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FINANCIAL STATEMENTS

FOR YEAR ENDING 31 JULY 2016

Buckinghamshire New University

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Financial Statements 2015-16


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

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Spotlight on our achievements

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Strategic objectives

6-7

Financial Review and Risks

8-11

Statement of Corporate Governance

12-13

Statement of Internal Control

14-15

Statement of Responsibilities of the University’s Council

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Report of the Independent Auditor’s to the University Council

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Consolidated Statement of Comprehensive Income and Expenditure

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Consolidated and University Statement of Changes in Reserves

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Consolidated and University Balance Sheet

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Consolidated Cash Flow Statement

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Statement of Principal Accounting Policies

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Notes to the Accounts

28-54

Board of Governors and Advisors

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Legal and Administration

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Front cover image: High Wycombe Campus

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INTRODUCTION FROM THE VICE-CHANCELLOR AND THE CHAIR OF COUNCIL The University launched its new five-year strategy in 2015-16, re-affirming our commitment to the success of our students and setting out our ambition to be a leading university for professional and creative education and applied research.

‘internationally excellent’. Building on the enhanced profile our work secured, our applied research and enterprise work focusses on shaping practice, informing policy, supporting innovation and enhancing economic growth. In support of this we have established the central Research and Enterprise Development unit.

We set challenging objectives for education, research and enterprise and for a number of cross-institutional priorities which will transform the effectiveness of the University. Our vision is to create a culture in which innovation, creativity and enterprise will flourish and an inclusive learning community, supporting the success of students from diverse backgrounds. As evidence of this diversity, 40% of our students are from a BME group, 11% declare a disability and 61% are designated as coming from widening participation backgrounds.

High quality partnerships are essential to our vision and we continue to create sustainable and mutually beneficial collaborations with UK, European and international partners, both in relation to teaching and research and in our role as an anchor institution in the region. Of particular note is the opening of our new site in the centre of Aylesbury, UCAV [University Centre Aylesbury Vale], in partnership with Aylesbury College. Bucks’ first cohort of students, studying for the Batchelor of Engineering, commenced their studies during the year and the range of courses is expanding for 2016-17.

A key feature of our academic strategy is our emphasis on applied, practice-based and skills-based learning. Our courses have a strong orientation to employment and draw in their design and delivery on the contributions of many experts in the various professions linked to our courses, as well as our extensive sector-based partnerships. This year 94.5% of our graduates were in work or further study six months after graduating.

We take our environmental responsibility seriously at Bucks and are proud to be 7th from 125 entrants in the Higher Education sector for carbon reduction in the Brite Green league table and to be one of very few in our sector to hold the Carbon Trust Standard. The last year has seen significant financial challenges as we, along with the rest of the sector, adjust to the new competitive market and significantly reduced funding from central government. Through careful financial management we were able to invest £5.2m in essential capital projects during the year, including major developments in IT, a new suite for Operating Department Practice and the creation of new facilities for corporate events in The Room and for students and staff in The Study Lounge.

In supporting our students into and through employment, we fund a wide range of in-course and extra-curricular opportunities designed to help them stand out in the competition for graduate jobs. Delivered through a partnership with the Students’ Union, activities such as skills workshops, volunteering, sports and cultural events enable students to develop leadership, team-working, inter-personal and other skills of direct relevance to their professional lives. We are proud that 550 students took part in volunteering this year, amassing over 8000 hours in 70 different projects. The Research Excellence Framework outcomes of December 2014 judged Bucks’ submissions as evidencing both 3* and 4* outputs, ‘world leading’ and

The new academic year marks 125 years of providing education in High Wycombe and we look forward to the ensuing celebrations. We thank our staff, Council and partners for their continued support, and our students for being such excellent ambassadors for the University.

Professor Rebecca Bunting Vice-Chancellor

Dr Michael Hipkins Chair of Council

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Financial Statements 2015-16


SPOTLIGHT ON OUR ACHIEVEMENTS It has been a successful year in which there has been a clear focus on the delivery of excellent teaching for our students across our programmes of study, which are professional and practical as well as academic.

so that our graduates are ready for the world of employment. One example is the Elite S812 flight simulator at our High Wycombe campus which provides our commercial pilot training students with a state-of-the-art learning experience.

As a leading university for professional education, we work in partnership to understand the needs and shape the future of all the professions with which we work. This year saw the University join with Buckinghamshire County Council and Aylesbury College to launch the Social Work Academy, a high-quality centre of excellence for the training of social workers in the county with the aim of addressing a serious skills shortage. Our academics continue to share their expertise through masterclasses for qualified social workers in Bucks to improve and develop their knowledge and skills. The University was also successful in its tender to deliver the Step up to Social Work programme as part of a Department for Education (DfE) initiative to encourage people into the social work profession. The University has been commissioned to run two further programmes following high satisfaction rates from employers and students.

In February, the University was honoured when Bucks graduate and Paralympian, Naomi Riches MBE opened our new multi-million pound Human Performance, Exercise and Wellbeing Centre. The centre has been designed with technology that puts our students at the forefront of knowledge and practice as they learn to use leading edge research tools for sport, exercise and therapy. The Centre offers significant potential for teaching, research and developing professional practice. Our teaching staff have already developed partnerships with hospital consultants on research projects which include the effect of concurrent exercise training on the autonomic function of heart failure in cardiac patients. The University was delighted to win the Teaching Excellence category at this year’s Guardian University Awards for its innovative simulation facilities to enhance the learning of our nursing and health students. We are the only UK university to combine state-of-the-art simulation laboratories with the expertise of a moulage specialist who is skilled in applying mock, and often gorily realistic, injuries for training purposes. This prestigious award for teaching excellence is testament to the way our students and academics are partners in learning across all courses at Bucks, working together to create an environment which provides the best opportunities for future success.

At Bucks we work with industry experts to develop courses which ensure our graduates have the skills that industry demands. In the past year we became the first University in the UK to be awarded a Gold Accreditation from People 1st for our aviation management and pilot training courses. The accreditation, awarded by a panel of independent industry professionals, recognises excellence in the delivery of qualifications and training. We also invest in the latest equipment across our courses

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Financial Statements 2015-16


Bucks Business School has continued to expand its international reach with the development of new partnerships in Singapore and the Middle East as well as closer to home in the City of London with the launch of an International MBA and MSc Global Banking. During the year, we opened The ‘Launch Pad’ boardroom and office space as part of our focus on developing students’ and graduates’ entrepreneurial ambitions. Bucks Business School now has a Dragon’s Den-style funding scheme supported by Mike Clare, the successful entrepreneur and long-time University supporter and alumnus.

This broadens the learning experience of our students and supports the wider NHS agenda of sharing resources, expertise and clinical experience for the benefit of patients and service users. We are proud to play a key role in helping to train the future workforce of the NHS, ensuring our students are equipped with the necessary skills and values to provide the best possible care to patients. The University was also named as finalists for a further six Student Nursing Times Awards, across a broad range of categories. We were also pleased to be shortlisted for two Times Higher Education Leadership and Management Awards in the Outstanding Digital Innovation in Management and Administration and Outstanding Estates Team categories.

We value highly our partnerships with industry, the public sector and charities. They are pivotal in our commitment to bring the real world to our students and our students to the real world. We were proud to win Partnership of the Year award at the national Student Nursing Times Awards for an initiative which supports the recruitment and training of our student nurses and social workers. The University works with the Independent Voices charity to encourage local service users and their carers to share their experiences and shape the education of healthcare professionals. Our partnership with Independent Voices is important because it makes a significant difference to the learning experience of the nurses and social workers of tomorrow and the people for whom they will care.

A six-month course for charity shop workers developed by Bucks New University, The Clare Foundation and John Lewis High Wycombe was shortlisted in the Charity Times Awards 2016. The Retail Academy for the Voluntary Sector aims to help charities to maximise their retail presence by focusing on areas including leadership skills, managing volunteers, and visual merchandising. We were honoured this year to receive an esteemed Silver Award under the Government’s Defence Employer Recognition Scheme for our support to the Armed Services. The University is building a reputation as a significant provider of Higher Education to the Royal Navy, British Army and Royal Air Force and is committed to being a provider of choice for those within or due to leave HM Armed Forces.

Our partnership with Independent Voices was also recognised by Health Education England at an awards event celebrating excellence and training in North West London. The University’s innovative and collaborative approach to placements for its nursing students was also acknowledged. Our students are given opportunities to apply nursing theory to their clinical practice in community and secondary care settings, not just hospitals.

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Financial Statements 2015-16


The University is working towards becoming a leading institution for applied research as well as professional and creative education. Increasingly, we are drawing on the University’s cross-disciplinary expertise to participate in international research, including the WATERSPOUTT project led by RCSI (Royal College of Surgeons in Ireland). The project aims to reduce the number of people worldwide who rely on unsafe drinking water, using technology based on solar water disinfection to kill harmful microbes in water. Buckinghamshire New University is one of 18 institutions from across Europe and Africa taking part in this major international research project with input from colleagues in both of the University’s faculties.

needs of the unregistered health and social care workers who perform a critical role in meeting the needs of patients across the UK. The IVLWR is the only institute of its kind in the UK focusing on the unregistered health and social care workforce and it works with national bodies like Health Education England and health and social care partners in North West London, Buckinghamshire, the Thames Valley and beyond. Our School of Arts & Creative Industries held another successful Art and Design Show, which included a catwalk show by BA (Hons) Fashion Design students. We were delighted to see our students enjoy awardwinning success at prestigious exhibitions including New Designers, the Young Creative Network Awards 2016, and the Bradford Textile Society Design Competition at which our students scooped the top three prizes in a field of around 1,000 entries.

We are also part of a two-year project funded by the Australian Coal Association Research Program (ACARP) which is developing Unmanned Aerial System technologies and methods to monitor changes in ecosystems. The project involves creating software to detect and map changes in ecologically sensitive vegetation communities and communicate these changes to companies and business leaders to inform their decision-making.

We also celebrated the success of our alumni including BA (Hons) Performing Arts (Film, TV and Stage) graduate Modupe Salu, who won two prestigious awards at the National Student Drama Festival: the Buzz Goodbody Student Director Award and Spotlight Most Promising Actress Award. BA (Hons) Graphic Arts graduands Will Dover and James Washington were also commended in the Royal Society of Arts (RSA) Student Design Awards for, respectively, their proposals for an App to assist farmers and their estates and a union to support workers in the emerging ‘sharing economy’.

The University’s roots in High Wycombe go as far back as the early 1890s and we continue to promote the town’s tradition in furniture. We are part of a £300,000 EU research project, with partners in the UK, Germany, Spain and Poland, which is focused on developing an International Masters in Furniture based upon innovation and exchange of good practices found in industry and universities.

Sports teams from Buckinghamshire New University won the annual Varsity match against students at the University of Roehampton. A total of 21 Bucks teams took on their counterparts across 10 sports and all events were well supported by students from both universities who together created a fantastic atmosphere.

There have been notable successes for the University’s staff and students during the year. Richard Griffin, Director of the University’s Institute of Vocational Learning and Workforce Research (IVLWR) was awarded an MBE in recognition of his excellent work to address the training and development

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Financial Statements 2015-16


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Financial Statements 2015-16


STRATEGIC OBJECTIVES Applied research

During 2015-16 the University wrote and launched its new strategic plan for 2016-21.

• Strengthen our reputation for research and enterprise in areas of academic and professional expertise.

Consultation took place with our staff, students, governors and other stakeholders during 2015-16 to agree our key strands and objectives to 2021. With a new Vice-Chancellor and senior management team now in place we are setting the scene for the next five years.

• Become more commercial in our working practices in order to invest in our success.

Our vision is for a leading University for professional and creative education and applied research and our key themes are:

In order to be successful we will:

Student success

• Be committed to equality and fairness, creating opportunities for social mobility.

• Be a professional, caring and supportive University, ambitious for our staff and our students.

• Develop a course portfolio at all levels that is attractive to applicants, sector engaged and leads to excellent graduate outcomes and employment.

• Develop and support our staff to meet the challenges the University faces in the increasingly competitive environment in which we operate.

• Create the conditions for student success through a leading-edge, employment focused curriculum, with recognised excellence evidenced across the University in teaching and in learning support.

• Work in partnership with our students to promote student engagement and success. • Develop a culture where innovation, creativity and enterprise flourish.

• Be an inclusive learning community, ensuring that our courses and services enable success for students from diverse backgrounds.

• Ensure that our infrastructure and administration are effective, efficient and fit for purpose.

Reputation and impact

• Maximise the potential of our campuses to support priorities.

• Value and promote high quality collaboration and partnerships for teaching and research. • Strengthen our international profile and activity, recognising that we live and work in global communities. • Extend our role as an anchor institution, able to use our local, national and international reach to benefit our students, partners and the wider community in which we operate.

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Financial Statements 2015-16


The strategic plan is divided into three key strands

1. Education Strand • Improve undergraduate completion measured by % of level 4 intakes achieving a degree outcome 3 years after enrolment.

1. Education Strand We will craft an accessible university education that enables our students to persist in their learning, and succeed as learners and as sought after graduates. We aim to create transformational experiences that change lives and nurture in our graduates the attributes to enable them to change the world.

• Increase students achieving a ‘good honours’ (1st and 2.1) as a % of awards. • Increase % of graduates entering ‘graduate jobs’ (derived from DHLE data at 6 months). • League table measure to be replaced by Teaching Excellence Framework position.

We will stretch and challenge our students to succeed, so that they thrive in graduate-level roles in the challenging and competitive environments they will face. To create and deliver transformative education, we will form strong partnerships with carefully selected organisations in a wide variety of sectors. We will be an anchor institution, established in the fabric of the regions, sectors and professions we choose to work in.

• NSS Overall Satisfaction Score (target top third for each subject in the sector rankings). • Increase number of full-time undergraduate applications for following academic year for faculty delivered programmes. • Increase undergraduate student FTEs on faculty delivered programmes.

Through the application of our creativity, our professional practice and a strongly commercial edge, we will grow as a university, so that we are able to make an even greater difference tomorrow than we do today.

• Increase postgraduate level 8 FTEs. • Increase income received from validation and franchise contracts with home and overseas partner institutions.

2. Research and Enterprise Strand

2. Research and Enterprise Strand

Building on the enhanced profile for our work secured in Research Excellence Framework 2014 (REF 2014), the research and enterprise strand of our strategy will ensure that Bucks New University is better recognised as a leading UK university in applied, practice based and translational research and related advanced scholarship in our fields of professional, creative and translational practice.

• Increase research grant and contract income. • Increase enterprise and consultancy income (reported in HEBCI return). 3. People and Organisational Effectiveness Strand • Achieve an agreed target % satisfaction in staff survey.

3. People and Organisational Effectiveness Strand A number of key cross-institutional priorities will transform the effectiveness of the University.

• Increase total income by an agreed target.

Key Strategy Performance Measures and Targets

• Increase historical cost surplus as % of income.

• Decrease staff costs as a % of income.

• Increase cash flow from operating activities as % of income.

The following key performance measures have been agreed by the University’s Council for 2016-17. It has developed high level strategic priorities, further articulated through strands for Education, Research and Enterprise, and People and Organisations. The University believes these are appropriate in order for it to achieve its vision.

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• Decrease external borrowing as % of income. • Increase net liquidity as number of days expenditure.

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Financial Statements 2015-16


FINANCIAL REVIEW AND RISKS The financial statements presented by the University’s Council comprise the consolidated results of the University and its subsidiary companies and joint ventures (the Group). The Group companies undertake activities which, for legal or commercial reasons, are more appropriately channelled through a limited company. Where possible, subsidiary companies pay their taxable profits to the University under the Gift Aid scheme.

FRS102 has necessitated some changes to the calculation and presentation of figures associated with the Local Government Pension Scheme. In the Consolidated Statement of Comprehensive Income and Expenditure (SOCIE) the main differences are the requirement to fund the administrative expenses of the scheme in year. The finance cost has also been replaced by a net interest cost which has been calculated using the discount rate applying at the start of the period. The impact of these two items has been an increased in year charge of £0.84m compared to what had been anticipated in the budget. The actuarial adjustment in respect of pension schemes now forms part of the total comprehensive income for the year. The large charge which the University has recognised in this financial year (£12.35m) is a reflection of the sharp fall in bond yields over the second half of the year.

Results for the year ended 31 July 2016 The financial statements have been produced following the adoption of the new FRS 102 financial reporting standard applicable in the UK and Ireland for accounting periods starting on or after 1 January 2015. For the Higher Education sector this required a transition date of 1 August 2014 with a comparative balance sheet on 31 July 2015 and the first FRS 102 compliant accounts being prepared for 31 July 2016.

The University has a small number of employees who are members of the USS pension scheme. As the scheme is in deficit and a funding plan agreed, section 28 of FRS102 now requires employers to recognise a liability for the contributions payable to close the funding gap. For the University this has meant an in year charge of £0.08m and a balance sheet provision requirement of £0.18m.

Results for the 2015-16 financial year are a consolidated group surplus of £0.330m. Income from HEFCE continues to reduce, however this on the whole is offset through an increase in the level of tuition fee income. In the main this is due to the impact of continuing students paying the new fee regime of £9,000. Undergraduate student numbers were down nearly 7% compared to the previous year which has meant a continued emphasis on cost efficiency has been required to maintain a small surplus for the University.

Full details of the pension schemes liabilities and FRS102 changes can be seen in notes 18 and 24. Under FRS102 transition arrangements the University undertook a revaluation of its land to fair value. This had the benefit of increasing the land value from what would have been £11.3m as at 31 July 2016 to £16.82m. The land valuation was carried out by an independent body from the University who was RCIS registered.

Buckinghamshire Education, Skills and Training (BEST) opened the new campus in Aylesbury Vale in January 2016. This is a joint venture with Aylesbury College with a 50% share being consolidated into these accounts. In the first year of operation BEST made a loss of £(1.5)m with £(0.78)m deficit being consolidated into these accounts. During the year a working capital loan of £(1.0m) has been made to BEST which is being used to pump prime the first year of operation and to fund investment and growth. By 2018-19 the building at Aylesbury is expected to be operating at full capacity and begin to report a trading surplus in the following year and begin to be able to repay the working capital injections it has received.

The other impacts which FRS102 has had on the accounts and are reflected within the reported figures are as follows: • An annual leave accrual for unused leave at 31 July 2016 of £0.04m • Donations and endowments that are not utilised at the end of the year are recognised in the year under the performance basis of accounting and then transferred to the restricted reserve at the end of the year (for future years use). The value of this in the year ended 31 July 2016 is £0.12m with a total restricted reserve standing at £0.20m.

Missenden Abbey is a 100% owned subsidiary and provides a centre for adult education, conferences and management training. Turnover continues to operate at similar levels to 2014-15 but cost control means that the surplus in the year is £0.39m (£0.26m 2014-15) which is gift aided to the University.

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• There is no longer a release to the income and expenditure account from the revaluation reserve; this is now a transfer straight from this reserve into the unrestricted income and expenditure reserve.

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Financial Statements 2015-16


Prior Year Adjustment

Capital projects

As part of the year-end review of the University’s fixed asset register it became apparent that a significant value in the fixed asset register relating to IT equipment and servers was being depreciated over a time period significantly longer than its actual useful life, a 15 year time frame. This equipment is currently in the process of being decommissioned and replaced as part of an extensive upgrade and refresh programme that began in 2015-16.

£5.7m was spent during 2015-16 on capital projects, the majority of which were to improve IT facilities and infrastructure for staff and students throughout all the campuses.

Cash Flow The cash balance (including short-term deposits) of £13.87m remains healthy and is adequate for future investment commitments. The reduction in cash of £0.72m during the year is largely due to the capital expenditure outlined above. The payment of £2.1m for the contribution towards the new road at our Hughenden Valley student accommodation has been made to Wycombe District Council.

The University’s depreciation policy for equipment states 5–15years, however regard should have been given to the particular equipment being purchased and the likely nature of having to replace in a much shorter time period. This situation therefore represents a mistake in the application of an accounting policy and under FRS102 is allowable as a prior period adjustment.

External debt of £0.69m has also been repaid leaving the total amount of debt outstanding at £28m; the University intends to finance future capital investment from cash balances as well as continuing to reduce down its outstanding debt. An analysis of Group cash balances versus borrowings over the last six years is shown on the chart below.

The adjustments which have taken place within the figures presented to reflect the levels of depreciation which should have been charged to the accounts in previous years and in 2015-16 are: • A reduction in the level of opening reserves in the balance sheet and an increase to the cumulative depreciation values as at 1 August 2014 of £1.58m. • An additional £0.31m of depreciation in both 2014-15 and 2015-16.

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Financial Statements 2015-16


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Financial Statements 2015-16


Balance Sheet and Reserves

Strategic risks

The balance sheet has experienced a reduction in its net assets since 31 July 2015 of £12.0m. The main reason for this is as a result of the additional £12.35m which has had to be added to the pension scheme reserve as a result of the impact of market forces on the bond yield rates which are used to calculate the value of the Local Government Pension Scheme Fund.

During 2015-16 the University was subject to the HEFCE Memorandum of Assurance and Accountability. It also adheres to the Council of University Chairs (CUC) Higher Education Code of Governance 2014. As such the governing body must ensure institutional financial health including adopting effective systems of control and risk management which promote value for money, meet mandatory audit requirements, and produce accurate and quality assured institutional data.

Moving forwards the University expects that the balance sheet and its reserves position will improve as both long term debt is repaid and the capital investment which is underway begins to help improve surpluses through income growth. Management remain satisfied that the University has adequate resources to continue in operation on a going concern basis.

In order to ensure that the strategy and its key performance indicators can be achieved the University’s Council also identifies and closely monitors business risks. Members of the executive team provide regular briefings to the Audit Committee and the University’s Council allowing Governors to monitor the assessment, mitigation and responses to these risks. Further details on the University’s risk management procedures and policies are set out in the statement of corporate governance.

Investment policy and performance Investment limits have been agreed by Council that reflect the credit rating of the relevant counterparty and the period of the deposit. Where there are multiple entities within a single group, individual investments are aggregated to avoid breaching limits. Credit ratings are taken to be the lowest of those assessed by the principal recognised agencies (Moody’s, Fitch and Standard & Poor’s) as applied to the senior debt of the relevant counterparty.

The key strategic risks are listed below: Student Experience • Failing to provide a good student experience. • Failing to maintain academic and governance standards. • Failure in reacting to adverse public image and reputational damage.

Only sterling deposits or sterling commercial paper with maturities within the limits set out in the next table are eligible:

People Aggregated Limit > 3 months

> 6 months

Up to 1 yr

Barclays

£10m

£5m

£2m

Other Long Term A Rated

£5m

£2m

£1m

• Failing to look after our staff via employee wellbeing, productivity and development and scholarship. • Failure to provide high quality facilities via lack of investment in the estates infrastructure.

At 31 July 2016 there was a total balance of £8m held in deposit accounts. This was split between Handelsbanken (£5m), and Scottish Widows (£3m)

Financial performance • Failure to achieve annual recruitment targets. • Failure to meet current financial obligations. External Forces • Failing to react appropriately to continued policy uncertainty in the sector. • Failing to have a business continuity plan especially for IT. • Failure to be resilient to major incidents or security issues.

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STATEMENT OF CORPORATE GOVERNANCE University Council

The following statement is provided to enable readers of the financial statements of Bucks New University to gain a better understanding of the governance and legal structure of the University and covers the period 1 August 2015 to 31 July 2016.

The University’s Council comprises independent and University members appointed under the Instrument and Articles of Government of the University, the majority of whom are non-executive. The roles of Chair and Deputy Chair of the Council are separated from the role of the University’s Vice-Chancellor. The matters specially reserved to the Council for decision are set out in the Articles of the University, by custom and under the Memorandum of Assurance and Accountability with HEFCE.

Bucks New University is an independent corporation, established as a Higher Education Corporation under the provisions of the Education Reform Act 1988 and the Further and Higher Education Act 1992. It is an exempt charity as defined under the Charities Act 2011 and is regulated by the Higher Education Funding Council for England (HEFCE), which is the principal regulator for English higher education institutions that are exempt charities. During 2015-16 The University’s Council, as trustee of the University, continued to have due regard to the Charity Commission’s guidance on public benefit and its supplementary guidance on the advancement of education.

The Council identifies that it has primary responsibilities that it reserves to itself for the ongoing strategic direction of the University, the determination of the educational character and mission of the University, the approval of the annual estimates of income and expenditure, the approval of major developments and the receipt of regular reports from Executive Officers on the day to day operations of its business and its subsidiary companies.

The University conducts its business in accordance with the seven principles identified by the Committee on Standards in Public Life and with the guidance to institutions of higher education provided by the Committee of University Chairs (CUC). The University’s Council is satisfied that it is in compliance with the HE Code of Governance published by CUC in December 2014.

The Council met four times during the year and had several Committees reporting to it, including a Resources Committee, a Remuneration Committee, a Governance Committee and an Audit Committee. All of these Committees are formally constituted with terms of reference and predominantly comprise of lay members of Council, one of whom is the Chair.

Its objects, powers and framework of governance are set in the Articles of Government. Amendments to these Articles must be approved by the Privy Council. The Articles require the University to constitute a University Council and an Academic Board, each with clearly defined functions and responsibilities, to oversee and manage its activities.

Academic Board Subject to the overall responsibility of the University’s Council, the Academic Board has oversight of the academic affairs of the University and draws its membership entirely from the staff and students of the University. It is particularly concerned with issues relating to the teaching and research work of the University. The Board is chaired by the ViceChancellor in her capacity as head of the institution.

Resources Committee The Resources Committee recommends to Council the University’s annual revenue and capital budgets, and monitors performance in relation to these approved budgets and key performance indicators. The committee usually meets three times during each academic year.

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Governance and Remuneration Committees

In accordance with the Articles of Government of the University, the Director of Academic Quality Directorate has been designated Secretary to the University’s Council and in that capacity provides independent advice on matters of governance to all Council members.

The Governance Committee considers nominations for vacancies in the Council membership under the relevant Statute and oversees the induction, training and information needs of members of Council.

Going concern

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

The University’s Council is satisfied that the University has adequate resources to continue in operation for the foreseeable future, and for this reason the Council consider that the accounts of the University should be prepared on a going concern basis. The University has made surpluses in each of the past six years and has significant cash reserves.

Audit Committee The Audit Committee normally meets four times each year, including a meeting with the external auditors to discuss audit findings. The committee considers the detailed internal audit report findings prepared by the University’s internal audit service, reviews the effectiveness of the systems of internal controls and monitors adherence with regulatory requirements. It reviews the annual financial statements together with the accounting policies. It reviews the system and processes in respect of the preparation and submission of statutory returns to HEFCE and the Higher Education Statistics Agency (HESA).

The budget for 2016-17 is also indicating the achievement of a surplus although this is a much smaller figure than in previous years. However, medium and long-term cash forecasts demonstrate financial sustainability. Investments in capital projects are carefully reviewed by a Project Board prior to approval. The Council only undertakes such investments with the knowledge that the University will remain solvent, and are likely to add value as a result of the investment.

Overview These committees are composed of independent and external co-opted members of the University’s Council. The decisions of all these committees are reported formally to the Council. The University’s Council conducts regular effectiveness reviews of itself and its committees. These reviews include an analysis of attendance, work undertaken and the views of members so that changes can be introduced as appropriate during the next cycle. As Chief Executive, the Vice-Chancellor exercises considerable influence upon the development of University strategy, the identification and planning of new developments and the shaping of the University ethos. Members of the Office of the Vice-Chancellor, currently the Deputy Vice-Chancellor, the Finance Director, Pro Vice-Chancellor (Education) and Pro Vice-Chancellor (Research), all contribute in various ways to this aspect of the work. However, the ultimate responsibility to the Council rests with the Vice-Chancellor.

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Financial Statements 2015-16


STATEMENT OF INTERNAL CONTROL The University’s Council acknowledges its responsibility for ensuring that an effective system of internal financial control is maintained and operated by Bucks New University.

The University’s Council has responsibility for reviewing the effectiveness of the system of internal control. The following processes have been established:

The system of internal financial control is based on a framework of regular management information, administrative procedures including the segregation of duties and a system of delegation and accountability. The following controls have been in place all academic year and up to the date of the approval of these financial statements and in particular, they include:

• The University’s Council meets at regular intervals to consider performance reports, operational plans and the strategic direction of the University. • The University’s Council receives periodic reports from the Chair of the Audit Committee concerning internal control and requires regular reports from managers on the steps they are taking to manage risks in their areas of responsibility, including progress reports on key projects. • The Audit Committee provides an oversight of risk management and receives regular reports from the internal audit service, which includes the internal audit service’s independent opinion on the adequacy and effectiveness of the institution’s system of internal control, together with recommendations for improvement. • A system of key performance and risk indicators has been developed which are reported on at each Council meeting. • A robust risk prioritisation methodology based on risk ranking and cost-benefit analysis has been established. • An organisation-wide risk register is maintained. • Procurement procedures are in place that promote economy, efficiency and ensure value for money. • Effective review processes are in place to provide assurance over the quality and completeness of data management.

• Comprehensive budgeting systems with an annual budget which is reviewed and agreed by Council. • Regular reviews by the University’s Council of periodic and annual financial reports which indicate financial performance against budgets and forecasts. • Setting targets to measure financial and other performance using KPIs as appropriate. • Clearly defined capital investment control guidelines. • The adoption of formal project management disciplines where appropriate. The University’s Council has established the processes for the identification, evaluation and management of risks the University faces. The University’s Council has responsibility for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives, while safeguarding the public and other funds and assets for which it is responsible. This is in accordance with the responsibilities assigned to the governing body in Instrument and Articles of Government and the Memorandum of Assurance and Accountability with HEFCE. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify the principal risks to the achievement of policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently, effectively and economically.

Buckinghamshire New University

14

Financial Statements 2015-16


Buckinghamshire New University

15

Financial Statements 2015-16


STATEMENT OF RESPONSIBILITIES OF THE UNIVERSITY’S COUNCIL The University’s Council is responsible for keeping adequate accounting records, which disclose with reasonable accuracy at any time the financial position of the Group, and for ensuring that the financial statements are prepared in accordance with the Instrument and Articles of Government, the Statement of Recommended Practice: Accounting for Further and Higher Education (2015) and other relevant accounting standards.

The University’s Council has taken reasonable steps to: • Ensure that funds from HEFCE and other funding bodies are used only for the purposes for which they have been given and in accordance with conditions which the funding bodies may from time to time prescribe, for example, in the HEFCE Memorandum of Assurance and Accountability. • Ensure that there are appropriate financial and management controls in place to safeguard public funds from other sources. • Safeguard the assets of the Group and prevent and detect fraud and other irregularities. • Secure the economical, efficient and effective management of the University’s resources and expenditure.

In addition, within the terms and conditions of the Memorandum of Assurance and Accountability agreed between HEFCE and the University’s Council, through its designated accountable officer, is required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of Bucks New University and Group and of the surplus or deficit and cash flows for that year.

In so far as each of the Governors is aware:

At Bucks New University the designated accountable officer has been identified as the Vice-Chancellor. In preparing those financial statements, the University’s Council is required to:

• There is no relevant audit information of which the University’s auditors are unaware. • The Governors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

• Select suitable accounting policies and then apply them consistently. • Make judgements and estimates that are reasonable and prudent and state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements. • Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in operation.

The University’s Council is responsible for the maintenance and integrity of the corporate and financial information included on the University’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Professor Rebecca Bunting Vice-Chancellor

Dr Michael Hipkins Chair of Council

Date Buckinghamshire New University High Wycombe Campus, Queen Alexander Road, High Wycombe, Buckinghamshire, HP11 2JZ

Buckinghamshire New University

16

Financial Statements 2015-16


REPORT OF THE INDEPENDENT AUDITOR’S TO THE UNIVERSITY’S COUNCIL Scope of the audit of the financial statements

We have audited the financial statements of Buckinghamshire New University (the ‘University’) for the year ended 31 July 2016 which comprise consolidated statement of comprehensive income and expenditure, the consolidated and University statement of changes in reserves, the consolidated and University balance sheets, the consolidated cash flow and the related notes.

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at www.frc.org.uk/ auditscopeukprivate. Opinion on financial statements In our opinion the financial statements:

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) including FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland.

• give a true and fair view of the state of the group’s and the University’s affairs as at 31 July 2016 and of the group’s and the University’s income and expenditure, gains and losses, changes in reserves, and the group’s cash flows for the year then ended in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been properly prepared in accordance with the Statement of Recommended Practice: Accounting for Further and Higher Education published in March 2014.

This report is made solely to the University’s Council, as a body, in accordance with the University’s articles of government. Our audit work has been undertaken so that we might state to the University’s Council those matters we are required to state to it in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the University and the University’s Council as a body, for our audit work, for this report, or for the opinions we have formed.

Opinion on other matters prescribed by HEFCE’s Memorandum of assurance and accountability dated July 2016 In our opinion, in all material respects:

Respective responsibilities of Council and auditor

• funds from whatever source administered by the University for specific purposes have been properly applied to those purposes and managed in accordance with the relevant legislation; • funds provided by HEFCE have been applied in accordance with the Memorandum of assurance and accountability and any other terms and conditions attached to them; and • the requirements of HEFCE’s accounts direction have been met.

As explained more fully in the Council’s Responsibilities Statement set out on page 16, the Council is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. 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.

Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants London 24 November 2016

Buckinghamshire New University

17

Financial Statements 2015-16


_______________________________________________________________________ Consolidated Statement of Comprehensive Income and Expenditure – Year Ended 31 July 2016 Year ended 31 July 2016 Notes Consolidated

University

Year ended 31 July 2015 Consolidated

University

£'000

£'000

£'000

£'000

48,588 5,769 718 10,092 65 151

48,588 5,769 718 8,232 64 151

48,520 5,873 785 11,251 85 100

48,520 5,873 785 9,435 85 100

65,383

63,522

66,614

64,798

8

33,347 23,173 4,915 2,767

32,702 22,022 4,861 2,767

33,594 24,970 4,407 2,701

33,013 23,759 4,361 2,701

9

64,202

62,352

65,672

63,834

Surplus before other gains losses and share of operating deficit of joint ventures.

1,181

1,170

942

964

Loss on disposal of fixed assets Share of operating deficit in joint venture

(70) (781)

(70) -

(9) (132)

(9) -

330 330

1,100 1,100

801 801

955 955

(12,350) (12,020)

(12,350) (11,250)

(3,157) (3,924) (6,280)

(3,157) (3,924) (6,126)

118 (12,066) (72) (12,020)

118 (11,296) (72) (11,250)

73 (6,281) (72) (6,280)

73 (6,127) (72) (6,126)

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

1 2 3 4 5 6

Total income Expenditure Staff costs Other operating expenses Depreciation Interest and other finance costs Total expenditure

Surplus before tax Taxation Surplus for the year

Unrealised loss on revaluation of land and buildings Actuarial loss in respect of pension schemes Total comprehensive income for the year

7 11

13

10

11 24

Represented by: Restricted comprehensive income for the year Unrestricted comprehensive income for the year Revaluation reserve comprehensive income for the year Attributable to the University

All items of income and expenditure relate to continuing activities.

| 24 Buckinghamshire New University

18

Financial Statements 2015-16


_______________________________________________________________________ Consolidated and University Statement of Changes in Reserves – Year Ended 31 July 2016

Consolidated

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

Revaluation reserve £'000

Total £'000

Balance at 1 August 2014

14

31,682

4,697

36,393

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

73 -

728 (7,081) 72 -

(72) -

801 (7,081) -

Total comprehensive income for the year

73

(6,281)

(72)

(6,280)

Balance at 1 August 2015

87

25,401

4,625

30,113

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

118 -

212 (12,350) 72 -

(72) -

330 (12,350) -

Total comprehensive income for the year

118

(12,066)

(72)

(12,020)

Balance at 31 July 2016

204

13,336

4,553

18,093

University

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

Revaluation reserve £'000

Total excluding Non Controlling Interest £'000

Balance at 1 August 2014

14

31,012

4,697

35,723

Surplus/(deficit) from the income and expenditure statement Other comprehensive income Transfers between revaluation and income and expenditure reserve Release of restricted funds spent in year

73 -

(2,275) (3,924) 72 -

(72) -

(2,202) (3,924) -

Total comprehensive income for the year

73

(6,127)

(72)

(6,126)

Balance at 1 August 2015

87

24,885

4,625

29,597

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

118 -

982 (12,350) 72 -

(72) -

1,100 (12,350) -

Total comprehensive income for the year

118

(11,296)

(72)

(11,250)

Balance at 31 July 2016

204

13,590

4,553

18,347

| 25 Buckinghamshire New University

19

Financial Statements 2015-16


_______________________________________________________________________ Consolidated and University Balance Sheet as at 31 July 2016 As at 31 July 2016 Notes Consolidated University £'000 £'000 Non-current assets Fixed assets Investments Investment in joint venture Current assets Stock Trade and other receivables Cash and cash equivalents Less: Creditors: amounts falling due within one year

95,546 95,546

94,393 1,036 95,429

95,198 95,198

94,048 1,036 95,084

18 6,002 13,871 19,891

6,424 13,115 19,539

19 7,956 14,593 22,568

8,161 13,899 22,060

(10,818)

(10,876)

(15,315)

(15,241)

9,073

8,663

7,253

6,819

104,619

104,092

102,451

101,903

17

(35,368)

(34,587)

(35,824)

(35,792)

18

(51,158)

(51,158)

(36,514)

(36,514)

18,093

18,347

30,113

29,597

11 12 13

14 15 20

16

Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year Provisions Pension provisions Total net assets

As at 31 July 2016 Notes Consolidated University £'000 £'000 Restricted Reserves I&E - restricted reserve Unrestricted Reserves I&E - unrestricted reserve Revaluation reserve Total Reserves

As at 31 July 2015 Consolidated University £'000 £'000

19

As at 31 July 2015 Consolidated University £'000 £'000

204

204

87

87

13,336 4,553

13,590 4,553

25,401 4,625

24,885 4,625

18,093

18,347

30,113

29,597

The financial statements were approved by the University Council on 21 November 2016 and were signed on its behalf on that date by:

Dr Michael Hipkins Chair of Council

Professor Rebecca Bunting Vice Chancellor | 26

Buckinghamshire New University

20

Financial Statements 2015-16


_______________________________________________________________________ Consolidated Cash Flow Statement – Year Ended 31 July 2016

Notes Cash flow from operating activities Surplus for the year Adjustment for non-cash items Depreciation Decrease/(increase) in stock Decrease/(increase) in debtors Increase/(decrease) in creditors Increase/(decrease) in pension provision Share of operating (surplus)/deficit in joint venture Adjustment for investing or financing activities Investment income Interest payable Loss on the disposal of fixed assets Capital grant income Net cash inflow from operating activities

11 14 15 16 18 13 5 8

Notes Cash flows from investing activities Proceeds from sales of fixed assets Capital grants receipts Loan to BEST Investment income Payments made to acquire fixed assets Pension contribution in respect of past service

Notes Cash flows from financing activities Interest paid Interest element of finance lease and service concession payments Repayments of amounts borrowed Capital element of finance lease and service concession payments

Decrease in cash and cash equivalents in the year Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year

20 20

Year ended 31 July 2016 £'000

Year ended 31 July 2015 £'000

330

801

4,915 1 2,960 (3,360) 917 781

4,407 4 (2,624) 1,690 569 132

(65) 2,767 70 (964) 8,352

(85) 2,701 9 (187) 7,417

Year ended 31 July 2016 £'000

Year ended 31 July 2015 £'000

734 (1,006) 65 (6,464) (174) (6,845)

9 588 85 (8,513) (167) (7,998)

Year ended 31 July 2016 £'000

Year ended 31 July 2015 £'000

(1,352) (46) (668) (163) (2,229)

(1,351) (644) (1,995)

(722)

(2,576)

14,593 13,871

17,169 14,593 | 27

Buckinghamshire New University

21

Financial Statements 2015-16


STATEMENT OF PRINCIPAL ACCOUNTING POLICIES Income Recognition

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

Income from the sale of goods or services is credited to the Consolidated Statement of Comprehensive Income and Expenditure when the goods or services are supplied to the external customers or the terms of the contract have been satisfied.

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

Fee income is stated gross of any expenditure which is not a discount and credited to the Consolidated Statement of Income over the period in which students are studying. Where the amount of the tuition fee is reduced, by a discount for prompt payment, income receivable is shown net of the discount. Bursaries and scholarships are accounted for gross as expenditure and not deducted from income.

Basis of preparation These financial statements have been prepared in accordance with the statement of recommended practice ‘SORP: Accounting for Further and Higher Education Institutions 2015’ and in accordance with the new FRS 102 Accounting Standards. The University is a public benefit entity and therefore applies the relevant public benefit requirement of FRS102. The financial statements are prepared in accordance with the historical cost convention.

Investment income is credited to the Statement of Consolidated Income on a receivable basis.

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

Funds the University receives and disburses as paying agent on behalf of a funding body are excluded from the income and expenditure of the University where the University is exposed to minimal risk or enjoys minimal economic benefit related to the transaction.

Going Concern

Grant funding

The Board of Governors is satisfied that the University has adequate resources to continue in operation for the foreseeable future and for this reason consider that the accounts of the Group should be prepared on a going concern basis.

The University has adopted the accrual model for government revenue grants. Government revenue grants including funding council block grant and research grants are recognised in income over the periods in which the University recognises the related costs for which the grant is intended to compensate. Where part of a government grant is deferred it is recognised as deferred income within creditors and allocated between creditors due within one year and due after more than one year as appropriate.

Basis of consolidation The consolidated financial statements include the University and all its subsidiaries for the financial year to 31 July 2016. The results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statement of Comprehensive Income and Expenditure from the date of acquisition or up to the date of disposal. Intra-group transactions are eliminated on consolidation.

Grants (including research grants) from nongovernment sources are recognised as income when the University is entitled to the income and performance related conditions have been met. Income received in advance of performance related conditions being met is recognised as deferred income within creditors on the balance sheet and released to income as the conditions are met.

The consolidated financial statements do not include the income and expenditure of the Students’ Union as the University does not exert control or dominant influence over policy decisions. Joint ventures and investments in associates are accounted for using the equity method.

Buckinghamshire New University

22

Financial Statements 2015-16


Capital grants

Research and Development expenditure

Government capital grants are recognised in income over the expected useful life of the asset using the accruals method of accounting. Other capital grants are recognised in income when the University is entitled to the funds subject to any performance related conditions being met.

Expenditure on Research and Development is written off to the Consolidated Statement of Comprehensive Income and Expenditure in the year in which it is incurred.

Donations and endowments

The University has a five-year rolling long-term maintenance plan, which forms the basis of the ongoing maintenance of the estate. The cost of long term and routine corrective maintenance is charged to the Consolidated Statement of Comprehensive Income and Expenditure as incurred for work is not capital in nature.

Maintenance of premises

Non exchange transactions without performance related conditions are donations and endowments. Donations and endowments with donor imposed restrictions are recognised in income when the University is entitled to the funds. Income is retained within the restricted reserve until such time that it is utilised in line with such restrictions at which point the income is released to general reserves through a reserve transfer.

Foreign currency Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in Surplus or Deficit. Nonmonetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined.

Donations with no restrictions are recognised in income when the University is entitled to the funds. Investment income and appreciation of endowments is recorded in income in the year in which it arises and as either restricted or unrestricted income according to the terms other restriction applied to the individual endowment fund. There are four main types of donations and endowments identified within reserves: 1. Restricted donations - the donor has specified that the donation must be used for a particular objective. 2. Unrestricted permanent endowments - the donor has specified that the fund is to be permanently invested to generate an income stream for the general benefit of the University. 3. Restricted expendable endowments - the donor has specified a particular objective other than the purchase or construction of tangible fixed assets, and the University has the power to use the capital. 4. Restricted permanent endowments - the donor has specified that the fund is to be permanently invested to generate an income stream to be applied to a particular objective.

Buckinghamshire New University

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Financial Statements 2015-16


Accounting for retirement benefits

Defined Contribution Plan

Retirement benefits for most employees of the University are provided by either the Teachers’ Pension Scheme (TPS) or the Local Government Pension Scheme (LGPS). Some retirement benefits are provided by Universities Superannuation Scheme (USS) and Scottish Widows Scheme. The TPS, LGPS and USS schemes are defined benefit schemes which are externally funded and contracted out of the State Second Pension (S2P). Scottish Widows is a defined contribution plan.

A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement in the periods during which services are rendered by employees.

Employment benefits

The USS is a multi-employer scheme for which it is not possible to identify the assets and liabilities to University at members due to the mutual nature of the scheme and therefore this scheme is accounted for as a defined contribution retirement benefit scheme.

Short term employment benefits such as salaries and compensated absences are recognised as an expense in the year in which the employees render service to the University. Any unused benefits are accrued and measured as the additional amount the University expects to pay as a result of the unused entitlement.

A liability is recorded within provisions for any contractual commitment to fund past deficits within the USS scheme.

Tangible fixed assets Fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Certain items of fixed assets that had been revalued to fair value on or prior to the date of transition to the 2015 FE HE SORP, are measured on the basis of deemed cost, being the revalued amount at the date of that revaluation.

Defined Benefit Plan Defined benefit plans are post-employment benefit plans other than defined contribution plans. Under defined benefit plans, the University’s obligation is to provide the agreed benefits to current and former employees, and actuarial risk (that benefits will cost more or less than expected) and investment risk (that returns on assets set aside to fund the benefits will differ from expectations) are borne, in substance, by the University. The Group should recognise a liability for its obligations under defined benefit plans net of plan assets.

Depreciation is provided to write off the cost or valuation less the estimated residual value of the tangible fixed assets by equal instalments over their useful economic life as follows: Core - 50 to 80 years; Roofs – 40 years; Finishes – 30 years; Fixtures and fittings – 20 years; Mechanical and electrical – 30 years; Refurbishments of freehold buildings – 30 years; Refurbishments of leasehold buildings – over the remaining period of the lease; Minor capital works – 5 years; Equipment - 5 to 15 years; Operating lease buyouts – over the remaining useful life of the underlying assets No depreciation is provided on freehold land.

This net defined benefit liability is measured as the estimated amount of benefit that employees have earned in return for their service in the current and prior periods, discounted to determine its present value, less the fair value (at bid price) of plan assets. The calculation is performed by a qualified actuary using the projected unit credit method. Where the calculation results in a net asset, recognition of the asset is limited to the extent to which the University is able to recover the surplus either through reduced contributions in the future or through refunds from the plan.

Buckinghamshire New University

24

Financial Statements 2015-16


a. Land and buildings - The University’s buildings are specialised buildings and therefore it is not appropriate to value them on the basis of open market value. Land and buildings inherited from the Local Education Authority (LEA) are stated in the balance sheet at valuation on the basis of depreciated replacement cost. Other land and buildings are included in the balance sheet at cost. Freehold land is not depreciated as it is considered to have an indefinite useful life.

Stock

The University is an exempt charity within the meaning of schedule 3 of the Charities Act 2011 (formerly schedule 2 of the Charities Act 1993) and as such within the meaning of paragraph 1 of schedule 6 to the Finance Act 2010. Accordingly, the University is potentially exempt from taxation in respect of income or capital gains received within categories covered by sections 478 to 488 of the Corporation Taxes Act 2010 (formerly enacted in section 505 of the Income and Corporation Taxes Act 1988), or section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that such income or gains are applied to exclusively charitable purposes.

Stock is held at the lower of cost and net realisable value, and is measured using an average cost formula. Educational stock is not material in relation to the University finances and is therefore charged to the Consolidated Statement of Comprehensive Income and Expenditure when purchased.

Taxation

A review for impairment of a fixed asset is carried out annually for assets with an anticipated useful economic life in excess of 50 years. The useful life of all assets is reviewed if events or changes in circumstances indicate that the carrying amount of the fixed asset may not be recoverable.

b. Buildings - Buildings under construction are accounted for at cost, based on the value of architects’ certificates and other direct costs, including associated finance costs, incurred to 31st July. No depreciation is charged on assets in the course of construction. c. Equipment - Equipment, including computers and software, costing less than £5,000 per individual item is recognised as expenditure. All other equipment is capitalised. Capitalised equipment is depreciated over its useful economic life.

The University receives no similar exemption in respect of Value Added Tax. Irrecoverable VAT on inputs is included in the costs of such inputs. Any irrecoverable VAT allocated to fixed assets is included in their cost. The University’s subsidiary companies are subject to corporation tax and VAT in the same way as any commercial organisation.

Where equipment is acquired with the aid of specific grants it is capitalised and depreciated in accordance with the above policy, with the related grant being credited to a deferred capital grant account and released to Consolidated Statement of Comprehensive Income and Expenditure over the expected useful economic life of the related equipment.

Cash and cash equivalents Cash includes cash in hand, deposits repayable on demand and overdrafts. Deposits are repayable on demand if they are in practice available within 24 hours without penalty.

Investments

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

Investments in subsidiary undertakings are recognised at cost less provision for impairment losses.

Buckinghamshire New University

25

Financial Statements 2015-16


Provisions, contingent liabilities and contingent assets

Finance Leases Leases in which the University assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. Leased assets acquired by way of finance lease and the corresponding lease liabilities are initially recognised at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease.

Provisions are recognised in the financial statements when: (a) the University has a present obligation (legal or constructive) as a result of a past event; (b) it is probable that an outflow of economic benefits will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation.

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

The amount recognised as a provision is determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability. A contingent liability arises from a past event that gives the University a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the University. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably.

Operating leases Costs in respect of operating leases are charged on a straight-line basis over the lease term. Any lease premiums or incentives are spread over the minimum lease term.

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

A contingent asset arises where an event has taken place that gives the University a possible asset whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the University. Contingent assets and liabilities are not recognised in the Balance Sheet but are disclosed in the notes.

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

Agency arrangements

The University accounts for its share of joint ventures using the equity method.

Funds the institution receives and disburses as paying agent on behalf of a funding body or other body, where the institution is exposed to minimal risk or enjoys minimal economic benefit related to the receipt and subsequent disbursement of the funds, are excluded from the Consolidated Statement of Comprehensive Income and Expenditure of the institution.

The University accounts for its share of transactions from joint operations and jointly controlled assets in the Consolidated Statement of Income. The University accounts for its investments in associates under the equity method.

Reserves

Financial Instruments

Reserves are classified as restricted or unrestricted.

The University only has financial assets and liabilities of a kind that qualify as basic financial instruments. They are initially recognised at transaction value and subsequently measured at their settlement value, as follows:

Other restricted reserves include balances where the donor has designated a specific purpose and therefore the University is restricted in the use of these funds.

• Cash – cash held. • Debtors – settlement amount after any discounts. • Creditors – settlement after any trade discounts. • Loans – amortised cost. • Finance leases – amortised cost.

Buckinghamshire New University

26

Financial Statements 2015-16


Buckinghamshire New University

27

Financial Statements 2015-16


_______________________________________________________________________ Notes  to  the  accounts Year  Ended  31  July  2016 Consolidated University 1

Tuition  fees  and  education  contracts Full-­‐time  home  and  EU  students Full-­‐time  international  students Part-­‐time  students   Education  Contracts

2

Funding  body  grants Recurrent  grant Higher  Education  Funding  Council Education  Funding  Agency Skills  Funding  Agency  

Notes

Specific  grants Knowledge  exchange  funding National  Scholarship  Programme Capital  grant

Year  Ended  31  July  2015 Consolidated University

£'000 30,358 329 3,466 14,435 48,588

£'000 30,358 329 3,466 14,435 48,588

£'000 29,177 2,041 4,615 12,687 48,520

£'000 29,177 2,041 4,615 12,687 48,520

£'000

£'000

£'000

£'000

3,685 509 3

3,685 509 3

4,193 444 12

4,193 444 12

608 -­‐   964 5,769

608 -­‐   964 5,769

757 280 187 5,873

757 280 187 5,873

£'000 41 38 635 4 -­‐   718

£'000 41 38 635 4 -­‐   718

£'000 21 10 555 62 137 785

£'000 21 10 555 62 137 785

£'000 5,122 1,861 395 2,714 10,092

£'000 5,122 -­‐   395 2,715 8,232

£'000 5,334 1,825 560 3,532 11,251

£'000 5,343 -­‐   560 3,532 9,435

3

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

4

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

5

Investment  income Other  investment  income

£'000 65 65

£'000 64 64

£'000 85 85

£'000 85 85

6

Donations  and  endowments Donations  with  restrictions

£'000 151 151

£'000 151 151

£'000 100 100

£'000 100 100

    | 35

Buckinghamshire New University

28

Financial Statements 2015-16


_______________________________________________________________________ Notes  to  the  accounts  (continued)   Year  Ended  31  July  2016

Year  Ended  31  July  2015

Consolidated

University

Consolidated

University

£'000 26,254 2,320 81 4,692 33,347

£'000 25,636 2,284 81 4,701 32,702

£'000 27,041 2,204 30 4,319 33,594

£'000 26,502 2,171 30 4,310 33,013

7 Staff  costs   Staff  Costs  : Salaries Social  security  costs Movement  on  USS  provision Other  p ension  costs   Total  

Year  ended  31   Year  ended  31   July  2016 July  2015 Emoluments  of  the  Vice-­‐Chancellor  (Professor  Rebecca  Bunting  from  1st  February  2015)    Salary    Benefits Subtotal  excluding  pension  contributions    Pension  contributions  to  Teachers'  Pensions  Scheme

£'000 200 -­‐   200 33 233

£'000 100 17 117 14 131

Emoluments  of  the  Vice-­‐Chancellor  (Professor  Ruth  Farwell  to  31st  January  2015)    Salary    Benefits Subtotal  excluding  pension  contributions    Pension  contributions  to  Teachers'  Pensions  Scheme

£'000 -­‐   -­‐   -­‐   -­‐   -­‐  

£'000 96 -­‐   96 12 108

No. -­‐   -­‐   -­‐   1 -­‐   1

No. 1 -­‐   1 1 -­‐   3

No. 343 14 93 57 177 684

No. 343 15 111 44 181 694

£'000 -­‐  

£'000 -­‐  

Remuneration  of  other  higher  p aid  staff,  excluding  employer's  p ension  contributions:

£100,000  to  £109,999 £110,000  to  £119,999 £120,000  to  £129,999 £130,000  to  £139,999 £150,000  to  £159,999

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

Compensation  for  loss  of  office  p ayable  to  a  senior  p ost-­‐holder: Compensation  p ayable  recorded  within  staff  costs

| 36

Buckinghamshire New University

29

Financial Statements 2015-16


_______________________________________________________________________ Notes to the accounts (continued) Key Management personnel Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the University. Staff costs include compensation paid to key management personnel. The key management personnel at the University are its senior management team which is headed up by the Vice Chancellor and comprises the Deputy Vice Chancellor, the Pro-Vice Chancellor Research & Enterprise, the Pro-Vice Chancellor Education and the Finance Director.

Key management personnel compensation

Year ended 31 July 2016 £'000

Year ended 31 July 2015 £'000

724

820

Council Members The University council members are the trustees for charitable law purposes. Due to the nature of the University's operations and the compositions of the Council, being drawn from local public and private sector organisations, it is inevitable that transactions will take place with organisations in which a member of the Council may have an interest. All transactions involving organisations in which a member of Council may have an interest, including those identified below are conducted at arm’s length and in accordance with the University’s Financial Regulations and usual procurement procedures. In 2015-16 transactions of this nature totalled £3,600. No council member has received any remuneration/waived payments from the group during the year (2015 - none) The total expenses paid to or on behalf of 15 council members was £5,000 (2015 - £2,000 to 13 council members). This represents travel and subsistence expenses incurred in attending Council, Committee meetings and Charity events in their official capacity.

| 37

Buckinghamshire New University

30

Financial Statements 2015-16


_______________________________________________________________________ Notes to the accounts (continued)

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

Year Ended 31 July 2016 Consolidated University Notes £'000 £'000

24

9 Analysis of total expenditure by activity Academic and related expenditure Administration and central services Premises Residences, catering & conferences Research grants & contracts Depreciation Interest payable Other expenses

Year Ended 31 July 2015 Consolidated University £'000

£'000

1,352 46 1 1,368 2,767

1,352 46 1 1,368 2,767

1,351 3 1,347 2,701

1,351 3 1,347 2,701

£'000

£'000

£'000

£'000

40,426 3,844 4,301 4,129 551 4,915 2,767 3,269 64,202

40,425 3,876 4,410 2,206 551 4,861 2,767 3,256 62,352

35,189 10,947 4,067 4,549 374 4,407 2,701 3,438 65,672

35,189 10,947 4,067 2,773 374 4,361 2,701 3,422 63,834

Auditor’s remuneration for audit services comprises £34,600 excluding VAT (2015: £44,000) for the University, £8,700 excluding VAT (2015: £8,000) in respect of subsidiaries and a one-off £10,000 fee for the audit of the FRS102 restatement. For non-audit services the cost exclusive of VAT is £19,509 (2015: £13,195). Costs for internal audit services were £47,700 excluding VAT (2015: £67,361) Included above are operating lease rentals of £3,194,000 (2015: £3,351,000) in respect of land and buildings. 10 Taxation Recognised in the statement of comprehensive income Current tax Current tax expense Adjustment in respect of previous years Current tax expense

£'000

£'000 -

-

Deferred tax Origination and reversal of timing differences Reduction in tax rate Recognition of previously unrecognised tax losses Deferred tax expense

-

-

Total tax expense

-

-

| 38

Buckinghamshire New University

31

Financial Statements 2015-16


Financial Statements 2015-16

_______________________________________________________________________ _______________________________________________________________________ Notes to the accounts (continued) 11 Fixed Assets Notes to the accounts (continued) 11 Fixed Assets Freehold Land and Buildings Freehold Land and

Leasehold Land and Buildings Leasehold Land

Fixtures, Fittings and Equipment Fixtures, Fittings

Assets in the Course of Assets in the Construction Course of

Total

Buildings £'000

and Buildings £'000

and Equipment £'000

Construction £'000

Total £'000

Cost or valuation At 1 August 2015 Cost or valuation Additions At 1 August 2015 Transfers Additions Disposals Transfers At 31 July 2016 Disposals

£'000 96,559 1,512 96,559 (103) 1,512 (382) (103) 97,586 (382)

£'000 9,736 564 9,736 564 -10,300 -

£'000 15,609 2,962 15,609 2,962 (662) 17,909 (662)

£'000 671 103 671 103 774 -

£'000 121,904 5,709 121,904 5,709 (1,044) 126,569 (1,044)

At 31 July 2016 Depreciation At 1 August 2015 Depreciation Charge for the year At 1 August 2015 Disposals Charge for the year At 31 July 2016 Disposals

97,586

10,300

17,909

774

126,569

14,498 2,583 14,498 2,583 17,081 -

1,776 196 1,776 196 1,972 -

10,432 2,136 10,432 (598) 2,136 11,970 (598)

----

26,706 4,915 26,706 (598) 4,915 31,023 (598)

At 31 July 2016 Net book value At 31book July value 2016 Net

17,081

1,972

11,970

-

31,023

80,505

8,328

5,939

774

95,546

At 31 July 2016 At 31 July 2015

80,505 82,061

8,328 7,960

5,939 5,177

774 -

95,546 95,198

At 31 July 2015

82,061

7,960

5,177

95,198

Freehold Land and Buildings Freehold Land and £'000 Buildings

Leasehold Land and Buildings Leasehold Land £'000 and Buildings

Fixtures, Fittings and Equipment Fixtures, Fittings £'000 and Equipment

Assets in the Course of Assets in the Construction Course of £'000 Construction

£'000

£'000

£'000

£'000

Total £'000 Total £'000

95,125 1,476 95,125 (103) 1,476 (382) (103) 96,116 (382)

9,736 564 9,736 564 -10,300 -

15,080 2,943 15,080 2,943 (633) 17,390 (633)

671 103 671 103 774 -

119,941 5,654 119,941 5,654 (1,015) 124,580 (1,015)

96,116 14,129 2,559 14,129 2,559 16,688-

10,300 1,776 195 1,776 195 1,971-

17,390 9,988 2,107 9,988 (567) 2,107 11,528 (567)

774 ----

124,580 25,893 4,861 25,893 (567) 4,861 30,187 (567)

16,688 79,428

1,971 8,329

11,528 5,862

774

30,187 94,393

At 31 July 2016 At 31 July 2015

79,428 80,996

8,329 7,960

5,862 5,092

774 -

94,393 94,048

At 31 July 2015

80,996

7,960

5,092

-

94,048

University University Cost and valuation At 1 August 2015 Cost and valuation Additions At 1 August 2015 Transfers Additions Disposals Transfers At 31 July 2016 Disposals Depreciation At 31 July 2016 At 1 August 2015 Depreciation Charge for the year At 1 August 2015 Disposals Charge for the year At 31 July 2016 Disposals Net value At book 31 July 2016 At 31 July 2016 Net book value

At 31 July 2016, freehold land and buildings included £14.8m (2015 - £14.8m) in respect of freehold land At 31 July 2016, freehold land and buildings included - £14.8m) in respect of freehold land which is not depreciated. Included in the cost of fixed£14.8m assets is(2015 aggregated interest capitalised of £2.6m which not depreciated. Included in the cost of fixed assets is aggregated interest capitalised of £2.6m (2015 -is£2.3m) (2015 - £2.3m) The University opted to undertake the revaluation of its land to fair value following the adoption of FRS102. The University toAitchison undertakeRaffety the revaluation its land to fairvaluer value following theindependent adoption ofbody FRS102. This was carriedopted out by who are aof RICS registered which is an This was out by Aitchison Raffety who a RICS is sites an independent bodyon from the carried University. The full revaluation date are of land wasregistered 01 Augustvaluer 2014 which and the were inspected from the2016. University. Theland full value revaluation daterevaluation of land wasis 01 August 2014 and the01sites were2014 inspected on 09 June The total following £16.8m restated as at August and would 09 June 2016. The total land value following revaluation £16.8m have been reported as £11.3m under 2007 SORP as at 31isJuly 2016.restated as at 01 August 2014 and would have been reported as £11.3m under 2007 SORP as at 31 July 2016. | 39 | 39

Buckinghamshire New University

32

Financial Statements 2015-16


Notes  to  the  Accounts  (continued)   Consolidated  fixtures,  fittings  and  equipment  include  assets  held  under  finance  leases  as  follows:    

Year  Ended 31  July  2016 £'000 1,376 -­‐   (193) 1,183

Year  Ended 31  July  2015 £'000 -­‐   -­‐   -­‐   -­‐  

Subsidiary   companies £'000

Total £'000

-­‐   -­‐   -­‐   -­‐   -­‐  

-­‐   -­‐   -­‐   -­‐   -­‐  

University

£'000

£'000

At  1  August  2015 Additions Disposals Impairment At  31  July  2016

1,036 -­‐   -­‐   -­‐   1,036

1,036 -­‐   -­‐   -­‐   1,036

Cost Accumulated  depreciation Charge  for  year Net  book  value 12 Non-­‐Current  Investments Consolidated

At  1  August  2015 Additions Disposals Impairment At  31  July  2016

Consolidated   and   University £'000

Subsidiary  Companies  consist  of:

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

1,822 (886) 100 1,036

Within  the  capital  and  reserves  of  BCUC  ( Conferences)  Limited  i s  £628k  of called  up  share  capital  i n  BCUC  ( Services).

  | 40

Buckinghamshire New University

33

Financial Statements 2015-16


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

Income and expenditure account

Year ended 31 July 2016 £'000 £'000

Yea r ended 31 Jul y 2015 £'000 £'000

17

66

(781)

(132)

Income Defi ci t before ta x Balance sheet Fi xed a s s ets

10,177

-

21

Current a s s ets

650 10,198

(389)

Credi tors : a mounts due wi thi n one yea r Credi tors : a mounts due a fter more tha n one yea r

(682)

(10,590)

Share of net assets

650

(10,979)

(682)

(781)

(32)

The balance as at year end 31 July 2015 was an amount owed to the University. As the amount was wholly related to activities for the University and it was agreed by both the University and College that the amount would be written off in the University’s books in 2015-16. Chiltern Student Villages Limited, a charitable company, is an associated entity of the University accounted for under the equity method. The cost and carrying amount of the investment at 31 July 2016 was nil (2015: £nil). Chiltern Student Villages Limited is a company limited by guarantee and therefore has no shareholders and makes no distributions to its members. As such, in the year ended 31 July 2016 the University’s share of the associate charitable company’s result is nil (2015: £nil).

| 41

Buckinghamshire New University

34

Financial Statements 2015-16


_______________________________________________________________________ Notes to the accounts (continued) 14

Stock Year ended 31 July 2016 University

Cons ol i da ted

Uni vers i ty

£'000

£'000

£'000

£'000

18

-

19

-

18

-

19

-

Consolidated

University

Cons ol i da ted

Uni vers i ty

£'000

£'000

£'000

£'000

Tra de recei va bl es

2,540

2,470

3,550

3,323

Other recei va bl es

-

-

1,363

1,363

906

901

1,493

1,481

-

497

-

444

Genera l cons uma bl es

15

Yea r ended 31 Jul y 2015

Consolidated

Trade and other receivables Yea r ended 31 Jul y 2015

Year ended 31 July 2016

Amounts fa l l i ng due wi thi n one yea r:

Prepa yments a nd a ccrued i ncome Amounts due from s ubs i di a ry compa ni es Amounts fa l l i ng due a fter more tha n one yea r: Loa n to Chi l tern Student Vi l l a ges Ltd

1,550

1,550

1,550

1,550

Loa n to BEST

1,006

1,006

-

-

6,002

6,424

7,956

8,161

Included within Trade Debtors is an amount due in more than one year of £1.55m from Chiltern Student Villages (CSV) Limited (2015: £1.55m). This is to provide additional security to the bank of CSV Ltd and will be required until the valuation of the buildings meet the banks requirements. An interest charge of £0.013m was received by the University in 2015-16 for this. 16

Creditors : amounts falling due within one year Year ended 31 July 2016

Yea r ended 31 Jul y 2015

Consolidated

University

Cons ol i da ted

Uni vers i ty

£'000

£'000

£'000

£'000

Secured l oa ns

700

700

669

669

Amounts due to s ubs i di a ry underta ki ngs

-

336

-

359

1,216

-

-

Ba nk overdra ft

Obl i ga ti ons under fi na nce l ea s es

1,216

Tra de pa ya bl es

1,098

937

1,781

1,495

Soci a l s ecuri ty a nd other ta xa ti on pa ya bl e

1,296

1,188

540

450

Accrua l s a nd deferred i ncome

6,508

6,499

7,793

7,736

Other credi tors

-

-

4,532

4,532

10,818

10,876

15,315

15,241

| 42

Buckinghamshire New University

35

Financial Statements 2015-16


Notes to the accounts (continued) Deferred income Included within accruals and deferred income are the following items of income which have been deferred until specific performance related conditions have been met. Year ended 31 July 2016

Year ended 31 July 2015

Consolidated

University

Consolidated

University

£'000

£'000

£'000

£'000

Donations

-

-

49

49

Research grants received on account

767

767

2,318

2,318

Grant income

197

197

840

840

Other income

1,352

1,264

1,785

1,698

2,316

2,228

4,992

4,905

17

Creditors : amounts falling due after more than one year Year ended 31 July 2016

Year ended 31 July 2015

Consolidated

University

Consolidated

University

£'000

£'000

£'000

£'000

7,267

7,267

7,772

7,772

27,320

27,320

28,020

28,020

781

-

32

-

35,368

34,587

35,824

35,792

Due within one year or on demand (Note 16)

700

700

669

669

Due between one and two years

735

735

699

699

Due between two and five years

2,388

2,388

2,271

2,271

Due in five years or more

24,197

24,197

25,050

25,050

Due after more than one year

27,320

27,320

28,020

28,020

Total secured and unsecured loans

28,020

28,020

28,689

28,689

28,020

28,020

28,689

28,689

28,020

28,020

28,689

28,689

Deferred income Secured loans Provision for BEST

Analysis of secured and unsecured loans:

Secured loans repayable by 2039

| 43

Buckinghamshire New University

36

Financial Statements 2015-16


Notes   to  the  Accounts  (continued)   _______________________________________________________________________ Included  in  loans  are  the  following:   Notes   to  the  Accounts  (continued)     Included  in  loans  are  the  following:     Lender

Initial  Loan

Term  

£'000

Interest  rate

Borrower

%

Lender Bank Barclays  

Initial   Loan 27,000

Term   2039

Interest  5.32 rate

Borrower University

Barclays  Bank

2039 2039

% 0.84 5.32

University

Barclays  Bank

£'000 5,000 27,000

Barclays  Bank

5,000

2039

0.84

University

USS

Defined  Benefit

Total

Pension

Obligations

Pensions

USS Provision

Defined   Benefit (Note   24)

Total Provisions

Pension £'000  

Obligations £'000  

Pensions £'000

Provision

(Note  24)

Provisions

£'000   95

£'000                                36,419

£'000 36,514

-­‐  

-­‐  

-­‐  

18   Provisions  for  liabilities     18   Provisions  for  liabilities    

Consolidated Consolidated

At  1  August  2015 Utilised  in  year At  1  August   Additions   in  22015 015-­‐16

95 90

36,419                              14,554 -­‐  

-­‐  

185 90

50,973                              14,554

51,158 14,644

-­‐  

-­‐  

-­‐  

At  31  July  2016

185

50,973

51,158

University

USS

Defined  Benefit

Total

Pension

Obligations

Pensions

USS Provision

Defined   Benefit (Note   24)

Total Provisions

Pension £'000  

Obligations £'000  

Pensions £'000

Provision

(Note  24)

Provisions

£'000   95

£'000                                36,419

£'000 36,514

At   31  July  i2 Additions   n  016 2015-­‐16 Unused  amounts  reversed  in  2015-­‐16

University

At  1  August  2015 Utilised  in  year At  1  August   Additions   in  22015 015-­‐16 Utilised  ain  mounts   year reversed  in  2015-­‐16 Unused   At   31  July  i2 Additions   n  016 2015-­‐16 Unused  amounts  reversed  in  2015-­‐16 At  31  July  2016

-­‐   95 90

-­‐                              14,554  36,419

   

36,514 14,644

-­‐  

Utilised  ain  mounts   year reversed  in  2015-­‐16 Unused  

University

-­‐   36,514 14,644

-­‐  

-­‐  

-­‐  

185 90

50,973                              14,554

51,158 14,644

-­‐  

-­‐  

-­‐  

185

50,973

51,158

| 44 | 44

Buckinghamshire New University

37

Financial Statements 2015-16


_______________________________________________________________________ Notes to the accounts (continued) Pension Enhancement The assumptions for calculating the provision for pension enhancements on termination under FRS 102 are as follows:

Consolidated Discount rate

4%

Inflation

1%

USS deficit

The obligation to fund the historic deficit on the Universities Superannuation Scheme (USS) arises from the contractual obligation with the pension scheme for total payments relating to benefits arising from past performance. Management have assessed future employees within the scheme and salary payments over the period of the contracted obligation in assessing the value of this provision. 19

Restricted reserves

Consolidated and University Reserves with restrictions are as follows: Donations £'000

2016 Total £'000

2015 Total £'000

87

87

14

New donations Payment from donations

124 (7)

124 (7)

83 (11)

Total restricted comprehensive income for the year

117

117

73

At 31 July

204

204

87

2016 Total £'000 8 196

2015 Total £'000 14 73

204

87

Balances at 1 August

Analysis of other restricted funds /donations by type of purpose: Scholarships and bursaries General

| 45

Buckinghamshire New University

38

Financial Statements 2015-16


_______________________________________________________________________ Notes  to  the  Accounts  (continued)   20

Cash and cash equivalents

At  1st  August 2015 £'000 14,593 14,593

Consolidated Cash  and  cash  equivalents

Cash   Flows £'000 (722) (722)

At  31st  July 2016 £'000 13,871 13,871

  21

Capital and other commitments

Provision  has  not  been  made  for  the  following  capital  commitments  at  31  July  2016:   31  July  2016

31  July  2015

Consolidated

University

Consolidated

University

£'000

£'000

£'000

£'000

Commitments  contracted  for

-­‐  

-­‐    

-­‐  

22

1,200  

-­‐  

1,200  

1,200

1,200

Lease obligations

Total  rentals  payable  under  operating  leases:  

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

31  July  2016 £'000

31  July  2015 £'000

3,187

3,351

3,533 10,903 93,125 107,561

3,351 12,072 95,482 110,905

 

| 46

Buckinghamshire New University

39

Financial Statements 2015-16


Notes to the accounts (continued)

_______________________________________________________________________ Notes to the accounts (continued) 23 Subsidiary undertakings The subsidiary companies (all of which are registered in England & Wales), wholly-owned or effectively controlled 23 Subsidiary undertakings by the University as follows: The subsidiary companies (all of which are registered in England & Wales), wholly-owned or effectively controlled Company Principal Activity Status by the University as follows: Missenden Abbey Limited

A management training complex

100% owned

Company BCUC (Conferences) Limited Missenden Abbey Limited BCUC (Services) Limited BCUC (Conferences) Limited

Principal Activity Dormant A management training complex Operating a lecture theatre complex Dormant

Status 100% owned 100% owned 100% owned 100% owned

BCUC (Services) Limited

Operating a lecture theatre complex

100% owned

24

Pension Schemes

Different categories of staff are eligible to join one of two main schemes at the University: 24

Pension Schemes

• Teachers’ Pension Scheme (TPS); for academic employees Different categories of staffPension are eligible to join one of main schemes at the University: • Local Government Scheme (LGPS); fortwo non-academic employees • are Teachers’ Pension Scheme (TPS); for academic employees . also part of the Universities There a very small number of non-academic employees who are • Local Government Pension Scheme (LGPS); for non-academic employees. Superannuation Scheme (USS) There a veryare small number of non-academic employees are alsoSecond part of Pension the Universities These are schemes defined benefit schemes contracted out who of the State (S2P), the assets of Superannuation (USS) . which are held inScheme separate trustee administered funds. These are funded by contributions from the University and employees and the accounts reflect the cost of providing these benefits. These schemes are defined benefit schemes contracted out of the State Second Pension (S2P), the assets of which are held inever separate administered funds.establishment, These are funded by contributions the the If the University closestrustee and there is no successor the Secretary of Statefrom becomes University and employees and the accounts reflect the cost of providing these benefits. compensating authority. If the University ever closes(TPS) and there is no successor establishment, the Secretary of State becomes the Teachers’ Pension Scheme compensating authority. The Teacher’s Pension Scheme is a statutory, unfunded, defined benefit occupational pension scheme. The Teachers’ (TPS) regulations (currently statutory instruments), these being: The Teachers Scheme is Pension governedScheme by statutory Pensions Regulations 2010 (as amended) and The Teachers’ Pension Scheme Regulations 2014. The Teacher’s Pension Scheme is a statutory, unfunded, defined benefit occupational pension scheme. The Scheme is governed statutory regulationsare (currently statutory instruments), these being: The Teachers Contributions to the by Scheme by employees set at rates determined by the Secretary of State, taking Pensions Regulations 2010 (as amended) and The Teachers’ Pension Scheme Regulations 2014. advice from the Scheme’s Actuary. The balance of funding is provided by Parliament. The Scheme’s administrative expenses are borne by the Scheme employer’s payable as a percentage of pensionable Contributions to the Scheme by employees are set at rates determined by the Secretary of State, taking earnings. advice from the Scheme’s Actuary. The balance of funding is provided by Parliament. The Scheme’s administrative expenses are borne by the Scheme employer’s payable as a percentage of pensionable earnings.

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_______________________________________________________________________ Notes  to  the  Accounts  (continued)     Changes  to  the  Scheme     Tiered  employee  contributions  (and  an  increase  in  the  average  contribution  rate)  were  introduced  for   employees  from  1  April  2012.  The  salary  bands  range  from  7.4%  to  11.7%  in  2015-­‐16  and  are  not  expected   to  change  for  employees  in  the  following  financial  year.     Employer  contributions  increased  on  1  September  2015  from  14.1%  to  16.4%.  From  the  same  date   employers  also  commenced  payment  of  a  0.08%  contribution  to  cover  administration  expenses.     Following  a  competitive  tendering  exercise,  Capita  were  awarded  a  new  contract  to  administer  the  TPS  for   seven  years  from  1  October  2011.  In  November  2014  the  contract  was  extended  by  three  years  bringing  the   contract  end  date  to  September  2021.     Scheme  Performance       The  Teachers’  Pension  Scheme  is  valued  by  the  Government  Actuary.  The  last  full  actuarial  assessment  of   the  scheme  was  at  31  March  2012  in  accordance  with  The  Public  Service  Pensions  Directions  2014  with  the   funding  report  being  published  by  the  Department  on  9  June  2014.  Actuarial  assessments  are  undertaken   in  intervening  years  between  formal  valuations  using  updated  membership  data  for  financial  reporting   purposes.     The  latest  statement  published  by  the  TPS  is  based  on  an  assessment  of  the  liabilities  as  at  31  March  2014,   with  an  approximate  update  to  31  March  2016  to  reflect  known  changes.  The  principle  financial   assumptions  used  are  set  out  in  the  table  below:     Assumption   31  March  2016   31  March  2015   Rate  of  return  (discount  rate)   3.6%   3.55%   Rate  of  earnings  increases   4.20%   4.20%   Rate  of  future  pension  increases   2.20%   2.20%   Rate  of  return  in  excess  of:       Pension  increases  (CPI)   1.37%   1.3%   Earnings  increases   -­‐0.60%   -­‐0.65%   Expected  return  on  assets   n/a   n/a       The  actuarial  valuation  deemed  the  market  value  of  the  scheme's  assets,  representing  notional  investments   and  estimated  future  contributions,  to  be  £176.6  billion,  with  scheme  liabilities  of  £191.5  billion,  giving  a   notional  past  service  deficit  of  £15.0  billion.     The  Teachers’  Pension  Scheme  is  a  multi-­‐employer  scheme  where  the  share  of  assets  and  liabilities   applicable  to  each  employer  is  not  identified.  The  University  therefore  accounts  for  these  pension  costs  on   a  defined  contribution  basis  as  permitted  by  FRS102  paragraphs  28.40  and  28.40A.    The  employers   contributions  to  the  Teachers’  Pension  Scheme  were  £2,050,039  (2015:  £1,929,000).     Universities  Superannuation  Scheme  (USS)     The  institution  participates  in  the  Universities  Superannuation  Scheme  (the  scheme).  Throughout  the   current  and  preceding  periods,  the  scheme  was  a  defined  benefit  only  pension  scheme  until  31  March  2016     | 48

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_______________________________________________________________________ Notes to the accounts (continued) which was contracted out of the State Second Pension (S2P). The assets of the scheme are held in a separate trustee-administered fund. Because of the mutual nature of the scheme, the scheme’s assets are not hypothecated to individual institutions and a scheme-wide contribution rate is set. The institution is therefore exposed to actuarial risks associated with other institutions’ employees and is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by Section 28 of FRS 102 “Employee benefits”, accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the accounting period. Since the institution has entered into an agreement (the Recovery Plan that determines how each employer within the scheme will fund the overall deficit), the institution recognises a liability for the contributions payable that arise from the agreement to the extent that they relate to the deficit and the resulting expense in the income and expenditure account. The total cost charged to the profit and loss account is £80,591 (2015: £32,111) as shown in note 7. The latest available full actuarial valuation of the scheme was at 31 March 2014 which was carried out using the projected unit method. Since the institution cannot identify its share of scheme assets and liabilities, the following disclosures reflect those relevant for the scheme as a whole. The 2014 valuation was the third valuation for USS under the scheme-specific funding regime introduced by the Pensions Act 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover their technical provisions. At the valuation date, the value of the assets of the scheme was £41.6 billion and the value of the scheme’s technical provisions was £46.9 billion indicating a shortfall of £5.3 billion. The assets therefore were sufficient to cover 89% of the benefits which had accrued to members after allowing for expected future increases in earnings. Defined benefit liability numbers for the scheme have been produced using the following assumptions: Discount rate Pensionable salary growth

2016 3.6% n/a

Pension increases (CPI)

2.2%

2015 3.3% 3.5% in the first year and 4.0% thereafter 2.2%

The main demographic assumption used relates to the mortality assumptions. Mortality in retirement is assumed to be in line with the Continuous Mortality Investigation's (CMI) S1NA tables as follows: Male members’ mortality 98% of S1NA [“light”] YoB tables – No age rating Female members’ mortality 99% of S1NA [“light”] YoB tables – rated down 1 year

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_______________________________________________________________________ Notes  to  the  Accounts  (continued)     Use  of  these  mortality  tables  reasonably  reflects  the  actual  USS  experience.  To  allow  for  further   improvements  in  mortality  rates  the  CMI  2014  projections  with  a  1.5%  pa  long  term  rate  were  also   adopted.  The  current  life  expectancies  on  retirement  at  age  65  are:       2016   2015   Males  currently  aged  65  (years)     24.3     24.2     Females  currently  aged  65  (years)     26.5     26.4     Males  currently  aged  45  (years)     26.4     26.3     Females  currently  aged  45  (years)     28.8     28.7         2016   2015   Scheme  assets     £49.8bn     £49.1bn     Total  scheme  liabilities     £58.3bn     £60.2bn     FRS  102  total  scheme  deficit     £8.5bn     £11.1bn     FRS  102  total  funding  level     85%     82%         Local  Government  Pension  Scheme  (LGPS)     The  Local  Government  Pension  Scheme  (LGPS)  is  a  defined  benefit  statutory  scheme  administered  in   accordance  with  the  Local  Government  Pension  Scheme  Regulations  2013  and  currently  provides  benefits   based  on  career  average  revalued  earnings.  The  administering  authority  for  the  Fund  is  Buckingham  County   Council.     The  Local  Government  Pension  Scheme  is  valued  every  three  years  by  a  professionally  qualified   independent  actuary  using  the  projected  unit  method,  the  rates  of  contribution  payable  being  determined   by  the  trustees  on  the  advice  of  the  actuary.  The  next  actuarial  valuation  of  the  Fund  is  being  carried  out  as   at  31  March  2016  and  will  set  contributions  for  the  period  from  1  April  2017  to  31  March  2020;  the  results   of  this  are  expected  to  be  published  March  2017.       Up  to  2013-­‐14,  18.3%  of  each  employee’s  salary  was  paid  into  the  scheme  by  the  University.  Since  2014-­‐15   the  calculation  has  been  split  between  a  %  contribution  of  12.5%  (representing  the  calculated  cost  of  the   accrual  of  future  benefits)  and  an  additional  monthly  amount  as  set  out  in  the  next  table:       Minimum  employer  contribution   1  April  2014   1  April  2015   1  April  2016   for  the  period  beginning   Percent  of  payroll   12.5%   12.5%   12.5%   Plus  monetary  amount  (£000s)   478   500   522           To  assess  the  value  of  the  Employer’s  liabilities  at  31  July  2016,  the  value  of  the  liabilities  calculated  for  the   funding  valuation  as  at  31  March  2013  have  been  rolled  forward,  using  financial  assumptions  that  comply   with  FRS102.           | 50

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_______________________________________________________________________ Notes to the accounts (continued) To calculate the asset share the actuary has rolled forward the assets allocated to the Employer as at 31 March 2013 allowing for investment returns, contributions paid into and estimated benefits paid from the Fund by and in respect of the Employer and its employees. The estimated asset allocation for Buckinghamshire New University as at 31 July 2016 is £51.961m (31 Jul 2015 £46.413m). The pension scheme assets are held in a separate trustee-administered fund to meet long-term pension liabilities to current and former employees. The trustees are required to act in the best interests of the fund’s beneficiaries. The trustees are responsible for setting the investment strategy for the scheme in consultation with professional advisers. An amount of £179,000 (2015: £167,000) was paid directly by the University in respect of supplementary pension entitlements of employees taking early retirement at the time of incorporation. The pension liability associated with this commitment is valued in line with the assumptions for the LGPS in the sections below. Key changes to accounting as a result of FRS102 The key changes under the new FRS102 standard are as follows: • • • • •

The “expected return on assets” figure will no longer be used – the “finance cost” (the difference between the interest on liabilities and expected return on assets) will be replaced by a “net interest cost” which will be calculated using the discount rate applying at the start of the period. A change in the way surpluses are restricted which may allow a surplus to be recognised where it was not under FRS17. FRS102 refers to the “fair value” of assets rather than specifically requiring the use of bid values. Treatment of expenses – administration costs, other than those relating to investment management will now be expensed as they are incurred. The cost of a defined benefit scheme will be divided into four elements, the first three of which will be included in profit/loss, the fourth in other comprehensive income: 1. Change in liability due to employee service during the reporting period (service cost) 2. Net interest on the net liability 3. Benefit changes, curtailments and settlements (past service costs) 4. Re-measurement of the liability - this comprises the actuarial gains and losses and the return on the fund assets (excluding the net interest amount). Various components within the disclosures will be relabelled and have been reflected in the following tables.

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_______________________________________________________________________ Notes  to  the  Accounts  (continued)   Assumptions  used  in  calculating  the  schemes  liabilities  under  FRS102     Demographic  assumptions     The  current  mortality  rates  allow  for  a  long-­‐term  rate  of  improvement  in  life  expectancy  of  1.5%  p.a.  The   assumed  life  expectations  from  65  are  as  below:           2016   2015   2014   2013   2012   Retiring  in  20  years:             Males   26.1   26.0   25.8   22.1   22.0   Females   28.5   28.4   28.3   26.0   25.9   Retiring  Today:             Males   23.8   23.7   23.6   20.1   20.0   Females   26.2   26.1   26.0   24.1   24.0                 Financial  assumptions     The  financial  assumptions  used  to  calculate  the  results  are  in  the  table  below.           2016   2015   2014   2013   2012   Salary  increases   4.0%   4.4%   4.5%   4.8%   4.0%   Pension  increases   2.2%   2.6%   2.7%   2.6%   1.8%   Discount  rate  applied  to  scheme  liabilities     2.6%   3.8%   4.3%   4.7%   3.9%               These  assumptions  are  set  with  reference  to  market  conditions  at  31  July  2016  and  future  pension  increases  are   assumed  to  be  based  on  CPI  rather  than  RPI.     Salary  increases  are  assumed  to  increase  at  1.8%  above  CPI  in  addition  to  a  promotional  scale.     Scheme  assets  and  expected  rate  of  return     The  return  on  the  Fund  (on  a  bid  value  to  bid  value  basis)  for  the  year  to  31  July  2016  is  estimated  to  be   11%.  The  actual  return  on  Fund  assets  over  the  year  may  be  different.     Based  on  the  estimated  asset  allocation,  the  Employer’s  share  of  the  assets  of  the  Fund  is  approximately   2%.    

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Financial Statements 2015-16


_______________________________________________________________________ Notes to the accounts (continued) The estimated asset allocation as at 31 July 2016 is as follows: Asset breakdown

31 Jul 2016 ÂŁ'000s

31 Jul 2015 %

ÂŁ'000s

%

Gilts

6,770

13%

5,658

12%

UK Equities

4,859

9%

5,103

11%

19,536

38%

17,533

39%

Private Equity

4,019

8%

2,923

6%

Other Bonds

6,317

12%

5,781

12%

Property

4,251

8%

3,675

8%

Cash

1,714

3%

1,554

3%

356

1%

641

1%

Hedge Funds

2,011

4%

1,677

4%

Absolute Return Portfolio

2,128

4%

1,868

4%

51,961

100%

46,413

100%

Overseas Equities

Alternative Assets

Total

Expected return on assets For accounting years beginning on or after 1 January 2015, the expected return and the interest cost will be replaced with a single net interest cost, which will effectively set the expected return equal to the discount rate. The figures in the following tables are as under the new FRS102 accounting standard for the year to 31 July 2016, the figures as they would have been under the new standard for the year to 31 July 2015 and the disclosed figures for the year to 31 July 2015 to enable identification of where things have moved or labels changed.

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Financial Statements 2015-16


_______________________________________________________________________ Buckinghamshire  New  University     Financial  Statements  2015-­‐16  

Notes  to  the  Accounts  (continued)  

_______________________________________________________________________ Year  to  31  Jul  2015   The  amounts  recognised  in  the  profit  and   loss  statement   are:   (continued)   Notes   to  the  Accounts  

Year  to  31  Jul   2016  

Year  to  31  Jul  2015   Disclosed  

FRS102   Restatement   £'000   Year  to  31  Jul   2015   (1,953)   FRS102  above   Included   Restatement   Included  above   £'000   Included  above   (1,953)   (351)   Included  (2,304)   above   Included  (1,347)   above   Included  above     (351)     (2,304)   (1,347)   (1,347)       (1,347)  

    £'000   £’000   Service   c ost   (2,724)   Separated   The  amounts  recognised  in  the  profit  and   Year  to  31  Jul   Year  to  31  Jul  b2elow   015   Current   s ervice   c ost   Included   a bove   (1,916)   loss  statement  are:   2016   Disclosed   Past  service  costs   Included  above   0       £'000   £’000   Losses  on  settlements  or  curtailments   Included  above   (37)   Service  cost   (2,724)   Separated  below   Administration  expenses   (35)   n/a   Current   service  cost   Included  (2,759)   above   (1,916)       (1,953)   Past   service  coosts   Included  (1,368)   above   0   Net  interest   n  the  defined  liability  (asset)   n/a   Losses   o n   s ettlements   o r   c urtailments   Included   a bove   (37)   Interest  on  obligation     (3,161)   Administration   xpenses   (35)     n/a   Expected  return  eo n  Fund  assets   2,479         (2,759)   (1,953)   (1,368)   (682)   Net  interest   on  trhe   defined   liability   (asset)   (1,368)   n/a   Negative   figures   epresent   costs   to  the   University   Interest   o n   o bligation     (3,161)     Expected  return  oin     2,479   Re-­‐measurements   n  Found   ther  acssets   omprehensive  income:   (1,368)   (682)       Negative  figures  represent  costs  to  the  University   Year  to  31  Jul   Year  to  31  Jul  2015   Year  to  31     2015  FRS102   Disclosed   Jul  2016   Re-­‐measurements   i n   o ther   c omprehensive   i ncome:   Restatement   (STRGL)    Re-­‐measurement  of  the  net  assets/  (defined  liability)         £'000   £'000   £'000   Year  to  31  Jul   Year  to  31  Jul  2015   Return  on  Fund  assets  in  excess  of  interest   3,311   2,428     Year  to  31   2015  FRS102   Disclosed   Actual  return  less  expected  return  on  Fund  assets     1,412   Jul  2016      Re-­‐measurement  of  the  net  assets/  (defined  liability)   Restatement   (STRGL)   Other  actuarial  gains/(losses)  on  assets   -­‐   -­‐   -­‐    Change     £'000   £'000   £'000   in  financial  assumptions   (15,347)   (6,358)     Return   o n   F und   a ssets   i n   e xcess   o f   i nterest   3,311   2,428       Changes   in  assumptions  underlying  the  present  value  of   (6,358)   Actual   return   less  expected  return  on  Fund  assets       1,412   the  Fund   liabilities   Other   actuarial  gains/(losses)  on  assets   -­‐   -­‐   -­‐     emographic   assumptions   -­‐   -­‐   -­‐     Change  in  fdinancial   assumptions   (15,347)   (6,358)     Changes   in  assumptions  underlying  the  present  value  of       (6,358)   Experience   gain/(loss)  on  defined  benefit  obligation   226       -­‐     -­‐   the   Fund  liabilities     Change  in  demographic  assumptions   -­‐   -­‐   -­‐   Changes  in  effect  of  asset  ceiling   -­‐   -­‐   -­‐   Remeasurement   of  the   net   assets/   (defined   liability)   Experience   gain/(loss)   on   defined   benefit   obligation       Changes  in  effect  of  asset  ceiling     Remeasurement  of  the  net  assets/  (defined  liability)        

226       (11,810)  

-­‐     (3,930)  

-­‐   (4,946)  

-­‐  

-­‐  

-­‐  

(11,810)  

(3,930)  

(4,946)  

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Financial Statements 2015-16


_______________________________________________________________________ Notes to the accounts (continued) Movement in net pension liability during the year: Year to 31 Jul 2015 FRS102 Restatement

Year to 31 Jul 2016

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

Year to 31 Jul 2015 Disclosed

£'000 (36,959) (2,724) 1,744 179 (1,368)

£'000 (31,278) (1,953) 1,733 167 (1,347)

(35) (11,810)

(351) (3,930)

£'000 (31,278) (1,916) 1,733 167 (682) (37) (4,946)

(50,973)

(36,959)

(36,959)

Reconciliation of the movement of the present value of the defined benefit obligation: Year to 31 Jul 2015 FRS102 Restatement

Year to 31 Jul 2016 Opening defined benefit obligation Current service costs Interest cost Change in financial assumptions Change in demographic assumptions Experience loss/(gain) on defined benefit obligation Actuarial losses Losses on curtailments Estimated benefits paid (net of transfers in) Contributions by scheme participants Unfunded pension payments Closing defined benefit obligation

£'000 (83,372) (2,724) (3,141)

£'000 (73,150) (1,953) (3,161)

(15,347)

(6,358)

-

-

226 Separated above 1,918 (673) 179

Separated above Combined above 1,731 (648) 167

(102,934)

(83,372)

Year to 31 Jul 2015 Disclosed £'000 (73,150) (1,916) (3,161) Combined below Combined below Combined below (6,358) (37) 1,731 (648) 167 (83,372)

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Financial Statements 2015-16


_______________________________________________________________________ Notes to the accounts (continued) Analysis of the movement in the fair value of scheme assets: Year to 31 Jul 2015 FRS102 Restatement

Year to 31 Jul 2016 Opening fair value of scheme assets Expected return on scheme assets Interest on assets Return on assets less interest Other actuarial gains/(losses) Total actuarial (losses)/gain Administration expenses Contributions by employer including unfunded Contributions by scheme participants and other employers Estimated benefits paid plus unfunded net of transfers in Settlement prices received/(paid) Closing fair value of Scheme assets

Year to 31 Jul 2015 Disclosed

£'000 46,413 n/a 1,773 3,311 n/a (35) 1,923 673 (2,097) -

£'000 41,872 n/a 1,814 2,428 n/a (351) 1,900 648 (1,898) -

£'000 41,872 2,479 n/a n/a n/a 1,412 n/a 1,900 648 (1,898) -

51,961

46,413

46,413

History of experience gains and losses:

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

2016 £'000 83,372 46,953

2015 £'000 83,372 46,413

2014 £'000 73,150 41,872

2013 £'000 64,704 39,555

2012 £'000 60,996 32,953

(50,973)

(36,959)

(31,278)

(25,148)

(28,043)

226

1,412

3,653 (990)

(72) 4,142

25 (1,836)

The University has elected not to restate prior year amounts as permitted by FRS102.The estimated employer contributions to the scheme for the year to 31 July 2017 is £1,744,000.

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Buckinghamshire New University

49

Financial Statements 2015-16


_______________________________________________________________________ Notes to the accounts (continued) Sensitivity Analysis The following table sets out a sensitivity analysis on the major assumptions which have been used in the above calculations: Sensitivity Analysis

ÂŁ000s

ÂŁ000s

ÂŁ000s

Adjustment to discount rate: Present value of scheme liabilities Projected service cost

+0.1% 100,874 3,332

0.0% 102,934 3,413

-0.1% 105,038 3,496

Adjustment to long term salary increase: Present value of total obligation Projected service cost

+0.1% 103,176 3,415

0.0% 102,934 3,413

-0.1% 102,693 3,411

Adjustment to pension increases and deferred revaluation Present value of total obligation Projected service cost

+0.1% 104,802 3,494

0.0% 102,934 3,413

-0.1% 101,105 3,334

Adjustment to life expectancy assumptions Present value of total obligation Projected service cost

+1 Year 105,954 3,500

None 102,934 3,413

-1 Year 100,002 3,328

25 Transition to FRS102 and the 2015 SORP As explained in the accounting policies, these are the University's first financial statements prepared in accordance with FRS 102 and the SORP. The date of transition to FRS102 is 1 August 2014 and the last set of accounts prepared under the previous UK GAAP was for the year ended 31 July 2015. The accounting policies set have been applied in preparing the financial statements for the year ended 31 July 2016, the comparative information presented in these financial statements for the year ended 31 July 2015 and in the preparation of an opening FRS 102 Statement of Financial Position at 1 August 2014. In preparing its FRS 102, SORP based Statement of Financial Position; the University has adjusted amounts reported previously in financial statements prepared in accordance with its old basis of accounting (2007 SORP). In order to ensure a comprehensive understanding of how the transition to FRS 102 and the SORP has affected the University's financial position, financial performance and cash flows the University has elected to do a more detailed disclosure and is set out in the following tables.

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Financial Statements 2015-16


_______________________________________________________________________ Restated  Consolidated  Balance  Sheet    

1  August  2014

Notes Non-­‐current  assets Fixed  Assets Investments Investment  i n  j oint  venture

a

Current  assets Stock Trade  a nd  other  r eceivables Investments Cash  a nd  c ash  equivalents

2007  SORP £'000   87,151   -­‐   -­‐   87,151  

23   5,332   -­‐   17,169   22,524  

Less:  Creditors:  a mounts  falling   due  within  one  year b

31  July  2015

Effect  of   transition  to   2015  SORP £'000  

2015  SORP £'000  

2007  SORP £'000  

(1,578)

8,711   -­‐   -­‐   8,711  

94,284   -­‐   -­‐   94,284  

89,959   -­‐   -­‐   89,959  

-­‐  

-­‐   -­‐   -­‐   -­‐   -­‐  

23   5,332   -­‐   17,169   22,524  

19   7,956   -­‐   14,593   22,568  

(1,207)

(13,652)

(14,133)

Prior  Year   Adjustment £'000   (1,578)

(12,445)

Effect  of   transition  to   2015  SORP £'000  

2015  SORP £'000  

(315)

5,554   -­‐   -­‐   5,554  

95,198   -­‐   -­‐   95,198  

-­‐  

-­‐   -­‐   -­‐   -­‐   -­‐  

19   7,956   -­‐   14,593   22,568  

(1,182)

(15,315)

Prior  Year   Adjustment £'000   (315)

Net  current  (liabilities)/assets

10,079  

-­‐  

(1,207)

8,872  

8,435  

-­‐  

(1,182)

7,253  

Total  assets  less  current  liabilities

97,230  

(1,578)

7,504  

103,156  

98,394  

(315)

4,372  

102,451  

(28,689)

(7,271)

(35,960)

(28,020)

(7,804)

(35,824)

(30,738)

(63)

(30,801)

(36,419)

(95)

(36,514)

170  

36,395  

33,955  

(3,527)

30,113  

Effect  of   transition  to   2015  SORP £'000  

2015  SORP £'000  

recorded  within  other   Comprehensive  I ncome. Creditors:  a mounts  falling   due  a fter  more  than  one  year c Provisions Pension  provisions

d

Total  net  assets  

37,803  

1  August  2014

 

Notes

Deferred  capital  grants

(1,578)

b&c

(315) 31  July  2015

Effect  of   transition  to   2015  SORP £'000  

2015  SORP £'000  

2007  SORP £'000  

7,558  

(7,541)

-­‐  

7,959  

(7,959)

-­‐  

-­‐  

17  

17  

-­‐  

87  

87  

7,711   -­‐   187  

31,681   4,697   36,395  

21,371   4,625   33,955  

4,345   -­‐   (3,527)

25,401   4,625   30,113  

2007  SORP £'000  

Prior  Year   Adjustment £'000  

Prior  Year   Adjustment £'000  

Restricted  Reserves   Income  a nd  expenditure   reserve  -­‐  r estricted  r eserve Unrestricted  Reserves Income  a nd  expenditure   reserve  -­‐  unrestricted Revaluation  r eserve Total  Funds

e

25,548   4,697   37,803  

(1,578) (1,578)

(315) (315)

The  main  movements  in  the  balance  sheet  and  restated  reserves  are  as  follows:     a) Increase  to  the  fixed  asset  values  as  a  result  of  the  revaluation  of  Land  at  the  date  of  transition  1   August  2014.  The  prior  year  adjustment  to  correct  the  IT  depreciation  charged  in  previous  years  has   been  shown  separately.   Buckinghamshire  New  University     b) Deferred  capital  grants  now  form  part  of  the  deferred  income  balances  Financial   within  creditors   due   within   Statements   2015-­‐16   one  year  as  well  as  Creditors  due  after  more  than  one  year.   c) An  accrual  is  made  for  an  estimate  of  outstanding  annual  leave  not  yet  taken  by  staff  and  is  shown   _______________________________________________________________________ within  Creditors  falling  due  within  one  year.   d) Donation  income  with  restrictions  not  utilised  within  the  year  of  receipt  is  now  held  within  a   restricted  reserve  to  be  offset  against  future  spend.  This  was  previously  held  within  Creditors  falling   | 58 due  within  one  year  as  a  deferred  income.   e) The  University  is  now  required  to  make  a  provision  for  its  estimated  obligation  to  fund  the  deficit  in   the  USS  pension  scheme  associated  with  past  obligations.   Restated Consolidated Statement of Comprehensive Income and Expenditure

Buckinghamshire New University

51

Effect  o f   tra ns i ti on  

Financial Statements 2015-16


e) The  University  is  now  required  to  make  a  provision  for  its  estimated  obligation  to  fund  the  deficit  in   the  USS  pension  scheme  associated  with  past  obligations.   Restated Consolidated Statement of Comprehensive Income and Expenditure

2007  SORP £'000  

Pri or  Yea r   Adjus tment £'000  

Effect  o f   tra ns i ti on   to  2015   SORP £'000  

48,520   5,873   785  

-­‐   -­‐   -­‐  

-­‐   -­‐   -­‐  

48,520   5,873   785  

Inves tment  i ncome

11,278   85  

-­‐   -­‐  

(27) -­‐  

11,251   85  

Total  income  before  donations  and  endowments

66,541  

-­‐  

(27)

66,514  

-­‐  

-­‐  

100  

100  

66,541  

-­‐  

73  

66,614  

-­‐  

-­‐  

-­‐  

-­‐  

66,541  

-­‐  

73  

66,614  

Notes Income Tui ti on  fees  a nd  e duca ti on  contra cts Fundi ng  b ody  gra nts Res ea rch  gra nts  a nd  contra cts Other  i ncome  (a djus ted  to  e xcl ude   i ncome  from  joi nt  ventures )

Dona ti ons  a nd  e ndowments

a

a

Total  income Less:  Share  of  income  from  joint  ventures Net  income

2015  SORP £'000  

Expenditure Sta ff  cos ts   Funda menta l  res tructuri ng  cos ts Other  o pera ti ng  e xpens es Depreci a ti on   Interes t  a nd  o ther  fi na nce  cos ts

b

33,168  

-­‐  

426  

33,594  

c d

368   24,602   4,092   2,033  

-­‐   -­‐   315   -­‐  

-­‐   -­‐   -­‐   668  

368   24,602   4,407   2,701  

64,263  

315  

1,094  

65,672  

(9) -­‐  

-­‐   -­‐  

-­‐   (132)

(9) (132)

2,269  

(315)

Total  expenditure Los s  o n  d i s pos a l  o f  fi xed  a s s ets Sha re  o f  o pera ti ng  s urpl us /(defi ci t)  i n  joi nt  venture Surplus  before  tax

Buckinghamshire  New  University     (1,153) 801   Financial  Statements   2015-­‐16  

Ta xa ti on -­‐   -­‐   -­‐   -­‐   _______________________________________________________________________ Surplus  tfo   or  tthe   he  yAear Notes   ccounts  (continued)  

2,269  

(315)

(1,153)

2007  SORP £'000  

Pri or  Yea r   Adjus tment £'000  

Effect  o f   tra ns i ti on   to  2015   SORP £'000  

2015  SORP £'000  

2,269  

(315)

(1,153)

801  

d

-­‐  

-­‐  

(3,157)

(3,157)

f

(4,940)

-­‐  

1,016  

(3,924)

(2,671)

(315)

(3,294)

(6,280)

  Notes

Surplus  for  the  year   Unrea l i s ed  l os s  o n  reva l ua ti on  o f  l a nd   a nd  b ui l di ngs Actua ri a l  l os s  i n  res pect  o f  p ens i on   s chemes Total  comprehensive  income  for  the  year

Buckinghamshire New University

52

801  

| 59

Financial Statements 2015-16

The  Consolidated  Statement  of  Income  and  Expenditure  brings  together  what  were  previously  the  


Total  comprehensive  income  for  the  year

(2,671)

(315)

(3,294)

(6,280)

The  Consolidated  Statement  of  Income  and  Expenditure  brings  together  what  were  previously  the   Consolidated  Income  and  Expenditure  Account  and  the  Statement  of  Total  Recognised  Gains  and  Losses.       The  main  changes  are  set  out  as  follows:     a) Donations  and  endowment  income  is  now  separated  out  from  other  income  with  the  total  amount   of  income  recognised  instead  of  an  element  being  transferred  as  deferred  income  to  creditors   (£0.10m  in  the  restated  table  above)  .   b) The  annual  leave  accrual  forms  part  of  the  staff  costs  (£0.045m)   c) The  depreciation  charge  has  been  adjusted  in  year  for  the  prior  year  adjustment  on  IT  depreciation   as  described  in  the  financial  commentary  on  page  19.1.   d) The  USS  pension  liability  which  the  University  now  has  to  provide  for  also  formed  part  of  the   increase  to  staff  costs  at  £0.03m,  and  an  interest  charge  of  £0.03m.   e) The  movement  in  the  land  valuation  undertaken  as  part  of  the  transition  to  FRS102  is  a  total   movement  of  £5.56m  from  1  August  2014  but  equates  to  an  unrealised  loss  for  the  year  ended  31   July  2015  of  £3.157m  . f) Note  7  sets  out  the  changes  to  the  LGPS  pension  scheme  reporting  as  a  result  of  the  changes  from   FRS102.  The  impact  on  the  total  comprehensive  income  for  the  year  was  zero.  There  was  an   increase  to  the  service  cost  of  £0.351m  and  additional  interest  charges  of  £0.665m  –  this  resulted   in  a  net  reduction  in  the  actuarial  loss  in  respect  of  pension  schemes  of  £1.016m.       26  Cash  Flow     The  only  impact  of  the  transition  to  FRS  102  on  the  cash  flows  of  the  University  or  the  Group  is  the   reclassification  of  some  short  term  investments  to  cash  and  cash  equivalents  as  shown  above.   27  Related  party  transactions     Certain   members   of   the   Council   are   associated   with   other   organisations   that   may   from   time   to   time   undertake   transactions   with   the   University   or   its   subsidiaries.   All   such   transactions   are  N undertaken   on   an   Buckinghamshire   ew  University     Financial   S tatements   2 015-­‐16   arm’s  length  basis  and  in  accordance  with  the  University’s  normal  terms.  No  member  of  the  Council  has  any   financial  interest  in  such  transactions,  nor  is  such  other  organisations  related  parties  of  the  University  or  its   subsidiaries.   _______________________________________________________________________   As  all  subsidiary  undertakings  are  wholly  owned,  the  University  has  taken  advantage  of  the  exemption   | 60 contained  in  FRS  102  and  has  therefore  not  disclosed  transactions  or  balances  with  entities  which  form  part   of  the  group.     The  University  is  a  third  member  of  Chiltern  Student  Villages  Ltd  along  with  Bank  of  Scotland  and  European   Structured  Finance  Limited.  There  is  no  controlling  party.  The  charitable  company  was  set  up  in  July  2008   for  the  transfer,  development,  provision  and  management  of  student  accommodation  at  the  University.   There  is  currently  a  loan  outstanding  of  £1,550,000  within  Trade  Debtors  (2015:  £1,550,000)  due  to   Buckinghamshire  New  University  which  is  invested  in  a  cash  collateral  account  and  not  available  for   charitable  purposes.              

Buckinghamshire New University

53

Financial Statements 2015-16


Board of Governors and Advisors University Council 2016 Independent & Co-opted Council Members Dame Christine Beasley

Independent

(Chair) Resigned 31 August 2016

Dr Michael Hipkins

Independent

(Chair from 1 September 2016)

Jenny Newton

Independent

(Deputy Chair from 1 September 2016)

Antonia Byatt

Independent

Resigned 31 July 2016

Gurdeep Chadha

Independent

Baljit Dhillon

Independent

Lori Flynn

Independent

Maggie James

Independent

Irene Kirkman

Independent

Dr Lise Llewellyn

Independent

Tim Marshall

Co-opted

Ken McCrea

Co-opted

Anthony Murphy

Independent

Dr Susan Rosser

Independent

Appointed 1 August 2016

Keith Ryan

Independent

Retired 31 July 2016

Bob Shennan

Independent

Appointed 1 August 2016

John Smith

Independent

Terri Teasdale

Independent

Retired 31 July 2016 Appointed 1 August 2016

University Council Members Professor Rebecca Bunting

Vice-Chancellor

Stephen Hoole

Elected Professional Service Employee

Hilary Mullen

Elected Academic Staff

Lauren Griffiths

Elected Senate Member

Joseph Collins

President, Students’ Union

Vacancy

Elected Professional Service Employee

Vacancy

Elected Senate Member

Resigned 4 September 2016 Retired 31 August 2016

Senior Management Team - Current Professor Rebecca Bunting

Vice-Chancellor

Ian Plover

Deputy Vice-Chancellor

Sean Mackney

Pro Vice-Chancellor (Education)

Tim Middleton

Pro Vice-Chancellor (Research and Enterprise)

Tracey Price

Director of Finance

Key Advisers Bankers

Barclays Bank PLC

External Auditors

Grant Thornton UK LLP

Internal Auditors

PricewaterhouseCoopers

Completed 31 July 2016

Internal Auditors

Kingston City Group

Appointed 1 August 2016

Lawyers

Mills and Reeve

Buckinghamshire New University

54

Financial Statements 2015-16


Uxbridge Campus Buckinghamshire

New University

55

Financial Statements 2015-16


University Campus Aylesbury Vale Buckinghamshire New University

56

Financial Statements 2015-16


Legal and Administration University Registered Office: Buckinghamshire New University Queen Alexandra Road High Wycombe Buckinghamshire HP11 2JZ Established by an Act of Parliament as a Higher Education corporation; its University status confirmed by the name change to Buckinghamshire New University in October 2007. Its charitable status is regulated by HEFCE. Addresses of Key Advisors: Barclays Bank 5 North Colonnade, Canary Wharf, London, E14 4BB Grant Thornton UK LLP Grant Thornton House, Melton Street, Euston Square, London, NW1 2EP Pricewaterhouse Coopers 1 Embankment Place, London, WC2N Kingston City Group Kingston University KH 1009 Kenry House, Kingston Hill Campus, Kingston Hill Kingston Upon Thames KT2 7LB Mills & Reeve Monument Place, 24 Monument Street, London, EC3R 8AJ

Buckinghamshire New University

57

Financial Statements 2015-16


Buckinghamshire New University

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Financial Statements 2015-16


Bucks New University Financial Statements For Year Ending 31 July 2016