Wells & Braithwaite 2-6 Cannon Street London EC4M 6YH Burt, Brill and Cardens 30 Old Steine Brighton BN1 1FL DMH Stallard Gainsborough House Peglar Way Crawley West Sussex RH11 7FZ
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Trustees’ Report for the year ended 31st March 2012 I. Structure, Governance and Management
Constitution Crime Reduction Initiatives (CRI) is a company limited by guarantee and is governed by a Memorandum and Articles of Association that determine its legal framework. The Charity was incorporated as CRI on 3rd December 1999. It has a Code of Governance that identifies the values and expectations that control the conduct of its affairs. The Charity does not have a share capital. Board of Trustees (Directors) The Board of Trustees is responsible for the strategic direction and performance monitoring of the organisation. It meets at least five times a year. Board members typically have expertise at a senior level in relevant areas such as financial management and accountancy, business strategy, communications, social care, clinical governance or the criminal justice system. The Trustees are the Members of CRI. The day-to-day management of the organisation is handed down by the Board to a professionally qualified executive management team led by the Chief Executive. The Board delegates the responsibility of a review of the periodic management accounts and the annual financial statements of the organisation to the Audit and Finance Committee, which, in turn, reports to the Board at the Board meetings. The Board also delegates specific responsibilities to three further sub-committees: the Remuneration and Nominations Committee, the Social Care and Clinical Governance Committee and the Brand and Profile Committee. The roles of these sub-committees are explained later. Recruitment and Appointment of the Board of Trustees The organisation operates an open, competency-based recruitment process and continually seeks to recruit new Trustees to the Board as necessary, seeking in particular to establish a diverse Board with a skill set that reflects the communities it serves. Prospective Trustees are asked to provide the Board with their CV and a letter expressing interest. They are then invited to an interview with a representative of the Board, usually the Chairman, as well as the Chief Executive. The candidate then decides whether or not to proceed with their application, and the Board subsequently decides whether or not to extend an invitation to join. Each Trustee stands down and seeks re-appointment by the members in accordance with the Articles of Association. Trustees appointed after December 2009 may serve up to two, three-year terms of office. Changes to the Board of Trustees Chris Newell and Varinder Singh retired from the Board in September 2011 having served as Trustees since 2002.Varinder Singh was a member of the Audit and Finance Committee, serving most recently as Chair, and Chris Newell was a member of the Remuneration and Nominations committee. CRI would like to thank both Varinder and Chris for their dedication, commitment and invaluable contribution to the Board and Sub-Committees on which they served during their terms of office. Hilary Jackson, a former civil servant, was appointed in June 2012.
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Induction and Training of Trustees All Trustees appointed to the Board receive a full induction briefing with specific reference to the CRI Code of Governance and other relevant documents, including external guidance. Newly appointed Trustees are encouraged to attend external governance training events. All Trustees are expected to visit projects periodically to meet staff and service users and find out more about how services are delivered. They can also attend project launches, open days, staff training workshops and regional staff conferences, which are held throughout the year. The Trustees are encouraged to attend ongoing training and relevant conferences organised by CRI. Board Evaluation The performance of the Chief Executive, the Chair and the Board of Trustees is evaluated annually. Board Sub-Committees Audit and Finance Committee The Committee’s members comprised the Chairman of Trustees (David Gregson), Roger Perkin (Trustee and Committee Chairman), co-opted advisors (Pravin Kapadia, Ernie Poku, Sarah Williams and Dermot Heffernan), supported by the Chief Executive and the Director of Finance.Varinder Singh served on the Committee until his retirement in September 2011. Pravin Kapadia retired after a term of nine years in May 2012. Ernie Poku served on the Committee as a co-opted advisor, until his resignation in November 2011. The Committee meets four times a year to discuss and review various financial issues affecting the organisation, following which the Committee Chairman reports back to the Board. Minutes of the meetings are presented to the Board for acceptance. Standing items for discussion, and for subsequent reports and recommendations to the Board, include a review of the financial risk register, the annual budget, internal audit, the investment of cash deposits and a review of the monthly management accounts. Remuneration and Nominations Committee The Committee’s members comprised five Trustees (David Gregson, Sir David Calvert-Smith, Nicholas Reeves (Committee Chairman), Paul Fallon and Deborah Loudon), supported by the Chief Executive (except in respect of his own remuneration). Varinder Singh served on the Committee until his retirement in September 2011.The Committee meets up to four times a year to review and make recommendations to the Board regarding the remuneration package of the Chief Executive. In addition, the Committee periodically reviews the pension policy for CRI and provides advice to the Chief Executive in relation to senior staff remuneration.
Social Care and Clinical Governance Committee The Committee’s members comprised two Trustees (Professor Mike Pringle (Committee Chairman) and Paul Fallon), supported by the Deputy Chief Executive, the Clinical Director, two Directors of Operations, two Deputy Directors and a member of Clinical Services. The Committee meets quarterly with a remit to identify and implement best clinical practice, review the clinical risk register, approve guidelines, implement audits and ensure compliance with statutory organisations. Brand and Profile Committee The Committee’s members comprised three Trustees (Moira Nangle (Committee Chair), Andrew Marsden and Jacob West), supported by the Chief Executive, the Director of Communications and a Director of Operations. The Committee meets four times a year with a remit to review the effectiveness of CRI’s marketing and communications strategy and explore opportunities for raising the organisation’s profile with key stakeholders. Co-opted Advisors CRI will from time to time engage the services of certain specialists to augment and support the work of the subcommittees by way of co-opted advisors. During the year, three co-opted advisors, Pravin Kapadia, Ernie Poku and Sarah Williams, served CRI on the Audit and Finance Committee. Pravin Kapadia retired in May 2012 after serving three terms of office. Ernie Poku resigned in November 2011 due to work commitments abroad. CRI would like to thank both Pravin and Ernie for their invaluable contribution to the Committee. Sarah Williams, a partner with Ernst & Young, joined CRI in March 2012, and Dermot Heffernan, a Chartered Accountant and former Director of Resources at WWF-UK, joined in July 2012. Executive Management Team The executive management team comprises the Chief Executive, Deputy Chief Executive, Director of Finance and Resources, Director of Communications, Director of Legal Services, Clinical Director and three Directors of Operations. The executive management team is responsible for delivering the Strategic Plan, which underpins the work of each of CRI’s operational divisions and its service groups. The Plan contains short-term strategic goals that are measured and evaluated throughout the year and is reviewed annually by the Trustees and executive team. Staff During the year under review, CRI continued to develop as a learning organisation with provision and access to learning opportunities for each member of staff. Regional Workers Forums are now well established which ensure that the views of staff are taken into account. The annual staff survey further supports internal communications by seeking staff opinions on a number of issues including communication, career development and diversity.
CRI continues to invest in its management competence and supports this by undertaking both leadership and management development programmes. Succession planning has been supported through our leadership development programme and individuals have been enabled to develop skills and acquire experience in line with the management competency framework. Our management development centres provided staff with an opportunity to be assessed against management competencies. To date 128 managers have completed the development centre process. CRI is committed to building an organisation that makes full use of the talents, skills, experience and different cultural perspectives available in a diverse society, and where people feel they are respected and valued, and can achieve their potential regardless of age, disability, gender reassignment, race, religion or belief, sex, sexual orientation, marriage or civil partnership and pregnancy or maternity. CRI applies this approach through its Equality and Diversity Policy, which aims to ensure that the diverse needs of employees are recognised and addressed in the day-to-day activity of CRI. Affiliates CRI was created from an amalgamation of a number of charitable bodies, the first being SARO, which was formed in 1977, and which in turn had developed associations in 1997 with Hastingsbased The Pilgrim House Trust Fund and Bournemouth-based Second Chance. SARO became part of CRI on the latter’s incorporation in 1999. Other affiliates include: The St Thomas Fund for the Homeless The St Thomas Fund had provided supported housing and care services, since 1980, to homeless people suffering from drug and alcohol dependency. The St Thomas Fund was fully incorporated into CRI on 31 March 2008 but all its activities remain separate and identifiable within CRI. A small team of dedicated supporters undertake voluntary fundraising for the St Thomas Fund project, to better provide for the welfare of its resident service users. All funds raised by the supporters of the St Thomas Fund will remain wholly dedicated to the St Thomas Fund houses and the welfare of residents. Hampshire Association for the Care and Resettlement of Offenders HACRO was fully incorporated into CRI in 2006 and CRI remains its sole corporate trustee. The funds received from HACRO are restricted for use in pursuing the original objects of the charity, namely for the rehabilitation of offenders and particularly for those who have problems related to alcohol or drug misuse. In addition, HACRO maintains its relationship with the Stonham Housing division of the Home Housing Group that provides services for ex-offenders at Alleynes House, Winchester.
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Trustees’ Report for the year ended 31st March 2012 I. Structure, Governance and Management (continued)
Partnerships CRI works in partnership with local authorities, Drug and Alcohol Action Teams (DAATs), Police, Probation Service, courts, Supporting People Teams, the Prison Service, Primary Care Trusts, Youth Offending Teams and other voluntary sector providers to deliver services that effectively address social care, community safety and criminal justice strategies. These partnerships are a key factor in the success of CRI projects and essential to developing integrated support packages to meet the range of service user needs and promote recovery. Scotland CRI is dual registered both with the Office of the Scottish Charity Regulator and the Charity Commission of England and Wales. No contracts were undertaken during the year to 31 March 2012 in Scotland, but this remains an opportunity for the organisation in the future. Public Benefit The Charities Act 2011 requires all charities to explicitly consider how their charitable aims are carried out for the public benefit. The Board of Trustees must: • ensure that they carry out the aims of CRI for the public benefit; • have regard to the Charity Commission’s guidance on public benefit; and • report on CRI’s public benefit in the Trustees’ Annual Report. The Board of Trustees has considered these requirements alongside CRI’s aims and activities, all of which are detailed in this report. The Board is satisfied that CRI has charitable aims that are carried out for the public benefit, in particular: • the benefits to individuals, families and communities (and hence the public) are clear and in line with CRI’s aims; • the beneficiaries are entirely appropriate to the aims; • there is no unreasonable restriction to accessing CRI’s services, either by poverty, any requirement to pay fees, any geographic restriction or the provision of services only for certain sections of the public; and • there is no private benefit. In arriving at this conclusion the Board of Trustees also had regard to the Charity Commission’s guidance on public benefit.
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Risk Management The CRI strategic planning process enables CRI to be risk aware and able to prevent or reduce the impact and likelihood of potential problems. Where risks have been identified contingency plans are in place. Risk management is conducted at both a strategic and an operational level. The Board conducts a full review of the risk register bi-annually and considers exceptional risks routinely at Board meetings when it receives reports of emerging or unforeseen risks. The Social Care and Clinical Governance and Audit and Finance sub-committees conduct an in-depth review of risk registers at their meetings and report by exception to the full Board. In addition, the Board conducts an annual review of strategic risks affecting the organisation as part of the business planning process. Business risks addressed are as follows: • employer’s risks (health and safety for staff, service users and the public); • reputational risks (consequences of providing services to serious offenders); • organisational risks (issues associated with working with chaotic service users who have profound and complex problems); and • financial risks (the prevailing economic climate, delayed payments, short-term contracts, reluctance of commissioners to meet the full cost of good governance and organisational sustainability, payment by results contracts). CRI manages these risks in a prudent manner, using the Code of Governance, that: • ensures the Trustees’ competency; • determines the framework and expectations of Board meetings that focus upon strategic issues; • provides a proper audit of activities; and • ensures a regular review of its risk register.
II. Objectives and Activities
Charity’s Objects The Charity’s objects are detailed in the Memorandum of Association and are: • to relieve poverty in particular but not exclusively through the provision of housing; • to relieve sickness and to advance the education and training in particular of all persons (and members of their families) who: • have committed, or are likely to commit, a criminal act or acts; or • have been, or are, or are in danger of becoming substance misusers; or • have been, or are, or are in danger of becoming addicted to or dependent upon drugs of any description including without limitation on the generality of the foregoing illegal drugs, alcohol, solvents or other addictive substances; or • have been, or are, or are likely to become victims of domestic abuse; or • have been, or are, or are likely to become homeless; or • suffer mental ill health; or • have suffered a legal restriction on their liberty in any penal or correctional establishment; • to advance the education of the public by promoting study and research into homelessness and all aspects of and methods of crime prevention and delinquency and the prevention of drug abuse and substance misuse and to disseminate the useful results of such research; • to promote for the public benefit the prevention of criminal acts and of drug abuse and substance misuse and of homelessness; • to promote for the public benefit the protection of people and property from criminal acts and the effects of drug abuse and substance misuse; • the promotion of charitable purposes within the member countries of the European Union, for the advancement of education, the protection of health, the relief of poverty, sickness and distress and to reduce substance related harm to the individual and the wider community; and • to undertake such other activities as are charitable.
Aims CRI’s aims, which are carried out for the public benefit, are to provide opportunities for people to lead more independent and purposeful lives, and to help reduce crime. It seeks to achieve this through: • improving the quality of existing services; • focusing on the service user as the way to effect positive change for the individual and the community at large; • increasing the range and geographical spread of services; and • enhancing its capacity to support the delivery of these services. In this respect, it is CRI’s strategic intention to continue to: • intervene at the right moment – seeking to engage with a greater number of families and young people by developing and extending the services that we already provide; • stay involved until the right moment – recovery and rehabilitation remain the key threads that run through CRI’s strategy. The intention is that, by staying involved for the optimum amount of time for each person, we ensure that the changes people have already made in their lives can be sustained. CRI will continue to achieve these aims by working in collaboration with its local stakeholders and commissioners and designing services that are compatible with and integrated into our partners’ plans. This approach means CRI is able to effectively address social care, community safety and criminal justice issues and develop strong working relationships for the achievement of its objectives. Objectives and Activities CRI works with individuals of all ages who are affected by substance misuse, crime and anti-social behaviour. Its objectives are to improve the safety of communities by supporting recovery from substance misuse and other issues and promoting the reintegration of individuals into their local communities. CRI achieves these objectives by providing a range of services to support individuals, families and communities whose lives are adversely affected by crime, substance misuse, homelessness, antisocial behaviour, domestic violence, social deprivation and lack of opportunity. CRI works with challenging service users with complex needs, including those with entrenched drug habits and offending behaviour. Services are particularly targeted at people who are difficult to reach and under-represented in services, such as women, substance misusers with parental responsibilities, black and minority ethnic communities, clients with complex needs, persistent and prolific offenders and street homeless people. The services that CRI delivers to achieve its objectives fall within the following charitable activities:
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Trustees’ Report for the year ended 31st March 2012
(continued)
II. Objectives and Activities (continued)
Criminal justice services CRI works with adults and young people with substance misuse problems whose behaviour brings them into contact with the criminal justice system. The focus is on combating substance misuse and the crime committed to fund addiction. Many of these services are delivered in prisons and police custody cells to provide therapeutic interventions at times of crisis together with support and motivation to engage in treatment. CRI particularly specialises in working with people with entrenched substance misuse problems who are consequently committing a disproportionate amount of crime. Substance misuse services in the community CRI provides a range of integrated treatment services in the community for adults and young people with substance misuse problems. Many service users attend voluntarily but others are obliged to do so as part of a court order and as an alternative to prison. These services promote recovery from substance misuse by providing service users with a clear, end-to-end recovery pathway from first engagement to successful and sustained reintegration into their local community. CRI provides structured therapeutic programmes, medically assisted recovery services and comprehensive support to address substance misuse and criminal activity. Services also address the educational, employment and housing needs of service users to help them make positive lifestyle changes and sustain their commitment to change. Street services CRI delivers street services in a number of towns and cities, working with rough sleepers, people who are begging, street drinkers, drug users, sex-workers and those involved in antisocial behaviour. Street teams adopt a high visibility approach and take their service out onto the streets to find and engage with individuals whose behaviour may be causing a nuisance, or who may be putting themselves and others at risk and making people feel unsafe. CRI street teams have been very successful at reducing rough sleeping and improving community safety in towns and cities across England and Wales and are at the forefront of the development of innovative practice to tackle anti-social behaviour and street nuisance. Teams also deliver a reconnection service for migrants from Eastern Europe who have become destitute.
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Residential and supported accommodation CRI runs a residential treatment service in Brighton & Hove for people with substance misuse problems. The St Thomas Fund project aims to support individuals in becoming drug and alcohol free. It is based on Cognitive Behavioural Therapy and provides a staged process of structured support to promote abstinence. CRI provides a range of supported accommodation for people attending structured treatment programmes and for those who have completed treatment programmes. The aim of this support is to maintain a commitment to treatment and rehabilitation and to maximise the recovery opportunities provided by treatment programmes. For those who have successfully completed programmes, the emphasis is on relapse management and on developing life skills to enable them to enter education, training or employment. CRI also provides accommodation for ex-offenders. Ex-Offender Supported Housing (EOSH) works to accommodate, support, reintegrate and empower individuals who have demonstrated the motivation to change their offending behaviour. Resettlement of service users into the community, together with the management of their risk, is the primary focus of the service. CRI also provides specialist support to homeless people living in hostel accommodation. Services for families and young people CRI works with young people and families affected by poverty, unemployment, deprivation, homelessness, crime and anti-social behaviour. Services include intensive practical interventions for parents and advice and support for young people. A holistic approach encompasses issues with housing, health and nutrition, money, education, training and employment. The aim is to help families and young people grow in confidence, motivation, aspiration and achievement and to lead more stable and positive lives. CRI also provides advice, information and guidance to young people who are not in education, employment or training (NEET). Services for young people include information and advice on parenting skills, sexual health and drugs awareness, and advocacy and support to help young people who are homeless, at risk of becoming homeless or living in unsuitable accommodation. Staff also work with the families, partners, parents and carers of people with substance misuse issues, and support the victims of domestic abuse and abuse related to drugs and alcohol.
III. Achievements and Performance in 2011-2012
The objectives, and the services to achieve them, are described in the previous section. This section reports on how CRI measures the performance of those services, what it has achieved during the year to meet its objectives and how its services have developed and grown. It also examines the investment that CRI puts into the quality of services, and the investment it makes in staff, volunteers, service users and peer mentors to ensure optimal service for its beneficiaries. CRI also produced its first annual Impact Report which provides details of our success and impact with our beneficiaries and includes data as well as comment from service users and commissioners. This can be viewed on the CRI website at www.cri.org.uk. Measurement CRI’s performance in achieving its objectives is measured by key performance indicators (KPIs). These include both financial and non-financial KPIs. CRI’s Quality Management Framework (QMF) system has been developed over the last six years to produce robust and meaningful data and KPIs to measure project performance. Each year the QMF system has been refined and the targets raised to ensure that wherever possible we exceed expectations and delivery requirements. CRI also focuses on the achievement of financial measures, which has been a key part of its success to date in establishing a financially robust organisation. These include targets for growth in income and the level of operating surplus and free reserves. Organisational Growth • In 2011-2012, we aimed to increase our income by 10% (based on 2010-2011 figures), and we actually increased our income by 17%. • We aimed to extend our presence into new geographical areas by winning new contracts and we managed to secure contracts in Suffolk, Milton Keynes and Worcestershire. • We aimed to implement the £8.5 million of new health-related contracts we had secured in the previous year and we succeeded in setting up these new services to timetable. • We aimed to retain 95% of our contracts due for re-commissioning during the year. Due to on-going changes in the commissioning market during the year, leading to some existing services being combined into broader and larger service portfolios, we actually retained 84% of re-commissioned contracts. • We aimed to review our brand and profile and to ensure that CRI becomes “known for what it does” by publishing three significant articles. We invested in our communications resources during the year, reviewed our external communications programme and began to implement a proactive communications strategy, which included seeking media coverage for our achievements. We also, for the first time, put in place a system for tracking and evaluating our media coverage. In addition, we refreshed the appearance of the CRI website.
In the Wales and the South Directorate, CRI: • Launched new drug and alcohol services for adults and young people across Caerphilly and Blaenau Gwent. • Was awarded £63k to tackle street drinking in Brighton & Hove in partnership with Brighton Housing Trust. • Conducted ‘Big Society’ research into the link between drug treatment and crime reduction in Cardiff, in partnership with Cardiff University. • Secured a county-wide contract to deliver drug and alcohol services in West Kent. • Opened a new recovery service in Worcestershire for people with drug and alcohol problems. • Conducted a Department of Health pilot in Brighton & Hove to raise awareness of the support needs of families and carers affected by someone else’s substance misuse. • Worked in partnership with East Sussex Fire and Rescue Service in East Sussex to raise awareness of fire safety amongst local families. • Secured a new contract to work with adult and young substance misusers in West Sussex. • Successfully retained our Domestic Violence Service in East Sussex. In the London and the East of England Directorate, CRI: • Opened a multi-agency integrated offender management service in Lambeth to cut re-offending among priority groups of offenders. • Started to implement our largest contract - a county-wide drug and alcohol recovery service in Hertfordshire. • Set up a new multi-agency offender management team in Southwark to tackle repeat offending. • Launched a support service in Haringey for families and carers affected by substance misuse. • Opened a new integrated drug and alcohol recovery service in Barking and Dagenham. • Held a London Service User Council conference to give our service users a voice, that was attended by more than 130 service users and staff. • Hosted a visit by Tim Loughton, Parliamentary-underSecretary-of-State for Children and Young People to three family services in Lewisham. • Opened three substance misuse recovery centres across Suffolk. In the North and Midlands Directorate, CRI: • Secured a contract to deliver all prescribing services for substance users in Manchester. • Was awarded a contract to deliver an integrated substance misuse service in Halton (Runcorn and Widnes). • Secured increased funding for homelessness and reconnections services in West Yorkshire. • Welcomed Lord Henley, Minister of State responsible for crime prevention and anti-social behaviour, to the Cumbria alcohol arrest referral service. • Hosted a visit by Gordon Birtwistle MP to the Inspire Recovery Academy in Burnley, run by peer mentors and volunteers.
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Trustees’ Report for the year ended 31st March 2012
(continued)
III. Achievements and Performance in 2011-2012 (continued)
Service Development In 2011-2012 we aimed to broaden the drug/alcohol recovery model offer to service users and commissioners via arrangements with three new subcontractors or via mergers and acquisitions. During the year we developed a new service delivery partnership with the RSA in West Kent. We also entered into a number of other partnerships in order to bid for new contracts. We did not enter into any mergers or undertake any acquisitions. We won five new contracts in the North and Midlands (in Halton, Rochdale, Manchester, Wakefield and Leeds), six new contracts in London and Eastern region (Hertfordshire, Richmond, three contracts in Peterborough and one in Slough), one new, and one extended contract in the South (West Kent and HMP Ford) and two new contracts in Wales (both in Blaenau Gwent). Our new contract wins included one new clinical service, one young people and families service, one young people’s substance misuse service, one integrated drug treatment service and one alcohol service. Quality and Performance In 2011-2012 we achieved the following: • We reviewed all care and quality standards and aligned care standards, governance and audit systems to comply with internal quality requirements as well as Care Quality Commission (CQC) minimum standards. New web-based audit processes were also introduced. • We reviewed all our services to ensure they were recoveryoriented and we also introduced an explicitly recovery-oriented internal audit process and new recovery-focused QMF targets across the organisation. • We published a Quality Plan for the whole organisation in July 2011, reported our progress to the Clinical Governance Committee, and published a formal Quality Account. • We published two significant impact analyses during the year: one was an Economic and Social Research Council (ESRC) funded research project about Cardiff Drug Interventions Programme (DIP) and the other was an internally produced Impact Report. Service Users and Peer Mentors In 2011-2012 we achieved the following: • We introduced twice yearly audits for all our services to identify any gaps in service user involvement and accredited learning. We recruited peer mentor co-ordinators to support the recruitment and induction of peer mentors for each region. The London Service User Council developed a ‘road show’ in which they checked for compliance to the service user involvement (SUI) toolkit. A full stock take of service user information and communications technology access was undertaken and we have a monthly snap shot report detailing numbers of peer mentors in projects. In the North and Midlands a Regional Service User Forum and quarterly coordinators’ meeting is used to standardise and improve all accredited training. A new South East Recovery Community Co-ordinator was recruited in the South.
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• We provided themed leads with the correct qualifications to deliver and assess accredited learning across the North and Midlands to enable CRI to bid for funds from the Skills Funding Agency as a recognised National Open College Network (NOCN) centre. All accredited learning is currently making the transition from NOCN to City and Guilds and all accredited learning facilitators across the region have completed Level 3 Principles and Practice in assessment along with a teaching qualification. • We continued to deliver accredited training during the year to peer mentors and service users in relevant industry skills, supported by the Open College Network (OCN). Once the transition to City & Guilds is complete all subjects will fall under the employability qualifications. • We evaluated and updated the peer mentor training programme and all accredited learning material and Quality Credit Framework subjects were reviewed and updated in partnership with the Learning & Development team. A City & Guilds accreditation process is on-going. • We promoted peer mentoring within the organisation and created new placement opportunities for peer mentors within CRI and with other organisations. An accredited service user involvement project has been completed to design marketing material to promote and advertise the Peer Mentor Diploma. • We improved the transition process from service user to peer mentor and peer mentor to volunteer through the inclusion of peer mentoring as an agenda item for staff supervising volunteer meetings and by developing regionalised peer mentor training. Accredited learning was developed to provide a learner with relevant skills and knowledge, across a spectrum of learning, at each stage of their recovery and learning journey. • Project volunteers worked with regional peer mentor coordinators to support the recruitment of more peer mentors. • We established London Service User Council integrated governance meetings and developed a structured work plan to establish the role of the London Service User Council both within local services and central management. We also began to train the London Service User Council to deliver training to local service user reps and other service users, and the ‘London model’ is being used to support service user involvement across the regions. In addition, quarterly regional and local Service User Forums were established and we are working to create a structured work plan and to establish their role both within local services and central management. Service User Involvement (SUI) Forums are now held to plan the achievement of SUI Quality Management Framework (QMF) targets and service user representatives attend management team meetings. Peer mentors help to facilitate accredited learning with staff members, and service user representatives audit services quarterly to meet QMF targets. Further SUI training will be provided to enable more staff to co-ordinate this process.
Staff In 2011-2012 we achieved the following: • 1,000 staff were trained in the use of International Treatment Effectiveness Project (ITEP), with almost 500 in the last financial year. • We created a Value Based Interviewing (VBI) recruitment process for CRI in conjunction with the National Society for the Prevention of Cruelty to Children (NSPCC). We ran a VBI pilot and are currently training 75 VBI interviewers internally with a view to using VBI as a part of every recruitment process, as well as to support Transfer of Undertakings (Protection of Employment) (TUPE) transfers and development centres. • We established an Equality and Diversity Group to achieve a workforce that reflects our client base and meets equality and diversity objectives. Equality and Diversity sessions were conducted at the regional staff conferences and a sub group is reviewing Equality and Diversity training. The Service User Council was involved to ensure service user involvement and the Equality and Diversity Group will also link with external agencies who can advise on diversity practice. • We made progress in developing staff competencies for front line and support staff that reflect CRI’s values, management competencies, core common competencies and role-specific competencies and skills. Staff competencies will be used as part of recruitment and for Performance Development Frameworks. Other staff achievements during the year include the following: • We implemented a new human resources (HR) information system called Snowdrop, which enables us to manage our HR processes more efficiently. • We worked towards City & Guilds accreditation for our internal training programmes, including accreditation with the Institute of Leadership and Management (ILM) and an in-house apprenticeship programme. • We continued to develop e-learning packages for staff, including an internal safeguarding package. • We developed a Workforce Development Strategy for 2012-2015. • We were awarded the Investors in People (IIP) 10 Year Award in 2011. CRI has been successfully re-accredited every three years since first achieving the IIP management standard in 2000. • Our staff attended 5,400 hours of training between April 2011 and April 2012.
Volunteers and Social Work Students In 2011-2012 we achieved the following: • We increased the number of volunteers across all regions by 40%. • We created new and more diverse volunteer roles to enable volunteers to support projects and administrative staff with internal processes such as HR, tenders and training. We also sought to recruit community volunteers to support service delivery and provide therapies and counselling. • We improved volunteer training by recruiting specific volunteer co-ordinators, establishing thematic groups that bring together service users, volunteers and managers to discuss best practice, and providing training in induction and personal and professional development for Staff Supervising Volunteers (SSVs). • We trained more staff to assist with the delivery of the volunteer training programme and trained all SSVs to support the supervision and training of volunteers. We also developed a Level 2 Volunteer Certificate in Progression. • We do not currently have a national volunteer co-ordination function, but national oversight of volunteering is achieved through thematic groups and regular regional co-ordinators’ meetings. • We replaced the Qualifications and Credit Framework (QCF) Diploma Level 3 qualification for volunteers with more flexible and bespoke training, accredited by City & Guilds. • We used the new Snowdrop Human Resources system to improve the data we hold on volunteers, including monitoring outcomes, reasons for volunteering and equal opportunities and diversity information. • We began developing partnerships with universities and other higher education providers to ensure the quality of teaching and supervision on social work student placements and to streamline the recruitment of students for placements. • We made progress towards updating our volunteer policies.
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Trustees’ Report for the year ended 31st March 2012
(continued)
IV. Financial Review
Review of the Year CRI had planned to grow its income by more than 10% in 2011-2012; this was achieved with an outturn of income of £80.8 million representing growth of 17%. Net assets and total funds stand at £12.7 million, reflecting a robust financial position at the year end for the organisation and positioning it well for 2012-13. The balance sheet again provides strong liquidity following another year of focus on working capital management that drove a net cash inflow of £1.4 million and ending the year with available liquid cash balances of £15.6 million (2010-2011 £14.2 million). With income increasing to £80.8 million (2010-2011: £69.0 million) growth was reported across all regions. The Wales directorate reported the highest growth of 146% with the inclusion of the new Worcestershire service and with the London region growing by 23%. The North and Midlands and the South each grew by 5% in the year. More detail of the sources of this growth is reported within ‘Achievements and Performance in 2011-12’. Principal funding sources are also explained in Note 1 to the financial statements. Total resources expended, including direct costs and support costs, increased overall by 17.3% to £79.0 million (2010-2011: £67.4 million), representing 98% of contract income, optimising the level of funds that are invested in the provision and delivery of services for CRI’s beneficiaries and commissioners. Total resources expended in the year have been incurred to meet the charitable activities and have been for the public benefit as described within ‘Objectives and Activities’ in this report. The resultant operating surplus (‘Net income/(expenditure)’ on the Statement of Financial Activities) is therefore £1.8 million (2010-2011: £1.6 million) representing a 2.2% return on income (2010-2011: 2.4%). The Trustees are of the opinion that this is an appropriate level of surplus, reserves generation and return in light of the level of investment in services and infrastructure in the year, combined with the issues of an uncertain economic environment. The net surplus for the year takes into account other recognised gains and losses which have arisen due to defined benefit pension scheme gains and losses, and the effect of changes to the carrying value of certain freehold properties that were due their formal five yearly valuation. The net effect of these various revaluations is an ‘Other recognised loss’ of £0.9 million (2010-2011: gain £0.1 million). The resultant net surplus is £0.9 million (2010-2011: £1.7 million). Reserves The year on year generation of net surpluses has enabled CRI to create a level of retained, unrestricted reserves, underpinned by available cash reserves. These provide working capital funding for operational running costs, supporting the delivery of the organisation’s objectives in an efficient and cost effective way. They provide a buffer for unforeseen expenditure and cover organisational liabilities and costs associated with the expansion of the organisation ahead of increased income.
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The level of total reserves (£12.7 million), and Free Reserves in particular, is reviewed periodically by the Audit and Finance Committee, which advises the Board accordingly. CRI measures its level of Free Reserves as a KPI, which provides information about working capital cash management, debt and liquidity and is also a recognised indicator in the sector. Free Reserves, at £9.2 million (2010-2011: £7.4 million), are defined as total unrestricted reserves (£12.2 million) less fixed assets (£4.6 million) and their related loans (£1.6 million). This level of Free Reserves achieved represents 6 weeks (2010-2011: 6 weeks) of total resources expended. After taking into consideration the current uncertainties in the sector with changes to the way in which funding will be allocated, as well as potential reductions in that funding, the Trustees are of the opinion that Free Reserves are at an acceptable level. The Trustees also consider that CRI has adequate resources to continue in business for the foreseeable future and that, for this reason, it should continue to adopt the going concern basis in preparing the accounts. Cash Reserves CRI maintains liquid cash balances in order to ensure that on-going cash flow requirements are met. Funds which are not needed for immediate working capital requirements are placed in a range of interest earning deposit accounts, mostly with immediate access, although some of the surplus funds are placed on a rolling plan of term deposits for periods of less than one year in order to further improve returns. The use of a range of different institutions continued during the year to ensure that, as far as possible, CRI was spreading its risk of any capital loss. Investment income in the year of £0.2 million (2010-2011: £0.2 million) relates solely to interest earned on cash deposits. The Audit and Finance Committee reviewed the position of holding cash-only deposits during the year and also the institutions where they are placed. In view of the requirement to have access to cash for working capital purposes they remained satisfied that this is a prudent policy that also serves the cash flow requirements of the organisation. Freehold Property Revaluations During the year, four freehold properties were formally re-valued on a market value basis, in line with the ‘RICS Valuation – Professional Standards 2012 Edition’, by Chartered Surveyors as part of the five-yearly cycle of valuations. The valuation showed an overall reduction of £0.9 million compared to the cost and valuation carrying value, which has been recognised in the accounts. There is no intention to sell any of the properties as their value in use is significant to the organisation.
V. Future Plans
CRI is well positioned to withstand continued uncertainty in the business and economic environment over the coming year. This will enable us to work with an increasing number of beneficiaries of our services and continuously improve the quality of the help we provide. We intend to ensure that financial targets are met as required in the new Payment by Results contracts and ensure that CRI understands the emerging financial products available and has access to working capital as required. Organisational Growth CRI will ensure that it is prepared for the financial changes to come in 2012-2013 by achieving our 2012-13 budget and ensuring that our financial targets are met as required in new Payment by Results contracts. We will improve our existing services by implementing the £13m of contracts that have been secured this year and aim to retain 75% of contracts that come up for re-commissioning during the year. This has been set lower than the 95% target during 2011-12, recognising the complexities around the on-going changes in the commissioning market resulting in some existing services being combined into new, broader and larger service portfolios. We intend to extend the presence of CRI into new geographical areas and increase our income by a further £7m through new contracts as the primary contractor for two health related services or as a subcontractor to penetrate one new market. We aim to raise still further the profile of CRI by marketing the organisation more effectively to respective target audiences in a variety of ways, and seeking to increase media coverage of our achievements. We will also develop a new intranet for staff which will ultimately enable us to improve internal communications. Service Development In 2012-2013 we aim to broaden the drug/alcohol recovery model offer to service users and commissioners by: • Piloting one new innovative service for young people using ‘legal highs’. • Making arrangements with three new prime or subcontractors. • Pursuing a suitable partnership, merger or acquisition.
Service Users and Peer Mentors In 2012-2013 we aim to: • Improve Service User Involvement (SUI) practice within services to meet SUI Quality Management Framework (QMF) targets. • Improve SUI training to staff, service user representatives, peer mentors and volunteers. • Increase the number of peer mentors by 60% and improve placement opportunities for them both within and outside CRI, and develop a Peer Mentor Recovery Charter and Learning & Development Support Plan. • Establish City & Guilds accredited theme leads to assess accredited learning for service users and further promote accredited learning and placement opportunities across the organisation. Staff In 2012-2013 we aim to: • Roll out value based interviewing (VBI) across the organisation to ensure that VBI is part of every recruitment and selection process. • Develop succession planning and talent management within CRI. • Introduce Change Management within the Leadership Development Programme. • Develop front line managers with programmes tailored to their specific operational needs. • Develop staff competencies for front line and support services staff. • Carry out the annual staff survey. Volunteers and Social Work Students In 2012-2013 we aim to: • Increase the numbers of volunteers by 33% in services and promote accredited learning and placement opportunities across the organisation. • Deliver Staff Supervising Volunteers training to all relevant staff. • Continue to work with universities and other learning providers to improve the quality of placements for social work students. • Fund the recruitment of apprentices for one-year, fixed term projects to train as drug and alcohol workers.
Quality and Performance In 2012-2013 we aim to: • Improve our impact and results reporting by identifying impact results for each of the major CRI service families and by publishing quarterly reviews of results on our website and via other means. • Develop an integrated information and governance system and identify sources of funds for investment in the system. • Publish an annual Quality Account describing achievements against the Quality Plan. • Undertake a new national service user survey. • Introduce an online Incident Reporting and Management system to improve intelligence and analysis of health and safety, clinical and operational incidents across the organisation.
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Trustees’ Report for the year ended 31st March 2012 VI. Statement of Trustees’ Responsibilities
The Trustees (who are also directors of Crime Reduction Initiatives for the purposes of company law) are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Company law requires Trustees to prepare financial statements for each financial year which give a true and fair view of the state of the affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the Trustees are required to: • select suitable accounting policies and then apply them consistently; • observe the methods and principles in the Charities SORP; • make judgements and estimates that are reasonable and prudent; • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business. The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the Trustees are aware: • there is no relevant audit information of which the charitable company’s auditor is unaware; and • the Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
Approved by
D. Gregson Chair 25th July 2012
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(continued)
Independent Auditor’s Report to the Trustees and Members of Crime Reduction Initiatives We have audited the financial statements of Crime Reduction Initiatives for the year ended 31 March 2012 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 charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and to the charitable company’s trustees, as a body, in accordance with section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. Our audit work has been undertaken for no purpose other than to draw to the attention of the charitable company’s trustees and members those matters which we are required to include in an auditor’s report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the charitable company and the charitable company’s trustees and members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of trustees and auditors As explained more fully in the Trustees’ Responsibilities Statement, 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 auditors under section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report to you in accordance with those Acts.
Opinion on the financial statements In our opinion the financial statements: • give a true and fair view of the state of the charitable company’s affairs as at 31 March 2012 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended; and • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006. Opinion on other matters prescribed by the Companies Act In our opinion the information given in the Trustees’ Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion: • the charitable company has not kept proper and adequate accounting records or returns adequate for our audit have not been received from branches not visited by us; or • the financial statements are not in agreement with the accounting records and returns; or • certain disclosures of trustees’ remunerations specified by law are not made; or • we have not received all the information and explanations we require for our audit.
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 Auditing Practices Board’s Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the charitable company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall presentation of the financial statements. In addition we read all the financial and non-financial information in the Trustees’ Annual Report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
25th July 2012 Nicholas Brooks Senior Statutory Auditor for and on behalf of Kingston Smith LLP, Statutory Auditor Kingston Smith LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006 Devonshire House, 60 Goswell Road, London EC1M 7AD
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Statement of Financial Activities
(incorporating the Income and Expenditure Account) for the year ended 31st March 2012 Prior Total Year Unrestricted Restricted Funds Funds Notes Funds Funds 2012 2011 £’000 £’000 £’000 £’000 Incoming resources Incoming resources from generated funds: Voluntary income 23 - 23 8 Investment income 1 194 6 200 150 Incoming resources from charitable activities: Criminal justice services 10,175 - 10,175 10,399 Substance misuse services in the community 59,596 94 59,690 46,354 Street services 2,947 109 3,056 3,115 Residential and supported accommodation 1,854 6 1,860 1,864 Services for families and young people 5,654 157 5,811 7,120 Total incoming resources 80,443 372 80,815 69,010 Resources expended Charitable activities: 3 Criminal justice services 9,342 - 9,342 9,561 Substance misuse services in the community 59,563 101 59,664 46,169 Street services 2,767 116 2,883 2,959 Residential and supported accommodation 1,674 7 1,681 1,797 Services for families and young people 5,269 148 5,417 6,865 Governance costs 4 43 - 43 48 Total resources expended Net incoming resources
3/5
78,658
372
79,030
67,399
2
1,785
-
1,785
1,611
Transfers Gross transfers between funds 13/14 17 (17) -
-
Net incoming resources before other recognised (losses)/gains 1,802 (17) 1,785 1,611 Other recognised (losses)/gains Revaluation of freehold property 7 (866) - (866) Actuarial (losses)/gains on defined benefit pension schemes 19 (21) - (21) 73 Net movements in funds 915 (17) 898 1,684 Reconciliation of funds Total funds brought forward at 1 April 2011 11,250 519 11,769 10,085 Total funds carried forward at 1 April 2012 12,165 502 12,667 11,769 The charity has no recognised gains or losses for the year other than as detailed above. The net movements in the Charity’s funds for the year arise from the Charity’s continuing operations. The Accounting Policies on pages 19 and 20 and the notes on pages 21 to 39 form part of these accounts.
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Balance Sheet as at 31st March 2012
Notes 2012 2012 2011 2011 £’000 £’000 £’000 £’000 Fixed assets Tangible assets 7 4,597 5,537 Current assets Debtors 8 5,819 5,264 Cash at bank and in hand 15,550 14,194 21,369 19,458 Creditors: amounts falling due within one year 9 (10,586) (10,531) Net current assets 10,783 8,927
Creditors: amounts falling due after more than one year 10 (1,600) (1,649) Provisions for liabilities and charges 11 (1,113) (1,046) Net assets 12,667 11,769 Funds Unrestricted 13 12,165 11,250 Restricted 14 502 519 12,667 11,769
Approved by the Board of Directors and Trustees on 25th July 2012 and signed on its behalf by:
R. Perkin MA (Cantab), FCA Trustee
D. Gregson Chair The Accounting Policies on pages 19 and 20 and the notes on pages 21 to 39 form part of these accounts. Company Registration Number: 3861209 (England and Wales).
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Cash Flow Statement for the year ended 31st March 2012
Notes 2012 2011 £’000 £’000 Net cash inflow from operating activities 17 1,948 2,217 Returns on investments and servicing of finance Investment income 208 131 Interest payable on bank loans (106) (109) 2,050 2,239 Capital expenditure and financial investment Purchase of tangible fixed assets 7 (649) (105) Cash inflow before increase in liquid resources and financing 1,401 2,134 Financing Decrease in mortgages (45) (43) Increase in cash in the year 1,356 2,091 Reconciliation of net cash flow to movements in net funds 18 Increase in cash in the period 1,356 2,091 Cash outflow from decrease in mortgages
45 43
Change in net debt resulting from cash flows 1,401 2,134 Net funds and debt at 1st April 2011 12,501 10,367 Net funds and debt at 31st March 2012 13,902 12,501 The Accounting Policies on pages 19 and 20 and the notes on pages 21 to 39 form part of these accounts.
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Accounting Policies Basis of accounts
The accounts have been prepared under the historical cost convention as modified by the revaluation of certain fixed assets, and include the results of the charity’s operations which are described in the Trustees’ Annual Report. The accounts have been prepared in accordance with the Statement of Recommended Practice, Accounting and Reporting by Charities (SORP 2005) issued in February 2005, applicable accounting standards and the Companies Act 2006. The accounting policies are consistent with the prior year. The principal policies of the Charity are as follows: a) Income Income received from gifts and donations is accounted for on a receipts basis. Contract income and grants are accounted for on an accruals basis. Investment income is stated at the amount receivable. Voluntary income includes donations (both from charitable sources with an interest in the activities of the charity and individuals) and funding for central costs. Incoming resources from charitable activities includes contract and grant income, rents receivable and other sundry receipts. b) Project accounting/allocation Income and direct costs relating to charitable activities are allocated to five charitable activity categories by classifying each project into one of the following - criminal justice services; substance misuse services in the community; street services; residential and supported accommodation and services for families and young people. Support Costs (after a deduction is made to allocate a portion of support costs to governance costs) are apportioned to charitable activities based on the direct costs of those activities. c) Classification of expenditure Direct costs represent all costs which relate directly to charitable activities and governance costs. Support costs are those incurred to support charitable activities and governance. Expenditure has been classified in accordance with SORP 2005. d) Project Start-up costs Project Start-up costs are treated as revenue expenditure in the period that a contract commences and matched with associated contract start-up income. In all other cases, project start-up costs are treated as revenue expenditure when incurred.
e) Tangible fixed assets Freehold Property In accordance with FRS 15 freehold land is not being depreciated. No depreciation has been charged on freehold buildings during the year. This represents a departure from the Companies Act 2006 but in the opinion of the Trustees the departure is required to show a true and fair view. This is because the properties are maintained at a high standard in order to meet the requirements of the funders. Consequently any depreciation charge on freehold buildings would not be material. The freehold buildings have been reviewed for impairment in accordance with FRS 11, the results of which indicated that the residual value is not materially different from the carrying amount. As required by FRS15, the properties are professionally valued on a five yearly cycle and by the Trustees every three years in the interim. The Trustees also consider the market value of the properties on an annual basis in the interim. Capitalisation of other assets Leasehold improvements, computers and other equipment purchased for specific projects are treated as revenue expenditure at the date the cost is incurred. Other assets with a value greater than ÂŁ2,000 are capitalised and depreciated to write off the cost of the assets over estimated useful lives. The annual depreciation rates and methods used are as follows: Leasehold property Leasehold improvements - over the lease term, on original cost. Furniture and equipment IT equipment - 33.3% per annum on a straight line basis, on original cost; Other equipment - 15% per annum on a straight line basis, on original cost.
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Accounting Policies
(continued)
Basis of accounts (continued)
f) Dilapidation provision Provision is made for the legal obligation in our property leases to reinstate the premises to the condition they were at the date the lease was signed. An estimate is made of the cost of that reinstatement, and this is provided over a period which is the shorter of the lease term or the period to the first lease break point. g) Funds Restricted funds Restricted funds are those whose application is limited to those causes specified by the donor. Any deficit incurred on any individual restricted fund is written off to the Unrestricted Fund in the financial year in which the deficit occurs. Unrestricted funds For control and audit purposes funds received for each project are accounted for individually with the relevant incoming resources and expenditure allocated accordingly. Expenditure for projects includes both direct costs attributable to the project and appropriate recharges for support costs. h) Leasing commitments Rentals payable under operating leases are charged against income on a straight line basis over the lease term. i) Pension scheme arrangements The Charity operates both defined benefit and defined contribution pension schemes for its employees. All defined benefit schemes are closed to new entrants. The assets of any defined benefit and defined contribution pension schemes are held separately from those of the Charity. Pension costs charged in the Statement of Financial Activities represent the contributions payable by the Charity for the year together with any material provision to record the Charity’s liability in relation to a defined benefit pension scheme.
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Notes to the Accounts for the year ended 31st March 2012 1 Incoming resources
Investment income 2012 2011 £’000 £’000 Interest on UK cash deposits 200 150 Incoming resources from charitable activities Incoming resources from charitable activities includes contract income from statutory sources, rents receivable and other sundry receipts. Grant income recorded during the year is disclosed within Note 14, Restricted Funds. Other incoming resources Other incoming resources includes gains on disposal of fixed assets, contributions towards training partner organisation staff and other sundry receipts not directly attributable to charitable activities or voluntary income.
2 Net incoming resources
Net incoming resources is stated after charging: 2012 2011 £’000 £’000 Auditors’ remuneration: - Audit services 29 28 - Non-audit services 2 50 Operating lease rentals - Plant and machinery 384 324 - Land and buildings 2,664 2,616 Depreciation 195 119
Non-audit services are all internal audit-related and cover additional review and assurance work in respect of internal controls.
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Notes to the Accounts
(continued)
for the year ended 31st March 2012 3 Resources expended Direct Support 2012 Direct Support 2011 costs costs Total costs costs Total £’000 £’000 £’000 £’000 £’000 £’000 Charitable activities: Criminal justice services 8,639 703 9,342 8,765 796 9,561 Substance misuse services in the community 55,175 4,489 59,664 42,324 3,845 46,169 Street services 2,666 217 2,883 2,713 246 2,959 Residential and supported accommodation 1,555 126 1,681 1,647 150 1,797 Services for families and young people 5,010 407 5,417 6,293 572 6,865 Sub-Total Governance Costs Total
73,045 39 73,084
5,942 4 5,946
78,987 61,742 5,609 67,351 43 44 4 48 79,030 61,786 5,613 67,399
Further analysis of the major components of direct and support costs is shown in note 5.
Central Business Finance Administration HR and Support and Legal and Training and IT Services Communications 2012 Total £’000 £’000 £’000 £’000 £’000 Support costs allocated to Charitable activities: Criminal justice services 117 170 139 277 703 Substance misuse services in the community 751 1,086 885 1,767 4,489 Street services 36 53 43 85 217 Residential and supported accommodation 21 30 25 50 126 Services for families and young people 68 99 80 160 407 Total 993 1,438 1,172 2,339 5,942 Central Business Finance Administration HR and Support and Legal and Training and IT Services Communications 2011 Total £’000 £’000 £’000 £’000 £’000 Support costs allocated to Charitable activities: Criminal justice services 124 174 126 372 796 Substance misuse services in the community 600 839 611 1,795 3,845 Street services 38 54 39 115 246 Residential and supported accommodation 24 33 23 70 150 Services for families and young people 89 125 91 267 572 Total 875 1,225 890 2,619 5,609 Support costs have been allocated to Charitable activities and Governance costs based on the direct costs of those activities.
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4 Governance costs 2012 2011
£’000 £’000 Audit fees 29 28 Legal and professional costs 6 13 Trustee and member expenses 4 3 Support costs 4 4 Total 43 48
5 Total resources expended Direct Direct Support Support costs costs costs costs 2012 2011 2012 2011 £’000 £’000 £’000 £’000 Staff costs 55,791 48,154 3,218 3,323 Client, volunteer and mentor expenses 5,348 3,346 65 55 Staff welfare costs 219 212 44 37 Rent, rates and room hire 3,112 2,957 342 341 Light and heat 470 423 33 6 Insurance 87 58 261 269 Hire of equipment 303 205 15 66 Start-up costs 2,253 1,725 2 11 Repairs, maintenance and replacements 1,489 1,159 83 82 Dilapidations 128 260 3 4 Printing, stationery and postage 377 303 75 62 Telephone 782 736 50 (36) Travel and subsistence 1,232 1,135 188 186 Legal and professional fees 445 329 584 465 Other expenses 92 16 43 23 IT costs 623 476 584 434 Bank charges 6 5 1 2 Interest payable on mortgages 35 46 71 63 Depreciation 5 1 190 118 Marketing costs 248 196 94 102 73,045 61,742 5,946 5,613 Allocated to governance costs - - (4) (4) Governance costs 39 44 4 4 Total 73,084 61,786 5,946 5,613
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Notes to the Accounts
(continued)
for the year ended 31st March 2012 6 Staff costs
2012 2011 £’000 £’000 Wages and salary costs 48,693 41,698 Social security costs 4,721 4,092 Training costs 745 946 Recruitment and general payroll costs 193 262 Pension costs 1,519 1,495 Agency and third party organisations 3,138 2,984 Total 59,009 51,477 The number of employees who received total remuneration in the following bands were as follows: 2012 2011 Number Number £60,000 to £69,999 5 £70,000 to £79,999 2 3 £80,000 to £89,999 3 1 £90,000 to £99,999 1 6 £100,000 to £109,999 4 1 £110,000 to £119,999 2 £120,000 to £129,999 1 £140,000 to £149,999 - 1 £150,000 to £159,999 1 £170,000 to £179,999 1 1 Fifteen (2011: Six) of the higher paid employees were accruing pension benefits under a defined contribution scheme and two (2011: two) under the SHPS defined benefit scheme. Contributions of £890,691 (2011: £610,262) were paid into a defined contribution scheme £141,334 (2011: £56,159) relates to higher paid employees). The other employees were members of the SHPS, NHS or LGPS defined benefit schemes (see note 19) into which contributions of £578,276 (2011: £431,355) were paid during the year £42,229 (2011: £39,868) relates to higher paid employees). Employers pension contributions outstanding at the year end amounted to £144,226 (2011: £83,350). Employee numbers: Average number of employees Average number of Full Time Equivalents
2012 2011 Number Number 1,866 1,637 1,698
1,497
Average number of Full Time Equivalents split between: Direct project staff 1,580 1,392 Operational support staff 45 37 Central support staff 73 68 Total 1,698 1,497
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7 Tangible fixed assets
Cost/valuation At 1st April 2011 Additions Revaluation Disposals
Freehold Leasehold Furniture and property property equipment Total £’000 £’000 £’000 £’000 5,170 103 574 5,847 6 23 92 121 (866) - - (866) - - (112) (112)
At 31st March 2012 4,310 126 554 4,990 Depreciation At 1st April 2011 - (25) (285) (310) Disposals - - 112 112 Charge for the year - (51) (144) (195)
At 31st March 2012 - (76) (317) (393) Net Book Value At 31st March 2012 4,310 50 237 4,597 At 31st March 2011 5,170 78 289 5,537 The total cost and valuation of Freehold property at 31 March 2012 was £4.3 million and consists of 6 properties. During the year four of the properties were professionally revalued in line with the five yearly revaluation cycle, and in accordance with the RICS Valuation - Professional Standards 2012 Edition. The result of these revaluations is that there is a reduction in the carrying value of £0.9 million. However, the Trustees have considered whether the reduction in carrying value is due to impairment or due to property prices. They considered CRI’s profitability, cash generation and lack of intention to dispose of these properties and, based on that, they consider that the value in use remains at or above their previous carrying value. Accordingly, the change in value is reported in the Statement of Financial Activities within ‘Other recognised (losses)/gains’. The original cost of the freehold properties is £4.0 million. 8 Debtors 2012 2011 £’000 £’000 Income receivable 4,130 3,540 Other debtors 153 120 Prepayments 1,536 1,604 Total 5,819 5,264 Included within ‘Income receivable’ is an amount of £0.3 million (2011: £1.5 million) relating to amounts invoiced in respect of the 2012-2013 financial year. An equivalent amount is included within ‘Deferred income’ in note 9.
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Notes to the Accounts (continued) for the year ended 31st March 2012 9 Creditors: amounts falling due within one year 2012 2011 £’000 £’000 Bank and other loans 48 44 Trade creditors 2,642 3,177 Deferred income 4,007 3,783 Social security and other taxes 1,381 1,219 Accruals 2,057 1,155 Other creditors 451 1,153 Total 10,586 10,531
10 Creditors: amounts falling due after more than one year
2012 2011 £’000 £’000 Bank and other loans 1,600 1,649 Bank and other loans are analysed further below: B arclays Bank plc Treasury Loan (secured on 140 - 142 Kings Cross Road, London): repayable in more than one year but no more than two years 51 59 repayable in more than two years but no more than five years 175 163 repayable in more than five years 1,290 1,343 Brighton and Hove Council (secured on 43 St Andrews Road, Portslade) 84 84 Total 1,600 1,649 The Barclays Bank plc Treasury loan was made on 15 January 2007 and is for a term of 25 years. The first ten years of the term is subject to interest rate protection whereby the maximum interest rate payable is 6.92%. The interest rate in force at 31 March 2012 was 6.65% (2011: 6.65%). The loan from Brighton and Hove City Council is only repayable if the property is sold and is non-interest bearing.
11 Provisions for liabilities and charges Dilapidation
Pension provision provisions Total £’000 £’000 £’000 At 1st April 2011 990 56 1,046 Amounts provided in the year 131 37 168 Utilised during the year (101) - (101)
At 31st March 2012 1,020 93 1,113
12 Limited liability
The liability of each member of the charity is limited to £1.
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C rim e Reduction In i t i at i v es
13 Unrestricted funds Total Gross funds brought Net transfers Other forward at incoming between recognised 1 April 2011 resources funds losses £’000 £’000 £’000 £’000 Unrestricted funds 6,375 1,785 798 (21) Revaluation reserve 1,032 - 113 (866) Free reserves 7,407 1,785 911 (887) Fixed assets net of related loans 3,843 - (894) - Total unrestricted funds 11,250 1,785 17 (887)
Total funds carried forward at 31 March 2012 £’000 8,937 279 9,216 2,949 12,165
The Revaluation reserve relates to Freehold properties (Note 7).
14 Restricted funds
Summary
Total funds Total funds brought forward Net incoming Gross transfers carried forward at 1 April 2011 resources between funds at 31 March 2012 £’000 £’000 £’000 £’000
a) HACRO 510 S ubstance misuse services in the community: b) Stoke-On-Trent Safer City Partnership - c) Department of Health Section 64 Grant - d) European Social Fund - Street Services: e) Department for Communities and Local Government - Residential and supported accomodation: f) Department of Health Section 64 Grant - Services for families and young people: g) Home Office - h) Ministry of Justice - i) Department of Health Section 64 Grant - j) European Social Fund 8 k ) Department for Children, Schools and Families 1 Total 519
6
(35)
481
(3) 3 - - - - (4) 4 - (7) 7 - (1) 1 (3) 3 - - - - - 12 - 20 - - 1 - (17) 502
a) HACRO The funds were gifted when CRI became the sole corporate trustee for HACRO in 2006 and are restricted for use in pursuing the original objects of the charity, namely for the rehabilitation of offenders and particularly for those who have problems related to alcohol or drug misuse. £35,000 of the funds were utilised in the year in respect of set-up costs on the adult substance misuse service operating across Hampshire.
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27
Notes to the Accounts (continued) for the year ended 31st March 2012 14 Restricted funds (continued)
b) Substance misuse services in the community - Stoke-On-Trent Safer City Partnership Incoming resources from charitable activities represents a grant from Stoke-On-Trent Safer City Partnership in relation to the funding of running costs of a facilty in Tunstall in Stoke. Incoming Resources resources expended £’000 £’000 Stoke-On-Trent Safer City Partnership 19 (22)
Net incoming Gross transfers resources between funds £’000 £’000 (3) 3
c) Substance misuse services in the community - Department of Health Section 64 Grant Incoming resources from charitable activities represents a Section 64 Grant from The Department of Health in respect of funding from the Reaching Out to Carers Innovation Fund within the Haringey Drug Intervention Programme. A summary of activity in the year is as follows: Net Incoming Resources incoming Gross transfers resources expended resources between funds £’000 £’000 £’000 £’000 Department of Health Section 64 Grant 25 (25) - - d) Substance misuse services in the community - European Social Fund Incoming resources from charitable activities represents a European Social Fund Grant in respect of funding for a Reconnnections service in Leeds. A summary of activity in the year is as follows: Net Incoming Resources incoming Gross transfers resources expended resources between funds £’000 £’000 £’000 £’000 European Social Fund 50 (54) (4) 4 e) Street Services - South Holland District Council Incoming resources from charitable activities represents a grant from South Holland District Council in respect of a “Greater Fens” Reconnections project in South Lincolnshire. A summary of activity in the year is as follows: Net Incoming Resources incoming Gross transfers resources expended resources between funds £’000 £’000 £’000 £’000 Department for Communities and Local Governnment grant 109 (116) (7) 7 f) Residential and Supported Accommodation - Department of Health Section 64 Grant Incoming resources from charitable activities represents a Section 64 Grant from The Department of Health in respect of funding for a complex case co-ordinator in Brighton & Hove which ended during the year. A summary of activity in the year is as follows: Net Incoming Resources incoming Gross transfers resources expended resources between funds £’000 £’000 £’000 £’000 Department of Health Section 64 Grant 6 (7) (1) 1
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C rim e Reduction In i t i at i v es
g) S ervices for families and young people - Home Office Incoming resources from charitable activities represents funding from The Home Office Witnesss and Victim Fund to provide a courtbased independent domestic violence advisor for the East Sussex SDVC. A summary of activity in the year is as follows: Net Incoming Resources incoming Gross transfers resources expended resources between funds £’000 £’000 £’000 £’000 The Home Office Witness and Victim Fund 20 (23) (3) 3 h) Services for families and young people - Ministry of Justice IDVA-MARAC Funding Incoming resources from charitable activities represents funding from The Ministry of Justice IDVA-MARAC fund as a contributions towards the salary cost of an independent Domestic Violence Advisor working in East Sussex. A summary of activity in the year is as follows:
Net Incoming Resources incoming Gross transfers resources expended resources between funds £’000 £’000 £’000 £’000 Ministry of Justice 36 (36) - - i) Services for families and young people - Department of Health Section 64 Grant Incoming resources from charitable activities represents a Section 64 Grant from the Department of Health in respect of funding for a Carers Care Co-ordination pilot in Brighton which ended during the year. A summary of activity in the year is as follows: Net Incoming Resources incoming Gross transfers resources expended resources between funds £’000 £’000 £’000 £’000 Section 64 Grant 1 (1) - - j) Services for families and young people - European Social Fund Incoming resources from charitable activities represents a European Social Fund Grant in respect of funding for a peer mentoring service in Wales. A summary of activity in the year is as follows: Net Incoming Resources incoming Gross transfers resources expended resources between funds £’000 £’000 £’000 £’000 European Social Fund 100 (88) 12 - k) Services for families and young people - Department for Children, Schools and Families Incoming resources from charitable activities represented an Intensive Intervention Project Grant from the Department for Children, Schools and Families in respect of funding for the purpose of promoting the wellfare of children and their families in East Sussex. The funding expired in 2010/11 and there was no activity in the year under review.
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Notes to the Accounts (continued) for the year ended 31st March 2012 15 Analysis of net assets between funds
Creditors: amounts Tangible falling due Provisions fixed Net current after more for liabilities assets assets than one year and charges Total £’000 £’000 £’000 £’000 £’000 Unrestricted Funds 4,597 10,281 (1,600) (1,113) 12,165 Restricted Funds - 502 - - 502 Total 4,597 10,783 (1,600) (1,113) 12,667 16 Annual commitments due under operating leases Land and buildings Other 2012 2011 2012 2011 £’000 £’000 £’000 £’000 Gross obligations repayable next year on leases: expiring within one year 1,218 651 70 175 expiring between two and five years 710 1,023 300 187 expiring in more than five years 1,480 1,293 - - Total 3,408 2,967 370 362 17 Reconciliation of changes in resources to net cash inflow from operating activities Net incoming resources for the year Actuarial (losses)/gains on defined benefit pension scheme Investment income Interest payable on bank loans Depreciation Increase in debtors Increase in creditors Increase/(decrease) in provisions Net cash inflow from operating activities
2012 2011 £’000 £’000 1,785 1,611 (21) 73 (200) (150) 106 109 195 119 (563) (2035) 579 2,935 67 (445) 1,948
2,217
18 Analysis of Net Funds At 1st At 31st April Cash March 2011 Flow 2012 £’000 £’000 £’000 Cash at bank and in hand 14,194 1,356 15,550 Bank loans (1,693) 45 (1,648) Total 12,501 1,401 13,902
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19 Pension schemes
Introduction Note 19 provides details of a number of defined benefit pension schemes which CRI participtates in as an employer. With the exception of the Social Housing Pension Scheme, CRI has obtained formal membership of these NHS or Local Government Pension Schemes (LGPS) as a result of being commissioned to deliver services which required the transfer in to CRI members of these schemes. All the defined benefit pension schemes are closed to new members. The disclosure that follows is a requirement of FRS 17 ‘Retirement Benefits’. Social Housing Pension Scheme (SHPS) CRI participates in the Social Housing Pension Scheme (SHPS). The Scheme is defined benefit, funded and is contracted out of the state scheme. It is not possible in the normal course of events to identify on a reasonable and consistent basis the share of underlying assets and liabilities belonging to individual participating employers. The scheme is a multi-employer scheme, where the assets are co-mingled for investment purposes, and benefits are paid out of total Scheme assets. Accordingly, due to the nature of the Scheme, the accounting charge for the period under FRS17 represents the employer contribution payable. The Trustee of the Scheme commissions an actuarial valuation of the Scheme every three years. The main purpose of the valuation is to determine the financial position of the Scheme in order to determine the level of future contributions required, in respect of each benefit structure, so that the Scheme can meet its pension obligations as they fall due. The last formal valuation of the Scheme was performed as at 30 September 2008 by a professionally qualified actuary using the Projected Unit Method. The market value of the Scheme’s assets at the valuation date was £1,527 million. The valuation revealed a shortfall of assets compared with the value of liabilities of £663 million, equivalent to a past service funding level of 70%. The Scheme Actuary has prepared an Actuarial Report that provides an approximate update on the future funding position of the scheme as at 30 September 2010. Such a report is required by legislation for years in which a full actuarial valuation is not carried out. The funding update revealed an increase in the assets of the scheme to £1,985 million and indicated a reduction in the shortfall of assets compared to liabilities to approximately £497 million, equivalent to a past service funding level of 80%. Following consideration of the results of the 2008 actuarial valuation it was agreed by the Trustee of the Scheme that the shortfall of £663 million would be dealt with by the payment of deficit contribution of 7.5% of pensionable salaries, increasing each year in line with salary growth assumptions, from April 2010 to September 2020, reducing to 3.1% from October 2020 to September 2023. During the accounting period CRI paid contributions at the rate of 18.9%.
The Scheme’s 30 September 2011 valuation is currently in progress and wil be finalised by 31 December 2012. The results of the 2011 valuation will be included in next year’s disclosure note. As a result of pension scheme legislation there is a potential debt on the employer that could be levied by the Trustee of the Scheme. The debt is due in the event of the employer ceasing to participate in the Scheme or the Scheme winding up. The debt for the Scheme as a whole is calculated by comparing the liabilities for the Scheme with the assets of the Scheme. If the liabilities exceed assets there is a buy-out debt. The leaving employer’s share of the buy-out debt is the proportion of the Scheme’s liability attributable to employment with the leaving employer compared to the total amount of the Scheme’s liabilities (relating to employment with all the currently participating employers). The leaving employer’s debt therefore includes a share of any ‘orphan’ liabilities in respect of previously participating employers. The amount of the debt therefore depends on many factors including total Scheme liabilities, Scheme investment performance, the liabilities in respect of current and former employees of the employer, financial conditions at the time of the cessation event and the insurance buy-out market. The amounts of debt can therefore be very volatile over time. CRI has been notified by The Pensions Trust of the estimated employer debt on withdrawal from the Scheme, based on the financial position of the Scheme as at 30 September 2011. At this date the estimated employer debt for CRI was £3.7 million. As at the balance sheet date there were eight active members of the Scheme employed by CRI. CRI has closed the defined benefit Scheme to new entrants. Pensions Trust Growth Plan CRI participates in the Pension Trust’s Growth Plan. The Scheme is funded and is contracted out of the state scheme. CRI offers the Growth Plan as an AVC investment option for members of SHPS and is therefore deemed to participate in the scheme. CRI does not pay any contributions to the Growth Plan. The Growth Plan is a multi-employer pension plan and it is not possible in the normal course of events to identify the share of underlying assets and liabilities belonging to individual participating employers. The members pay contributions at a rate of their choice. As at the balance sheet date there were two active members of the Scheme employed by CRI. Teesside Pension Fund CRI’s admission body status in the Teeside Pension Fund was terminated during the year on the departure of the remaining member in the scheme. A cessation event liability of £33,000 was payable on termination in the year.
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Notes to the Accounts (continued) for the year ended 31st March 2012 19 Pension schemes (continued)
NHS Pension Scheme for England and Wales CRI has Directions Body status with the NHS Pension Scheme in relation to employees at its projects based in Warrington, Kent, East Lancashire, Stoke, Staffordshire, Lewisham, Greenwich, Suffolk, Berkshire, Milton Keynes, Barking & Dagenham, Dudley, Bromley, Worcestershire, Cambridge, Peterborough, Halton and Hampshire during the year to 31 March 2012. The NHS Pension Scheme is an unfunded, defined benefit scheme that covers NHS employers, GP Practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The scheme is not designed to be run in a way that would enable CRI to identify its share of the underlying Scheme assets and liabilities. Therefore, the Scheme is accounted for as if it were a defined contribution scheme and the cost of the Scheme is taken as being equal to the contributions payable to the Scheme for the accounting period. The total employer contributions payable in 2011-2012 was £483,121 (2011: £298,783). At 31 March 2012 there were 126 active members in the scheme employed by CRI. The Scheme is subject to a full actuarial valuation every four years and a FRS17 accounting valuation every year. The last formal actuarial (funding) valuation on this basis, which determined current contribution rates, was undertaken as at 31 March 2004. Consequently, a formal actuarial valuation would have been due for the year ending 31 March 2008. However, formal actuarial valuations for unfunded public service schemes have been suspended by HM Treasury on value for money grounds while consideration is given to recent changes to public service pensions, and while future scheme terms are developed as part of the reforms to public service pension provision. Employer and employee contribution rates are currently being determined under the new scheme design. In accordance with FRS 17, a valuation of the Scheme liability is carried out annually by the Scheme actuary as at the balance sheet date by updating the results of the full actuarial valuation. However, as the interval since the last formal valuation now exceeds four years, the valuation of the scheme liability as at 31 March 2012 is based on detailed membership data as at 31 March 2010 updated to 31 March 2012 with summary global member and accounting data. The latest assessment of the liabilities of the Scheme is contained in the Scheme Actuary report, which forms part of the annual NHS Pension Scheme (England and Wales) Pension Accounts, and can be viewed on the NHS Pensions website. Cambridgeshire County Council Local Government Pension Scheme CRI’s admission body status in the Cambridgeshire County Council Local Government Pension Scheme was terminated during the year on the departure of the remaining member in the scheme. A cessation event liability of £11,000 has been provided at the year end.
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C rim e Reduction In i t i at i v es
Shropshire County Pension Fund In the process of taking over a contract in HMYOI Stoke Heath and HMP Shrewsbury during 2008-2009, CRI gained admission body status into the Shropshire County Pension Fund with effect from 1 August 2008. The scheme is a multi-employer defined benefit scheme and as at the balance sheet date there were four members of the scheme employed by CRI. The scheme is closed to new entrants from CRI. During the year ended 31 March 2012 contributions paid by CRI were £9,846 (2011: £12,726). CRI has obtained from the Scheme actuary, Mercer Limited, the following information which needs to be disclosed under FRS 17 ‘Retirement Benefits’. 2012 2011 Balance Sheet at 31 March 2012 £’000 £’000 Market value of assets 382 359 Liabilities (416) (387) Deficit (34) (28) Value of unfunded liabilities (included in above) - Movement in Deficit during 2011-2012 £’000 £’000 Current service cost (14) (20) Employer contribution 10 13 Expected return on assets 21 28 Interest on pensionable liabilities (22) (33) Past service gain - 34 Effect of curtailments or settlements - (10) Actuarial (loss)/gain (1) 88 Net movement (6) 100 Revenue items for 2011-2012 - Operating £’000 £’000 Current service cost (15.2%/17.6% of pensionable payroll) (14) (20) Past service gain - 34 Curtailment or Settlement cost - (10) Total cost (14) 4 Revenue items for 2011-2012 - Finance £’000 £’000 Expected return on assets 21 28 Interest on pensionable liabilities (22) (33) Net loss (1) (5) Statement of Actuarial gains and (losses) Asset losses (3.4%/37.6% of year end assets) Liability gain (2.9%/57.6% of year end liabilities) Net (loss)/gain (0.26%/22.7% of liabilities)
£’000 £’000 (13) (135) 12 223 (1)
88
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33
Notes to the Accounts (continued) for the year ended 31st March 2012 19 Pension schemes (continued)
Additional disclosure items: Assets at 31 March 2012 Assets at 31 March 2011 £’000 % £’000 % Equities 202 53.0% 234 65.2% Government Bonds 55 14.4% 41 11.4% Other Bonds 40 10.4% 36 10.0% Property 14 3.6% 14 3.8% Cash/Liquid 18 4.8% 18 5.1% Other 53 13.8% 16 4.5%
382 100.0%
359 100.0%
The date of the last actuarial valuation was 31 March 2010 and the market value of the total fund assets at that date was £951 million. Actuarial assumptions Beginning End of year of year Financial assumptions Rate of CPI inflation 3.0% 2.6% Rate of increase in salaries 4.5% 4.1% Rate of increase in pensions 3.0% 2.6% Discount rate 5.5% 5.2% Beginning End of year of year Expected return on assets Equities 7.5% 7.0% Government Bonds 4.4% 3.1% Other Bonds 5.1% 4.1% Property 6.5% 6.0% Cash/Liquidity 0.5% 50.0% Other 7.5% 7.0% Note - Beginning of year determined as at 31 March 2011; End of year determined as at 31 January 2012. The actuarial assumptions used in the calculation of the year end balance sheet liabilities are based on 2010 actuarial valuation assumptions, other than the financial assumptions which are shown above. The above expected returns are gross of expenses. A deduction of 0.79% (2011: 0.79%) in respect of expenses is made in calculating the expected return for the year.
34
C rim e Reduction In i t i at i v es
Hammersmith and Fulham Local Government Pension Scheme In the process of taking over a contract in Hammersmith and Fulham in 2009-2010 CRI gained admission body status into the Hammersmith and Fulham Local Government Pension Scheme with effect from 8 March 2010. The scheme is a multi-employer defined benefit scheme and as at the balance sheet date there was one member of the scheme employed by CRI. The scheme is closed to new entrants from CRI. During the year ended 31 March 2012 contributions paid by CRI were £501 (2011: £9,231). CRI has obtained from the Scheme actuary, Barnett Waddingham, the following information which needs to be disclosed under FRS 17 ‘Retirement Benefits’.
2012 2011 Balance Sheet at 31 March 2012 £’000 £’000 Market value of assets 60 54 Liabilities (89) (71) Deficit (29) (17) Value of unfunded liabilities (included in above) - Movement in Deficit during 2011-2012 £’000 £’000 Current service cost (1) (6) Employer contribution 1 5 Expected return on assets 4 3 Interest on pensionable liabilities (4) (4) Actuarial loss (12) (15) Net movement (12) (17) Revenue items for 2011-2012 - Operating £’000 £’000 Current service cost (16.7%/17.6% of pensionable payroll) (1) (6) Total cost
(1) (6)
Revenue items for 2011-2012 - Finance £’000 £’000 Expected return on assets 4 3 Interest on pensionable liabilities (4) (4) Net loss - (1) Statement of Actuarial gains and (losses) Asset gain(1.7%/20.3% of year end assets) Liability loss (14.6%/36.6% of year end liabilities) Net loss (13.5%/21.1% of liabilities)
£’000 £’000 1 11 (13) (26) (12) (15)
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Notes to the Accounts (continued) for the year ended 31st March 2012 19 Pension schemes (continued)
Additional disclosure items Assets at 31 March 2012 Assets at 31 March 2011 £’000 % £’000 % Equities 34 57.0% 30 55.0% Government Bonds 1 2.0% 7 13.0% Cash/Liquid 1 1.0% 1 2.0% Other 24 40.0% 16 30.0%
60
100.0%
54 100.0%
The date of the last actuarial valuation was 31 March 2010 and the market value of the total fund assets at that date was £554 million. Actuarial assumptions Beginning End of year of year Financial assumptions Rate of RPI inflation 3.5% 3.3% Rate of CPI inflation 2.7% 2.5% Rate of increase in salaries 5.0% 4.7% Rate of increase in pensions 2.7% 2.5% Discount rate 5.5% 4.6% Beginning End of year of year Expected return on assets Equities 7.4% 6.3% Government Bonds 4.4% 3.3% Cash/Liquidity 3.0% 3.0% Other 7.4% 6.3% The actuarial assumptions used in the calculation of the year end balance sheet liabilities are based on 2010 actuarial valuation assumptions, other than the financial assumptions which are shown above.
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C rim e Reduction In i t i at i v es
Merseyside Pension Fund In the process of taking over a contract in Sefton, Liverpool in 2008-2009 CRI gained admission body status into the Merseyside Pension Fund with effect from 1 November 2008. The scheme is a multi-employer defined benefit scheme and as at the balance sheet date there were three members of the scheme employed by CRI. The scheme is closed to new entrants from CRI. During the year ended 31 March 2012 contributions paid by CRI were £4,644 (2011:£32,058). CRI has obtained from the Scheme actuary, Mercer Limited, the following information which needs to be disclosed under FRS 17 ‘Retirement Benefits’.
2012 2011 Balance Sheet at 31 March 2012 £’000 £’000 Market value of assets 364 341 Liabilities (306) (280) Surplus 58 61 Value of unfunded liabilities (included in above) - Movement in Surplus 2011-2012 £’000 £’000 Current service cost (12) (14) Employer contribution 10 62 Expected return on assets 23 18 Interest on pensionable liabilities (16) (16) Past service gain - 27 Effect of curtailments or settlements - (16) Actuarial loss (8) Net movement (3) 61 Revenue items for 2011-2012 - Operating £’000 £’000 Current service cost (17.3%/18.4% of pensionable payroll) (12) (14) Past service gain - 27 Curtailments or settlements costs - (16) Total cost
(12) (3)
Revenue items for 2011-2012 - Finance £’000 £’000 Expected return on assets 23 18 Interest on pensionable liabilities (16) (16) Net loss 7 2 Statement of Actuarial gains and (losses): £’000 £’000 Asset loss (4.1% of year end assets) (15) Liability gain (2.3% of year end liabilities) 7 Net loss (2.6% of liabilities) (8)
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1 37
Notes to the Accounts (continued) for the year ended 31st March 2012 19 Pension schemes (continued)
Additional disclosure items Assets at 31 March 2012 Assets at 31 March 2011 £’000 % £’000% % Equities 215 59.1% 207 60.7% Government Bonds 57 15.7% 36 10.7% Other Bonds 15 4.0% 23 6.7% Property 34 9.3% 27 7.9% Cash/Liquid 8 2.2% 8 2.3% Other 35 9.7% 40 11.7%
364
100.0%
341 100.0%
The date of the last actuarial valuation was 31 March 2010 and the market value of the total fund assets at that date was £4,706 million. Actuarial assumptions Beginning End of year of year Financial assumptions Rate of CPI inflation 3.0% 2.6% Rate of increase in salaries 4.5% 4.1% Rate of increase in pensions 3.0% 2.6% Discount rate 5.5% 5.2% Beginning End of year of year Expected return on assets Equities 7.5% 7.0% Government Bonds 4.4% 3.1% Other Bonds 5.1% 4.1% Property 6.5% 6.0% Cash/Liquid 0.5% 0.5% Other 7.5% 7.0% Note - Beginning of year determined as at 28 February 2011; End of year determined as at 31 January 2012. The actuarial assumptions used in the calculation of the year end balance sheet liabilities are based on 2010 actuarial valuation assumptions, other than the financial assumptions which are shown above.
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20 Trustee and related party transactions
During the year no trustee received any remuneration (2011: £nil). Five trustees (2011: five trustees) received general travel expenses totalling £4,084 (2011: £3,617). During the year CRI continued its insurance policy to indemnify the charity trustees or other officers against all risks except for dishonesty, fraud or deliberate breach of trust. The insurance cost £1,363 (2011: £1,397). During the year CRI paid £8,723 (2011: £17,191) to a company where a trustee is a director in respect of critical incident training provided to staff. The trustee received no remuneration from that company in respect of the training provided. No amount was outstanding at the year end. During the year CRI paid £6,600 (2011: £nil) to a company where a trustee is an equity partner in respect of recruitment services. £3,300 (2011: £nil) was outstanding at the year end.
21 Ten Year Summary
The table below discloses CRI’s financial performance over the last 10 years, and includes details of annual growth rates and return on Incoming resources. The table underlines CRI’s focus on financial stability and its success in achieving year on year growth, despite operating in an increasingly difficult economic and financial environment. 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05 2003/04 2002/03 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Incoming resources 80,815 69,010 57,508 42,588 32,682 27,487 17,712 11,486 8,457 6,408 Growth % 17% 20% 35% 30% 19% 55% 54% 36% 32% 55% Resources expended (79,030) (67,399) (56,116) (40,854) (31,972) (26,492) (17,006) (10,873) (7,728) (5,699) Net Incoming resources 1,785 1,611 1,392 1,734 710 995 706 613 729 709 % 2.2% 2.3% 2.4% 4.1% 2.2% 3.6% 4.0% 5.3% 8.6% 11.1% Other recognised gains/(losses) (887) 73 (151) - 634 22 499 32 30 (44) Net movements in Funds 898 1,684 1,241 1,734 1,344 1,017 1,205 645 59 665 % 1.1% 2.4% 2.2% 4.1% 2.2% 3.7% 4.5% 5.6% 9.0% 10.4% Total funds carried forward 12,667 11,769 10,085 8,844 7,110 5,766 4,749 3,544 2,899 2,140 Note - ‘%’ above is in relation to Incoming resources.
C rim e R e d u c t io n I ni ti a ti v e s
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Regional Offices Registered Office and South Regional Office 3rd floor, Tower Point 44 North Road Brighton BN1 1YR t: 01273 677 019 f: 01273 693 183 e: south@cri.org.uk London and Eastern Regional Office 140-142 King’s Cross Road King’s Cross London WC1X 9DS t: 020 7833 7975 f: 020 7278 4513 e: london@cri.org.uk
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C rim e Reduction In i t i at i v es
North and Midlands Regional Office 2nd Floor Duncan House 14 Duncan Street Leeds LS1 6DQ t: 0113 380 4640 f: 0113 246 8568 e: north@cri.org.uk e: midlands@cri.org.uk Wales Office 57-59 St Mary Street Cardiff CF10 1FE t: 02920 349 800 f: 02920 226 183 e: wales@cri.org.uk
safer communities, healthier lives
Charity Registration Number: 1079327 (England and Wales), SC039861(Scotland). Company Registration Number: 3861209 (England and Wales) Publication ID: 20110622T092316
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C rim e Reduction In i t i at i v es
Certificate No. OHS 567416