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Financial Statements for the year ending 31 July 2014


VISION To be recognised as a modern civic university delivering solutions to the challenges of the 21st century

MISSION Our mission is to create and sustain a vibrant community for learning and knowledge where staff and students work together in an active and supportive partnership; providing opportunities to enrich our students, partners and wider society through education, training, research, scholarship and knowledge transfer.


Liverpool John Moores University

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Liverpool John Moores University

Contents

Page Operating and Financial Review 5 Public Benefit Statement 13 Board of Governors 19 Officers and Advisors of the University 20 Responsibilities of the Board of Governors 20 Corporate Governance 21 Report of the Auditors 25 Statement of Principal Accounting Policies 27 Consolidated Income and Expenditure Account 29 Statement of Consolidated Total Recognised Gains and Losses 30

Balance Sheets 31 Consolidated Cash Flow Statement 32 Notes to the Financial Statements 33-57

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Liverpool John Moores University

Operating and Financial Review Scope of the Financial Statements These are the consolidated statutory accounts of Liverpool John Moores University and its subsidiaries for the year ended 31 July 2014. Vision and Mission Our Vision is to be recognised as a modern civic university delivering solutions to the challenges of the 21st century. Our mission is to create and sustain a vibrant community for learning and knowledge where staff and students work together in an active and supportive partnership: providing opportunities to enrich our students, partners and wider society through education, training, research, scholarship and knowledge transfer. Strategic Objectives Our actions in pursuing our Vision and Mission are guided by our Strategic Framework for 2012 to 2017 which sets out a detailed roadmap for the University. Our strategic objectives are to be: n

A university known for excellent teaching within an academically engaging and supportive student experience that produces graduates who, as citizens, are prepared for life and the world of work and are valued as contributors to society.

n A university where scholarship is at our core and our Research Institutes are recognised as beacons of excellence that provide inspiration and motivation for staff, students and society. n A university which is true to its values and is recognised globally as a driving force that through partnership supports wealth creation, social well-being, culture and the arts within the city-region and beyond.

Student Applications

Student FTEs 21000 20500 20000 19500 19000 18500 18000 17500 17000

Successful achievement of these outcomes will require strong focus, strategic management discipline and a clear and relentless pursuit of the 35000 principles of excellence. Robust mechanisms and structures are in place to 32500 deliver these requirements.

30000 27500 Students 25000 LJMU is one of the largest Universities22500 in the UK with 21,400 students in Liverpool plus a further 3,000+ students enrolled on accredited University 20000 time equivalent numbers for 2013/14 were 08/09 courses overseas. Actual full13/14 Operations

08/09

13/14

18,487. This represents a reduction of less than 1% compared with 2012/13.

Student Applications

The enhancement of the postgraduate programme portfolio has tobeen priority, This relatively static position is attributable excellentarecruitment in FTwith a ra UG which resulted in an increase of 500+ FTEs in comparison to 2012/13. new programmes being designed to meet new and emerging market demands. Anoth 35000 However, this was offset by a decrease in PGT and PT UG activity. The focus has been the continuous improvement the quality of planned all taught programmes, 2013/14 of recruitment was in line with control numbers for 2013/14. in lin 32500 the Strategic Plan and guided 30000by the revised UK Quality Code and our preparations f The enhancement of the postgraduate programme portfolio has been a Review in 2015-16. The newly-formed Academic Registry brought together academ 27500 priority, with a range of new programmes being designed to meetkey new and emerging market demands. Another key focus has been the continuous 25000 wider support services, together with Faculty Registrars, to ensure a more coheren improvement of the quality of all taught programmes, in line with the Strategic 22500 consistent approach to quality assurancePlan and enhancement the and guided by the revised UKacross Quality Code andUniversity. our preparations for HE 08/09

13/14

20000

Review in 2015-16. The newly-formed Academic Registry brought together key academic and wider support services, together with Faculty Registrars,

A new assessment receipt, marks and feedback tool on the University’s VLE (Blackboard 5 accessible through mobile devices, has enhanced the student learning exper


Liverpool John Moores University LJMU delivered a new foundation year for Jaguar Land Rover. Successful students were in a position to apply to enrol on either BEng Manufacturing Systems Engineering or BEng Industrial Electronics and Control Engineering in January 2014.

to ensure a more coherent and consistent approach to quality assurance and enhancement across the University. A new assessment receipt, marks and feedback tool on the University’s VLE (Blackboard), also accessible through mobile devices, has enhanced the student learning experience. Improvements have also been made to student-facing administrative processes, such as enrolment and online module registration. Student satisfaction, as evidenced in the NSS outcomes, continues to rise.

Collaborative relationships with employers continue to develop with the World of Work Careers Centre Local Group including Ernst and Young, Ricoh, The Army, Liverpool City Council, Aldi, SEMTA, The RAF, Royal Mail, Barclays, Liverpool Chamber of Commerce, Tate Liverpool, DWF LLP, Co-operative Group, Enterprise Rent-A-Car, Bosch and BT.

As shown above, student applications and recruitment remains buoyant despite the very challenging environment that universities are facing. LJMU continues to operate very effective widening participation and outreach activities which are identified in the Access Agreement recently approved by OFFA, e.g. the National Schools Observatory scheme continues to grow as schools use their access to the Liverpool Telescope

In 2014 LJMU recorded the 6th successive year on year increase in the percentage of graduate level employment (74.2% of all graduates), the fourth successive annual decrease in unemployment (6.8% for all graduates) and another increase in positive outcomes (92.9% all graduates in work or further study). The World of Work Programme continued to be recognised as a best practice case study in nationally important publications and conferences in 2013/14 including from the University Alliance, the Higher Education Academy, British Council and QS Apple.

In total, 57 new programmes were approved for development in 2013/14 of which 37 were Postgraduate taught and 20 undergraduate. This represents an increase of 25 more than the previous year and demonstrates a commitment to continual refreshing of the portfolio and the strategic objective to increase the University’s Postgraduate portfolio.

During the year over 7,500 students completed the Bronze, Silver or Gold stages of the World of Work Skills Certificate. The certificate continues to be designed, developed and delivered collaboratively with many employer partners and a Student Advisory Group and is being continuously modified and improved following feedback.

The university continued to ensure that, wherever possible, programmes have Professional Statutory Regulatory Body accreditation. Of the 111 Key Information Set (KIS) course records 64 accreditations are recorded, including multiple accreditations on some programmes. There are 52 distinct KIS programme with one or more accreditations representing 47% of KIS records an increase of 5%.

The university organised the second year of the LJMU funded internships programme for unemployed graduates (50) and Level 5 students (65) which was highly successful. This year the student internships were focussed on supporting the International Festival for Business.

In February 2012, a bid was successfully submitted to the HE STEM Sigma project and £10,000 was awarded (to be match funded by the university) for the establishment of a Maths Resource and Support Centre (MRSC) at LJMU. This MRSC operates alongside existing study support provision. The MRSC opened in March 2012 and has now been in continuous operation since that time. The centre has proven to be very successful and the university opened a second Maths support centre in 2013/14.

The University continues to share its employability expertise by accepting invitations to conferences and to work with universities and Governments in Egypt, Morocco, Tunisia, Dubai, Palestine, Taiwan and USA, Research & Scholarship In 2013-14 the University continued to focus its research efforts and resources through its Research Institutes and Centres. Core HEFCE QR research funds (distributed based on RAE2008 performance) have continued to be primarily used to support academic staff costs in these research-active areas. The institutional submission to the Research Excellence Framework (REF2014) was a major highlight of the year. Non-HEFCE, competitively-won, research grant income has a vital role in supporting the research projects that staff undertake but has seen a fall against past years. Such funding increasingly makes a contribution to academic staff salaries through the full economic costing model.

Internationally the University is redoubling its efforts to recruit strongly from outside the EU and has a long-term goal of recruiting 15% of the student body in Liverpool from non-EU territories from a base of 4% in 2013 entry cohorts. Following an extensive review, new structures and procedures (including a competitive scholarship offer and centralised decision-making on international applications) have been put in place. The University continues to expand upon its portfolio of international collaborations and graduated its first dual PhD student in 2013 from the University of Malaya. New agreements on student articulation were concluded with institutions in China and the University continues to be a strong partner of the Sino-British College in Shanghai, delivering BEng degrees in Industrial Electronics & Control and Manufacturing Systems. We have also begun a very promising dialogue with a set of state universities in the USA state of Connecticut.

The strategic framework for the institution for 2012-17 provides a clear roadmap for the University for delivering excellence in research and scholarship that positively impacts on society and serves as an inspiration to students, fellow staff and the public. Highlights

Significant progress has also been made in relation to maximising the mutual benefits of the LJMU/Study Group (SG) strategic partnership, kick started by an LJMU/SG Summit in Summer 2013 to agree a new, revitalised institutional approach to the partnership, including new IFY routes and the development of on-line products. The LJMU/ SG International Study Centre (ISC) was reviewed by QAA (as part of an assessment of 13 colleges offering provision in the name of Study Group Bellerbys). The key findings for the LJMU ISC were that there was confidence in the academic standards at the ISC, confidence in the quality of the learning opportunities at the ISC and reliance on the accuracy of information published about the ISC and its programmes.

n

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The University’s submission to the Research Excellence Framework in November 2013 comprised 17 Units of Assessment, reflecting the University’s intention to submit all the excellent research identified across the institution. A 21% increase in academic staff submitted in REF2014 (to 256 headcount) represented an increase of 55 headcount from RAE2008. Five emerging areas of research in the University were submitted for the first time to the exercise.


Liverpool John Moores University

n Particular research strengths remain in STEM (e.g., astrophysics, built environment, life sciences, public health, electrical and general engineering, maritime) and STEM-related subjects (e.g., biological anthropology, sports sciences). Together these account for >90% of all external research income to LJMU (from grants and HEFCE-QR). n Research grant income fell by 17% in 2013-14 compared to 2012-13, to £7.5m. However 12/13 had seen an increase of 11% over the previous year. A reduction in grant income was observed across all major disciplines but especially in areas where there is a reliance on public sector funding (NHS and local authority), continuing a trend over recent years. n As at the end of July 2014 LJMU was managing a research grants portfolio of £41m. n £10.5m worth of new research grants were awarded to LJMU in 2013-14. n Based on sector-wide data for 2012-13 (HESA), LJMU is ranked 65th in the UK for research grant income (compared to 67th in the previous year) and 5th in the NW region n Grants are awarded from a very wide range of sponsors. UK Research Council income (the most competitive source of research funding) accounts for approximately 23% of our total research income, with ~74% of such funding awarded to a single area: The Astrophysics Research Institute. Funding from the Technology Strategy Board represents an increasingly important part of the University’s grants portfolio. n

Funding from the European Framework programmes has become a more important part of the funding portfolio in recent years and continues to account for ~14% of the Institution’s total research income. The current Horizon 2020 and European Research Council programmes are currently a major focus for collaborative bids, with considerable institutional support being given to academic staff and teams.

n

Academic staff continue to submit substantive research grant bids to external organisations at a rate in excess of 200 grant bids per annum. A majority of such bids are collaborative with other HEIs in the UK and overseas. The institution is placing increased emphasis on providing enhanced support for staff in preparing high quality bids through our recently enhanced Researcher Development Programme.

n

Investment in research by the University in 2013-14 saw another round of strategic investment in research-active academic posts (a combination of both early career and well established researchers who can act as team leaders and mentors). These posts were targeted at areas of research excellence right across the University.

n The number of research degrees awarded by the University in 2013-14 was 77 including 68 PhDs. n Preparations for the next REF, including Open Access compliance are underway. Commercial Enterprise, Knowledge Exchange and Student Entrepreneurship The University utilises income from the Higher Education Innovation Fund (HEIF) combined with core funds to ensure support for Commercial Enterprise, Knowledge Exchange and Student Entrepreneurship activity across the University. Following the establishment of the central support team; Research & Innovation Services, an integrated approach to these activities continues to support both external clients and stakeholders along with our own staff and students. 7


Liverpool John Moores University

Highlights n

n

Analysis of the Higher Education Business and Community Interaction survey (HE-BCIS) for 2012-13 showed the total annual value of LJMU’s interaction with business and the community was £14.38m A 10% increase from 2011-2012 . This places the University 62nd in the UK overall, a rise of 4 places.

Key events included: n Innovators Day – in conjunction with 15 partners delivering advice, presentations and networking surrounding IP & commercialisation n Business of Sport Conference – in conjunction with University of Liverpool; 2 day conference which LJMU led on day 2 delivering presentations and sessions around Sports Science Research and application to sports. n The Skills show n Enabling science and industry event - a participant at The Heath event n Provision of 50 student internships for businesses across the festival n Hosted the Federation of Small Businesses summit meeting n Summer start-up challenge, students engaged with business mentors and professionals under a scheme that ran for the period of the festival with the aim to start a business up from scratch to trade within 52 days. 3 business ideas were brought to fruition and had begun trading by the close of the festival.

n LJMU is ranked 34th in the UK for attendees to free Public Events a rise of 35 places driven by its successful partnership with Liverpool Biennial n

The creation of 2 Spin Offs with HEI ownership during 2011-2012 saw LJMU placed 16th a rise of 39 places year on year. A further 2 Spin Offs were realised during 2012-13 demonstrating the focus and intent for LJMU to develop an IP portfolio with diversified returns.

n The piloted and novel adopted approach to Commercialisation has seen a true success story with one of LJMU spin off companies created in 2012-2013, Pulmorphix, become in, 2013-2014, the first University spin off company in the UK to be successfully crowd funded. Pulmorphix has been nominated for multiple awards and its success to date is an endorsement of the novel approach to commercialisation adopted by the University. n

Follow on funding from the IPO to continue to develop match funding application housed within the ‘OpenLIVin’ platform (initially JISC funded) continues to progress positively with the first phase successfully developed during 2013/14 and discussions to roll out the platform use with external Investor communities are under way during 2014/15.

Resources Capital Development The University’s ongoing capital investment strategy is for the most part driven by a blend of changing stakeholder expectations, rising energy costs, tightening regulations and a wish to deliver on the University’s environmental sustainability agenda.

n In 2013-2014 Commercial Enterprise has maintained its outturn of £3.7m year on year. n

The newly created faculty of Education, Health and Community achieved an outturn of £1.2m through the development of new partnerships and continued growth in existing continuing professional development (cpd) and training programmes.

n

Projects with key industrial partners including Unilever, Jaguar Land Rover and Rolls Royce alongside the continued growth in professional maritime training saw a continued growth in the expertise areas of Engineering and Maritime.

n

The School of Sports Science have continued to develop their relationship with Prozone which started with the joint development and delivery of a course in performance analysis. The course has now had over 700 attendees to date and is now expanding into international markets. This has led to research collaborations with the School and a KTP with a further project in the pipeline which will secure licensing income.

n

Continued notable key partnerships within the Sports and Exercise sciences field include Liverpool FC, Manchester United, Nike, Everton FC and the Football Association. These relationships are delivered through a wide variety of Knowledge Exchange vehicles: commissioned contract research; consultancy contracts; PhD sponsorship; Internships and curriculum visits/lectures.

n

Development of delivery partnerships with third sector organisation such as the Joseph Rowntree Trust, through engagement activities using creative facilitation techniques have been very successful in generating multiple workshops and opportunities for academic engagement.

During June and July 2014 Liverpool hosted the International Festival for Business, an international event that ran over 52 days. LJMU hosted a number of key activities associated with this festival and contributed to many fringe events across a variety of sectors with key partners.

The University’s ambition over the next seven years is to invest £160 million in the creation of a Connected University Village that combines ongoing investment in bricks and mortar with the delivery of high quality, innovative, cutting edge buildings that offer transformational learning, teaching, research and civic opportunities for the entire University. The University’s Board of Governors recently approved the next phase of capital investment which will allow the University to continue to consolidate and rationalise its property portfolio and deliver a Connected University Campus Village in the heart of Liverpool City Centre. Key features of the Connected University Village include: n

The redevelopment of the Copperas Hill site as an environment that all students and staff will want to identify and connect to. With a location next to Liverpool Lime Street Station, this presents a unique opportunity for the University to make a bold statement to staff, students, stakeholders and the public that LJMU is a place to “dream, plan and achieve”.

n The disposal of the University’s I M Marsh Campus following the relocation of all academic delivery within the Connected University Village. n The development of a connected city centre university village that co-locates all University buildings into an integrated centre of knowledge and learning. n A sustainable refurbishment programme that will ensure the entire University’s entire property portfolio is fit for purpose, efficient and flexible. 8


Liverpool John Moores University

Over the past twelve months and while developing a campus wide Master Plan, the University has undertaken a moderate amount of capital investment in its property portfolio and has made excellent progress in delivering enhanced learning, teaching and research spaces. The following progress has been made over the past twelve months; n The University has recently developed a new campus-wide Master Plan. n

The John Foster building continues to undergo a significant change with the University identifying a substantial capital investment in the refurbishment of the site. Following a three month refurbishment programme, the John Foster Building now provides modern general teaching accommodation for the Faculty of Arts, Professional and Social studies.

n

Following the closure of the Haigh Building, the University has undertaken a refurbishment of the John Foster Building (basement). The basement area has been designed to provide Liverpool SU with a central business support facility along with accommodation for the development of Liverpool SU student societies. This central facility compliments the various satellite facilities across the University estate.

n

To improve the student experience the University has continued to invest in the refurbishment of its Byrom Street campus, which is providing enhanced general teaching space, lecture theatres and specialist teaching and research facilities.

n

To develop the student experience the University has continued to invest in the upgrading of its Audio Visual Information Technology (AVIT) systems. This programme of investment has continued over the summer with a substantial outlay for the upgrading of the AVIT equipment in both the John Foster Building and John Lennon Art & Design Building.

n

The University has continued to invest in its Tithebarn Street Building over the past six months. The continued investment in the general teaching and learning environment will provide enhanced accommodation for the Faculty of EHC.

n

The University has identified a requirement to improve the current levels of employability for LJMU students and to support this initiative the University has invested in the development of a number of World of Work (WoW) careers guidance centres across the University.

colleges to identify, evaluate, manage and improve their sustainability and environmental practices. The University continues to deliver significant improvements across a range of environmental sustainability metrics. For example this year the University is submitting to UI Green Metric World University Ranking. Criteria includes; n Public transport links, ease of access, number of cars/bicycles entering campus, etc. n Status/progression of relevant policies and programmes e.g. energy efficiency upgrades, travel planning, emissions reduction, etc. n Electricity and renewables quota, waste and water treatment n Visibility of sustainability and student involvement n Research funding for sustainability, n Events and scholarly publications relating to sustainability. The University also continues to develop its various policies and strategies including the Environmental Policy, the Procurement Strategy, the Sustainable Procurement Policy, the Travel Plan, the Biodiversity Policy, the Carbon Management Policy, the Energy Policy, the Waste and Recycling Policy and the Print Strategy. The University’s highlights this year include: n 46% recycling rate in 2012/13 (awaiting the most recent figures to do 2013/14). n Retention of Carbon Trust Standard

Environmental Sustainability The University continues to deliver on its environmental sustainability agenda. Over the past twelve months the University has invested in a number of carbon reduction initiatives including: n

n 100% renewable electricity contracted, year beginning 2014/15. n Latest estimates that a 49% reduction of emissions in 2019 will be achieved against 2005 baseline

Replacement lighting schemes, the largest being at John Lennon Art & Design Academy, which will see a large proportion of the existing lighting replaced for low energy LED lighting. This project cost is in excess of ÂŁ200,000.

n Emissions from business travel have reduced by 29% against a 2009/10 baseline. n Nearly 50% reduction of single passenger car commuting amongst staff against 2005 baseline

n Insulation of pipe work. n Replacement of inefficient heating and hot water systems.

n Bin the Bottle campaign and installation of mains-fed water fountains

n Upgrading Building Management control systems in order to shut off heating and lighting systems to conserve energy.

n 5.2% reduction in water consumption in 2013/14 compared to 2012/13

The University has retained an EcoCampus environmental management system Silver award. EcoCampus is a national Environmental Management System and award scheme for the higher and further education sectors, enabling universities and

n New Institutional Green Travel Plan 9


Liverpool John Moores University

n First LJMU-based sustainability survey of fresher students. n

n The University remains strongly committed to adopting best practice in terms of Governance and Management.

Development of partnership and LJMU representation on a number of external platforms in the city, e.g. Merseytravel, Liverpool Green Partnership and Mayoral Commission for Environmental Sustainability (chaired by our VC), EAUC NW Regional Group, Knowledge Quarter Sustainability Group (being set up with LJMU at forefront), IGEE 2014, etc.

n Risk management is incorporated into the corporate planning and decision making process of the Institution. The Risk Management Policy contains a definition of the Institution’s risk appetite, reflecting informal advice from the University’s internal auditors and members of the Board with specific expertise in this area.

IT Developments n Ongoing and significant investment has been made in the university’s computer network, including: n Replacement of over 750 student facing PCs. n Complete rebuild of over 2,500 student PCs with the latest Microsoft products. n Deploying over 150 student loan laptops and procuring over 700 I-Pads. n The implementation of module appraisals to capture student feedback. n A 50 fold improvement in performance. n Self-service photo mechanism for enrolment of new students. n Personalised exam timetables delivered to students’ Outlook calendars

Results for the Year Financial Headlines n Historical cost surplus for the year £13.3m n The group underlying operating surplus of £19.6m (prior to FRS17, impairment revaluation and profit on sale of fixed assets) n Capital expenditure £7.65m n Income increase of 3.4% to £178.2m n Expenditure increase of 0.3% to £166.7m

n As a modern civic university, IT facilities have been provided in the libraries for use by the local community.

Income and Expenditure Account

n A service catalogue has been developed to provide a framework for business users to access and find information about the services they require. n

2013/14 has been an excellent year as a result of the continuing strategic approach to the finances of the university with an outturn surplus of £13.3m for the year. An underlying operating surplus of £19.6m was achieved before the FRS17 pension charge of £1.3m, revaluation impairment of £6.1m and the profit on sale of a fixed asset of £1.1m

The IT Department has been restructured to ensure it is best positioned to meet the challenges it will face in the future, and to enable it to become more agile in support of the University strategic plan.

Total Income increased by 3.4% to £178.2m. The main changes were as a result of the reduction of HEFCE core funding and earmarked grants reducing by a further £16m. These decreases were offset by the changes to the student fee income.

n Significant infrastructure improvements were made including: n Upgrade of the library system n Upgrade of production virtualisation infrastructure n Building a comprehensive test environment for our Student Information System n Provision of Merseyside at War WW1 web-site n Rolling upgrades of all firmware and management software on entire server estate. n Responded to over 12800 support requests with an average customer satisfaction of 98.8%.

Expenditure remained fairly stable whilst incurring pay increases of 1% and investing further in academic delivery. The impact of FRS17 (Retirement Benefits) was a decrease to group surplus of £1.3m (2012/13 £2.2m). Balance Sheet The Balance Sheet has maintained its strength. Income and Expenditure Reserves excluding the Pension Reserve (associated with FRS17) are £87.1m showing a further significant increase of £14.6m compared with the previous year. The pension liability reserve has increased by £13.4m highlighting the volatility of the economic market. Total reserves are now £34.8m compared to £34.9m the previous year. This is as a result the improvements in the Income & Expenditure Reserves being offset by the Pension Reserve.

Sports Facilities An agreement with Liverpool City Council’s Sports and Leisure Division continues to provide the following facilities to students and staff: n n

published in November 2004.

The provision of general access to a range of sports and leisure facilities across the Life Style venues. To progressively allow the relocation of those academic programmes that have a sport related component which are currently delivered at the IM Marsh Campus to the Copperas Hill Campus on opening in 2018.

Fixed Assets have decreased by £10m. The decrease was mainly due to the sale of a building and a revaluation of a building which are both part of the development of the University Estate Masterplan. Cash and deposits have increased significantly by over £20m during the year, as part of the preparations for the future University wide Estate Masterplan. This encompasses over £7.65m spent on capital investment in the university.

n To enable the Liverpool Students Union to provide facilities for its club and societies, presently provided either at IM Marsh or purchased from private providers. Governance and Risk n The University’s governance practices are consistent with the revised “Guide for Members of Higher Education Governing Bodies in the UK” by the Committee of University Chairs (CUC), 10


Liverpool John Moores University

Results for the Year The University’s consolidated Income, Expenditure and Results for the year to 31 July 2014 are summarised as follows:

2013/14 2012/13

£000 £000

Income Expenditure

178,183 172,379 166,718 166,295

Surplus after depreciation of assets at valuation and before tax Profit/(Loss) on disposal of fixed assets Surplus/(deficit) after depreciation of tangible fixed assets at valuation and disposal of fixed assets and before tax

11,465

6,084

1,074

(22)

12,539

6,062

Share of Operating profit/(loss) in associate (48) (91) Taxation - 57 Surplus/(deficit) after depreciation of tangible fixed assets at valuation, disposal of assets and tax

12,491

6,028

Surplus/(deficit) for the year transferred to 336 accumulated income in endowment funds

326

Surplus/(deficit) for the year Difference between historical cost depreciation charge and the actual depreciation charge for the year on the revalued amount Realisation of property revaluation gains of previous years on disposal of assets Surplus/(deficit) for the year on a historical cost basis

11

12,827

6,354

494

672

20

-

13,341

7,026


Liverpool John Moores University

Future LJMU continues to work to rise to the challenges presented by the changing political and economic climate, and the ramifications of the new fee regime. As a consequence, LJMU fully achieved its targeted home student control numbers for 2013/14 and 2014/15 whilst demonstrating enhanced retention rates for existing students. Notwithstanding, we will need to continue to work hard to ensure that this level of success is delivered in 2014/15 and onwards. This will be achieved by the continuation of the successful implementation of the 2012-17 Strategic Framework. This clearly sets out our ambitions for the coming 3 years. Conclusion 2013/14 has been an extremely successful year for LJMU. Significant investment in the staffing establishment and infrastructure has continued to enable continued improvements in academic delivery. A surplus significantly in excess of budget has increased LJMU’s net worth before pension liabilities. This, coupled with the on-going delivery of the 2012-17 Strategic Framework and an enhanced league table position, places LJMU in a strong position to manage the challenges and difficulties currently facing Universities in the light of the changing financial climate ahead.

Mr Rod Hill BA, FCMA, IPFA Chairman 12


Liverpool John Moores University Delivering the Public Benefit n To create appropriate high quality opportunities that enable learning, advancement, development, and employment, and that are open to as many individuals and communities as is achievable and sustainable.

Liverpool John Moores University (LJMU) is a Higher Education Corporation (HEC), as defined by the Education Reform Act 1988, and, as such, is an exempt charity with the charitable purpose of the advancement of education for the public benefit. The University achieves its charitable purposes by creating appropriate high quality opportunities that enable learning, advancement, development, and employment, and that these are open to as many individuals and communities as is achievable and sustainable. The Corporation is regulated by HEFCE by virtue of the Charities Act 2006, now consolidated into the Charities Act 2011.

n To create and support opportunities for successful participation by under-represented groups, as well as for continuing personal, professional and skills development for all members of the University. n To create an environment in which staff and students can engage in research that is innovative; that contributes to knowledge or to professional practice; that encourages personal and professional development; that enhances learning; or that is of social or economic importance to communities.

The primary beneficiaries of the University’s charitable purpose are: LJMU’s students who are directly engaged in learning, scholarly activity or research; the recipients of the University’s research and knowledge transfer activities, including the public, employers, and businesses; and, school children and alumni of LJMU who can engage in educational events organised by the University or use its academic facilities. The information provided from 6.5 below is not an exhaustive list but a small sample of the University’s delivery of its charitable purpose across the breadth of the University.

n To reinforce the entire range of activities with a culture of scholarship and with a growing body of specific research that is consistently of national and international standing and benefit. n To endeavour through partnership and enterprise to impact upon economic development and regeneration, as well as social and cultural advancement, whether at local, national or international levels.

Statement of Public Benefit The Board of Governors, also known as Trustees, have complied with their duty to have due regard to the guidance on public benefit published by the Charity Commission, and particularly to its supplementary public benefit guidance on the advancement of education, in accordance with the requirements of the HEFCE acting as principal regulator of English higher education institutions under the Charities Act 2011. The Charity Commission’s guidance on public benefit is also included as part of the induction process for new governors.

Beneficiaries Students who attend the University benefit directly from the quality of the education they receive. The University’s World of Work Programme aims to ensure that every student is equipped with the skills they need to stand out from the crowd and to successfully engage in the world of work, either because they possess skills which are highly valued by employers or because they are well equipped to set themselves up in their own business. In 2012/13 the World of Work Careers Centre conducted 20,000 student interactions and the following number of students completed the three statements that constitute the World of Work Skills Certificate – Self Awareness (5,426); Organisational Awareness (1,251); and Making Things Happen (490). By doing so each student reflected and provided evidence of these essential employability attributes. The World of Work Careers Centre is accredited against the Department for Business, Innovation and Skills EMQC Matrix Quality Standards. It offers a range of services designed to support graduates in their job hunting and these services are available to the University’s alumni for life. In 2014 the University saw the highest number of graduates for five years securing managerial and professional employment and five successive years of decreasing graduate unemployment. In 2013/14 the World of Work Careers Centre is supporting Merseyside schools’ sixth forms by collaboratively developing a model of career planning which is based on the LJMU World of Work Skills Certificate and it won the Association of Graduate Careers Advisory Services Excellence Award for Technology. In addition to administering over 100 LJMU funded internships for students and graduates the Centre has also provided training and consultancy services for universities in Jordan, Egypt, Morocco and Tunisia. It was recognised for this work in being the Runner-Up in the Guardian University Awards International Category. The Director of Graduate Advancement continues to provide public benefit as a member of the Local Enterprise Partnership Employment and Skills Board, a member of the Youth Unemployment Task Force and as an Adviser to the Liverpool City Council Select Committee on Employment, Skills and Enterprise.

Mission, Vision and Aims LJMU’s vision is “to be recognised as a modern civic university delivering solutions to the challenges of the 21st century”. The University’s mission is to create and sustain a vibrant community for learning and knowledge where staff and students work together in an active and supportive partnership; providing opportunities to enrich our students, partners and wider society through education, training, research, scholarship and knowledge transfer. We are an ambitious and forward thinking Institution that challenges convention and believes passionately in the concept of ‘One University’ – a community working together to common student-centred objectives within a clear strategy. Since becoming a University, LJMU has grown substantially from around 8,000 students in 1988 to now more than 25,000 students studying across 4 faculties, studying from a range of 250 degree courses; with approximately 9,000 students graduating this year. This represents a substantial contribution to accessible Higher Education in the UK. The University’s vision gives a particular focus to the benefits that both students and society receive as a result of the University’s educational purpose. The vision is: ‘To be recognised as a modern civic university delivering solutions to the challenges of the 21st century’. LJMU’s core values are embedded in the University’s Strategic Plan, which illustrates clearly the University’s commitment to the public benefit. The Board of Governors is responsible for defining the strategic aims of the University and approved the Strategic Framework 2012-2017. The framework reflects the Board of Governors’ commitment to the public benefit as illustrated in the University’s mission statement and vision and charitable purposes below. LJMU’s charitable purpose, as perceived by its members and stakeholders, can be summarised as follows:

The Centre for Entrepreneurship support students and graduates who want to set up their own businesses and is part of the North West Higher Education Enterprise Champions ERDF project. The Centre provides support with developing business ideas, working as freelancers, launching products and services and growing an existing business. It also provides help with and access to professional networking opportunities, supportive academic staff and relevant business training. 13


Liverpool John Moores University

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Liverpool John Moores University

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Liverpool John Moores University LJMU’s Astrophysics Research Institute carries out internationallyleading research in areas ranging from the evolution of stars to the structure of the Universe. Within the University, it is responsible for the operation and development of the Liverpool Telescope as the world’s largest and most capable fully robotic telescope operating as a UK National Facility. Although the majority of the time on the telescope is devoted to serving the national and international research communities, time is also set aside specifically for public engagement, particularly for access by schools through LJMU’s National Schools’ Observatory (NSO) project.

In partnership with the Faculty of Arts in the University of Shanghai and the International Association of Art Critics LSAD has established the ‘John Moores Critics Awards’, an award to encourage participation and engagement with critical writing on a local basis and to stimulate debate about the nature of critical writing between the UK and China. The first edition of the prize took place in 2012 and the second is planned for 2014. In 2012-13 the University began to put in place a set of corporate partnerships with some of the major arts & cultural organisations within the city-region. Given the University’s city-centre location and civic ethos, the University has begun to establish strong formal links to the world-class cultural and arts establishments within the City with the primary driver of putting these relationships in place to improve the student experience – providing opportunities for LJMU students to access for free, or at discounted rates, the premier cultural establishments within the city. Additional benefits accrue, including opportunities for academic collaboration and co-creation of exhibitions and performances, as well as corporate benefits such as reputational enhancement through joint events and co-branding. The primary focus is on enhancing the student experience, and we are now promoting a series of ‘exclusive offers’ for LJMU students to enjoy a range of offers and discounts at cultural events across the city. Three head-line partnerships are now in place with The Royal Liverpool Philharmonic Orchestra (RLPO); The Everyman & Playhouse Theatres; and Tate Liverpool (Art Gallery). In addition, the University has sponsored a number of cultural events, or arts organisations; notably: Light Night, the city’s annual arts and culture festival; Homotopia, the international lesbian, gay, bisexual and transgender festival; the Liverpool Biennial, the UK’s largest festival of contemporary visual art; the John Moores Painting Prize; and The Royal Court Theatre.

LJMU’s School of Sport and Exercise Sciences delivers innovative, research-led and employability focused undergraduate and postgraduate programmes that are supported by world class academics and state-of-the-art laboratory facilities. It is the only Sport and Exercise Science Department in the UK designated as a Centre of Excellence in Teaching and Learning. The School of Sport and Exercise Sciences has continued its Research and Public Engagement activity. Under the continuing remit of “Face-2-Face with Sport Science”, and a Royal Society grant partnership researchers within the School continue to observe and collect scientific data related to sports performance and health. “Face to Face with Sports Science” brought their public engagement programme to a number of televised and radio events including the BBC 5-live “Big Sporting Night Out” where research activity in sport and educational opportunities were delivered to over 100 local and disadvantaged school children and youths; “BBC Sport Relief” and “Turbo Boost” a CBBC programme aimed at children where researchers from RISES were able to showcase key scientific and technological developments in Sports Science and encouraging public interest in health, nutrition and exercise, especially from a young age. The School was also at the Natural History Museum as part of Champion Science, one of the 44 exhibitions selected for the prestigious Universities Week 2014.

Research and technology transfer Impact is at the forefront of the University’s research activities, rooted in the need to provide a public benefit to the public funding for research that extends beyond our academic peers and benefits the wider community through knowledge exchange activities. From working directly with industry and commerce, public and third sector organisations and engaging with the public the University’s researchers are helping to inform public debate, policy, shape new laws, transform lives and enhance the environment.

The School of Sport and Exercise Sciences actively supports Mersey STEM events and received a commendation from STEMNET for their programme for training staff and students as STEM Ambassadors and providing opportunities for STEM Ambassadors to attend and promote STEM subjects in schools or at events. In the School of Pharmacy and Biomolecular Sciences the University launched the esteemed Royal Society of Chemistry (RSC) outreach project ‘Chemistry for All’ which is aimed at understanding the impact of longitudinal interventions in chemistry by promoting the significance of chemistry to school children.

The University’s research is truly global, building on opportunities for collaboration with some of the best minds, organisations and facilities from across the globe (especially throughout Europe, North America and Asia); with more than half the University’s published research co-authored internationally. This global present leads to a stimulating and contemporary student learning experience. A thriving research base helps the University to engage globally, and embrace internationalisation to the benefit of its students, staff and partners.

The University’s Liverpool School of Art & Design (LSAD) has established ‘Hunting in Packs’. This is a scheme in partnership with the Developer, Urban Splash, that will see 24 recent graduates occupying a shared creative studio hub in order to develop innovative new businesses and social enterprises. The graduates lease the space free of charge and are supported in the development of their businesses by relevant academic staff and the Centre for Entrepreneurship. LSAD has established the Exhibition Research Centre (ERC), which provides students and recent graduates to engage with a cutting edge and research based exhibition programme. The ERC also stages public keynote lectures which further knowledge and debate about the history of exhibitions and examine new developments in the field. The ERC benefits recent graduates, artists and creatives in the city by exposing them to a research focused articulation of cutting edge developments in the field of exhibition making.

University academic staff are expected to publish the results of research they have undertaken in peer reviewed academic journals, to publish books, to submit and present to research conferences and to embed that research into their teaching. The University makes available publicly, via its website, access to its research archive and has collaborative and reciprocal arrangements in place with other university libraries for access or borrowing facilities for students and academic staff. Outreach programmes informed by the University’s research activities seek to engage with public audiences of all ages and to inspire the next generation, and are a significant element of the University’s activities.

In addition to the ERC, LSAD maintains an active programme of more locally focussed exhibitions in the John Lennon Art and Design Building. The programme for this year includes ‘Deaf School – the art school dance goes on forever’, ‘The Willie Russell Archive’, and the RIBA President’s Medals. These exhibitions benefit the broader community of the city by articulating its own history.

Following on from the University’s successful “Inspire” initiative that last year recruited more than 40 new research staff as part of the University’s preparation for REF 2014 (Research Excellence Framework) the University has continue its investment in staff via an “Inspire 2” initiative that will add a further 30 academic posts across all disciplines. 16


Liverpool John Moores University strategic plan. External funding is sought from a wide range of UK and European sources, including European Regional Development Fund (ERDF), European Social Fund (ESF), Research and Technological Development (RTD) programmes as well as various Government initiatives. A small sample of the projects supported by GPP is provided below:

Benefit related to teaching and learning Some illustrations of the University’s contributions are: JUMP IN(tegrated) Dance: In-reaching community of practice: JUMP IN(tegrated) Dance is a project based learning community of practice which was started in 2007 with Centre for Excellence in Teaching and Learning (CETL) funded support. The project is self-sustaining as a social enterprise activity. The project has three important constructs: As a piece of staff student participatory action research, an innovative curriculum development model and a community outreach project, reflecting the University’s strategy for civic engagement.

Open Labs: Open Labs is a five year ERDF project providing a unique environment in which to develop and nurture collaborative partnerships between small and micro-SMEs and Higher Education. Focusing on the development of digital products and services and the technologies and processes that enable them, Open Labs have a proven track record in helping local businesses access the specialist expertise and research facilities available within the University.

The project works in close partnership with dance agencies, education providers, day care centres and the local authority. Students and client groups are drawn from cross year groups of the undergraduate degree and disabled service providers/users from the northwest communities. The project enables participants to design and create specific learner plans and engage in student centred learner partnerships. Dissemination is through performance work, conferences and research papers. Project participants have gone onto further training in the arts and/or post graduate study or performance training with Cando Co’s foundation course for dance artists. In 2014 the project is developing its practice further with other partnership organisations such as DaDa Festival and Claremont specialist Sports College. The project is part of a £100,000 research pilot bid for the European Human Rights Commission to encourage further participation in physical activity for disabled people.

The overall aim of the project is twofold: to help local businesses grow and become more successful, and to help LJMU’s academics to transfer their research knowledge and expertise to local companies. For example, during Summer 2014, Open Labs are hosting a unique series of workshops exploring the applications of small Unmanned Aerial Systems (sUAS), commonly known as drones. Covering techniques applicable to a wide range of sectors, from the life sciences to construction, the sessions give hand on experience, a key understanding of potential civilian and specialist applications and a firm grasp of the safety aspects of flying sUAS. Workshops will allow researchers, technologists, engineers, operators, software developers and end users to explore this emerging opportunity together. Open Labs also help small/micro-SMEs by offering insight into new markets and technologies; providing advice on suitable sources of funding; facilitating the growth of communities of interest and strengthening peer networks.

Scientific Advisory Committee of the International Atomic Energy Agency’s Technical Co-operation Project: A senior member of staff from the School of Education, Leisure and Sport was appointed in June 2014 to the Scientific Advisory Committee of the International Atomic Energy Agency’s Technical Co-operation project “Assessing the Impact of Climate Change and its Effects on Soil and Water Resources in Polar and Mountainous Regions”. This four-year project involving scientists from 27 countries has funding of £1.6 million euros in the first instance to conduct research at 12 benchmark sites in polar and mountainous regions across the world.

Low Carbon: The Low Carbon Innovation Hub (LoC) is a 20 month ERDF project based on the Open Labs model. The project supports the development of SMEs in the Liverpool City Region (LCR) by improving access to the City Region’s Research and Development base. It facilitates access to high value commercially viable research linked to the low carbon agenda providing the SMEs in the region with a competitive edge. The aim of the project is to create high levels of resource efficiency and increase the regions low carbon goods, processes and services to generate economic wealth and create jobs for Merseyside.

Centre for collaborative innovation in dementia: The centre adopts a living lab approach to innovation and is European Network of Living Labs (ENoLL) accredited. The living lab approach facilitates the development and testing of new or existing technologies in partnership with people living with dementia by providing a ‘pragmatic research environment which openly engages all relevant partners with an emphasis on improving the real-life care of people living with dementia through the use of economically viable and sustainable innovations.

LJMU has niche and unique strengths in low carbon economy and will provide local SMEs first mover advantage in areas such as: Low Carbon Planning; Sustainable Asset Management; Energy Efficiency and Management; Renewable Management; Waste Management and Recycling; Wind Energy Manufacture; and Transport and Supply Chain energy from waste systems.

The Faculty of Technology and Environment’s School of Engineering, Technology and Maritime Operations delivered its first Summer School in conjunction with the Smallpeice Trust in July 2013. The Smallpeice Trust provides residential courses to promote engineering careers to young people. Forty 14 and 15 year old students from across the UK took part in an interactive introduction to offshore wind energy generation through a series of classes and lectures. Over four days the students competed in teams to design and build the components of an offshore wind generation system whilst gaining exclusive use of the University’s laboratories. They learnt about energy generation and the challenges faced by engineers in building, installing and maintaining offshore wind farms and in distributing this energy to domestic and industrial users. They also had an insight into the career opportunities in the industry when they attended a talk by Siemens.

Innovative Dementia: Innovative Dementia is a three year INTERREG North-West Europe (NWE) Project [a programme of the European Union to promote the economic, environmental, social and territorial future of the NorthWest Europe area] focussing on the issues and solutions connected to an ageing population with increased threat of dementia. Ageing is a large socio-economic threat in NWE and a top priority issue at EU level. Dementia is a leading psychiatric condition for people over 60 and needs higher recognition as cases are expected to double by 2025. Managing this potential threat to NWE society in a cost-efficient way requires innovative approaches presenting opportunities for new businesses and employment as well as concerted action by business and policy-makers at all regional levels.

Economic Development The University’s Grants Policy and Projects Office (GPP) exploits various external sources of funding to support projects which address the Social and Economic Engagement strand of the University’s 17

Innovative Dementia aims to boost innovation and employment by strengthened cooperation at international level between all concerned


Liverpool John Moores University journalism and entertainment.

parties to develop, implement and integrate innovative, long-lasting solutions to the socio-economic challenges linked with ageing and dementia.

LJMU’s world-leading Astrophysics Research Institute owns and operates the World’s largest and most sophisticated Robotic Telescope, based in the Canary Islands (See 6.5.3 above), and time on this telescope is made available to the National Schools’ Observatory (NSO) alongside its function as a National Facility for research. The NSO now has approximately 4,000 teachers including those in some 1,500 secondary schools as registered users of the telescope and approximately 14,000 individual students have user accounts. Since the NSO was launched, almost 80,000 observations have been requested and delivered to schools across the UK. The NSO project is funded by LJMU and is offered free to registered school users. Expansion of the scope and reach of the NSO is being undertaken within the University’s Widening Participation agenda. The Institute also helped found, and continues to provide knowledge input to ‘Spaceport’, a locally based major tourist attraction, owned by Mersey Travel and attracting around 70,000 paying customers per year. The ARI is active more broadly in outreach, with staff and research students delivering talks, workshops and other activities to over 20,000 people in 2013/14, as well as several TV and radio appearances. During this period, the support of the Ogden Trust [a charitable foundation which aims to promote the teaching and learning of physics, partly through supporting Science Officers at universities around the UK, including LJMU] has also allowed the LJMU Ogden Science Officer based in the Institute to engage with over 2,500 school pupils, spending almost 400 hours directly in contact with students and teachers. It has in addition enabled the Institute the time to develop five new workshops and three talks which are now offered to schools via the Institute’s outreach website.

Student Access LJMU is proud of its longstanding record of reaching out to students from disadvantaged backgrounds and ensuring that the benefits of a university education are accessible to everyone with demonstrable academic ability irrespective of their social or economic background. The University’s longstanding and successful track record of widening participation is evidenced by its performance against Higher Education Statistical Agency (HESA) widening participation indicators. 96.6% of LJMU’s young students are from state schools, 16.5% from lower participation neighbourhoods and 37.2% from social classes NS-SEC 4-7 (as classed by HESA). The percentage of mature students with no previous higher education experience and from lower participation neighbourhoods is 20.2%, which is considerably higher than the UK average of 10.9%. 3% of LJMU students are in receipt of the Disabled Students’ Allowance and 9.7% of home students are from a BME background. The University also provides funds to support students experiencing financial hardship and continues to invest in carefully targeted financial support for students from lower income backgrounds offering a holistic approach to help aid retention and progression. In 2013/14 the profile of the students in receipt of a National Scholarship Programme (NSP) award shows that 17.03% were from a BME background, 8.29% were disabled students and 27.39% were mature students. These figures are higher than the percentage for new students that did not receive the NSP and demonstrate that, in addition to coming from a low income background, the award is targeting students that may be potentially experiencing other forms of disadvantage. The University has continued to match-fund its Government allocation of the NSP by doubling the number of places and will monitor and evaluate the progression of students who receive this scholarship.

LJMU’s School of Sports Science, which has been involved with most Sport Relief challenges, providing training to David Walliams and Chris Moyles, among others, also provided training for John Bishop to ensure he completed his ‘Bishop’s Week of Hell’ for Sport Relief. This year has seen one of the team provide training and support for the Comic Relief Challenge to travel down the Zambezi River. Again this challenge has resulted in the raising of over £1 million to support projects related to children’s health and disease prevention in Africa.

LJMU also provides a bursary of £500 per annum to home full-time undergraduate students with a household income of £25,000 or less and allocated an additional £250,000 in 2013-14 to a student support fund. This fund was directed at students who are most in need in order to aid retention. The University remains committed to ensuring that all students that are able to participate in higher education can do so regardless of their financial circumstances.

The Centre for Entrepreneurship (CfE) has previously received funding from the UnLtd Higher Education Support Initiative, a joint initiative from UnLtd and HEFCE to embed social entrepreneurship into Higher Education. This scheme has enabled the CfE team to provide the necessary support, resources and knowledge within LJMU, enabling companies who provide a social benefit to the community to start-up and thrive.

Trading with Integrity

LJMU Geography and Wildlife Conservation students from the School of Natural Sciences and Psychology recently worked with children at St Albert’s Catholic Primary School in Stockbridge Village to create a new community orchard and outdoor learning zone behind their school. The students have been learning about the Mab Lane Community Woodland project as a case study in a new module called ‘Sustainable Natural Heritage’ which explores the cultural and social aspects of conservation and how it engages the wider community.

As one of the largest employers in the Greater Merseyside region, LJMU continues to develop its approach to ethical trading. This is done through the purchase of Fair Trade goods where possible and appropriate, balancing always the benefits of developing educational opportunities for the citizens of the world with a careful consideration of the political, ethical and human rights records of the governments of those countries in which LJMU operates or recruits students Community Engagement Some illustrations of the University’s contributions are: As a flag-ship of LJMU’s community engagement, the Roscoe Foundation for Citizenship promotes good citizenship amongst the young people in the Greater Merseyside region. More than 900 schools are engaged in the scheme, to promote good citizenship to school children by making awards to role models in society. The Foundation also runs the prestigious Roscoe Lecture series, securing high profile speakers from the national and international community to present thought-provoking public lectures that are free and open to the community in the North West. Audiences typically number over 1000 (and sometimes reach 2500) and tickets are free of charge. Speakers have included notable people from the fields of national and international politics and diplomacy, academia, religion and belief,

The Faculty of Education, Health and Community has a high number of vocational programmes and this offers many opportunities for students to work for the social benefit of the local, regional, national and international communities. For example, teacher training students regularly participate in voluntary projects in local schools. Initiatives have included: developing eco schools and local playgrounds; education and awareness training on bullying and homophobia; and health education awareness training. The Nursing students also work with Public Health students internationally on a series of AIDS related health awareness policies across the African sub-continent.

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Liverpool John Moores University BOARD OF GOVERNORS The University is an independent Higher Education Corporation whose authority derives from the Education Reform Act 1988, and the Further and Higher Education Act 1992. The Board of Governors derive their authority from the University’s Instrument and Articles of Government which was approved by the Privy Council on 5 March 1993, and revised in 1995 and 2002. The Instrument and Articles of Government state that the Board shall consist of not less than twelve and not more than twentyfour appointed members. The Board must decide what size it wishes to be. The Board currently consists of twenty members, of whom up to thirteen would be independent members, one nominee each from the Academic Board and two students, two staff governors and two co-opted members. The membership of the Board is completed by the Vice-Chancellor, who is the Chief Executive. In the period from 1 August 2013 membership of the Board of Governors has been as follows: Ex-officio Members Professor Nigel Weatherill

Vice-Chancellor & Chief Executive

External Independent Members Ms N. Benson Ms K Byrne Mr R Hill Mr A Holroyd Mr P Hyland Sir B Massie Mr B McCann Mr G Morris Ms D Shackleton Mr J Stopforth External Co-opted Members Mr P Holme Mr C Williams Nominee Members Dr T Livsey Mrs J Murphy Mr C Reid Mr D Cole Miss S Davys Staff Members Professor P Lisboa Ms. S Maclennan Ms D Fantin

Deputy Chairman of Finance Committee Chairman and Pro Chancellor Chairman of Nominations Committee Chairman of Remuneration Committee (Retired 30 September 2013) Deputy Chairman of Employment Committee Deputy Chairman of Audit Committee (Retired 30 September 2013) Chairman of Audit Committee (Appointed 1 October 2013) Deputy Chairman of Audit Committee (Appointed 1 October 2013) Chairman of Finance Committee Chairman of Audit Committee (Retired 30 September 2013) Deputy Chairman of the Board of Governors (Appointed 1 October 2013) Chairman of Remuneration Committee (Appointed on 1 October 2013)

Co-opted Governor from Education Sector Deputy Chairman of Employment Committee (Retired 11 December 2013) Chairman of Employment Committee Appointed co-opted member of Audit Committee

Staff Governor (Academic Board Nominee) (Retired 31 August 2013) Staff Governor (Academic Board Nominee) (Appointed 1 September 2013) Student Governor (Student President) (Retired 7 July 2014) Student Governor (Student Vice President) (Appointed 27 September 2013 (Re-appointed 5 July 2014) Student Governor (Student President) Staff Governor (Teaching Staff) (Appointed 8 February 2014) Staff Governor (Non-Teaching Staff) (Appointed 29 October 2013) Staff Governor (Teaching Staff) (Retired 7 February 2014)

The Board of Governors are the Trustees of the University.

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Liverpool John Moores University OFFICERS AND ADVISORS OF THE UNIVERSITY Vice-Chancellor and Chief Executive

:

Professor Nigel Weatherill

Bankers : Barclays Bank plc. 6th Floor 1 Marsden Street Manchester M2 1HW External Auditors : KPMG LLP St James’ Square Manchester M2 6DS Solicitors : Davies Wallis Foyster 5 St Pauls Square Old Hall Street Liverpool L3 9AE Internal Auditor : Deloitte LLP Horton House Exchange Flags Liverpool L2 3PG RESPONSIBILITIES OF THE BOARD OF GOVERNORS OF LIVERPOOL JOHN MOORES UNIVERSITY In accordance with the Education Reform Act 1988, the Board of Governors of the University is responsible for the administration and management of the affairs of the University and is required to present audited financial statements for each financial year. The Board of Governors is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the University, and to enable it to ensure that the financial statements are prepared in accordance with the Education Reform Act, the Statement of Recommended Practice on Accounting for Further and Higher Education Institutions and relevant Accounting Standards. In addition, within the terms and conditions of a Financial Memorandum agreed between the Higher Education Funding Council for England and the Board of Governors of the University, the Board of Governors, through its designated office holder, is required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the University and of the surplus or deficit and cash flows for that year. In causing the financial statements to be prepared, the Board has ensured that: n Suitable accounting policies are selected and applied consistently. n Judgements and estimates are made that are reasonable and prudent. n Applicable accounting standards have been followed, subject to any material departures disclosed and explained

in the financial statements.

n Financial statements are prepared on the going concern basis unless it is inappropriate to presume that the University will

continue in operation. The Board is satisfied that the University has adequate resources to continue in operation for the foreseeable future; for this reason the going concern basis continues to be adopted in the preparation of the financial statements. The Board has taken reasonable steps to:

n Ensure that funds from the Higher Education Funding Council for England and the Training and Development Agency are used

only for the purposes for which they have been given and in accordance with the Financial Memorandum with the relevant Funding Council and any other conditions which the Funding Council may from time to time prescribe.

n Ensure that there are appropriate financial and management controls in place to safeguard public funds and funds from other

sources.

n Safeguard the assets of the University and prevent and detect fraud. n Secure the economical, efficient and effective management of the University’s resources and expenditure.

Mr Rod Hill Chairman

BA, FCMA, IPFA

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Liverpool John Moores University Corporate Governance Statement 2013/14 The University is committed to adopting good practice in all aspects of corporate governance. It aims to conduct its business in accordance with the principles identified in the Committee on Standards in Public Life (selflessness, integrity, objectivity, accountability, openness, honesty and leadership) and the Committee of University Chairs (CUC) Guide for Members of Higher Education Governing Bodies in the UK, known prior to 2010 as the ‘Combined Code’ and now known as the ‘UK Corporate Governance Code’. The Board of Governors has adopted the CUC’s Governance Code of Practice and works to ensure that governance practice remains consistent with the principles of the Code. Summary of the University’s Structure of Corporate Governance The University is an exempt charity and as such is required to undertake activities, in accordance with its aims and objectives, which are for the public benefit. The University has had regard to the Charity Commission’s guidance on public benefit, and information on how the University has delivered its charitable purpose [the provision of Education] for the public benefit is set out on page 13. The Board of Governors holds to itself the responsibilities for the educational character, the ongoing strategic direction and the financial solvency of the University. The Board approved the University’s new Strategic Plan 2012-2017 on 15 February 2012 which can be found http://www.ljmu.ac.uk/Vice_Chancellor. In addition to its formal Board and Committee meetings, the Board holds a number of strategic workshops and a residential strategic event each year, affording it the opportunity to consider, contribute to and influence strategic issues at an early stage in their development. The Board is also responsible for approval of all major developments, including property developments. In this regard the Board has set up a Governance Steering Group to oversee the major capital project of a ‘connected university village’, consisting of Governors with particular expertise in this area and coopting an independent member with particular expertise in overseeing major capital projects. Governors are also in receipt of regular reports from Executive Officers on the day-to-day operations of the University’s business and its subsidiary operations. The Board of Governors has a strong and independent non-executive element and no individual or group dominates its decision-making process. The Board is independent of management and free from any business or other relationship which could interfere materially with the exercise of its independent judgement. As a demonstration of the University’s stated commitment to place students ‘at the heart’ of its activities, the number of student Governors on the Board was increased from one to two in 2011/12. This is the maximum permitted under the relevant legislation. In addition, a ‘Student Voice Committee’ was established in September 2013, which provides a forum for full and frank dialogue between the University’s Strategic Management Team (SMT) and the elected student sabbatical officers. Upon commencing appointment, Governors are required to declare any pecuniary, family or other personal interest, direct or indirect, and this is noted in the Register of Members’ Interests. Governors are advised and expected to update their entry at any time as and when their circumstances change and the University also conducts an annual update in accordance with the recommendations of the CUC. The Registers of Interests for both the Board and the University’s Senior Management are published on the University website. Upon appointment Governors are also required to sign a ‘statement of confidentiality’. In accordance with the introduction of the Bribery Act 2010, Governors have taken responsibility for establishing an anti-corruption culture formulated around the six general principles of: Proportionate procedures; Top-level commitment; Risk Assessment; Due diligence; 21


Liverpool John Moores University Employment Committee met on 21 October 2013; 3 March 2014; and 2 June 2014. Up to the present date in the new financial year, the Employment Committee has met on 20 October 2014.

Communication (including training); and Monitoring and Review. A statement of commitment from the Chairman of the Board of Governors outlines that the Board of Governors expects that all staff, associates and agents will conduct business in accordance with the highest standards of ethical behaviour and that any bribery, or any form of corruption, by a member of staff of the University will be considered gross misconduct and the member of staff may face dismissal. To ensure that all staff are aware of the new Bribery Act, which came into effect in 2011, a mandatory e-learning module has been developed which gives an overview of the legislation to help staff to understand their corporate and individual duties and responsibilities. Agents, consultants and business partners who work with, or on behalf of, the University must act with integrity and behave ethically. The University will terminate agreements with such agents, consultants and business partners in the event of any breach of antibribery law, corruption or unethical behaviour of which it becomes aware.

The Remuneration Committee, which meets at least once a year, considers the performance and determines the annual remuneration of the Vice-Chancellor & Chief Executive and Senior Officers of the University. The Chairman of the Remuneration Committee, in line with best practice, is the Deputy Chairman of the Board, Ms Deborah Shackleton, appointed from 1 October 2013. In the last financial year the Remuneration Committee has met on 28 October 2013; 17 March 2014; and 2 June 2014. Up to the present date in the new financial year, the Remuneration Committee has met on 27 October 2014. The Nominations Committee meets at least once a year and more regularly if necessary, and considers membership issues and appointments to vacancies on the Board for non-executive members. The Committee also advises the Board of Governors of attendance statistics on an annual basis and supports any necessary intervention that the Chairman of the Board should make in instances of low attendance. Issues around attendance are discussed by the Chairmen of Committees as part of performance review meetings with individual Governors, which Nominations Committee also oversees. The Chairman of the Nominations Committee is Mr Rod Hill, appointed from 1 April 2013. In the last financial year, the Nominations Committee met on 28 October 2013; 27 March 2014; and 2 June 2014. At its meeting held on 2 June 2014 the Nominations considered the equality characteristics of the membership of the Board and agreed more pro-active succession planning would need to take place to ensure the right age; gender; disability and ethnicity balance of the membership of the Board. In this regard it was agreed that an executive search company should be appointed; that the University’s alumni should be further targeted and that a general vacancy for governors should be included on the University’s website encouraging prospective governors from the equality groups stated above to apply. Up to the present date in the new financial year, the Nominations Committee has met on 27 October 2014.

The Board of Governors meets a minimum of four times a year and maintains several Committees: a Finance Committee; an Employment Committee; a Remuneration Committee; a Nominations Committee; and an Audit Committee. All of these Committees are formally constituted with terms of reference and comprise lay members of the Board of Governors only. The Chairman or Deputy Chairman of the Board are not members of the Audit Committee and there is no overlap in membership of the Audit and Finance Committees. The Audit Committee also has a co-opted member who has the relevant financial qualifications and expertise required for the Committee. The Vice-Chancellor & Chief Executive is not a member of the Audit Committee and attends that Committee in his capacity of ViceChancellor & Chief Executive rather than as a Governor. The Board of Governors and its Committees review their terms of reference on a regular basis in the light of prevailing circumstances with a view, inter alia, to ensuring that they are embedding risk management effectively into their work. The Chairman of the Board of Governors is Mr Rod Hill appointed from 1 April 2013. The Deputy Chairman of the Board is Ms Deborah Shackleton, appointed from 1 October 2013. The full Board of Governors, in the last financial year, met on 30 September 2013; 18 November 2013; 2 December 2013 (Governors’ Workshop); 29 and 30 January 2014 (Residential Strategic Event); 31 March 2014; and 7July 2014. Up to the present date in the new financial year, the Board has met on 29 September 2014 and 17 November 2014.

The Audit Committee, which meets at least four times a year (five in 2013/14), is responsible for overseeing the work of the external auditors (currently KPMG) and internal auditors (Deloitte). After a tendering process, and in line with best practice, new internal auditors were appointed from 1 August 2014 (Baker Tilly). The Committee considers detailed reports on the maintenance of the University’s systems of control, including management reports and implementation plans and also considers any recommendations for improvement of systems and controls. In line with government regulations, the Audit Committee has two members with the appropriate financial expertise and qualifications, having appointed an additional Co-opted Member to the Committee in February 2013. The Committee also receives and considers reports from HEFCE as they affect the University’s business, monitors adherence with regulatory requirements and reviews the University’s accounting policies. Whilst the Vice-Chancellor and Chief Executive and other managers attend meetings of the Audit Committee as necessary, they are not members of the Committee. The Committee is empowered to meet any auditors on their own for independent discussions should this be decided to be necessary by either party. The Chairman of the Audit Committee is Sir Bert Massie who became Chairman from 1 October 2013 with Mr Brian McCann becoming Deputy Chairman of the Audit Committee from 1 October 2013. Mr Andrew Holroyd joined the Audit Committee on 1 October 2013 and Mr Carl Williams, Co-opted member joined the Committee on 4 February 2013. The Audit Committee, in the last financial year, met on 14 October 2013; 4 November 2013; 10 March 2014; 23 June 2014; and 21 July 2014. Up to the present date in the new financial year, the Audit Committee has met on 13 October 2014 and 3 November 2014.

The Finance Committee meets at least three times a year and recommends to the Board of Governors the University’s annual revenue and capital budgets after giving consideration to the financial health of the University. It also receives at each meeting reports on the University’s performance in relation to approved budgets, estate related capital investment plans and treasury management, and a financial report from the Liverpool Students’ Union (LiverpoolSU), which is a separate legal entity. The Chairman of the Finance Committee is Mr Graham Morris appointed from 1 April 2013 and who was Deputy Chairman before this date. Ms Kerry Byrne became Deputy Chairman of the Finance Committee from 7 July 2013. The Finance Committee, in the last Financial Year, met on 28 October 2013; 17 March 2014 and 26 June 2014. Up to the present date in the new financial year, the Finance Committee has met on 27 October 2014. The Employment Committee meets at least three times a year and considers issues related to staffing and employment; and including Health & Safety in the University. Health & Safety is also a standing item at the full Board meetings. The responsibilities of the Committee also encompass equality and diversity monitoring and the regulatory aspects of the University’s relationship with the student body. The Chairman of the Employment Committee is Mr Paul Holme appointed on 12 December 2012; Mr Andrew Holroyd is Deputy Chairman, appointed on 12 December 2012. In the last financial year the 22


Liverpool John Moores University of: Establishing and Enhancing the Student Partnership; Excellence in Learning, Teaching and Assessment; Embedding Research and Scholarship; and, Social and Economic Engagement.

In the opinion of the Board of Governors, the governance practices of the University are consistent with the “Guide for Membership of Higher Education Governing Bodies in the UK”, published by the CUC in February 2009, and as superseded by the UK Corporate Governance Code in May 2010.

The Strategic Management System requires and ensures a regular review of the University’s strategic direction and performance. Progress against the strategy is monitored by the Strategic Management Team (SMT). The Strategy Management Director, as a member of SMT, and a dedicated Strategy Support Office have specific responsibility for oversight of the performance and delivery of the University’s strategy; as well as strategy-related risk management.

During 2009 the Board of Governors conducted an in-depth review of the effectiveness of institutional governance arrangements of the University and made proposals for forward action. Such an intensive effectiveness review is conducted every four years with any identified actions/enhancements implemented in the meantime as and when the need arises. The 2009 review determined that there continued to be a high level of satisfaction within the Board of Governors and the Executive with the current governance arrangements within the University, alongside a commitment to self-evaluation and continuous improvement. The recommendations arising from the review were implemented during 2009/10. The Board recognises that the maintenance of good corporate governance arrangements is an ongoing process and a programme of development in governance work was undertaken and implemented in 2010/11. With the appointment of a new Vice-Chancellor & Chief Executive in 2011 the University has recently gone through a major realignment exercise with a new minimal University committee structure. The Board of Governors has decided, therefore, that the re-alignment and new committee structure will need time to embed before carrying out the next in-depth review of the effectiveness of institutional governance arrangements. However, the Board has committed to ensuring that the Board’s committee structure is aligned with the new University committee structure and is appropriate to the University’s business needs. These issues will be considered by the Chairmen of the Board and Committees during 2014/15 and the process for the next in-depth governance effectiveness review will begin during the latter part of 2014 and has been included in the 2014/15 Internal Audit Plan.

During 2013/14, the University has put in place a further strategic realignment of the organisational structure for implementation on 1 August 2013. This realignment is designed to further enhance the University’s ability to deliver the strategy through standardised faculty structures; common interfaces between faculties and central professional services; the appointment of three Pro-Vice-Chancellors with dedicated university-wide responsibilities for the core strategic themes; and, a minimal committee structure to oversee the key strategic activity and supporting initiatives. The Board of Governors and the Board’s Committees review their terms of reference on a regular basis against prevailing conditions, with a view, inter alia, to agreeing how best to maintain risk assessment activity into their work. The terms of reference for the Audit Committee were reviewed and amended in November 2010 to take into account the new reporting requirements within HEFCE’s Financial Memorandum for regulations under the Charities Act 2006, and further amended on 3 October 2011 to take account of new duties in accordance with the Bribery Act 2010. The terms of reference for both the Audit Committee and the Finance Committee have recently been reviewed in light of the new memorandum of assurance and accountability between HEFCE and institutions which came into effect on 1 August 2014.

2013/14 was an exceptionally busy period for Governors during a time of great change for the HE sector, and major strategic changes within the University with particular reference to the re-alignment of the academic and professional services structure within the University and embarking on a major capital investment to establish a “connected university village”. As a consequence of these changes and to ensure the relevant experience and skills remained on the Board the term of office for the Chairman of Finance Committee was extended by a further year and the Chairman of Employment Committee by a further two years.

The Board of Governors’ agenda includes a regular item for consideration of any relevant risk item. The Board receives reports on risk and the Risk Management arrangements from SMT and the Audit Committee. The Internal Audit Plan is derived from a high level risk assessment of the University’s operations in consultation with University management and the assessment makes detailed reference to the University’s Strategy Map and Plan, risk register, pipeline of possible audits and previous internal audit reports.

Internal Control The SMT and the Audit Committee receive regular reports from internal audit, which include any recommendations for development or improvement. The Internal Auditors, who operate to the standards defined in the HEFCE Accountability and Audit Code of Practice, submit regular reports, including independent opinion on the adequacy and effectiveness of the system of internal control, with any recommendations for enhancement.

The University’s Board of Governors is responsible for the University’s system of internal control and for reviewing its effectiveness. The system is designed to support the achievement of operational activities and to manage and limit the risk of failure to achieve policies, aims and objectives. The system of internal control is based on an ongoing risk management process designed to identify the principal risks to the achievement of the organisation’s objectives; to evaluate the nature and extent of those risks; and to manage them efficiently, effectively and economically. It is underpinned by compliance with the requirements of the core standards in:

The established processes for the identification, evaluation and management of the risks that the University faces were the subject of a major review in 2011/12, resulting in enhanced arrangements. All SMT members are required to have in place procedures for the identification, evaluation and management of risk both at the institutional level and in their local areas. All papers and reports presented to the SMT consider possible risk issues and appropriate key performance and risk indicators. The SMT receives regular reports setting out key risk indicators and considers possible control issues brought to its attention by early warning mechanisms which are embedded within the operational units. The Institutional Risk Register is reviewed on a regular basis and procedures for identifying risks refined. From 2012/13 all local risk registers are subject to annual review by SMT. Risk management is incorporated into the corporate planning and decision making process of the Institution. The Risk Management

n Governance n Financial Management n Risk Management Review procedures cover business, operational and compliance as well as financial risk. The University has the following processes and control arrangements in place: The University remains committed to best practice in Governance and Management. The principles of excellence underpin the University’s strategy (2012 to 2017), which itself is based on the four core themes

23


Liverpool John Moores University A steering group, chaired by the Pro Vice Chancellor (Education) and with representation from each Faculty and the relevant professional services, has been set up to oversee preparations for the Review which includes mapping University policies and procedure against the revised Quality Code and auditing them. A number of improvements have already been approved and are being implemented, including improved guidance and monitoring of collaborative partner compliance with University policies and a new Code of Practice for all placement activities. The guidance and procedures for programme validation and review for both internal and collaborative programmes has also been formally reviewed and revised for the start of 2014-15.

Policy contains a definition of the Institution’s risk appetite, reflecting informal advice from the University’s internal auditors and members of the Board with specific expertise in this area. An annual Risk Assurance Report is presented to the Audit Committee and the Risk Management Policy has recently been reviewed, amended and approved by the Board of Governors in July 2014. Particular indicators of the effectiveness of the internal control systems during 2012/13 include: The most recent overall assessment from the HEFCE Assessment of Institutional Risk, dated 24 March 2014, was that LJMU was not at higher risk and was meeting the accountability obligations set out in the Financial Memorandum between HEFCE and Institutions.

The University has a two stage process for the approval of new collaborative partners and the approval of new programme development. An initial Assessment of Strategic Fit (IASF) exercise is undertaken by the Academic Partnership Team to be approved by the relevant Dean. Once approved the full process of due diligence is undertaken. Following successful completion of the due diligence process the proposal for a new partner is submitted to the SMT for approval. New programme developments are considered by the Academic Planning Panel with recommendations being considered by the Education Committee for approval.

The 2013/14 annual assessment statement by the Internal Auditors of the University’s system of internal control, including risk management and governance, reports that: ‘Based on the work which we have undertaken during the year, we are able to conclude that Liverpool John Moores University has a basically sound system of internal controls, which should provide substantial assurance regarding the effective achievement of the University’s objectives’. Assessment gradings for audits in 2013/14 were in the main either full or substantial. Two audits were graded as limited assessments. These audits were arranged as support to management in areas where action was consciously planned to resolve issues that had been identified by management and to further improve controls. The Internal Auditors advised that they were satisfied that the University was implementing the appropriate policies and meeting the recommendations from the internal audit fieldwork.

The University now has a mechanism in place to look at the best use of staff resource across the University through the introduction of a new Staff Resource Management Group. The group is composed of the three Pro-Vice Chancellors, the Director of Human Resources and the Finance Director & Deputy Chief Executive, and takes a holistic view across the Institution when vacancies arise and new posts are funded. This approach provides the opportunity to redirect resources around the Institution consistent with the University’s strategy and to support particular projects and initiatives, whilst taking account of aspects such as Staff Student Ratios and recruitment trends.

The Office of Fair Access (OFFA) approved the University’s Access Agreement 2015-2016, which had been recommended by the SMT and endorsed by the Board of Governors. The Widening Participation Strategic Assessment submitted in the last financial year remains in place.

To support the management of the UKVI Highly Trusted Status Licence the University UKVI Compliance Officer has continued to undertake internal audits to ensure Tier 4 activity complies with current sponsor guidance. LJMU has continued to subscribe to the UKVI premium service, which provides more information to the University in relation to the core measurable rates.

The Board of Governors approved the original Carbon Management Programme in March 2010, delegating responsibility for ongoing monitoring of the Programme to the Finance Committee. In so doing the University is demonstrating compliance with HEFCE’s requirement for oversight of the programme by the Board, and a nominated committee. The plan is currently being reviewed to ensure alignment with the new Estate master plan. The University’s Carbon Management Plan is currently 40% in progression towards achieving its 2015 target. This target will be revised through alignment with a new master plan. A revised plan will consider how we can achieve the statutory target of 34% by 2020 based on 1990 emissions. Monitoring of the Carbon Management Strategy is a responsibility of the University’s Estates Committee.

The University has met the reporting requirements of both the Freedom of Information Act 2000 and the Data Protection Act 1998 for requests received, including handling the requests effectively and within the legal timeframe. The University managed its occupational safety and health risks effectively, successfully implementing its procedures for automatic fire alarm activation response and making the required progress against the targets contained in the Safety and Health Services Action Plan 2013/14. The Occupational Health Unit met the Faculty of Occupational Medicine’s service standards, along with professional bodies’ standards for students in vocational programmes; all health screening targets were met. Workplace accidents resulting in minor injuries reduced for each of the following: staff, students and others. Accidents reported to the Health and Safety Executive reduced from 10 to 6 (four related to staff accidents). The corresponding incidents rate for reportable accidents per 1000 staff reduced from 2.44 to 1.74. Accident statistics submitted to HESA were within sector norms.

An Anti-Bribery Policy was agreed by the Board of Governors on 28 March 2011 and a working group was subsequently established to identify high risk areas and ensure implementation of the Policy. Considerable work has been carried out over the last few years in connection with Fraud, Anti-Money Laundering, Anti-Bribery and Due Diligence through the re-drafting of policies, development of a series of workshops and creation of on-line training modules. This is all essential as part of both legislation and reporting requirements and good practice but it is recognised that having policies in place does not ensure compliance nor does it ensure understanding in all cases. Consequently, monthly monitoring now takes place in regard to completion of the on-line training modules and in order to develop greater understanding and awareness across the University training has been and will continue to be provided on an ongoing basis to the Strategy Delivery Forum and specific groups of employees. There have been no incidents of bribery reported in 2013/14.

The number of cases being referred to the Office of the Independent Adjudicator (OIA) in relation to student complaints and appeals continues to be low. The OIA opened sixteen complaints for the calendar year 2013. Out of the nine complaints closed by the OIA, three were determined “Not Justified”, one was determined as “Justified – in part” and three were determined as “Ineligible”. Two complaints were settled prior to decision by the OIA.

The University will undergo an HE Review, led by the Quality Assurance Agency (QAA) in 2015-16 on a date yet to be confirmed.

The governance of I.T. decision-making and strategy development was revised following the introduction of the new minimal LJMU 24


Liverpool John Moores University INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF GOVERNORS OF LIVERPOOOL JOHN MOORES UNIVERSITY

Committee Structure. The I.T. Committee, chaired by the Registrar & Deputy Chief Executive, has now taken on the senior governance role, and development projects are managed by the I.T. Projects Panel, chaired by a Director of School and reporting to the I.T. Committee. A new LJMU I.T. Strategy has been progressed through the governance structure and has been approved by the SMT.

We have audited the group and University financial statements (the ‘‘financial statements’’) of Liverpool John Moores University for the year ended 31 July 2014 which comprise the Consolidated Income and Expenditure Account, the Group and University Balance Sheets, the Consolidated Cash Flow Statement, the Statement of Consolidated Total Recognised Gains and Losses and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the Board of Governors, in accordance with paragraph 13(2) of the University’s Articles of Government and section 124B of the Education Reform Act 1988. Our audit work has been undertaken so that we might state to the Board of Governors 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 Board of Governors for our audit work, for this report, or for the opinions we have formed.

There has been a revision in institutional policy in that requests for system developments are now submitted either to the I.T. Services Desk, or directly to the I.T. Projects Panel as successor to the Development Programme Steering Group. The I.T. Projects Panel, chaired by a Director of School, has responsibility for the prioritisation and monitoring of small scale I.T. development requests deemed to be of a sufficient scale to warrant formal project management. The I.T. Projects Panel reports to the I.T. Committee. In addition as part of the implementation of the I.T. Strategy projects that require capital investment are subject to a detailed business case and presented to SMT for approval. The P2P (Procure to Pay) e-marketplace system i-procurement and i-buy - has been used within the University since April 2011. All faculties and divisions of the University now use the online procurement system. The online system continues to be improved through development of workflow, increased number of suppliers, the expanding use of e-invoicing and use of internal suppliers such as catering. In addition there were continued improvements in the actual usability of the system during 2013/14. There was a 36% increase in the number of purchase orders raised in the University system compared to the previous year and this was reflected across all areas of the University. The online system strengthens controls through the use of workflow processes over monitoring of budgets and authorisations of purchase orders and improves the efficiency of purchasing, receipting and invoice matching.

Respective responsibilities of the Board of Governors and auditor As explained more fully in the Statement of Responsibilities the Board of Governors on page 20 the Board of Governors is responsible for the preparation of financial statements which 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. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the groups and University’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Board of Governors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Operating and Financial Review to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

The Diamond Report on Collaborative procurement has recommended a savings target of 30% for individual HEI spend via existing national or regional agreements. LJMU’s collaborative spend for the last reported year was £12.1m which represents 28.5% savings and an improvement on 24.5% savings for the prior year. LJMU reported that use of such collaborative agreements contributed £965k towards the cashable savings reported in the EMM (Efficiency Measurement Model) return. The Audit Committee conducts a self-assessment every two years in order to satisfy itself and demonstrate that the Committee is committed to ensuring that it is continuing to fulfil its obligations as set out in its Terms of Reference and continuing to find ways of enhancing its effectiveness. The last review was held during September and October 2012 and reported to the Audit Committee on 5 November 2012 and which identified no serious issues of concern. Due to the appointment of a new Chairman of Audit Committee in August 2013 the next review will take place in 2015.

Opinion on financial statements The Board of Governors is of the view that there is an ongoing process for identifying, evaluating and managing the University’s significant risks: that a process was in place for the year ended 31 July 2014; that it is regularly reviewed by the Board of Governors; and that it accords with internal control guidance for directors on the UK Corporate Governance Code as deemed appropriate for HE. The Risk Management Policy and Framework has been updated to reflect and align closely with the new Strategic Framework 2012-2017.

In our opinion the financial statements: n give a true and fair view of the state of the affairs of the Group and University as at 31 July 2014 and of the Group’s income and expenditure, recognised gains and losses and cash flows for the year then ended; n have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

Going Concern n have been prepared in accordance with the Statement of Recommended Practice – Accounting for Further and Higher Education.

After making appropriate enquiries, the Board of Governors considers that the University has adequate resources to continue in operational existence for the foreseeable future. For this reason the Board continues to adopt the ‘going concern’ basis in preparing the financial statements.

Opinion on other matters prescribed in the HEFCE Audit Code of Practice issued under the Further and Higher Education Act 1992 In our opinion, in all material respects: 25


Liverpool John Moores University

41


Liverpool John Moores University STATEMENT OF PRINCIPAL ACCOUNTING POLICIES

n funds from whatever source administered by the University for specific purposes have been properly applied to those purposes n funds provided by HEFCE have been applied in accordance with the Financial Memorandum and any other terms and conditions attached to them.

Basis of preparation These financial statements have been prepared in accordance with the statement of recommended practice (SORP – 2007): Accounting for Further and Higher Education and in accordance with applicable accounting standards.

n Income has been applied in accordance with the University’s statues.

Basis of accounting The financial statements have been prepared under the historical cost convention, modified by the revaluation of certain land and buildings.

Matters on which we are required to report by exception We have nothing to report in respect of the following matter where the HEFCE Audit Code of Practice issued under the Further and Higher Education Act 1992 requires us to report to you if, in our opinion:

Basis of consolidation The consolidated financial statements include the University and its subsidiary undertakings for the financial year to 31 July 2014. Intragroup sales and purchases are eliminated fully on consolidation. In accordance with FRS2, the activities of the Students Union have not been consolidated because the University does not control nor have significant influence over their managerial and financial policy decisions.

n the statement of internal control included as part of the Corporate Governance Statement is inconsistent with our knowledge of the University and group.

Recognition of income Trevor Rees For and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants St James’ Square Manchester M2 6DS

Income from research grants, contracts and other services rendered is included to the extent of the completion of the contract or service concerned. This is generally equivalent to the sum of the relevant expenditure incurred during the year and any related contributions towards overhead costs. All income from short-term deposits is credited to the income and expenditure account in the period in which it is earned.

Date: 20/11/2014 Income from specific endowments and donations is included to the extent of the relevant expenditure incurred during the year, together with any related contributions towards overhead costs.

The maintenance and integrity of the Liverpool John Moores University website is the responsibility of the Board of Governors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

Recurrent grants from the Funding Council are recognised in the period in which they are receivable. Non-recurrent grants from Funding Council or other bodies received in respect of the acquisition or construction of fixed assets are treated as deferred capital grants and amortised in line with depreciation over the life of the assets.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Pension schemes The three pension schemes for the University’s staff are the Teachers’ Pension Scheme (TPS), Universities Superannuation Scheme (USS) and the Merseyside Pension Fund (MPF). The schemes are defined benefit schemes, which are externally funded and contracted out of the State Earnings-Related Pension Scheme. The Funds are valued every five years (TPS) by actuaries using the entry age method, or three years (MPF and USS) by actuaries using the projected unit method, the rates of contribution payable being determined by the trustees on the advice of the actuaries. Pension costs are assessed on the latest actuarial valuations of the Schemes and are accounted for on the basis of charging the cost of providing pensions over the period during which the institution benefits from the employees’ services. Variations from regular cost are spread over the expected average remaining working lifetime of Members of the Schemes after making allowances for future withdrawals. Tangible fixed assets a. Land and buildings

42

27

Land and Buildings are stated at valuation. The basis of valuation is either open market value for existing use or depreciated replacement cost. CB Richard Ellis, Chartered Surveyors, revalued the freehold and leasehold land and buildings at 31 May 2013. Valuations normally take place every 5 years, with an interim valuation in year 3. Freehold land is not depreciated. Buildings are depreciated over their expected useful lives of 50 years and leasehold buildings over the life


Liverpool John Moores University of the lease. Assets in the course of construction are valued at cost and are not depreciated.

the Taxation of Chargeable Gains Act 1992 to the extent that such income or gains are applied to exclusively charitable purposes.

Where buildings are acquired with the aid of specific grants they are capitalised and depreciated as above. The related grants are treated as deferred capital grants and released to income over the expected useful life of the buildings.

The University receives no similar exemption in respect of Value Added Taxation. Irrecoverable VAT on inputs is included within the cost of such inputs. Any irrecoverable VAT relating to Tangible Fixed Assets is included in their cost.

b. Maintenance of premises

The University’s subsidiary companies with the exception of JMU Building Services and Maintenance Ltd (which has the same Corporation Tax status as the University, and is not registered for VAT) are subject to corporation tax and VAT in the same way as any commercial organisation.

The cost of routine corrective maintenance is charged to the income and expenditure account in the period in which it is incurred. c. Telescope

Cash flows and liquid resources

The Liverpool Telescope has been capitalised at cost and is being depreciated over 20 years.

Liquid resources include sums on short-term deposits with recognised banks and building societies and government securities.

d. Heritage Assets

Provisions

The University owns a number of works of art which were donated or loaned during the last 10 years. These items are not included in the Financial Statements. Further information can be obtained in note 10.

Provisions are recognised when the University has a present legal or constructive obligation as a result of a past event, it is probable that a transfer of economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

e. Equipment Equipment, including computers and software, costing less than ÂŁ5,000 per individual item, or group of related items, is written off to the income and expenditure account in the year of acquisition. All other equipment is capitalised at cost and depreciated over 4 years. 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 the income and expenditure account over the expected useful life of the equipment. f. Leases Fixed assets held under finance leases and the related lease obligations are recorded in the balance sheet at the shorter of the fair value of the leased assets at the inception of the lease or the life of the asset as appropriate. The excess of lease payments over recorded lease obligations is treated as finance charges, which are amortised over each lease term to give a constant rate of charge on the remaining balance of the obligations. Rental costs under operating leases are charged to expenditure in equal annual amounts over the period of the leases. Investments Fixed asset investments that are not listed on a recognised stock exchange are carried at historical cost less any provision for impairment in their value. Current asset investments are included at the lower of their original cost and net realisable value. Stocks Stocks are valued at the lower of their cost and net realisable value. Where necessary, provision is made for obsolete, slow moving and defective stocks. Taxation status 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 is considered to pass the tests set out in Paragraph 1 of Schedule 6 Finance Act 2010 and therefore meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the University is potentially exempt from taxation in respect of income or capital gains received within categories covered by section 287 CTA2009 and sections 478-488 of the Corporation Tax Act 2010 (CTA 2010) (formerly section 505 of ICTA 1988) or section 256 of

28


Liverpool John Moores University

CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT For the year ended 31 July 2014 Income Funding council grants Tuition fees and education contracts Research grants and contracts Other income Endowment and Investment income

Note

2013/14 ÂŁ000

2012/13 ÂŁ000

1 2

37,807 127,794

53,932 104,398

3 4 5

7,433 4,833 316

9,047 4,664 338

178,183

172,379

6 8 10 11 7

100,252 46,841 9,216 6,128 4,281

101,079 48,974 8,888 2,575 4,779

8

166,718

166,295

11,465

6,084

Total income Expenditure Staff costs Other operating expenses Depreciation Impairment Interest payable Total expenditure Surplus after depreciation of tangible fixed assets at valuation and before tax

Financial Statements 2014

Profit/(Loss) on disposal of fixed assets

1,074

10

Surplus/(Deficit) after depreciation of tangible fixed assets at valuation and disposal of fixed assets and before tax Share of operating (loss)/profit in Associates

12,539

12

(22) 6,062

(48)

Taxation Surplus/(Deficit) after depreciation of tangible fixed assets at valuation and tax

(91)

-

57

12,491

6,028

Transferred from/(to) endowment funds

20

336

326

Surplus/(Deficit) for the year

22

12,827

6,354

The income and expenditure account has been prepared in respect of continuing operations 40

29


Liverpool John Moores University

CONSOLIDATED STATEMENT OF HISTORICAL COST SURPLUSES AND DEFICITS For the year ended 31 July 2014 Note Surplus/(Deficit) after depreciation of fixed assets at valuation and tax

2013/14 £000

2012/13 £000

12,827

6,354

Difference between historical cost depreciation charge and the actual depreciation charge for the year calculated on the revalued amount

21

494

672

Realisation of property revaluation gains of previous years on disposal of assets

21

20

-

13,341

7,026

Historical cost surplus/(deficit) for the period after tax

STATEMENT OF CONSOLIDATED TOTAL RECOGNISED GAINS AND LOSSES Note Surplus/(deficit) after depreciation of fixed assets at valuation and tax Endowment additions Unrealised (deficit)/surplus released on impairment/revaluation of assets Actuarial gain/(loss) in respect of pension scheme Total recognised (losses)/gains relating to the year

Opening reserves and endowments Total recognised gains/(losses) in year Closing reserves and endowments

41

30

2012/13 £000

12,491

6,028

13 21

182 (848)

216 (10,029)

26

(12,139)

11,116

(314)

7,331

2013/14 £000

2012/13 £000

36,266

28,935

(314)

7,331

35,952

36,266

Financial Statements 2014

Reconciliation

2013/14 £000


Liverpool John Moores University

BALANCE SHEETS As at 31 July 2014 Fixed assets Tangible assets Investments Investment in associate: Share of net (liabilities)/assets

Note

Group 2014 £000

University 2014 2013 £000 £000

10 12

181,126 39

190,954 39

181,126 16,029

190,954 16,029

12

(137) 181,028

(89) 190,904

197,155

206,983

Endowment assets Current assets Stocks and work in progress Debtors Short-term deposits Cash at bank and in hand

13

1,170

1,324

1,170

1,324

14 17 17

62 4,629 53,833 4,762

64 5,116 32,794 4,938

62 4,756 53,833 4,131

64 5,196 32,794 4,749

Creditors: Amounts falling due within one year Net current assets Total assets less current liabilities Creditors: Amounts falling due after more than one year

15

63,286

42,912

62,782

42,803

33,145 30,141

33,527 9,384

32,324 30,458

33,119 9,684

212,339

201,613

228,783

217,991

16

44,811

45,398

60,969

61,556

Provisions for liabilities

18

14,842

16,292

14,842

16,292

152,686

139,923

152,972

140,143

Net assets excluding pension liability

Financial Statements 2014

2013 £000

Net Pension liability Net assets including pension liability

26

83,413 69,273

70,027 69,896

83,413 69,559

70,027 70,116

Deferred capital grants Endowments Permanent Expendable Total Endowments Reserves Income and Expenditure Account excluding pension reserve

19

33,320

33,629

33,320

33,629

20 20

12 1,158 1,170

12 1,312 1,324

12 1,158 1,170

12 1,312 1,324

22

87,088

72,500

87,374

72,720

(83,413) 3,675

(70,027) 2,473

(83,413) 3,961

(70,027) 2,693

31,108 34,783 69,273

32,470 34,943 69,896

31,108 35,069 69,559

32,470 35,163 70,116

Pension Reserve Income and Expenditure Account including pension reserve Revaluation Reserve Total Reserves

26

21

The financial financialstatements statementson onpages page 37 29-57 Governors on on17 17th November 2014 November 2014. The to 68were wereapproved approvedby bythe the Board Board of of Governors

Mr Rod Hill BA, FCMA, IPFA Chairman

Professor Nigel Weatherill DSc, FREng, FRSA Vice-Chancellor & Chief Executive

42

31


Liverpool John Moores University

CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 July 2014 Note

2013/14 £000

2012/13 £000

Net cash inflow from operating activities

23

27,456

17,315

Returns on investments and servicing of finance Taxation Capital expenditure and financial investment

24 23 24

(2,846) (3,156)

(2,492) 57 (15,243)

Cash outflow before use of liquid resources and financing Management of liquid resources Financing

24 24

Decrease/(Increase) in cash in the year

21,454

(363)

(21,039) (637)

4,886 (637)

(222)

3,886

2013/14 £000

2012/13 £000

(222) 637

3,886 637

Reconciliation of net cash flow to movement in net debt

Decrease/(Increase) in cash in the year Cash inflow/(outflow) from increase in debt and lease financing Cash (outflow)/inflow from movement in liquid resources

25 25 25

Change in net debt resulting from cash flows Non cash movement on Endowments

25

21,039

(4,886)

21,454

(363)

7

9

21,461

Net debt at 1 August 2013

(7,097)

(6,743)

14,364

(7,097)

Net debt at 31 July 2014

25

43

32

(354)

Financial Statements 2014

Movement in net debt for year 2014


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 1 Funding Council grants

HEFCE £000

NCTL £000

2013/14 £000

2012/13 £000

Recurrent grant Specific grants

32,292 2,164

624 612

32,916 2,776

47,013 5,058

1,192 923 36,571

1,236

1,192 923 37,807

1,231 630 53,932

2 Tuition fees and education contracts

2013/14 £000

2012/13 £000

Full-time students (UK and European Union) Full-time students charged overseas fees and other fees Part-time fees (UK and European Union) Other fees and NHS education contracts

99,757 7,179 2,432 18,426 127,794

74,781 7,868 2,800 18,949 104,398

3 Research grants and contracts

2013/14 £000

2012/13 £000

Deferred capital grants released in year Buildings (note 19) Equipment (note 19)

Financial Statements 2014

Research councils UK based charities Health & Hospitals Central and Local Government Other research grants and contracts

1,856 613 1,636 920 2,408 7,433

4 Other income

2013/14 £000

Residences and Catering Other Services rendered Released from deferred capital grant (note 19) Other Income

1,102 2,708 335 688 4,833

5 Endowment and Investment income Income from expendable endowments Income from permanent endowments Income from short-term deposits

44

33

1,574 475 2,900 986 3,112 9,047 2012/13 £000 1,052 2,557 210 845 4,664

2013/14 £000

2012/13 £000

7 309 316

9 329 338


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 6 Staff Costs Salaries and wages Social security costs Pension costs (including FRS17 adjustment) Severance: Restructuring costs Pension costs relating to enhanced pension provision (note 18)

Emoluments of the Vice-Chancellor Salary Benefits in kind Pension contributions The average number of persons employed by the University during the year as expressed in full time equivalents was: Academic Other

2013/14 £000

2012/13 £000

80,283 6,567 11,859 98,709

80,279 6,472 11,315 98,066

834

2,050

99,543 709 100,252

100,116 963 101,079

2013/14 £

2012/13 £

230,000 1,000 231,000 36,800

213,840 6,660 220,500 33,600

2013/14 Number

2012/13 Number

(restated)

1,050 1,142 2,192

2013/14 Number

2012/13 Number

1 3 1 6

2 2 2 6

Annual remuneration of higher paid staff other than the Vice-Chancellor, excluding pension contributions: £100,000 - £109,999 £110,000 - £119,999 £120,000 - £129,999 £130,000 - £139,999

In addition to the above, severance pay of £183k was paid to a member of staff who had previously earned over £100k.

45

34

Financial Statements 2014

1,066 1,081 2,147


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 7 Interest payable On bank loans, overdraft and other loans: Wholly repayable within five years Not wholly repayable within five years Other interest payable FRS17 Adjustment: Net interest on pension liabilities (note 26)

8 Analysis of 2013/14 expenditure by activity Academic Academic services Research grants & contracts Residences & catering Premises Administration & central services General education Staff student facilities Other expenses Total per income and expenditure account

Financial Statements 2014

Other operating expenditure includes: Auditors remuneration: External audit (of this amount £50k (2013 £47k) relates to the University) External auditors provision of non-audit services: Taxation Grant audits Internal audit Operating leases

2013/14 £000

2012/13 £000

3,155 7 3,162

2,829 1 2,830

1,119

1,949

4,281

4,779

2013/14 £000

2012/13 £000

75,518 18,710 6,471 1,765 32,450 11,200 12,108 4,836 3,660

73,382 20,611 8,291 1,822 28,817 11,131 13,066 4,544 4,631

166,718

166,295

2013/14 £000

2012/13 £000

53

51

228 15 98 381

50 18 94 508

The total expenses paid to or on behalf of 22 governors was £7k (2013 - £12k on behalf of 23 governors). This represents travel and subsistence expenses incurred in attending Board of Governors, Committee meetings and Charity events in their official capacity.

46

35


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 9 Taxation

Current Tax: UK Corporation taxation at 24% Under/(Over) provision of taxation in prior years

2013/14 Group University £000 £000

2012/13 Group University £000 £000

-

-

(57)

(57)

-

-

(57)

(57)

10 Tangible fixed assets Group and University Cost or valuation At 1 August 2013 Additions Impairment Re-classified Disposals At 31 July 2014

173,091

Leasehold land and Buildings £000

WIP

Telescope

Equipment

Total

£000

£000

£000

£000

5,059

21,921

210,227

4,104 630 (11,080)

7,650 (7,637) (14,823)

5,436

4,720

40 (472) (2,577)

1,182 (2,249) -

168,654

2,427

3,653

5,108

15,575

195,417

2,233

2,024

-

2,365

12,651

19,273

4,974

196

-

294

3,752

9,216

-

-

94 (10,992)

(662) (13,536)

2,275 (7,637) 2,091 (1,166)

(662) (1,166)

(94) (1,378)

49 -

5,379

748

-

2,659

5,505

14,291

34,967 29,444

665 726

-

1,250

1,900

35,632 33,320

98,864

288

3,653

1,199

8,170

112,174

At 31 July 2014

163,275

1,679

3,653

2,449

10,070

181,126

At 1 August 2013

170,858

3,412

4,720

2,694

9,270

190,954

Net book value Inherited Financed by capital grant Other

47

36

Financial Statements 2014

Depreciation At 1 August 2013 Charge for the year Impairment Re-classified Disposals At 31 July 2014

Freehold land and Buildings £000


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 10 Tangible fixed assets (continued) The University’s freehold and some leasehold land and buildings were revalued at 31 May 2013 at open market value for existing use or depreciated replacement cost at £148.468m. In addition the remaining leased buildings are shown at the value of the lease. Included in land and buildings is land to the value of £15.575m that is not depreciated. During the year, leasehold land and buildings with a net book value of £0.52m and £0.68m respectively was disposed of. The resulting profit was £1.1m. Disposals of equipment were made during the year with a net book value of £0.088m. Should land and buildings that have been financed by exchequer funds be sold, the University may be required, under the terms of the Financial Memorandum with HEFCE, to surrender the proceeds. As at 31st July 2014 the net value of assets financed by exchequer funds is: 2014 £000 23,515 909 475 1,388 26,287

Freehold Land and Buildings Leasehold Land and Buildings Telescope Equipment

2013 £000 24,491 1,091 560 676 26,818

The University holds heritage assets, donated to the University with an insurance value of £57,000, and loaned to the University with an insurance value of £492,500. Heritage assets include paintings, vases and ceremonial maces. These assets are not recognised on the balance sheet.

Financial Statements 2014

11 Impairments As at 31st July 2014 the University continues to develop a major capital plan. As part of this development, the University plans to change the use of a freehold building which currently has academic use and is valued at depreciated replacement cost (DRC), to office space in 2017/18. The University has carried out an impairment review of this building to ensure that the carrying value is appropriate. The advice given by University valuers CBRE is that the valuation method of DRC is no longer appropriate, and an existing use method should be applied. The result of this change in valuation method is an impairment of £6.128m. This amount has been written off to the income and expenditure in the year. During the year ended 31st July 2013 some freehold and leasehold land and buildings of the University were revalued in accordance with accounting policy at open market value for existing use or depreciated replacement cost. This revaluation resulted in an impairment in the cost of three buildings totalling £2.575m. This amount was written off in the Income and Expenditure account during the year ended 31st July 2013.

48

37


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 12 Investments Group

Other Investments £000

Cost or valuation At 1 August 2013 and 31 July 2014

39

Other investments are in respect of shares in CVCP Properties PLC (1.0%) and Amaze Ltd (250,000 preference shares, redemption value £nil). University

Cost or valuation

Interest in Group Undertakings £000

Other Investments

Total

£000

£000

15,990

39

Net book value at 1 August 2013 and 31 July 2014

16,029

Subsidiary undertakings The subsidiary companies, with the exception of Liverpool John Moores (Malaysia) SDN.BHD are registered in England and Wales. Liverpool John Moores (Malaysia) SDN.BHD is registered in Malaysia and ownership in the UK is via circular transaction. All the subsidiary companies, wholly owned or effectively controlled by the University, are as follows: Principal Activity

Status

JMU Property Development Company Ltd

100% owned

Property Development Company

JMU Services Ltd

100% owned

Academic enterprise

JMU Learning Resource Centre Ltd

100% owned

Leasing of the Avril Robarts Learning Resource Centre

JMU Building Services and Maintenance Ltd

100% owned

Promotion of the advancement of education by provision of funds to the University

Liverpool Business School Ltd

100% owned

Dormant

Liverpool John Moores (Malaysia) SDN.BHD

100% owned

Promote and support collaborations within Malaysia

Microwaste Two Limited

100% owned

Proof in concept of novel energy waste management system 49

38

Financial Statements 2014

Company


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 12 Investments (continued) The University exercises a significant influence over the operations of JMU Building Services and Maintenance Limited, a company limited by guarantee. The University is the guarantor and the directors of the company must be appointed from officers or governors of the University, or members of the Company. Liverpool Science Park Limited is a company limited by guarantee. The company was incorporated on the 13 June 2003. Liverpool John Moores University, University of Liverpool and Liverpool City Council’s interest in the company is 24.5%, 24.5% and 51% respectively. The company commenced trading in November 2005. The net liabilities of the company for the year ended 31 March 2014 are £558,063 (2013 net liabilities £360,922), the group share of these being £136,725 (2013 net liabilities £88,426). The company’s financial year end was 31st March 2014. Investment in associate - group

Share of net assets/ (liabilities) at 1 August 2013

Financial Statements 2014

Liverpool Science Park Limited

(89)

Share of net assets/ (liabilities) for the year (48)

Share of net assets/ (liabilities) at 31 July 2014 (137)

13 Endowment asset investments

2014 £000

2013 £000

At 1 August 2013 Additions for the year Expenditure for the year Interest for the year Balance at 31 July 2014

1,324 182 (343) 7 1,170

1,434 216 (335) 9 1,324

1,167 3 1,170

1,206 118 1,324

Represented by: Cash Deposits Debtors

50

39


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 14 Debtors

Group

Amounts falling due within one year Trade debtors Prepayments Other debtors Amounts due from associated company Amounts due from subsidiary companies

University

2014 £000

2013 £000

2014 £000

2013 £000)

604 2,415 1,453 157 4,629

994 2,606 1,384 132 5,116

233 2,413 1,453 157 500 4,756

754 2,602 1,380 132 328 5,196

15 Creditors

Group

University

Amounts falling due within one year

2014 £000

2013 £000

2014 £000

2013 £000

HEFCE grants not applied Accruals - research grants Payroll deductions Bank loan Salix loan Amounts due to subsidiary companies Trade creditors Other creditors

1,742 13,662 2,553 538 49 2,003 12,598 33,145

2,587 12,944 2,509 538 99 2,869 11,981 33,527

1,742 13,181 2,553 538 49 667 1,986 11,608 32,324

2,587 12,944 2,509 538 99 1,455 2,840 10,147 33,119

16 Creditors

Group

Amounts falling due after one year

2014 £000

2013 £000

2014 £000

2013 £000

44,811 44,811

45,349 49 45,398

44,811 16,158 60,969

45,349 49 16,158 61,556

The intercompany lease is in respect of the Avril Robarts Learning Resource Centre. The lease runs for 25 years from the 18th February 1994.

51

40

Financial Statements 2014

Bank loan Salix Loan Intercompany lease

University


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 17 Interest rate risk profile of financial liabilities Cash at Bank and in hand Group University 2014 2013 2014 2013 £000 £000 £000 £000

Short Term Deposits Group University 2014 2013 2014 2013 £000 £000 £000 £000

Floating Rate

4,762

4,938

4,131

4,749

-

-

-

-

Fixed Rate As at 31 July 2014

4,762

4,938

4,131

4,749

53,833 53,833

32,794 32,794

53,833 53,833

32,794 32,794

The short-term deposits are placed with banks at rates based on prevailing market rates at the time of the deposit. All balances were held in sterling. 2014 2013 £000 £000 Maturity of financial liabilities Within 1 year or on demand Between 1 & 2 years Between 3 & 5 years Over 5 years

587 538 1,614 42,659 45,398

All financial liabilities relate to bank and loan debt.

637 587 1,614 43,197 46,035

The Bank loans are as follows:

Financial Statements 2014

Original Value £m 10.4 3.0 3.0 20.0 10.0 10.0

Term Years 25 25 25 25 from 2013 18 from 2015 12 from 2011

Fixed/Variable Fixed to 2024 Variable Variable Fixed to 2038 Fixed to 2033 Fixed to 2023

Security Aldham Robarts LRC Assorted Properties Avril Robarts LRC Art and Design Academy Art and Design Academy Tom Reilly Building

52

41

Interest rate 7.985% 1.30% 1.31% 6.065% 6.36% 6.68%


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 17 Interest rate risk profile of financial liabilities (continued) Borrowing facilities The group has £20m undrawn borrowing facility available as at 31 July 2014. Total

£000

Floating Rate Financial Liabilities £000

Fixed Rate Financial Liabilities £000

As at 31 July 2014

45,398

2,220

43,178

As at 31 July 2013

46,034

2,460

43,574

All the group’s creditors falling due within 1 year (other than bank and other borrowings) are excluded from the above table. 18 Provisions for liabilities and charges Group and University

Pension Enhancements £000

At 1 August 2013 Utilised in the year Transfer from/(to) income and expenditure account At 31 July 2014

Other £000

Total £000

12,413 (826) 709

3,879 (1,683) 353

16,292 (2,509) 1,059

12,296

2,549

14,842

Included within other provisions are provisions for restructuring costs of £417k (2013 £1.591m) and dilapidation costs of £863k (2013 £674k). Restructuring costs charged to the Income and Expenditure account in the current year totalled £834k (2013 £2.050m). Dilapidations charged to the Income and Expenditure account in the current year totalled £189k (2013 £674k). Other provisions include contractual obligations in relation to student activity.

53

42

Financial Statements 2014

The pension provision is in respect of pension enhancements payable to staff that have taken early retirement. The provision has been re-valued at 31 July 2014.


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 19 Deferred capital grants

Group and University Funding Council £000

At 1 August 2013 Buildings Equipment Total

Financial Statements 2014

Income Buildings Equipment Total

Other

Total

£000

£000

25,925 882 26,807

5,687 1,135 6,822

31,612 2,017 33,629

1,583 1,583

201 410 611

201 1,993 2,194

Disposals Buildings Equipment

-

(13)

Adjustments Buildings Equipment

12

(12)

(13) -

Released to income and expenditure Buildings (notes 1 and 4) Equipment (note 1 and 4)

(1,192) (923)

(142) (233)

(1,334) (1,156)

Total

(2,103)

(400)

(2,503)

At 31 July 2014 Buildings Equipment Total

24,733 1,554 26,287

5,746 1,287 7,033

30,479 2,841 33,320

Included in the Buildings total of £24,733k is £305k relating to the Telescope enclosure which is shown in the Telescope category in Fixed Assets (Note 10).

54

43


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 20 Endowments

Group and University Restricted Permanent £000

Balances at 1 August 2013 Capital Accumulated income Additions for the year Interest for the year Expenditure for the year Net Balances at 31 July 2014

Restricted Expendable £000

Total 2014

Total 2013

£000

£000

12 12

1,180 132 1,312

1,192 132 1,324

1,311 123 1,434

-

182

182

216

-

7 (343) (336)

7 (343) (336)

9 (335) (326)

12

1,158

1,170

1,324

12 12

1,019 139 1,158

1,031 139 1,170

1,192 132 1,324

Represented by: Capital Accumulated income 21 Revaluation reserve

Group and University

Revaluations

2014 £000

55

44

32,470 (20) (848) (494) 31,108

43,171 (10,029) (672) 32,470

Financial Statements 2014

At 1 August 2013 Disposals (note 22) Revaluation Impairment Contributions to depreciation: Released in year (note 22) At 31 July 2014

2013 £000


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 22 Income and Expenditure Account

Group 2014

Group 2013

University 2014

University 2013

£000

£000

£000

£000

At 1 August 2013 Surplus/(deficit) retained for the year Transfer from revaluation reserve Actuarial gain/(loss) in respect of pension scheme

2,473

(15,669)

2,693

(15,556)

12,827 514 (12,139)

6,354 672 11,116

12,893 514 (12,139)

6,461 672 11,116

3,675

2,473

3,961

2,693

(83,413) 87,088

(70,027) 72,500

(83,413) 87,374

(70,027) 72,720

3,675

2,473

3,961

2,693

At 31 July 2014 Balance represented by: Pension Reserve Income and Expenditure account excluding pension reserve

Financial Statements 2014

23 Reconciliation of consolidated operating surplus to net cash flow from operating activities

2013/14 £000

2012/13 £000

Surplus after depreciation of fixed assets and tax

11,465

6,084

Depreciation (note 10) Impairments (note11) Taxation Deferred capital grants released to income (note 19) Investment income(note 5) Interest Payable Decrease /(increase) in stock Decrease/(increase) in debtors Increase/(decrease) in creditors (Decrease)/increase in provisions (note 18) Share of Loss/(profit) of associates Pension costs less contributions payable

9,216 6,128 (2,503) (316) 4,281 2 602 (145) (1,450) 48 128

8,888 2,575 (57) (2,166) (338) 4,779 (15) 2,436 (7,000) 1,740 91 298

Net cash inflow from operating activities

27,456

17,315

56

45


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 24 Analysis of cash flows for headings netted in the cash flow statement Returns on investments and servicing of finance Interest received Interest paid Capital expenditure and financial investment Payments made to acquire fixed assets (note 10) Proceeds from sales of fixed assets (note 10) Deferred Capital Grants received(note 19) Management of liquid resources Cash placed on short term deposit (note 25) Financing Repayments of amounts borrowed 25

Analysis of net debt

Cash in hand and at bank: Endowments General

2013/14 £000

2012/13 £000

316 (3,162) (2,846)

338 (2,830) (2,492)

(7,650) 2,300 2,194 (3,156)

(16,310) 1,067 (15,243)

21,039

(4,886)

(637) (637) At 1 August 2013 £000

Cash Flow £000 (46) (176) (222)

Debt due after one year Debt due within one year

(45,398) (637) (46,035)

637 637

Current asset investments

32,794 (7,097)

21,039 21,454

57 46

7 7 587 (587) 7

At 31 July 2014 £000 1,167 4,762 5,929 (44,811) (587) (45,398) 53,833 14,364

Financial Statements 2014

1,206 4,938 6,144

Non Cash Change £000

(637) (637)


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 26

Pension schemes

The pension schemes for the University’s staff are the Teachers’ Pension Scheme (TPS), which is administered by the Teachers’ Pension Agency (TPA), the Universities Superannuation Scheme (USS), which is administered by Universities Superannuation Scheme Limited and the Merseyside Pension Fund (MPF), which is administered by Wirral Metropolitan Borough Council. Teachers’ Pension The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers' Pensions Regulations 2010, and, from 1 April 2014, by the Teachers’ Pension Scheme Regulations 2014. These regulations apply to teachers in schools and other educational establishments, including academies, in England and Wales that are maintained by local authorities. In addition, teachers in many independent and voluntary-aided schools and teachers and lecturers in some establishments of further and higher education may be eligible for membership. Membership is automatic for full-time teachers and lecturers and, from 1 January 2007, automatic too for teachers and lecturers in part-time employment following appointment or a change of contract. Teachers and lecturers are able to opt out of the TPS.

Financial Statements 2014

The Teachers' Pension Budgeting And Valuation Account Although members may be employed by various bodies, their retirement and other pension benefits are set out in regulations made under the Superannuation Act 1972 and are paid by public funds provided by Parliament. The TPS is an unfunded scheme and members contribute on a ’pay as you go‘ basis – these contributions, along with those made by employers, are credited to the Exchequer under arrangements governed by the above Act. The Teachers' Pensions Regulations 2010 require an annual account, the Teachers' Pension Budgeting and Valuation Account, to be kept of receipts and expenditure (including the cost of pension increases). From 1 April 2001, the Account has been credited with a real rate of return, which is equivalent to assuming that the balance in the Account is invested in notional investments that produce that real rate of return. Valuation of The Teachers' Pension Scheme The latest actuarial review of the TPS was carried out as at 31 March 2012 and in accordance with The Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014. The valuation report was published by the Department for Education (the Department) on 9 June 2014. The key results of the valuation are:   

employer contribution rates were set at 16.4% of pensionable pay; total scheme liabilities for service to the effective date of £191.5 billion, and notional assets of £176.6 billion, giving a notional past service deficit of £14.9 billion; an employer cost cap of 10.9% of pensionable pay.

The new employer contribution rate for the TPS will be implemented in September 2015. A full copy of the valuation report and supporting documentation can be found on the Teachers’ Pension Scheme website at the following location: https://www.teacherspensions.co.uk/news/employers/2014/06/publication-of-the-valuationreport.aspx

58 47


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 26 Pension schemes (continued) Scheme Changes Following the Hutton report in March 2011 and the subsequent consultations with trade unions and other representative bodies on reform of the TPS, the Department published a Proposed Final Agreement, setting out the design for a reformed TPS to be implemented from 1 April 2015. The key provisions of the reformed scheme include: a pension based on career average earnings; an accrual rate of 1/57th; and a Normal Pension Age equal to State Pension Age, but with options to enable members to retire earlier or later than their Normal Pension Age. Importantly, pension benefits built up before 1 April 2015 will be fully protected. In addition, the Proposed Final Agreement includes a Government commitment that those within 10 years of Normal Pension Age on 1 April 2012 will see no change to the age at which they can retire, and no decrease in the amount of pension they receive when they retire. There will also be further transitional protection, tapered over a three and a half year period, for people who would fall up to three and a half years outside of the 10 year protection. Regulations giving effect to a reformed Teachers’ Pension Scheme came into force on 1 April 2014 and the reformed scheme will commence on 1 April 2015.The pension costs paid to TPS in the year amounted to £5,325,849 (2013 – £5,251,072). Universities Superannuation Scheme (USS) The University participates in the Universities Superannuation Scheme (USS), a defined benefit scheme which is contracted out of the State Second Pension (S2P). The assets of the scheme are held in a separate fund administered by the trustee, Universities Superannuation Scheme Limited.

The triennial valuation was carried out using the projected unit method. The assumptions which have the most significant effect on the result of the valuation are those relating to the rate of return on investments (i.e. the valuation rate of interest), the rates of increase in salary and pensions and the assumed rates of mortality. The financial assumptions were derived from market yields prevailing at the valuation date. An “inflation risk premium” adjustment was also included by deducting 0.3% from the market-implied inflation on account of the historically high level of inflation implied by government bonds (particularly when compared to the Bank of England’s target of 2.5% for CPI which corresponds broadly to 2.75% for RPI per annum). To calculate the technical provisions, it was assumed that the valuation rate of interest would be 6.1% per annum, salary increases would be 4.4% per annum (with short term general pay growth at 3.65% per annum and an additional allowance for increases in salaries due to age and promotion reflecting historic scheme experience, with a further cautionary reserve on top for past service liabilities) and pensions would increase by 3.4% per annum for 3 years following the valuation then 2.6% per annum thereafter. 59 48

Financial Statements 2014

The latest triennial actuarial valuation of the scheme was at 31 March 2011. This was the second 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. The actuary also carries out regular reviews of the funding levels. In particular, he carries out a review of the funding level each year between triennial valuations and details of his estimate of the funding level at 31 March 2012 are also included in this note.


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 26 Pension schemes (continued) The assumed life expectations on retirement are: Males (Females) currently aged 65

23.7 (25.6) years

Males (Females) currently aged 45

25.5 (27.6) years

At the valuation date, the value of the assets of the scheme was £32,433.5 million and the value of the scheme’s technical provisions was £35,343.7 million indicating a shortfall of £2,910.2 million. The assets therefore were sufficient to cover 92% of the benefits which had accrued to members after allowing for expected future increases in earnings. The actuary also valued the scheme on a number of other bases as at the valuation date. On the scheme’s historic gilts basis, using a valuation rate of interest in respect of past service liabilities of 4.4% per annum (the expected return on gilts) the funding level was approximately 68%. Under the Pension Protection Fund regulations introduced by the Pensions Act 2004 the Scheme was 93% funded; on a buy-out basis (i.e. assuming the Scheme had discontinued on the valuation date) the assets would have been approximately 57% of the amount necessary to secure all the USS benefits with an insurance company; and using the FRS17 formula as if USS was a single employer scheme, using a AA bond discount rate of 5.5% per annum based on spot yields; the actuary estimated that the funding level at 31 March 2011 was 82%.

Financial Statements 2014

As part of this valuation, the trustees have determined, after consultation with the employers, a recovery plan to pay off the shortfall by 31 March 2021. The next formal triennial valuation is as at the 31 March 2014. If experience up to that date is in line with the assumptions made for this current actuarial valuation and contributions are paid at the determined rates or amounts, the shortfall at 31 March 2014 is estimated to be £2.2 billion, equivalent to a funding level of 95%. The contribution rate will be reviewed as part of each valuation and may be reviewed more frequently. The technical provisions relate essentially to the past service liabilities and funding levels, but it is also necessary to access the on-going cost of newly accruing benefits. The cost of future accrual was calculated using the same assumptions as those used to calculate the technical provisions but the allowance for promotional salary increases was not as high. Analysis has shown very variable levels of growth over and above general pay increases in recent years, and the salary growth assumptions built into the cost of future accrual based on more stable, historic, salary experience. However, when calculating the past service liabilities of the scheme, a cautionary reserve have been included, in addition, on account of the variability mentioned above. As at the valuation date the Scheme was still a fully Final Salary Scheme for future accruals and the prevailing employer contribution rate was 16% of salaries. Following UK government legislation, from 2011 statutory pension increases or revaluations are based on the Consumer Prices Index measure of price inflation. Historically these increases had been based on the Retail Prices Index measure of inflation. Since the previous valuation as at 31 March 2008 there have been a number of changes to the benefits provided by the scheme although these became effective from October 2011. 60 49


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 26

Pension schemes (continued)

Since the previous valuation as at 31 March 2008 there have been a number of changes to the benefits provided by the scheme although these became effective from October 2011. These include: New Entrants Other than in specific, limited circumstances, new entrants are now provided on a Career Revalued Benefits (CRB) basis rather than a Final Salary (FS) basis. Normal pension age The normal pension age was increased for future service and new entrants, to age 65. Flexible Retirement Flexible retirement options were introduced. Member contributions increased Contributions were uplifted to 7.5%p.a. and 6.5% p.a. for FS Section members and CRB Section members respectively. Cost Sharing If the total contribution level exceeds 23.5% of Salaries per annum, the employers will pay 65% of the excess over 23.5% and members would pay the remaining 35% to the fund as additional contributions.

Since 31 March 2011 global investment markets have continued to fluctuate and following its peak in September 2011 inflation has declined rapidly towards the year end, although the market’s assessment of inflation has remained reasonably constant. The actuary has estimated that the funding level as at 31 March 2012 under the scheme specific funding regime had fallen from 92% to 77%. This estimate is based in the results from the valuation at 31 March 2011 allowing primarily for investment returns and changes to market conditions. These are sighted as the two most significant factors affecting the funding positions which have been taken into account for the 31 March 2012 estimation. On the FRS17 basis, using an AA bond discount rate of 4.9% per annum based on spot yields, the actuary calculated that the funding level at 31 March 2012 was 74%. An estimate of the funding level measured on a historic gilts basis at that date was approximately 56%. Surpluses or deficits which arise at future valuations may impact on the institution’s future contribution commitment. A deficit may require additional funding in the form of higher contribution requirements, where a surplus could, perhaps, be used to similarly reduce contribution requirements.

61 50

Financial Statements 2014

Pension increase cap For service derived after 30 September 2011, USS will match increase in official pensions for the first 5% If official pensions increase by more than 5% then USS will pay half of the difference up to a maximum increase of 10%.


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 26

Pension schemes (continued)

USS is a “last man standing” scheme so that in the event of the insolvency of any of the participating employers in USS, the amount of any pension funding shortfall (which cannot otherwise be recovered) in respect of that employer will be spread across the remaining participant employers and reflected in the next actuarial valuation of the scheme. At 31st March 2013, USS had over 145,000 active members and the University has 45 active members participating in the scheme. The total pension contribution to USS for the University was £413k (2013 £295k). The employer contribution rate payable by the University for the Financial Year was 16%. Surpluses or deficits, which arise at future valuations, may impact on universities’ future contribution commitment. Local Government Pension Scheme (LGPS) – Merseyside Pension Fund

Financial Statements 2014

The LGPS is a funded defined benefit scheme, with the assets held in separate trustee administered funds. The total contribution made for the year ended 31 July 2014 was £3,636,791 (2013 £3,444,308). The agreed contribution rate for employers for the financial year was 10.5%. The employee rate paid is based on the whole time equivalent pensionable pay in accordance with the following table: Salary

Pension Contribution Rate

£0 – £13,500 £13,501 – £21,000 £21,001 – £34,000 £34,001– £43,000 £43,001 – £60,000 £60,000 – £85,000 £85,001 – £100,000 £100,001 – £150,000 Over £150,000

5.5% 5.8% 6.5% 6.8% 8.5% 9.9% 10.5% 11.4% 12.5%

The pensions cost is assessed every three years in accordance with the advice of a qualified independent actuary. All revisions to contributions were implemented from 1 April 2013. The assumptions and other data that have the most significant effect on the determination of the contribution levels are as follows: Latest actuarial valuation Actuarial method Investment returns per annum Pension increases per annum Salary scale increases per annum Market value of assets at date of last valuation Proportion of members’ accrued benefits covered by the actuarial value of the assets

62

51

31 March 2013 Projected Unit 5.6% per annum 2.6% per annum 4.1% per annum £5,819 million 76%


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 26

Pension schemes (continued)

A full actuarial valuation was carried out at 31 March 2013 and updated to 31 July 2014 on an FRS 17 basis by a qualified independent actuary. The material assumptions used by the actuary for FRS 17 at 31 July 2014 were:

Inflation Rate of increase in salaries Rate of increase for pensions Discount rate for liabilities Commutation of Pension to Lump sum

At 31 July 2014

At 31 July 2013

2.3% 3.8% 2.3% 4.3% 50%

2.4% 3.9% 2.4% 4.6% 50%

The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are:

Retiring today Males Females Retiring in 20 years Males Females

At 31 July 2014

At 31 July 2013

Years

Years

22.3 25.2

21.8 24.7

24.7 28

23.7 26.6

The University’s share of the assets in the scheme and the expected rates of return were:

Equities Government Bonds Other Bonds Property Cash/liquidity Other

60.2% 13.7% 2.3% 7.8% 4.4% 11.6%

63

52

Value at Long term 31 July rate of 2014 return expected at 31 July £000 2013

Value at 31 July 2013

101,363 23,068 3,873 13,134 7,409 19,532 168,379

101,079 24,661 4,218 13,629 3,245 15,413 162,245

7.0% 3.3% 4.3% 5.7% 0.5% 7.0%

£000

Financial Statements 2014

Long term rate of return expected at 31 July 2014


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 26

Pension schemes (continued)

Analysis of the amount charged to income and expenditure account

Year Ended 31 July 2014 £000

Year Ended 31 July 2013 £000

Employer Service cost Curtailment costs/Past service

6,165 780

5,802 124

Total operating charge

6,945

5,926

Year Ended 31 July 2014 £000

Year Ended 31 July 2013 £000

9,610 (10,729)

7,767 (9,716)

(1,119)

(1,949)

Analysis of net pension finance (costs)

Expected return on pension scheme assets Interest on pension liabilities Net pension finance (costs)

Financial Statements 2014

Amount recognised in the statement of total recognised gains and losses (STRGL)

Actual return less expected return on pension scheme assets Change in financial and demographic assumptions underlying the scheme liabilities Actuarial (loss)/ gain/recognised in STRGL

64

53

Year Ended 31 July 2014 £000

Year Ended 31 July 2013 £000

(6,032) (6,107)

15,757 (4,641)

(12,139)

11,116


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 26

Pension schemes (continued)

Movement in deficit during the year

Year Ended 31 July 2014 £000

Year Ended 31 July 2013 £000

Deficit in scheme at 1 August 2013 Movement in year: Current service charge Contributions Past service/Curtailment cost Net interest on assets Actuarial gain/(loss)

(70,027)

(78,896)

(6,165) 6,817 (780) (1,119) (12,139)

(5,802) 5,628 (124) (1,949) 11,116

Deficit in scheme at 31 July 2014

(83,413)

(70,027)

In accordance with the revised FRS17 accounting standard, assets have been valued at realisable (i.e. bid) values for the year ended 31 July 2014. Analysis of the movements in the present value of the scheme liabilities

65

54

Year Ended 31 July 2013 £000

232,272 6,165 10,729 2,266 6,107 (6,527) 780 251,792

214,067 5,802 9,716 2,251 4,641 (4,329) 124 232,272

Financial Statements 2014

At the beginning of the year Current service cost Interest cost Contributions by scheme participants Actuarial losses and (gains) Benefits paid Curtailments At the end of the year

Year Ended 31 July 2014 £000


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 26 Pension schemes (continued) Analysis of movement in the fair value of the scheme assets

At the beginning of the year Expected rate of return on scheme assets Actuarial (losses) and gains Contribution by the employer Contributions by scheme participants Benefits paid At the end of the year

Year Ended 31 July 2014 £000

Year Ended 31 July 2013 £000

162,245 9,610 (6,032) 6,817 2,266 (6,527) 168,379

135,171 7,767 15,757 5,628 2,251 (4,329) 162,245

The group expects to contribute £3,035m to its defined benefits pension plan during the year ending 31 July 2015 Reserves

University’s estimated asset share Present value of scheme liabilities Deficit in the scheme

Financial Statements 2014

History of experience gains and losses

Year Ended 31 July Difference between the expected and 2014 actual return on assets: £000

Year Ended 31 July 2014 £000

Year Ended 31 July 2013 £000

168,379 (251,792) (83,413)

162,245 (232,272) (70,027)

Year Ended 31 July 2013 £000

Year Ended 31 July 2012 £000

Year Ended 31 July 2011 £000

Year Ended 31 July 2010 £000

Amount % of scheme assets Change in assumptions Amount % of scheme liabilities

6,032 3.6%

(15,757) 9.7%

6,635 4.9%

(6,380) 4.9%

(7,124) 8%

(6,107) 2.4%

(4,641) 2%

(6,725) 3.1%

(4,665) 2.4%

Total amount recognised in STRGL Amount % of scheme liabilities

(15,01 0) 8.5%

12,139 4.8%

11,116 4.8%

(13,360) 6.2%

1,715 0.9%

(5,886) 3.3%

66

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Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 27 Access funds

Balance at 1 August 2013 Funding Council grants Interest earned Disbursed to students Balance at 31 July 2014

2013/14 £000

2012/13 £000

5 492 497

29 490 1 520

(497)

(515)

-

5

Funding Council grants are available solely for students; the University acts only as paying agent. The grants and related disbursements are therefore excluded from the Income and Expenditure Account. 28 NCTL bursaries

Balance at 1 August 2013 NCTL grants Disbursed to students

2013/14 £000

2012/13 £000

263 1,455 1,718

(6) 2,536 2,530

(1,352)

Balance at 31 July 2014

366

(2,267) 263

Bursaries are available solely for students, the University acts only as paying agent. The grants and related disbursements are therefore excluded from the income and expenditure account.

Non-cancellable operating lease rentals are payable as follows:

Less than one year Between one and five years More than five years

67

56

2013/14 £000

2012/13 £000

-

381 -

-

381

Financial Statements 2014

29 Operating Leases


Liverpool John Moores University

NOTES TO THE FINANCIAL STATEMENTS 31 July 2014 (continued) 30 Capital commitments

2013/14 £000

Capital expenditure contracted for, but not provided for in the financial statements Capital expenditure authorised by Board of Governors, but not yet contracted for Balance at 31 July 2014

2012/13 £000

-

-

-

-

-

-

31 Related party transactions No transactions in 2013/14 were identified which should be disclosed under Financial Reporting Standard 8 ‘Related Party Disclosures’. The Group has taken advantage of the exemption set out in FRS 8 and has not disclosed intragroup transactions. 33 Ultimate Parent Organisation

Financial Statements 2014

Liverpool John Moores University is the ultimate parent organisation. Copies of the group accounts are obtainable from the Finance Director and Deputy Chief Executive, 4th Floor, Kingsway House, Hatton Garden, Liverpool, L3 2AJ.

68 57

Financial statements 2014  

Financial Statement for the year ending 31 July 2014

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