Annual report 2012

r o f u o y k n “ T h a m e my g n i v i g ” k c a life b

Annual Report & Accounts 2012 www.arthritiscare.org.uk

Contents Chair’s Report

1

Message from Jane Asher

2

Key Facts about arthritis

3

Key Facts about Arthritis Care

4

How we help and support

5-14

Thank you

15

Our branches and support groups

16

Report & Financial Statements

17

Report of the trustees

18-19

Achievements & Performance

20

Independent auditors’ report

22-23

Statement of Financial Activities

24

Balance Sheet

25

Cashflow Statement

26-27

Notes to the financial statements 28-40

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Chair’s Report Welcome to our Annual Report, where we can show you what we have achieved in 2012 and start to set out our plans for 2013. I am proud to be Chair of this great charity; as someone who has had rheumatoid arthritis since my teenage years I know what it is like to combat constant pain.

At Arthritis Care our aim remains to support the 10 million people in the UK who are dealing with arthritis as part of their daily lives.

Arthritis remains the most common cause of chronic pain in the UK and now accounts for one in five of all GP visits.

In 2012 we wanted to give immediate help to everyone who turned to us. Our work included information booklets; over 120,000 of these were downloaded from our website. Our free and confidential helpline dealt with nearly 9,000 requests for help and our vibrant network of 194 branches continued to provide face-to-face support in every corner of the UK. Our strength lies in the fact that, although we are a national charity, we have a strong local presence. People with arthritis form the core of our charity and are represented through our trustees, staff, members and volunteers ensuring that we respond directly to the changing needs of people living with this condition.

In this year’s report you can read about our activities across the UK, everything from talks in London libraries, to sports tournaments in Northern Ireland, information days across Wales and our time spent with primary schools in Scotland. We rely on a huge network of trained volunteers to seek out the people who need us and who are living in their communities. We are indebted to our many hundreds of volunteers who create such an impact.

www.arthritiscare.org.uk

Arthritis is often viewed as a condition affecting the elderly, so we must not forget the work we do for the 27,000 children and young people in the UK who have arthritis. Our work with this group is vital and includes a specialist helpline, workshops and adventure activities to promote confidence and independence for these children.

I’d also like to mention our campaigning - during the year we commissioned and published our OA Nation 2012 survey turning the spotlight on osteoarthritis. This document gives an up-to-date snapshot of the wideranging physical, emotional and financial impact osteoarthritis is having in the UK today.

OA Nation showed us clearly how much more work there is to be done by Arthritis Care in helping to change the lives of those battling their arthritis. By working with key stakeholders at a national level we are ensuring that arthritis is recognised and prioritised by government and health care professionals.

Lastly I would like to leave you with my hopes for 2013. Our work is constantly expanding and with a difficult economic situation we took vital steps in 2012 to safeguard our future.

We have cut staff numbers and sold our head office building, allowing us to invest in both our charitable services and fundraising, which will allow us to reach out to even more people in 2013.

I do hope you enjoy reading about what we achieved in 2012 and look forward with me to a very positive 2013.

Ann Heaton

1

Message from Jane Asher

As we look back over 2012 in this report I feel very proud of Arthritis Care and the work it is doing and am very honoured to be President. I was first asked to help with publicising and supporting this wonderful charity many years ago now, and I was only too happy to do so. I felt then, and I do now, that the practical and effective support that is offered by Arthritis Care is vitally important and, knowing as we do just how many millions of people are affected by this complex disease, it is essential that its work is encouraged and allowed to develop and grow. Arthritis is not a fashionable or sensational cause – it’s been with us for centuries - and has become, wrongly, an accepted and overlooked condition that is still vastly misunderstood.

Far too many still think of it as only affecting older people and that it’s ‘just a few aches and pains’ and an inevitable part of ageing. Far too many people with arthritis struggle to access the right medication or to receive the practical help they need, and far too many are still suffering in silence. It’s in areas like this that the excellent campaigning undertaken by our charity is so necessary and can be so effective.

During the year, I took part in the launch of our very impressive report ‘OA Nation’, and I was startled and saddened by many of its findings,

2

including the upsetting statistic that over six million people are living in constant pain. This spurs me on to do my utmost in the years ahead to ensure that Arthritis Care can grow and prosper and that we can reach more of the people who need us.

We couldn’t, of course, do a fraction of what we do without the help of our wonderful volunteers: I know just what busy lives we all have and how many calls are made on our time and attention and I do thank all of you who give so generously and unselfishly of your time. We owe you so much, and are so lucky to have so many dedicated and loyal helpers.

I know we have an exciting time ahead of us as we begin another year – there is still so much more to be done - but with national offices, branches, volunteers, campaigners and supporters all working together I’m sure we can reach out to many more of those who are coping with pain and distress and make a real difference to their lives.

With my best wishes as always

Jane Asher President

www.arthritiscare.org.uk

Key Facts about arthritis Two-thirds of people with osteoarthritis face extra costs of nearly ÂŁ500 per year on prescriptions, heating bills and transport to live with the condition.

One third of people with osteoarthritis retire early, give up work or reduce the number of hours they work.

There are over 200 types of arthritis.

Seven in ten people with osteoarthritis in the UK (6 million people) are in constant pain.

The number of people with osteoarthritis is set to rise to 17 million, one in four of the population, within the next 20 years due to poor lifestyle and people living longer.

One in five people with osteoarthritis give up holidays, hobbies and leisure activities.

10 million people in the UK have arthritis; of these 8.5 million have osteoarthritis and 690,000 have rheumatoid arthritis.

The average age for diagnosis of osteoarthritis is 57 although one person in five is under 45.

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Nearly one in three people with rheumatoid arthritis is forced to give up work within one year of diagnosis.

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Key Facts about Arthritis Care in 2012

The only patient-led UK charity tackling 12,000 members. all forms of arthritis.

194 branches and support groups across the UK. Over 800 volunteers were actively involved in delivering information, support and running our network of local voluntary branches.

1,250 people successfully attended selfmanagement courses.

We have trained 236 volunteers who deliver our self-management courses across the UK.

Our Helpline answered 8,810 requests for help.

We had 750,000 unique visits to our website.

11,500

followers on Twitter.

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80 young people took part in a residential activities weekend.

We supported 258 young people via The Source Helpline.

www.arthritiscare.org.uk

We help people to live full and active lives One of the biggest problems faced by people with arthritis is the extreme levels of pain they experience. This pain stops them working, socialising or even being able to take care of themselves.

We were the UK pioneer in delivering structured self-management training in the early 1990s and have been delighted that in 2012 our self-management courses continued to flourish with 1,250 people taking control of their arthritis.

Our courses are delivered by trained volunteers; not only do they have great impact on the lives of those who participate, they are also extremely cost-effective. Independent research showed that for every £1 spent on our courses £7.25 is gained in wider social value*.

“I now have a more positive attitude towards having arthritis. I am now coping with the pain better and not getting so down and depressed and fed up with having the condition.” (Central England course participant 2012)

“My increased mobility has helped me physically and mentally; I can do more with friends I have more confidence.”

(Northern Ireland course participant 2012) Reaching out to those who need us Another highlight for us in 2012 was our London Libraries project, run by our England team, which will be running for the next three years. We saw a real need to reach out to older men in the capital living with arthritis and had found that medical settings were not the place for us to find them. We have now set up dropin information centres in libraries from Harrow to Merton as we aim to help these men reengage with their health care professionals. *Value for Money in Arthritis Care’s Training Courses: Making Self-Management Count, Robin Brady, SROI Evaluation, 2011

‘I have been living alone for the last 13 years and feel very lonely - which is not a good feeling.The groups have been fantastic and talking about my condition with others in similar situations helps me to overcome certain things. It has improved my health through learning different tips and given me a different viewpoint on arthritis and what you can do about it. I know that I am not the only one living with the condition which makes me feel less isolated.’

(75yr old male, Surrey)

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Support for children and young people We continue to deliver a range of services to children and young people, including their own helpline and online forums for both young people and their parents. To consolidate this we also produce specific literature for children and their parents which, in 2012, received a commendation from the British Medical Association.

An important part of our work with young people is setting up and running workshops and activity weekends for them. These weekends are hosted and delivered by young volunteers who have arthritis themselves and have an amazing impact.

• 23% increase in young people feeling self-confident.

• 22% reported a reduction in feelings of isolation.

• 22% increase in feeling positive about their arthritis.

• 20% increase in their confidence to talk about their arthritis with others.

• 15% increase in high hopes for the future.

“For my son, it was a great confidence boost to see other young people with the same condition. He had been declining into a depression and withdrawing socially and this workshop has definitely had a positive impact on him.The workshops were great, and he has been talking about them. However just being with other young people who have this condition has been tremendously powerful. I know my presence was purely there as my son’s carer but seeing the positive attitude, resilience and ability, regardless of the impact the condition has made on the young people’s lives, was truly inspirational. I look to the volunteers and know that I need not worry about my son’s future, that regardless of the condition he will be able to realise his dreams” (a parent’s view).

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Shay’s story My name is Shay Horan. I’m 15 years old and have Systemic Lupus Erythamatosis. That’s the medical term for an illness that I simply describe as ‘a pain’.

Before the diagnosis I had no idea what was going on with me. Growing up, I loved football, but after every game I would get really bad pains in my legs that took a few days to get over, but I never thought anything of it. I just plodded on and accepted the aches and pains in my joints. Until the rash...........and not just a simple red rash! Multiple trips to the doctor and several attempts to diagnose what was wrong with me caused what I can only describe as a ‘crustation’ on my face. I was so weak and sick I missed about six months of school, lost contact with my ‘so-called friends’ who stopped calling for me, stopped inviting me to football, and sleep overs.

I felt like the freak! I had just started a new school and should have been enjoying my ‘teenage years’ hanging around with mates. But I had been deserted. I was sort of relieved that I was too sick for school because when I did go out everyone stared at me. I was filled with thoughts of ‘Why did this happen to me?’ and ‘What have I done to deserve this?’ I wanted to be like everyone else. The emotional stuff was just as difficult to deal with as the physical pains.

And this is where Arthritis Care weekends saved me. It was no longer just me - I was with kids who knew what it is like to live with pain and medication on a daily basis. I realised that we are not different from other children; we want to do what other children do. Despite pain in joints, constant fatigue and medication management the Arthritis Care weekends gave us the opportunity to be active and ‘normal’.

We can mountain climb, canoe, river walk, whatever challenges are put in front of us we give it a go! I am proud to be one of the children from Arthritis Care. We support each other and we give each other encouragement and confidence to have fun together and forget about the other stuff that goes on in our lives.

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We can be ourselves without worrying that others will not understand the aches and pains.

Arthritis Care weekends are the best! It’s not just about the active stuff. For me it’s about being with other children who accept me for being me and listen and empathise with my daily pains. I don’t have to pretend to be anything I’m not. The weekends have restored my confidence and made me a stronger person.

I have met some great people who will always be my ‘real’ friends!

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We empower people through information and support Our Helpline team has continued to give quality support in 2012 managing nearly 9,000 requests for help. We have found that this year our online presence has increased in both importance and popularity. Our Helpline team answered over 1,000 emails, the number of people following us on Twitter tripled to 11,500 and our Facebook page is now reaching over 5,000 people each week.

Our website showed similar growth, with over 750,000 unique visits and a staggering 5.7million page views. We also host online web forums where people can connect with each other and talk about the issues affecting them.

These have become the most popular pages on our website.

Our booklets are another vital strand of what we do. They are distributed far and wide by our teams of volunteers. In 2012 we also made sure that all our information booklets were available to download. This has meant that people can access the information they want immediately; over 10,000 of our booklets were downloaded every month.

We know it is important to take our message out into communities.

In Wales we did just this, setting up 18 information events to promote what we can offer to people living with arthritis. Locations ranged from supermarkets and the DVLA offices through to country fairs and festivals. We plan to do more of this in 2013 as we know that there are more people throughout the UK who are still struggling alone.

In Scotland we responded to a cry for help from a parent of a young child with arthritis.

This led us to set up a special schools project consisting of an afternoon workshop for the children, involving them in a range of activities.

This project was so successful that it is now available to schools across Scotland.

“Thanks so much for coming along and for explaining to the children (and me!) what arthritis really is.The afternoon was so successful, it was a pleasure to be involved.”

Deputy Head, Mrs McKay

“The Arthritis Care leaflets were a huge help to me, explaining my illness to me clearly, offering advice on ways to help myself and giving me information about the different drugs and treatments available. I found the forums a particular help as you could chat to people who really understood how you felt and what you were going through. I felt like part of a family with Arthritis Care.” (Amanda) www.arthritiscare.org.uk

Our helplines • 1,235 hours spent on the phone supporting people with arthritis.

• 96% of callers would use the helpline again.

• 98% of people would recommend the helpline to others.

• 99% of people using our Helpline service go on to do something positive to change their lives such as taking their first steps into self-management by changing their lifestyles, diet and exercise.

www.arthritiscare.org.uk

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We seek out those who need us

Our branches Our network of over 194 branches and support groups continues to be at the heart of our charity. They deliver so much, from distributing our literature, holding talks, fundraising for us and being the local focus point for Arthritis Care within their communities.

We are indebted to our huge network of volunteers who deliver our message and our services across the UK. We have already mentioned our self-management courses, but our volunteers do far more than this.

One highlight from 2012 was the Ballymoney Branch in Northern Ireland which organised and hosted a Boccia and New Age Kurling Tournament. (Sports similar to bowls.) Eighteen teams from Arthritis Care branches came to take part with over 140 of our members joining in. It was such a great success they are already organising the event again for 2013.

In 2012 we started a telephone befriending scheme in England using trained volunteers to reach out to people who are hard to access.

We held a weekly phone call for an hour with a group of participants supporting 38 people with arthritis in this pilot project.

We asked those who took part if they had found it helpful to have these calls and over 80% reported that they had made changes to their lifestyle as a result of this support. For 2013 we are expanding this work as it helps us to reach out to those who cannot come to us.

“Living with a long term condition like arthritis can leave you feeling lonely and isolated and to see all those people enjoying themselves while participating in exercise and having fun was absolutely amazing.”

Marie Mitchell, Northern Ireland Trustee

Our telephone befriending scheme showed: • 78% were very satisfied with the programme.

• 83% said they had made changes to their lifestyle as a consequence of the groups.

• 67% said that they had a noticed an overall benefit in their wellbeing.

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Chris’ story My name is Chris. I’m a 67 year old mum of two (now grown-up) girls and have osteoarthritis in my spine; I’m also a volunteer for Arthritis Care.

My arthritis started out many years ago as a simple bad back, but quickly progressed to the point where I could no longer work and found myself in a wheelchair.

My involvement with Arthritis Care happened by chance when I saw an advert about my nearest branch in Salisbury in my local paper. I took what was then a big step for me and got involved. It was through my branch activities that I found out about Arthritis Care’s selfmanagement courses and decided that I would give that a try.

Things really moved on for me in later years.

I’m walking again, and I have the confidence to get the train, go on a tube and talk to anyone.

My daughters even feel slightly put out when I’m not in when they call! It’s not exaggerating to say that Arthritis Care has given me my life back.

It was their course that changed so much for me, I still feel very grateful to the volunteer who ran it. I’d been sceptical before I went, but immediately noticed little differences, then gradual changes until I felt so very much better than I had in years. I had understood how to deal with my pain and make changes to how I lived. I also learned how to talk to my doctors and to take control of all my treatments.

Arthritis Care have helped me so much, and now I try to help them any way I can, which led me eventually to becoming a trustee so I can help ensure that the views of people with arthritis really do inform what this innovative charity does. I am proud to be a part of my local branch, organising street collections, giving out leaflets and even holding local talks. I know just what a difference taking control of your arthritis can make.

www.arthritiscare.org.uk

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We ensure the voices of those with arthritis are heard Arthritis Care works hard to influence policy and make beneficial changes to the lives of people with arthritis. We tackle this work across the UK at national level and also within our regions as we know that services differ greatly depending on where you live.

Our aim is to ensure greater awareness of the needs of everyone with arthritis, improved services and an end to discrimination. We do this by representing the needs of people with arthritis to key policymakers, influencing national health initiatives, being on top of social care changes and benefit cuts to ensure people with arthritis know what these will mean to them, and by working with key partners to influence national policy and practice.

“The achievements and contribution of Arthritis Care in promoting research, improving awareness and providing counselling and advice are to be publically applauded.We must continue to focus on early intervention and reinforce the need for early diagnosis which can have a significant impact on outcomes for patients.”

Northern Ireland’s Health Minister, Edwin Poots MLA

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Key successes from 2012: • NICE (The National Institute of Health and Clinical Excellence) have agreed to develop a quality standard for rheumatoid arthritis.

• In December 2012 the NHS Commissioning Board announced that they are going to create a position of National Clinical Director for all musculoskeletal conditions.

• In Northern Ireland the Executive has produced a “Priorities for Government” document in which the Health Minister has pledged to secure a maximum three-month waiting time for access to new powerful treatments for people with rheumatoid arthritis. (anti-TNF / biological therapies).

• In Scotland, Arthritis Care participated in the production and publication of the Scottish Health Network needs assessment report on rheumatoid arthritis.

• In England we campaigned successfully for the Quality & Outcomes Framework to include mention and measures of treatment given to people with arthritis, with the Department of Health publishing three new indicators on the treatment of rheumatoid arthritis to be included in 2013.

• In Wales, Arthritis Care continues to Chair the Long Term Conditions Alliance Cymru and regularly engages with the Welsh Government.

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OA Nation Perhaps our biggest campaigning success in 2012 was the publication of OA Nation, a report that turned the spotlight on osteoarthritis, the most common form of arthritis.This report provided a detailed snapshot of the wide-ranging physical, emotional and financial impact osteoarthritis is having on the millions of Britons who are suffering now with daily pain due to painful joints.

The main objectives of the research were to: • Understand the daily impact of osteoarthritis on people with the condition.

• Gauge the awareness of treatment options among people with osteoarthritis and understand how they use them.

• Investigate the link between osteoarthritis and activity and sport.

• Look at the changing demographics of those with osteoarthritis.

We were delighted by the impact of the report; it was publicised via national and local press, television, radio and the internet. After publication we knew we had managed to reach out successfully, with calls to our helpline doubling within a week.

“Osteoarthritis has huge implications for the wider economy in terms of lost working years and also for the NHS, which is currently performing over 140,000 hip and knee replacements each year,” “Britain is facing a tsunami of pain due to osteoarthritis as the number of people over 50 increases dramatically and obesity levels continue to rise. Action is needed immediately; we have to bust this myth that painful joints are an inevitable part of getting older that we have to put up with.”

“I see 45-year-old joiners who are being diagnosed with knee pain and I know that they won’t be able to carry on working long enough to pay off their mortgages.This disease has a big impact on the ability of individuals to earn a living – especially in manual trades.”

“It’s frustrating that this survey reveals that many people become less active when diagnosed with OA, when all the clinical evidence available suggests this is the worst thing you can do because keeping moving can actually strengthen joints and improve symptoms.

We have to make sure that patients get better information and advice about this.”

“There are so many ways to help with osteoarthritis pain including taking pain relief medication, strengthening muscles, taking aerobic exercise, losing weight if appropriate and, in the worst case scenario, joint replacement surgery – so it’s by no means all doom and gloom.”

Philip Conaghan, Professor of Musculoskeletal Medicine at the University of Leeds

“Millions of people in the UK are blighted by this painful condition. Nobody should be in pain even for a few days, let alone be allowed to endure constant pain. At Arthritis Care we can help through providing information and support to those who need it the most. Something can always be done and we encourage those with OA to try and keep active, even if just a little, to help reduce the impact of the condition.”

Jane Asher, President, Arthritis Care

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We provide value for money

Looking forward to 2013

2012 was a difficult financial period for us we faced huge challenges in our fundraising, coupled with a difficult economic situation.

We have responded by reducing our staff numbers and selling our London office to free up our reserves. We are now running in a more cost-effective way and are able to invest in diversifying our fundraising to ensure our stability in the longer term.

As we move into 2013 we have set out a new operating plan that will allow us to expand our work with confidence.

‘The Big Lottery Fund is delighted to support Arthritis Care’s Staying Connected project (Northern Ireland) which will support older people who are disabled by arthritis, boosting their confidence and self-esteem and getting them out of the house and involved in community activities.’

Big Lottery Fund

Key plans include: • Increase and extend our self-management support, offering greater flexibility to those who wish to take part.

• Re-launch our membership magazine and recruit additional members to strengthen further our relationship with people living with arthritis.

‘We are pleased • Continue to develop our already to support Arthritis Care’s popular social media work to reach project to provide information people in new ways. points in London libraries for people living with arthritis.The project addresses • Increase the number of volunteers the aims of our Older Londoners programme in helping older people, particularly men we train and support to deliver and those from black and minority ethnic our range of services. backgrounds, live healthier and more active lives as well as contributing in their communities • Deliver ‘Arthritis Watch’ and through a wide range of volunteering ‘Connect Scotland’ which will opportunities offered by Arthritis Care. gather evidence from individuals We look forward to hearing about the about their local services, ensuring progress of the project.’ that we are campaigning effectively.

City Bridge Trust

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www.arthritiscare.org.uk

Thank you!

Our work changing the lives of people with arthritis would not be possible without the hundreds of individuals and organisations who supported us during the year. We would like to thank everyone for their contribution to our work this year. Here is just a sample of the organisations that have supported our work.

The AMW Charitable Trust Astra Zeneca BBC Children in Need Bedfordshire Learning Partnership Belfast Health and Social Care Trust Big Lottery Fund Northern Ireland Big Lottery Fund Scotland Central Lancashire NHS Charities Aid Foundation City Bridge Trust Coventry Primary Care Trust Etwall Well Dressing Association, Derbyshire Greenwich Primary Care Trust Health and Social Care Board (North) Northern Ireland Hywel Dda Health Board The Jordan Foundation Lloyds TSB Foundation for Northern Ireland Miss E. M. Lidbury Charitable Trust Mrs M. H. McMillan’s Charitable Trust NAPP NHS Norfolk Oxfordshire County Council Peacock Charitable Trust Peewit Caravan Park, Felixtowe Pennine Musculoskeletal Partnership (PMSKP) Pfizer Roche Sanofi The Schuh Trust The Scottish Government Southern Health and Social Care Trust Northern Ireland Stoke-on-Trent Primary Care Trust Worcestershire Primary Care Trust We would like to express a special thank you to all the branches that have supported the delivery of courses and workshops this year.

www.arthritiscare.org.uk

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Our branches and support groups Shetland 1

Our branches and support groups meet regularly and offer you a chance to meet others affected by arthritis.

The groups aim to help you better manage living with arthritis by hosting informative guest speakers, arranging social activities and offering opportunities to help others with arthritis in your local community.

If you are interested in finding a group in your local area please call your national office or email supporterservices@ arthritiscare.org.uk

Orkney

1

Scotland

25

Northern Ireland

Get in touch

North England

21

45

Isle of Man

1

Central England

24

Wales

13

London &The South

61

Channel Islands 16

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www.arthritiscare.org.uk

Report and Financial Statements Reference and administrative details of the charity, its trustees and advisors For the year ended 31 December 2012 The trustees, who are also the directors of the charity for the purposes of the Companies Act, submit their report and audited financial statements for the year ended 31 December 2012. The statements appear in the format required by the Statement of Recommended Practice for Accounting and Reporting by Charities (revised March 2005), the Charities and Trustee Investments (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. The report and statements also comply with the Charities Act 2011.

Patron: Duke of Westminster President: Jane Asher Trustees: Gordon Anderson Peter Anscombe Gordon Blyth Susan Cheetham Ursula Davies William Eckhardt Ann Heaton Christine Knight Marie Mitchell Robert Pickles David Walter Karen Willson Other trustees during 2012: Rosemary Blair Chrystal Carmichael Edward Copisarow Ann Frye Richard Hull David Humphreys Christopher Preston Acting Chief Executive: Philip Baker

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External auditors: Sayer Vincent 8 Angel Gate City Road London EC1V 2SJ Bankers: National Westminster Bank (Royal Bank of Scotland Group) Corporate Banking London 9th Floor, 280 Bishops Gate London EC2M 4RB Solicitors: Russell-Cooke Solicitors 2 Putney Hill London SW15 6AB Wilsons Solicitors LLP Alexandra House, St Johns Street, Salisbury SP1 2SB Investment advisers: UBS AG 1 Curzon Street London W1J 5UB

Principal places of business Head Office 4th Floor Linen Court 10 East Road London N1 6AD Tel: 020 7380 6500 Northern Ireland Unit 4 McCune Building 1 Shore Road Belfast BT15 3PG Tel: 028 9078 2940 Scotland Unit 25A, Anniesland Business Park 242 Netherton Road Glasgow G13 1EU Tel: 0141 954 7776 Wales Arthritis Care in Wales / Gofal Arthritis yng Nghymru One Caspian Point Pierhead Street Cardiff Bay CF10 4DQ Tel: 029 204 44155

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Report of the trustees For the year ended 31 December 2012 The trustees present their report and the audited financial statements for the year ended 31 December 2012.

as part of their daily lives. Arthritis remains the most common cause of chronic pain in the UK and now accounts for one in five of all GP visits.

Reference and administrative information set out on page 17 forms part of this report.The financial statements comply with current statutory requirements, the memorandum and articles of association and the Statement of Recommended Practice for Accounting and Reporting by Charities (issued in March 2005).

In 2012 we wanted to give immediate help to everyone who turned to us. Our work included information booklets; over 120,000 of these were downloaded from our website. Our free and confidential helpline dealt with nearly 9,000 requests for help and our vibrant network of 194 branches continued to provide face-to-face support in every corner of the UK.

Our vision Arthritis Care is working for an inclusive society in which the needs of people living with arthritis are fully recognised, respected and met.

Our mission To provide immediate practical support and campaign for a better deal for people living with arthritis.

Our strategic objectives • To provide excellent services which help people living with arthritis with self-management of their condition.

• To influence public policy and service provision to secure a better deal for people living with arthritis.

• To engage people living with arthritis in the work of Arthritis Care.

• To develop Arthritis Care as an efficient and effective organisation that is fit for purpose.

Structure, governance and management Arthritis Care is a charitable company limited by guarantee and was set up in 1947.The guarantee of each member is limited to £1. It is governed by a memorandum and articles of association, which were last amended in 2012.

Public Benefit The trustees continue to give due regard to the public benefit provided by the Charity in relation to its charitable purpose as set out by the objectives above and have given due consideration to the relevant guidance issued by the Charity Commission.The trustees will continue to ensure that the activities that promote the charitable objects above will be applied to provide public benefit.

Key Activities At Arthritis Care our aim remains to support the 10 million people in the UK who are dealing with arthritis

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Our strength lies in the fact that, although we are a national charity, we have a strong local presence.

People with arthritis form the core of our charity and are represented through our trustees, staff, members and volunteers ensuring that we respond directly to the changing needs of people living with this condition.

In this year’s report you can read about our activities across the UK, everything from talks in London libraries, to sports tournaments in Northern Ireland, information days across Wales and our time spent with primary schools in Scotland.We rely on a huge network of trained volunteers to seek out the people who need us and who are living in their communities.

We are indebted to our many hundreds of volunteers who create such an impact.

Arthritis is often viewed as a condition affecting the elderly, so we must not forget the work we do for the 27,000 children and young people in the UK who have arthritis. Our work with this group is vital and includes a specialist helpline, workshops and adventure activities to promote confidence and independence for these children.

As part of our campaigning programme we commissioned and published our OA Nation 2012 survey turning the spotlight on osteoarthritis.This document gives an up-to-date snapshot of the wideranging physical, emotional and financial impact osteoarthritis is having in the UK today. OA Nation showed us clearly how much more work there is to be done by Arthritis Care in helping to change the lives of those battling their arthritis. By working with key stakeholders at a national level we are ensuring that arthritis is recognised and prioritised by Government and health care professionals.

www.arthritiscare.org.uk

Our work is constantly expanding and with a difficult economic situation we took vital steps in 2012 to safeguard our future.We have cut staff numbers and sold our head office building, allowing us to invest in both our charitable services and fundraising, which will allow us to reach out to even more people in 2013.

Board of Trustees The governing body of the charity is the Board of Trustees, which has a current total of twelve members (sixteen members in 2011).The trustees of the Charity also act as the directors of the charitable company.The Board meets at least four times a year together with the Chief Executive and other senior management where appropriate.

Board effectiveness The board has set up a number of sub-committees to review and monitor the work of the charity. This includes the nominations panel, remuneration committee, and audit and finance committee. Smaller working groups of trustees can be set up with the agreement of the board to tackle specific and time-limited governance or strategic matters. Every two years the board reviews its performance, undertaking a self-assessment process to determine how effectively it believes it is performing and agreeing development and training needs.

Recruitment and appointment of new trustees The composition of the board of trustees reflects the user-involvement ethos and devolved structure that underpins the work of the charity. Each of the seven national/regional committees elects one of their number (two in the case of Scotland) to serve as a trustee for three years. In addition, five trustees can be directly elected by the membership to serve for three years. The majority of the current board are individuals with personal experience of arthritis.

Induction and training of trustees On appointment each trustee completes a register of interests and receives appropriate induction.

Further training needs are met both individually and as an entire trustee board through the regular holding of board development days and trustees attending training days provided by external training providers.The board recognises the importance of both risk management and health and safety by their appointment of a trustee champion for each area.

Management The trustees exercise executive responsibility for the governance of the Charity and, through the Chair, supervise the management of the Charity by the Chief Executive and the senior management team.The Chair and Chief Executive also task the Board with decisionmaking on strategic management issues as appropriate.

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Risk and internal control The trustees have overall responsibility for ensuring that the Charity has an appropriate system of controls, financial and otherwise.They are also responsible for safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities and to provide reassurance that: • its assets are safeguarded against unauthorised use or disposition; • proper records are maintained and financial information used within the Charity or for publication is reliable; and • the Charity complies with relevant laws and regulations.

As part of the Charity’s risk management process the trustees acknowledge their responsibility for the Charity’s system of internal control and reviewing its effectiveness. It is also recognised by the trustees that such a system is designed to manage rather than eliminate the risk of failure to achieve the Charity’s objectives and can only provide reasonable, not absolute, reassurance against material misstatement or loss.The Board has an audit and finance sub committee with an external chair which reviews the charities risk register, mitigations and advises the board.The trustees keep under regular review the major risks that could affect their achievement of the Charity’s objectives.

Volunteers and staff The charity is grateful for the unstinting efforts of its appointed and elected volunteers and staff who are involved in service provision and fundraising.

Employee involvement and employment of disabled people The charity continues to ensure that it reviews existing personnel policies and develops new processes in accordance with legislative changes and current good practice with particular emphasis on recruiting, retaining and supporting disabled people in the workplace. The charity’s Joint Negotiating Committee comprising trade union representatives together with members of the senior management team meets routinely throughout the year to consider formally and agree a range of employment related opportunities and initiatives.

Relationships with related parties Arthritis Care (Trading) Ltd The charity’s wholly owned trading subsidiary is nonoperating and was in a dormant state at the year end.

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Achievements and Performance Financial Review Review of the year The overall funds of the Charity increased by £1.5m in 2012 to £4.5m compared with the balance of funds at 31st December 2011 reported last year.

This increase includes a prior year adjustment of £0.7m due to an error of omission in legacy income as a particular sum to be received had been confirmed to the Charity before last year’s accounts were signed.

At the operating level, Net incoming / (outgoing) resources before transfers, a ‘surplus’ of £749k was generated in 2012 compared with the adjusted ‘loss’ of £48k for 2011. This included a gain of £1,347k on the disposal of our previous HQ in Stephenson Way and £736k of discontinuance costs associated with operational restructuring in 2012, which was funded from previously designated reserves. Thus the underlying position was a modest ‘surplus’ of £138k.

Taking into account the prior year adjustment, incoming resources were down by 27%, if the gain from the sale of Stephenson Way is excluded, due to a 36% reduction in the value of legacies and a 25% reduction in income from charitable activities. This reduction in income was offset by a 17% reduction in expenditure.

Basis of Accounting The key accounting policies remain unchanged.

Principal funding sources Voluntary income and fundraising After restating the 2011 accounts to include a significant legacy, the 2012 accounts show a 36% reduction in legacy income. This is the most significant element of the reduction in total incoming resources from generated funds from £4.0m to £2.9m.

Income from charitable activities Incoming resources from information, training and branches fell by 25% to £1.1m Other incoming resources A one-off gain on disposal of Stephenson Way of £1.3m is reflected in the 2012 accounts.

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Resources expended Total resources expended continue to fall year-onyear, this year by £949,000 to £4,604,000 (2011: £5,553,000) demonstrating the charity’s continuing endeavours to cut its cost-base.

Balance sheet The balance sheet strengthened this year with total net assets increasing by £0.8m, which included an increase in unrestricted funds of £1.8m.

Investment policy and returns Investment decisions for the centrally-administered investments are taken by professional fund managers, UBS, within the investment mandate set by the trustees, as permitted by an Order of the Charity Commission under Section 26 of the Charities Act 1993. Reports are received on a quarterly basis from the investment managers.

The overriding aim is to maintain the real value of the capital through long-term investment.

For the twelve months to 31st December 2012, the portfolio produced a total return of 9.85% versus the composite benchmark of 8.30%.

Reserves policy During the year the trustees reviewed their requirements for designated and general reserves with particular reference to the 2012 publication by ACEVO, Charity Finance Group and the Institute of Fundraising, Beyond Reserves, and commended by The Charity Commission.

As at 31st December 2012 designated reserves totalling £2.8 million were agreed: i) £153,000 as fixed asset reserve, representing the value of funds invested in fixed assets. ii) £1,098,000 as legacy working capital reserve, representing legacies accrued, but not yet received. iii) £500,000 future investments fund, representing funds set aside to pay for income generating projects going forward. iv) £1,069,000 of net unrestricted funds generated by branches pending the outcome of discussions with branches on the use of these and branch ‘restricted’ funds.

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The trustees have determined a minimum level of £1.25m for ‘free’ general reserves to manage uncertainties and fluctuations in legacy income (£0.5m), other income (£0.25m) and expenditure (£0.25m), and ‘black swan’ unforeseen events (£0.25m). The current level of ‘free’ general reserves is £2.47m. However, in view of the current negative pension reserve (£2.77m) and dependant on the outcome of discussions with the Pension Trust regarding the recent triennial revaluation, the trustees may consider a lump sum contribution as part of its strategy to manage this long term liability.

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 (as amended). 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 addition, Restricted funds totalling £1,947k are held Insofar as the trustees are aware: where specific grants or donations of a restricted • there is no relevant audit information of which nature (£297k), and where local committee branch the charitable company’s auditors are unaware; and group funds previously reported as restricted and (£1,650k) have not yet been fully spent.

• the trustees have taken all steps that they ought to have taken to make themselves aware of any Going concern relevant audit information and to establish that The trustees have prepared these accounts on a the auditors are aware of that information. going concern basis.

The trustees are responsible for the maintenance Statement of responsibilities of the and integrity of the corporate and financial trustees information included on the charitable company’s The trustees (who are also directors of Arthritis website. Legislation in the United Kingdom Care for the purposes of company law) are governing the preparation and dissemination of responsible for preparing the trustees’ report financial statements may differ from legislation in and the financial statements in accordance with other jurisdictions. applicable law and United Kingdom Accounting

Standards (United Kingdom Generally Accepted Members of the charity guarantee to contribute Accounting Practice). an amount not exceeding £1 to the assets of the

charity in the event of winding up. The trustees Company law requires the trustees to prepare are members of the charity but this entitles them financial statements for each financial year which only to voting rights. The trustees have no beneficial give a true and fair view of the state of affairs of the interest in the charity. charitable company and of the incoming resources and application of resources, including the income Re-appointment of auditors and expenditure, of the charitable company for that A resolution to re-appoint Sayer Vincent as auditors period. In preparing these financial statements, the was proposed and accepted by the members at the trustees are required to: annual general meeting on 25 September 2012. A • select suitable accounting policies and then apply resolution to reappoint them for 2013/14 will be them consistently; considered at the annual general meeting on 22 June • observe the methods and principles in the 2013.

Charities SORP; • make judgements and estimates that are Approved by the trustees on 15 May 2013 and reasonable and prudent; signed on their behalf by • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.

Ann Heaton, Chair of Trustees

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Independent auditors’ report Charitable Company (audited under CA2006) registered in England & Wales only To the members of Arthritis Care We have audited the financial statements of Arthritis Care for the year ended 31 December 2012 which comprise the statement of financial activities, balance sheet, 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 and trustees, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and section 44(1) (c) of the Charities and Trustee Investment (Scotland) Act 2005 . Our audit work has been undertaken so that we might state to the charitable company’s members and trustees those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members and trustees, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of trustees and auditors As explained more fully in the statement of trustees’ responsibilities set out in the trustees’ report, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with regulations made under those Acts.

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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 nonfinancial information in the trustees’ 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.

Opinion on 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 December 2012 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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• 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 2006 In our opinion the information given in the trustees’ 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

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• the financial statements are not in agreement with the accounting records and returns; or • certain disclosures of trustees’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit

Pamela Craig (Senior statutory auditor)

17 May 2013

for and on behalf of Sayer Vincent, Statutory Auditors

Sayer Vincent, 8 Angel Gate, City Road, LONDON EC1V 2SJ Sayer Vincent is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

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Statement of Financial Activities (Incorporating an income and expenditure account) For the year ended 31 December 2012

Unrestricted Restricted 2012 2011

Funds Funds Total Total

Notes £’000 £’000 £’000 £’000 Incoming resources Incoming resources from generated funds: Voluntary income legacies 2 1,849 179 2,028 3,150 Voluntary income - other 2 (a) 695 34 729 723 Activities for generating funds 3 93 1 94 99 Investment income 4 22 24 46 50 Total incoming resources from generated funds 2,659 238 2,897 4,022 Incoming resources from charitable activities: Information 222 199 421 416 Training 54 184 238 382 Voluntary run branch activities 361 89 450 680 Total incoming resources from charitable activities 5 637 472 1,109 1,478 Other incoming resources 5 (a) 1,347 - 1,347 5 Total incoming resources 4,643 710 5,353 5,505 Resources expended Costs of generating funds: Fundraising and trading costs

8 1,227

- 1,227 1,271

Resources expended on charitable activities Representation and Campaigning 110 - 110 237 Information 382 317 699 1,637 Training 392 185 577 663 Voluntary run branch activities 5 (b) 811 746 1,557 1,435 Governance costs 434 - 434 310

2,129 1,248 3,377 4,282 Total resources expended 8 3,356 1,248 4,604 5,553 Net incoming (outgoing) resources before transfers 1,287 (538) 749 (48) Transfer between funds 15 556 (556) - Net outgoing resources before other recognised gains and losses 1,843 (1,094) 749 (48) Net realised gains/(losses) on investment assets 10 22 3 25 (18) Net incoming/(outgoing) resources plus realised gains on investments and property 1,865 (1,091) 774 (66) Net unrealised gains/(losses) on investment assets 10 51 66 117 (28) Actuarial gains/(losses) on defined benefit pension 14 (96) - (96) (1,001) Net movement in funds 1,820 (1,025) 795 (1,095) Fund balances at start of year as previously stated (7) 2,972 2,965 4,762 Prior Year Adjustment 19 702 - 702 Fund balances at start of year as restated

695 2,972 3,667 4,762 Fund balances at end of year 2,515 1,947 4,462 3,667 There were no other recognised gains or losses other than those stated above. Movements in funds are disclosed in Notes 15 & 16 to the financial statements.

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Balance sheet As at 31 December 2012

Notes

2012 2011 £’000 £’000

Fixed assets Tangible Investments

153 1,393 2,100 2,487 2,253 3,880

9 10

Current assets Debtors and prepayments 11 1,244 1,980 Cash at bank and in hand 12 4,052 986

5,296 2,966 Creditors: amounts falling due within one year

13

(313) (367)

Net current assets

4,983 2,599

Net assets excluding pension liability 7,236 6,479 Pension liability Net assets including pension liability

14

(2,774) (2,812) 4,462 3,667

Funds Restricted funds 15 1,947 2,972 Unrestricted funds 16 Designated funds General funds

2,820 1,594 2,469 1,913

5,289 3,507

Pension reserve

16

(2,774) (2,812)

Total unrestricted reserve

2,515 695

Total funds

4,462 3,667

Approved by the trustees on 15 May 2013 and signed on their behalf by

Ann Heaton (Chair) David Walter (Treasurer)

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Cashflow Statement For the year ended 31 December 2012 Unrestricted Restricted 2012 Unrestricted Restricted 2011

Funds Funds Total Funds Funds Total

Notes £’000 £’000 £’000 £’000 £’000 £’000 Net cash (outflow) from operating activities A 1,034 (1,118) (84) 358 (875) (517) Returns on investments and servicing of finance B 22 24 46 14 - 14 Capital expenditure and investing activities C (3,057) 47 3,104 (4) 150 146 Increase/(decrease) in cash

D & E

4,113 (1.047) 3,066

368 (725) (357)

Notes to the consolidated cashflow statement A Reconciliation of net incoming (outgoing) resources to net cash inflow (outflow) from operating activities Unrestricted Restricted 2012 Unrestricted Restricted 2011

Funds Funds Total Funds Funds Total

£’000 £’000 £’000 £’000 £’000 £’000 Net incoming (outgoing) resources 1,843 (1,094) 749 823 (871) (48) Add back net pension service cost net of finance cost (134) - (134) (181) - (181) Investment income (22) (24) (46) (50) - (50) Servicing of finance - - - 36 - 36 Depreciation 12 - 12 29 1 30 Profit on Sale of Fixed Assets (1,347) - (1,347) - (5) (5) Decrease in debtors 736 - 736 (415) - (415) (Increase) / decrease in creditors (54) - (54) 116 - 116 Net cash inflow (outflow) from operating activities

1,034 (1,118) (84)

358 (875) (517)

B Returns on investments and servicing of finance Interest and dividends received 22 24 46 50 - 50

- - - (36) - (36) Net cash inflow from returns on investment and servicing of finance

22 24 46

14 - 14

C Capital expenditure and investing activities Purchase of tangible fixed assets (162) - (162) - - Net proceeds of sale of tangible fixed assets 2,737 - 2,737 - 5 5 Purchase of investments (351) (87) (438) (425) (52) (477) Net (increase)/decrease of bank deposits, building society accounts and bonds 81 - 81 (23) - (23) Proceeds from sale of investments 752 134 886 444 197 641 Net cash inflow from capital expenditure and investing activities

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3,057

47 3,104

(4) 150 146

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D Reconciliation of net cash flow to movement in net cash funds Unrestricted Restricted 2012 Unrestricted Restricted 2011

Funds Funds Total Funds Funds Total

£’000 £’000 £’000 £’000 £’000 £’000 Increase/(decrease) in cash in the period Net cash funds as at 1 January 2012

Net cash funds as at 31 December 2012

4,137

(1,071)

3,066

(768) 1,754 986 3,369

683 4,052

368 (725) (357) (1,136) 2,479 1,343 (768) 1,754

986

E Analysis of changes in net cash funds

At 1 At 31 At 1 At 31 January Cash December January Cash December

2012 Flow 2012 2011 Flow 2011

£’000 £’000 £’000 £’000 £’000 £’000 Restricted funds: Held by branches 996 (610) 386 1,736 (740) 996 Held centrally 758 (461) 297 743 15 758

1,754 (1,071) 683

2,479 (725) 1,754

Unrestricted funds: Held by branches 719 338 1,057 - 719 719 Held centrally (1,487) 3,799 2,312 (1,136) (351) (1,487)

Net cash funds

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(768) 4,137 3,369 (1,136) 368 (768) 986 3,066 4,052

1,343 (357) 986

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Notes to the financial statements For the year ended 31 December 2012 1. Accounting policies (a) Accounting convention The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market valuation and freehold properties which are included at valuation. The financial statements have been prepared in accordance with Companies Act 2006, the Statement of Recommended Practice (SORP), “Accounting and Reporting by Charities” published in March 2005 and applicable accounting standards. (b) Consolidation The financial statements of the Charity include the assets, liabilities, funds and income and expenditure of all the Charity’s local committees, branches and groups, as well as its UK office and regional services. The local committee, branch and group figures have been compiled from returns by local treasurers made up to 31 October 2012. (c) Company Status The charity is a company limited by guarantee and does not have share capital. In the event of the charity being wound up, each member of the board and member of the charity guarantee to pay the sum of £1. (d) Fund accounting General funds are unrestricted funds which are available for use at the discretion of the trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the trustees for particular purposes. The aim and use of each designated fund is set out in note 16.

Restricted funds are funds which have to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes. The cost of raising and administering such funds are charged against the specific fund.

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(e) Incoming resources All incoming resources are included in the Statement of Financial Activities (SoFA) when the charity is legally entitled to the income and the amount can be quantified with reasonable accuracy. (i) Legacy income is recognised on the basis of our forecast of legacies notified to the charity by the year-end and which can be valued with reasonable certainty. (ii) Grants awarded, including grants for equipment are included in the financial statements at the time the grants are received or the conditions of the grants have been met. (iii) Training income is recognised on the basis of the contract and in the case of work in progress at year end on the basis of proportion delivered. (iv) All income is included in full in the SoFA when receivable and measurable with accuracy. Income is deferred if it has been received but relates to a specific future period or is dependent upon conditions to be fulfilled by the charity. (f ) Depreciation of tangible fixed assets Tangible fixed assets, with the exception of freehold land and buildings, are stated at cost and depreciated on a straight line basis at rates calculated to write off the cost over their expected useful economic lives as follows: Freehold land Freehold buildings Leasehold improvements

Office equipment Motor vehicles Self Catering Units

Nil over 50 years over the term of the lease over 3 years over 4 years over 10 years

Freehold land and buildings are stated at valuation (see note 9 for further details).

Fixed assets with an individual cost of less than £3,000 are written off in the year of purchase.

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(g) Investments Investments are stated at market value at the balance sheet date. The SoFA includes the realised and unrealised gains and losses arising on disposals and revaluations throughout the year.

(h) Pension Costs Through 2010, the charity operated a defined benefit pension scheme on behalf of its employees. The assets of the scheme are held separately from those of the charity in an independently administered scheme. The Charity has adopted the full requirements of Financial Reporting Standard 17 - Accounting for Retirement Benefits (FRS17). Current or past service costs and gains, as determined by the scheme’s actuary, are charged to the statement of financial activities. Pension finance costs or income are included within total resources expended or incoming resources as applicable. Actuarial gains and losses arising are recognised within ‘gains and losses’ on the SoFA.

In addition, the deficit on the scheme, representing the shortfall of the value of the scheme assets below the present value of the scheme liabilities is recognised as a liability on the balance sheet to the extent that the employer charity is able to recover a surplus, or has a legal or constructive obligation for the liability. A corresponding pension reserve is included within total unrestricted funds.

At the end of 2010, the charity closed the defined benefits pension scheme, replacing it with a defined contributions arrangement.

The charitable company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the charitable company in an independently administered fund. The pension cost charged to the SoFA represents contributions payable under the scheme by the charitable company to the fund. The charitable company has no liability under the scheme other than for the payment of those contributions.

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(i) Resources Expended All expenditure is accounted for on an accruals basis and has been summarised under activities.

Where costs cannot be directly attributed to particular activities they have been allocated in proportion to the estimated usage that each activity makes of the resources using staff time as basis of apportionment. (i) The cost of generating funds is the direct cost spent on fundraising activity. A proportion of central support costs is allocated to the cost of generating funds. (ii) Governance costs are the costs associated with the governance of the charity which relate to the general running of the charity as opposed to those costs associated with fundraising or charitable activity. Included within this category are costs associated with the strategic as opposed to day-today management of the charity’s activities and statutory compliance costs. (iii) Support costs, which comprise general management, payroll administration, budgeting and accounting, information technology, human resources, facilities management and financing, are allocated across the categories of charitable expenditure, governance costs and the cost of generating funds. The basis of the allocation is as follows: Cost allocation includes an element of judgement. The charity considered the cost benefit of detailed calculations and the record keeping in deciding a basis for allocating support costs. The staff hours and therefore staff costs were deemed to be the most directly representative of how indirect costs are incurred.

Support costs are allocated in two stages: firstly, the costs are allocated on estimate of actual time spent on voluntary branch activities and governance. The balance is then allocated across all activities on the ratio of staff costs. (j) Operating leases Rentals payable under operating leases, where substantially all risks and rewards of ownership remain with the lessor, are charged to the SoFA on a straight line basis over the duration of the lease. (k) Corporation Tax The charitable company is exempt from corporation tax as all its income is charitable and is applied for charitable purposes.

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2. Voluntary Income - legacies 2012 2011

Unrestricted Restricted Total Unrestricted Restricted Total

£’000 £’000 £’000 £’000 £’000 £’000 Accrued legacies 1 January (1,828) - (1,828) Legacies received during year 2,606 152 2,758 Legacies accrued 31 December 1,071 27 1,098

1,849 179 2,028

(1,486) 2,808 1,828 3,150

- (1,486) - 2,808 - 1,828 - 3,150

Legacies valued at £1,219,961 were receivable as at 31 December 2012 and due in 2013. We estimate we can forecast 90% of the value of these legacies with sufficient accuracy to include them in the accounts.

2(a). Voluntary income - other Individual donations 577 29 606 Trusts and Corporate 118 5 123 Other donations - - -

695 34 729

3. Activities for generating funds

600 91 10 701

- 600 - 91 22 32 22 723

Events 93 1 94

93 1 94

4. Investment Income

99 99

- 99 - 99

Dividend Income 22 - 22 Income from investment held by voluntary run branches - 24 24

22 24 46

25

- 25

25 50

- 25 - 50

5. Incoming Resources from Charitable Activities

Voluntary branch activities

Information Training (note (5a)) 2012 Total 2011 Total

£’000 £’000 £’000 £’000 £’000 Advertising Publication Sales Membership and subscription Grants and Contracts Donations

5(a). Other Incoming Resources

11 - - 11 41 4 - - 4 5 94 - - 94 133 312 238 - 550 619 - - 450 450 680 421 238 450 1,109 1,478

Gain on disposal of tangible fixed asset: Stephenson Way Other

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1,347 - 5 1,347 5

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5(b). Branches 2012 2011

£’000 £’000 Income Membership 33 39 Branch Donations 450 680 Legacies 18 13 Investment Income

24 25 Total incoming resources

525 757 Expenditure Welfare 785 800 Depreciation

- 1 Total resources expended

785 801

Net resources expended

(260) (44)

Transfers to Central Profit on Sale of Fixed Assets Net realised gains on investment assets

(159) (129) - 5 3 1

Net income and expenditure for the year (416) (167) Net unrealised gains/(loss) on investment assets

Net movement in funds

Cost of supporting the voluntary run branch network Total voluntary run branch activities

6. Staff Costs Gross pay Social security costs Pension costs: defined contributions scheme Pension costs: defined benefits scheme Payments to agencies or similar for temporary help Compensation and redundancy

66 6 (350) (161) 772 634 1,557 1,435 1,552 2,266 142 218 78 117 119 72 42 35 301 2,234 2,708

One employee was paid emoluments between £60,000 to £70,000 (2011 - 3).

This employee participated in the defined contribution pension scheme and the employers contributions were £1,310.

The average number of persons employed during the year was:

Total Central Regions Number of employees 2012 68 22 46 Number of employees 2011 103 41 62 Full time Equivalent 2012 45 17 28 Full time Equivalent 2011 78 37 41 7. Trading subsidiary The Charity has a wholly owned subsidiary, Arthritis Care (Trading) Limited, a company incorporated and registered in England. The company is currently dormant.

Called up share capital is £252 (2011: £252)

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8. Resources expended on charitable activities

Costs of Representation Voluntary

Generating and Run Branch Support Funds Campaigning Information Training Activities Governance costs 2012 Total 2011 Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Staff Costs (note 6) 194 35 299 144 2 40 1,520 2,234 2,708 Staff recruitment & training 7 - 3 3 - 4 19 36 33 Trustees and staff expenses 1 6 4 28 5 35 63 142 237 Volunteers expenses 1 - 5 23 6 - 12 47 84 Premises & equipment (2) - - 1 2 - 188 189 176 Insurance - - - - - - 28 28 30 Postage & telephone (3) 3 7 11 1 18 68 105 105 Office printing & stationery 6 - - 6 4 16 37 69 92 Advertising 4 - - 8 2 - 4 18 15 Courses costs - - 3 52 3 4 8 70 63 Publications production 57 - 9 - - - - 66 182 Direct mail, legacy, events 91 - - - - 9 3 103 84 Professional fees (incl audit) 113 - 10 20 - 94 151 388 549 Database & IT outsourcing 146 - 22 - - - 66 234 252 Depreciation - - - - - - 12 12 30 Branch expenses (note 5b) - - - - 785 - - 785 800 Other Costs 22 13 2 3 - 6 32 78 113 637 57 364 299 810 226 2,211 4,604 5,553

Support Costs 590 53 335 278 747 208 (2,211) - Total resources expended 1,227

110

699 577

1,557

434

- 4,604 5,553

This is stated after charging: 2012 2011 Unrestricted Restricted Total Unrestricted Restricted Total

£’000 £’000 £’000 £’000 £’000 £’000 Depreciation charge on tangible fixed assets (owned) 12 - 12 Operating lease costs land & buildings 123 - 123 Auditors remuneration for audit services 23 - 23 Auditors remuneration for non-audit services 3 - 3

29 36 25 3

1 30 - 36 - 25 - 3

Trustees receive no remuneration for their services in that capacity. 17 trustees (2011:13) have been reimbursed for travel expenses incurred carrying out their activities as trustees at a cost of £17,989 (2011: £19,517).

Premiums of £5,702 were paid in the year (2011: £8,010) on a professional indemnity policy to protect the charity, trustees and employees from loss arising from neglect or defaults of the trustees or employees.

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9. Tangible fixed assets

Unrestricted Restricted

Properties Leasehold Fixtures & Total Motor Freehold Improvements Equipment Unrestricted Vehicles Total

£’000 £’000 £’000 £’000 £’000 £’000

Cost At the start of the year 1,740 - 244 1,984 50 2,034 Additions in year - 140 22 162 - 162 Disposals in year (1,740) - - (1,740) - (1,740) At the end of the year

-

140

266 406 50 456

Depreciation At the start of the year 350 - 241 591 Charge for the year - 9 3 12 Disposals in year (350) - - (350) At the end of the year

-

9

Net book value At the end of the year -

131

At the start of the year

1,390

-

50 641 - 12 - (350)

244 253 50 303 22 153 3 1,393

- 153 - 1,393

Freehold properties

18 Stephenson Way, London, was sold during the year, as part of the 2012 business plan and change programme.

The property was sold on 28 September 2012 for £2,800,000

10. Fixed Asset Investments 2012 2011

Unrestricted Restricted Total Unrestricted Restricted Total £’000 £’000 £’000 £’000 £’000 £’000 Market value: Listed stocks and shares 827 1,240 2,067 1,155 1,218 2,373 Bank deposits and building society accounts 33 - 33 114 - 114 Total 860 1,240 2,100 1,269 1,218 2,487 The charity owns 100% of the issued share capital with a nominal value of £252 in its subsidiary undertaking.

Movement in quoted investments Market value as at 1 January 2012 1,155 1,218 2,373 1,227 1,356 2,583 Less: Disposals proceeds 752 134 886 444 197 641 (Gain) / Loss on sale (22) (3) (25) 19 (1) 18

730 131 861 463 196 659 Add: Acquisitions at cost 351 87 438 425 52 477 Net gains/(losses) on revaluation 51 66 117 (34) 6 (28)

402 153 555 391 58 449 Market valuation as at 31 December 2012 827 1,240 2,067 1,155 1,218 2,373

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Investment Summary: Unrestricted Funds Invested in Listed Stocks and Shares Market Value ARTEMIS INCOME FUND UNITS CL R 83,858 JO HAMBRO CAO MGMT UK UMB FUND UK 73,900 M&G INV FUND 3 RECOV FUND 72,243 THREADNEEDLE INV FD UK FND INST CLASS INC NET 64,813 MULTI STRATEGY ALTERNATIVE FUND 80,000 ISHARES S&P 500 SHS(GBP) 66,640 ALL OTHER FUNDS INDIVIDUALLY LESS THAN £50,000 385,382

% 10.1% 8.9% 8.7% 7.8% 9.7% 8.1% 46.7%

11. Debtors 2012 2012 2012 2011 Unrestricted Restricted Total Unrestricted

As restated

£’000 £’000 £’000 £’000 Trade debtors 26 - 26 43 Legacies receivable 1,071 27 1,098 1,828 Other debtors 108 - 108 44 Accrued income

12 - 12 65 Total

1,217 27 1,244 1,980

Legacies receivable include a prior year audit adustment to correct for an error of ommission in 2011. Legacies receivable have been increased by £702,000 in 2011, increasing voluntary income from legacies and consequently the funds brought forward accordingly.

12. Cash at bank and in hand 2012 Unrestricted Restricted Total

£’000 £’000 £’000 Held by: Local committees, branches and groups 1,057 386 1,443 Central office

2,312 297 2,609 Total

3,369 683 4,052

2011 Unrestricted Restricted Total

£’000 £’000 £’000 Held by: Local committees, branches and groups 719 996 1,715 Central office (1,487) 758 (729) Total (768) 1,754 986

Cash and Bank Arthritis Care has a cash pooling arrangement for all unrestricted and restricted balances held at the Natwest Bank (RBS). All balances are utilised to minimise finance cost. Cash pooling does not affect the delivery of restricted projects.

13. Creditors: amounts falling due within one year 2012 2011 Unrestricted Unrestricted

£’000 £’000 Trade creditors 103 156 Statutory creditors 33 91 Other creditors 42 81 Accruals

135 39 Total

313 367

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14. Retirement benefits Throughout 2010, the Charity operated a defined benefit scheme, whose assets are held separately from those of the charity and are independently administered by The Pensions Trust. The Open Section of the scheme is contracted-out of the state scheme, whereas the closed Section is contracted-in. The scheme provides benefits based on 1/60th of average pensionable pay multiplied by pensionable service in completed months and years and is fully funded. The most recent formal valuation of the scheme was performed as at 30 September 2009.

In December 2009 the board took the strategic decision to change the pension scheme from defined benefit to defined contribution. The formal staff consultation relating to this decision was undertaken in 2010 and, following this, the defined benefit scheme was closed at the end of 2010 and replaced by a defined contributions scheme from 1 January 2011.

The employee benefit obligations recognised in the balance sheet are as follows:

2012 2011

£’000 £’000 Present value of funded obligations (9,629) (9,152) Fair value of plan assets

6,855 6,340 Net liability

(2,774) (2,812) Amounts recognised in net incoming/(outgoing) resources are as follows: Current service cost 78 72 Interest on obligation 425 443 Expected return on plan assets

(384) (443) Total

119 72 Actual return on plan assets

548 13 Changes in the present value of the defined benefit obligation are as follows: Opening defined benefit obligation Service cost Interest cost Contributions by employees Actuarial losses / (gains) Benefits paid, death in service insurance, premiums and expenses

Closing defined benefit obligation

9,152 8,286 78 72 425 443 - 260 571 (286) (220) 9,629 9,152

Changes in the fair value of plan assets are as follows: Opening fair value of plan assets Expected return Actuarial gains and (losses) Contributions by employer Benefits paid, death in service insurance, premiums and expenses

6,340 6,294 384 443 164 (430) 253 253 (286) (220) 6,855 6,340

The movement in the surplus/(deficit) during the year is as follows: (Deficit) in scheme at beginning of year Current service cost Interest cost Expected return on plan assets Contributions by employer Actuarial (loss) / gain

(2,812) (1,992) (78) (72) (425) (443) 384 443 253 253 (96) (1,001) (2,774) (2,812)

The major categories of plan assets as a percentage of total plan assets are as follows:

2012 2011

% % Equities 64% 64% Bonds 30% 29% Property 6% 6% Cash

0% 1%

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14. Retirement benefits continued Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):

Discount rate at the end of the year Future salary increases Future pension increases Inflation assumption (RPI) Inflation assumption (CPI)

2012 2011 % % 4% 5% 4% 4% 4% 4% 3% 3% 2% 2%

Amounts for the current and previous four periods are as follows:

Defined benefit obligation Plan assets

(Deficit)

Experience adjustments on plan liabilities Experience adjustments on plan assets

2012 2011 2010 2009 2008 £’000 £’000 £’000 £’000 £’000 (9,629) (9,152) (8,286) (8,422) (5,561) 6,855 6,340 6,294 5,519 4,621 (2,774) (2,812) (1,992) (2,903) (940) 137 60 556 (18) (15) 164 (430) 248 380 (1,601)

15. Restricted funds

Central and regional funds Central and regional funds hold donations, grants and other income given for specific purposes. The balances represent amounts which had not been spent at the year end. Fund balances are supported by current assets.

Local committee branches and group funds Local committee, branch and group funds are raised and controlled locally for services to people with arthritis in the local area. Fund balances are supported by cash and investments.

Transfer between funds The central and regional transfer from restricted to unrestriced funds reflects the correction in classification of the Patterson Bequest, the restrictions of which had already been fully discharged. The local transfer from restricted to unrestricted funds is the net transfer of funds between branches and UK head office to support the Charity’s activities and delivery of specific projects throughout the year.

1 January Incoming Resources 31 December

2012 Resources expended Transfers 2012 £’000 £’000 £’000 £’000 £’000 Central & regional funds Information 150 199 (317) - 32 Training 52 184 (185) - 51 Patterson Bequest 556 - - (556) Legacies and Other Income - 214 - - 214 Restricted Funds 758 597 (502) (556) 297 Local committee, branch & group funds 2,214 182 (746) - 1,650 Total restricted funds 2,972 779 (1,248) (556) 1,947

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15. Restricted funds continued Restricted projects and purpose of funds

Information Charities Aid Foundation 2012 - first year of five years funding - mixed for Young Persons & Family including adult services and new development City Bridge Trust - information points in London libraries Information provision in libraries - signposting to resources OA Nation Project - osteoarthritis survey For research, report writing, launch, evaluation Bank Workers Charity Project Partnership funding services to people with artritis in the banking community Big Lottery Fund - Joint Activity feasibility study Big Lottery Fund - funding for a feasibility study for Joint Activity which is a community based project to support people with arthritis to become confident and effective self managers Wales volunteering Wales volunteer support Connect Scotland Scottish Government Health Grant Connect Scotland is an interactive peer support resource CHK Trust - training publications To publish training materials Training NIPFW-NI Positive Future Workshop To deliver workshops for young people with arthritis Challenging arthritis - Central England Challenging arthritis - N England training Big Lottery-Get Fit For Arthritis (Northern Ireland) To enable people with arthritis to be fitter, healthier and happier HSCB (North) Challenging Arthritis (Northern Ireland ) To provide Challenging Arthritis courses in H&SCB north area Legacy - for use in the North East Challenging arthritis - Scotland To deliver challenging arthritis courses Children in Need - Northern Ireland To fund a part time Youth Worker and associated project costs Belfast Health and Social Care Trust Challenging Pain Programme Anglia Co-op - Central England General donation to support people with arthritis in Cambridgeshire Anglia Co-op - South England General donation to support people with arthritis in Oxfordshire Challenging pain - North England The Scottish Government - Rheum for Teen Support Peer support for teenagers Challenging pain Hwel-Dda Health Board-Wales To deliver Challenging Pain workshops Long-term Conditions Alliance Scotland - Paths for all Walking towards better health The Schuh Trust - Scotland Joint potential youth project Third Sector intership - Scotland Infrastructure project Scotland Office -Scottish Government Community Care Grant Core funding for Scotland office Other Patterson bequest Proceeds of sale - transferred to unrestricted since restriction conditions discharged.

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16. Unrestricted funds

Movement

in funds

1 January New utilised/ 31 December

2012 designations realised Transfers 2012 £’000 £’000 £’000 £’000 £’000 Designated Contingency Reserve 845 - (736) (109) Fixed Asset Reserve - 153 - - 153 Legacy Working Capital Reserve - 1,098 - - 1,098 Future investments - 500 - - 500 Training and information programmes 30 - (30) - Local committee branch and group funds 719 - 350 - 1,069 Total designated funds 1,594 General funds 1,913 Pension reserve (2,812) Total unrestricted funds

695

1,751 (1,751) -

(416) (109) 2,820 1,642 665 2,469 38 - (2,774)

- 1,264 556 2,515

Contingency reserve The fund was set at a level of reserves required to discharge liabilities in the event of closure. The costs incurred in 2012 of restructuring the business have been paid out of this fund. The total of £736k comprises redundancy costs £300k; other staff costs £301k; professional fees £119k; and other costs of £16k.

Fixed Asset Reserve This fund has been set up to reflect the funds invested in tangible fixed assets. The fund has been set up to reflect the net book value of these assets recorded in the accounts Legacy Working Capital This fund has been set up to reflect the funds represented by legacies accrued, but not yet received. Since these funds are inaccessible until receipt, they are shown separately to the general fund.

Future investments This fund has been set up to pay for income generation projects going forward, using part of the proceeds from the sale of Stephenson Way.

Training and information programmes This reserve supported continuing internally funded projects that straddled the financial year end.

Local committee branch and group funds This reserve represents the net funds generated by branches pending the outcome of discussion with branches on the use of branch reserves.

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17. Analysis of Net Assets between Funds (excluding pension liability) Unrestricted Restricted

Funds Funds Total Funds

£’000 £’000 £’000 Fund balances at 31 December are represented by: Tangible fixed assets 153 - 153 Investments 860 1,240 2,100 Current assets: Debtors 1,244 - 1,244 Cash & bank 3,666 386 4,052 Current liabilities (313) - (313) Net Assets 5,610 1,626 7,236 18. Operating leases

The group had annual commitments at the year end under operating leases expiring as follows:

2012 2011

Land and buildings Land and buildings

£’000 £’000 2 - 5 Years

155 36 155 36

19. Prior Year Adjustment

The prior year (2011) balances have been restated to correct for an error of omission in 2011. Legacies receivable have been increased by £702,000 in 2011, leading to an equivalent increase in fund balances at 1 January 2012.

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Appendix A: Restricted central and regional funds

Opening Closing balance at balance at 1 January Expenditure 31 December

2012 Income & Transfers 2012

£ £ £ £ Project Information Charities Aid Foundation 120,000 - City Bridge Trust - information points in libraries - 23,738 OA Nation - 94,978 Brighter Futures - 18,409 Big Lottery Fund - Joint Activity feasibility study 9,950 - Wales volunteering 996 - Connect Scotland Scottish Government Health Grant 16,458 27,000 CHK Trust- Training Publications 2,634 - Christmas Appeal - Lifelines - 26,913 Infrastructure Project Reallocation

- 8,114 Information total

150,038 199,152

95,464 15,825 94,978 18,409 9,950 996 43,458 2,634 26,913 8,114

24,536 7,913 -

316,741

32,449

Training NIPFW-NI Positive Future Workshop 3,195 933 4,128 Challenging arthritis - Central England 6,810 - 6,810 Challenging arthritis - N England training 3,500 - 3,500 Big Lottery - Get Fit for Arthritis (Northern Ireland) 9,509 80,983 62,264 28,228 HSCB (North) Challenging Arthritis (Northern Ireland) 3,587 8,000 11,587 Legacy - North East - 10,603 10,603 Scotland challenging arthritis 16,914 - 16,914 Children in Need (Northern Ireland) - 19,585 13,015 6,570 Belfast Health & Social Care Trust - Challenging Pain - 1,164 1,164 Anglia Co-op - Central England 3,389 - 3,389 Anglia Co-op - South England 2,225 - 2,225 North England Challenging Pain 900 - 900 Scotland befriending project - 38,916 23,916 15,000 Challenging pain Hwel-Dda Health Board-Wales 1,916 1,827 3,743 Paths for all - Scotland - 788 - 788 Young people project - Scotland - 5,000 5,000 Third Sector internship - Scotland

- 2,002 2,002 Infrastructure Project Reallocation

- 13,886 13,886 Training total

51,945 183,687

185,046

50,586

Infrastructure projects Scotland Office Scottish Government Community Care Grant - 22,000 22,000 Reallocated to information - (8,114) (8,114) Reallocation to training

- (13,886) (13,886) Infrastructure project total

- -

-

-

Other Legacies and other income determined as restricted - 214,213 - 214,213 Patterson bequest (transferred to Unrestricted Funds) 556,346 - 556,346

Other Total 556,346 214,213 556,346 214,213 Restricted project total

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758,329 597,052

1,058,133

297,248

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Can we help?

Arthritis Care is the UK’s largest organisation working with and for all people with arthritis.

Registered Address Arthritis Care Floor 4, Linen Court 10 East Road London N1 6AD Tel: 020 7380 6500 supporterservices@arthritiscare.org.uk www.arthritiscare.org.uk Free confidential helpline:

0808 800 4050 (10am-4pm Mon-Fri)

Registered charity numbers 206563 and SC038693 Charitable company limited by guarantee and not having a share capital. Each member of the board and member of the charity guarantees the company the sum of ÂŁ1.

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