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annual report and financial statements for the year ending 31 July 2012


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

An introduction from the Vice-Chancellor

Professor Nigel Weatherill Introduction 2011/12 The Financial Statements for the year ended 31 July 2012 represents another strong financial performance for the University. This sits alongside a successful academic year as measured by our student recruitment and improved National Student Survey (NSS) and league table positions. A new Strategic Framework has been agreed that will steer the University over the next five years from 2012 to 2017. The University's ambitious plan is underpinned by a commitment to be seen as a modern civic university delivering solutions to the challenges of the 21st century. The higher education sector is presently in a period of considerable change. However, our clear strategy, together with our underlying financial strength, gives the University confidence to meet these challenges. The Balance Sheet has maintained its strength; income and expenditure reserves are showing a significant increase compared with the previous year. We have continued to invest in our key areas of activity with the purpose of enhancing the student experience and developing as a University that embeds scholarship in everything we do. Of particular relevance has been the major investment in new staff over the last year that has attracted internationally recognised scholars from around the world to the University. I appreciate that the success of the University is dependent upon the hard work of staff across the Institution. I would like to take this opportunity to thank them all for their hard work and dedication. These are uncertain times, but the University is clear on its mission, and its clarity of purpose will enable it to emerge as a stronger institution.

Professor Nigel P Weatherill Vice-Chancellor and Chief Executive

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Liverpool John Moores University

About Liverpool John Moores University...

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Liverpool John Moores University

...In 1825, a small institution was founded that was to revolutionise education in Liverpool and provide opportunities for the working people of the city. The Liverpool Mechanics School of Art was founded by men of power and influence who recognised the transformative effects of education and the impact that learning and aspiration could have on individuals, on communities and society. This small, pioneering movement laid the foundations for Liverpool John Moores University, an institution that has grown and flourished and continues to provide opportunities for all.

Staff Breakdown

6%

7% 45%

36% 6%

It is an ethos we characterise in the simple words – dream, plan, achieve – from a statement made by our namesake Sir John Moores, the founder of the Littlewoods empire and a beacon of equal opportunities in Liverpool, “... if you want to enough, you can achieve anything”.

Academic Technical Adminstrative

Building on this educational heritage, LJMU is now one of the UK’s leading contemporary universities, delivering exceptional teaching and learning underpinned by high quality research and commercial engagement.

Research Manual

at a glance

n Annual turnover is £170.4m (2011/2012)

n Expenditure £165.4m (2011/2012)

n Underlying operational surplus £4.9m (2011/2012)

n 24,456 students

n 2,933 staff

n 250+ courses at undergraduate and postgraduate level The University continues to attract students from a wide range of backgrounds and countries around the world. LJMU successfully met its undergraduate recruitment targets for the 2012/2013 academic year.

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Liverpool John Moores University

University Structure LJMU is organised into five academic Faculties with supporting professional services. We are based in two clusters in the city centre with one outlying greenfield campus.

City Campus

City Campus City Campus supports students enrolled on a wide range of undergraduate and postgraduate programmes covering pharmacy, psychology, sports science, engineering, the built environment, computer science, maritime studies, nursing, midwifery, social work and much much more.

Mount Pleasant Campus

Mount Pleasant Campus (Liverpool Knowledge Quarter) The Mount Pleasant Campus supports students enrolled on a wide range of undergraduate and postgraduate programmes covering law and criminology, business, art and design, humanities and social sciences, drama and creative writing, media, journalism and film studies.

IM Marsh Campus IM Marsh Campus

IM Marsh Campus supports students enrolled on undergraduate and postgraduate programmes in teacher training, vocational education, education studies, tourism, events management, food, sport, dance, outdoor education and professional development. This is the only LJMU campus not located in Liverpool city centre.

Regardless of the discipline studied, all programmes emphasise the development of professional skills and competencies underpinned by sound theoretical and cutting-edge research. 4


Liverpool John Moores University

Student Statistics Total number of students: 24,456 19,803.8 FTE (2011/2012)

3%

13%

9%

46%

88%

7%

10%

10%

84%

94%

46%

58%

15% 2%

6% 80%

5%

42%

54%

23%

54%

77%

6% 69%

5

Total

FTE

% of LJMU Total

% of LJMU FTE

Arts Professional and Social Sciences

8091

7223.6

33.1

36.5

Education, Community and Leisure

3168

2717.7

13

13.7

Health and Applied Social Sciences

4216

2214.6

17.2

11.2

Science

4465

3865.9

18.3

19.5

Technology and Environment

4516

3782.1

18.5

19.1


Liverpool John Moores University

Establishing and enhancing the

student partnership

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Liverpool John Moores University

LJMU is committed to effective student representation across the University, from programme level to the Board of Governors, with student views being actively sought informally and via course representatives, student surveys and the election of student sabbatical officers in the Liverpool Students’ Union. Overall satisfaction with the LJMU learning experience, as recorded in the National Student Survey (NSS), has risen by 3% for the second year running; with 83% of final year students stating they were satisfied with the overall quality of their course. Similar results were achieved in the LJMU Survey, which mirrors the NSS, with 81% of Level 4 and 5 undergraduates saying they were also satisfied with their course.

“LiverpoolSU wants LJMU to

be the best, and to do what we need to help create a culture where amazing teaching is pursued relentlessly and celebrated endlessly.”

Paul Abernathy, President of the Liverpool Students’ Union

LJMU awards scholarships and bursaries worth £7million every year

Every student is assigned a Personal Tutor

LJMU delivers sector-leading support for students who have been in local authority care or who are estranged from their parents thanks to our John Lennon Imagine Awards, established with support from the Yoko Ono Spirit Foundation.

at a glance National Student Survey 2012 results: n 35 programmes secured overall satisfaction rates of 90% or above

n Assessment and feedback: student satisfaction increased by 7% to 73%, 3% above the sector average n Academic support: student satisfaction increased by 6% to 80%, above the sector average by 1%

n Learning Resources: up 5% to 86% and LJMU is now outperforming the sector by 4%

n Personal Development: increased by 1% to 81%, equal to the sector average

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Liverpool John Moores University

Excellence in teaching, learning and assessment

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Liverpool John Moores University

Preparing future generations to deliver solutions to the challenges of the 21st century Currently ranked 66 in the UK by the Sunday Times Good University Guide, LJMU delivers an exceptional student experience, founded on high quality teaching, ground-breaking research and extensive links with employers and business leaders. It’s this combination of academic expertise and ‘real world’ experience that helps ensure that our degrees are kept up-to-date and secure accreditation by key professional bodies. Every year students nominate staff for the Liverpool Students’ Union Teaching Excellence Awards and the nominations prove that inspiring teaching and learner support is at the heart of the LJMU student experience.

6 National Teaching Fellowships or 'Academic Oscars' from the Higher Education Academy in recognition of our outstanding teaching and learner support

Extensive portfolio of undergraduate degrees, postgraduate taught courses and research opportunities LJMU research directly informs all areas of the curriculum

“The LJMU Racing Team

has transformed its traditional ‘lecture-tutoriallaboratory’ programme delivery into an innovative, problem-solving approach which centres on real-life applications and industryled design projects.” The LJMU Formula Student Racing Team, winner of an LJMU Teaching and Learning Award

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Liverpool John Moores University

Boosting graduate employability Our unique World of Work programme has been developed in partnership with FTSE 100 companies and leading business organisations. The programme ensures that all our undergraduates develop the experience, attributes and skills demanded by today’s employers in all sectors of the economy. The World of Work Programme is integral to all our undergraduate courses and consists of three interrelated elements: graduate skills, which are taught, practised and assessed as part of our academic modules; work-related learning and an additional World of Work Skills Certificate, only awarded to students who pass a ‘mock’ graduate-entry level interview conducted by an employer from their preferred sector. n The British Council regards the World of Work Programme as a ‘best practice’ approach to employability for universities worldwide.

n Successful World of Work pilot programme completed with Malaysia’s largest public university.

“ The World of Work

Programme will give LJMU students the competitive edge that no other university will give them.”

Lindsey Fryer, Tate Liverpool

“ The World of Work

programme is a unique formula to make graduates employable.” Dr Norsaadah Ismail, Director Industry Relations Division, Malaysian Ministry of Higher Education

Graduate destinations For the third year in succession, LJMU has improved its overall graduate employment rates, with more students than ever securing prestigious graduate-entry positions. This positive trend is set against a backdrop of rising graduate unemployment and increasing competition within a very challenging labour market. n The average salary for all LJMU graduates was £19,000, which was higher than the UK average of £16,700. n The average salary for students in graduate-level roles was £22,900, compared to a national average of £19,400. n Over 90% of graduates are in work or further study since months after leaving the University n 54% of students secure graduate-entry professional jobs n Unemployment rates for LJMU graduates declined to just over 2% n Approximately 60% of graduates work in Merseyside 10


Liverpool John Moores University

Embedding research and scholarship Our Research Institutes are beacons of excellence providing inspiration and motivation to staff, students and society.

LJMU is currently one of the leading research-active contemporary universities in the UK. The 2008 Research Assessment Exercise confirmed that we conduct worldleading and internationally-excellent research quality right across the Institution, and the impact of our research in physics was highlighted in 2011 as best practice in the Research Excellence Framework (REF) pilot. 11


Liverpool John Moores University

LJMU is ranked in the top 4 post-92 universities for the following research:

1st for Electrical and Electronic Engineering, General Engineering, Sports-Related Studies and Architecture and Built Environment (joint holders)

2nd for Anthropology and Physics 3rd for Biological sciences

4th (joint) for Computer Science and Informatics

The range of research conducted at LJMU is considerable. From developing cutting edge new technology to detect brain tumours to ground-breaking studies on the impact of the recession in UK cities, our researchers are helping to inform public policy, shape new laws, transform lives and improve the environment. The continued development of our highquality research programme is critical to LJMU’s strategic development. We are committed to carrying out research that is both relevant to society and which ensures that our staff can teach students from an active and personal engagement with their subject.

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Liverpool John Moores University

at a glance Research funding 2011/2012 In 2011/2012, LJMU was awarded research grants worth over £8million. RESEARCH FUNDING BY FACULTY: n Arts and Professional Studies: £258k

n Education Community and Leisure: £79k n Health and Applied Social Sciences: £2.87m

n Science: £3.74m

n Technology and Environment: £1.15m

Our Centre for Public Health is a designated World Health Organisation Collaborating Centre for Violence Prevention

LJMU is ranked joint 1st in the UK for sport-related research and our School of Sport and Exercise Sciences is rated as ‘amongst the very best departments in the world’

RESEARCH FUNDING SOURCES: n UK Research Councils: £1.4m

n Health funding (NHS, Department of Health and local health authorities): £3.5m

n EU Framework programmes: £1.3m

NOTABLE RESEARCH CENTRE/ INSTITUTE HIGHLIGHTS:

n Astrophysics Research Institute: £1.3m

n Centre for Public Health: £2.8m

n Research Institute for Sport and Exercise Sciences: £1.6m

“ I’ve worked with some of the most respected people

in sports science, with a highlight being my placement at Liverpool Football Club Academy. I got a real insight into the world of elite sport, speaking to players and staff and learning from their experiences.” Matthew Draper, BSc (Hons) Applied Sports Psychology graduate

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Liverpool John Moores University

Social and economic engagement Our aim is to be recognised globally as a modern civic university while still retaining our strong links with Liverpool, a true city of the world.

Working with business and the community LJMU continues to be one of the UK’s leading higher education institutions for our interaction with business and the community. We are currently ranked in the top 40 UK universities for staff and graduate start-up companies and in the top 20 for the spin-off companies. n LJMU is recognised for its best practice in governance, leadership and management n In 2008, we became the first university in Europe to achieve the European Foundation for Quality Management (EFQM) Excellence Model award n Football Exchange clients include: Real Madrid, Manchester United, Prozone, Glaxo Smith Kline, UEFA, FIFA, The FA, Umbro and other Premier League football clubs

Enterprising students

“ LJMU’s Centre for

Entrepreneurship is the perfect example of the right support for students and graduates who want to set up their own businesses. I am absolutely convinced that if we support our young people in this way they will rise to the challenge to reinvigorate our economies.”

We first launched our Student Enterprise programme in 2003, thanks to funding from the European Social Fund. Now our dedicated Centre for Entrepreneurship is helping to equip students and graduates with the skills and confidence to drive economic recovery through new business formation. It is also helping LJMU deliver lasting impact both within Merseyside and beyond, firmly positioning the University as a ‘talent pipeline’ for the business leaders of the future.

Robert Hough, Chair of Liverpool City Region’s Local Enterprise Partnership 14


Liverpool John Moores University

Culture and debate LJMU’s Roscoe Lecture Series – the largest public lecture series in Liverpool – attracts up to a 1,000 people per lecture. The Series is named after the ‘founder of Liverpool culture’ William Roscoe, a Liverpool MP who campaigned for the abolition of slavery despite huge public outcry. The series continues to attract high profile speakers, including His Holiness the Dalai Lama, HRH the Prince of Wales, Alec Salmond and Lech Walesa. LJMU has long standing links with the Liverpool Biennial International Festival of Art and hosted three major exhibitions in 2012. In addition to taking part in the Festival, the School of Art and Design conducts research looking at the role and impact of Biennials around the world, and is working collaboratively on this subject with the University of Shanghai.

Inspiring future generations For over 15 years, LJMU has led a campaign to recognise the inspiring actions of young people across the North West of England. To date over 900 primary and secondary schools, further education and sixth form colleges have joined our Good Citizenship Award Scheme.

International connections LJMU offers international students the option of completing pre-postgraduate programmes at the University’s International Study Centre. These degree preparation offer direct progression onto our undergraduate and taught postgraduate degrees. As well as an established presence in South East Asia – the University has an office in Kuala Lumpur and has been working with partners in the region since the 1950s – international commercial activities have grown in recent years with customised contracts in Shanghai and India as well as with professional organisations, such as FIFA. n Over the years thousands of Malaysian students have followed LJMU programmes in-country and finalised their studies with a summer school in Liverpool. n Every summer students from Ghana, Malaysia, Singapore and Sri Lanka join LJMU for the University’s Summer Semester Programme. n The Nigerian Maritime Administration and Safety Agency has selected LJMU to deliver a BSc Nautical Science to its students. 15

n LJMU works in partnership with over 250 schools and colleges in Merseyside to raise the aspirations of young people across the region.

n Our National Schools’ Observatory` (NSO) brings high quality astronomical images right into the classrooms of around 2,500 schools nationwide.


Liverpool John Moores University

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Liverpool John Moores University

A sustainable future LJMU received a First Class Award and is ranked 21 out of 145 universities in the People and Planet Green League 2012 the UK's only comprehensive and independent green ranking of universities. Good quality higher education requires good quality environments. That’s why we have invested over £160million over the last 10 years in new capital projects and modernising existing buildings and facilities. By investing in our campus and improving facilities for our staff, students and other stakeholders, we are also advancing the renewal and regeneration of Liverpool, driving up its competitiveness, improving the public realm and making the city a more attractive place in which to live, work and socialise. LJMU is serious about becoming a low carbon university and we are committed to reducing our carbon footprint by 25% by 2015. In addition the University was awarded the EcoCampus Silver Award (a national environmental management system for the higher education sector) in 2011, and is now planning its Gold Award submission for later in 2012.

The £38million Redmonds Building provides industrystandard film and broadcasting studios as well as general teaching space and professional training facilities.

The £25.5m Tom Reilly Building boasts outstanding facilities including appetite laboratories, psychology testing labs, neuroscience labs, an indoor 70-metre running track, a driving simulator and a chronobiology lab.

Our Art and Design Academy received a prestigious Royal Institute of British Architects’ award as well as the World Architecture News Best Educational Building prize.

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Liverpool John Moores University

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Liverpool John Moores University

Financial Statements 2012 19


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 2012. 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. Successful achievement of these outcomes will require strong focus, strategic management discipline and a clear and relentless pursuit of the principles of excellence. Robust mechanisms and structures are in place to deliver these requirements. Operations Students LJMU is the tenth largest University in the UK with 25,450 students in Liverpool plus a further 4,500+ students enrolled on accredited University courses overseas. Actual full time equivalent numbers for 2011/12 were 20,050 an increase of 2% compared with 2010/11. 20


Liverpool John Moores University

Research & Scholarship The University continues to focus its research efforts and resources in areas of demonstrable research excellence; our Research Centres and Institutes. Additionally a number of newly emerging clusters of research activity are being developed, building on best practice elsewhere in LJMU. Core HEFCE QR research funds based on RAE2008 performance are increasingly used to support academic staff costs in research-active schools. Non-HEFCE research grant income has a critical role in supporting the research projects that staff undertake and increasingly make a contribution to academic staff salaries through the full economic costing model. The new strategic framework for the institution for 2012-17 provides a clear roadmap for the University for delivering research excellence that has impact across society and serves as an inspiration to all. Highlights n

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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 external research income to LJMU. As at the end of July 2012 LJMU was managing a research grants portfolio of £49m. £8.4m worth of new research grants were awarded to LJMU in 2011-12. LJMU continues to lever external research grant income using core HEFCE research income at a rate above the sector average (>£2 earned for every £1 of HEFCE QR compared to sector median in 2011 of £1.5; HESA data). LJMU remains 57th in the UK for research grant income (2010-11 HESA research income), ahead of all but one of the post-1992 HEIs and ahead of some well-established research-led Universities. Planning for the next round of research assessment (the Research Excellence Framework, REF2014) is well underway with a series of externally-led reviews taking place in the Autumn and Winter of 2012 in preparation for the submission in November 2013. After almost 10 years of sustained growth ahead of the sector average, external research grant income in 2011-12 was £8.1m (21% below 2010-11). A high reliance on public-sector funding (research council, NHS and local authority) and the budget constraints imposed on those external funding streams coupled with ever-increasing inter-University competition has had considerable impact on the levels of external funding available. LJMU derives the bulk of its grant income from a small number of research areas, in particular the Centre for Public Health. That Centre’s activities have been constrained because of the severe limitations and policy changes imposed by the Department of Health. The Centre’s performance remains exceptional (34% of total research income generated by a small team of permanent LJMU staff). 22


Liverpool John Moores University

n

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UK Research Council income (the most competitive source of research funding) accounts for approximately 17.5% of our total research income, with 80%+ in The Astrophysics Research Institute.

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Funding from the Technology Strategy Board and European Framework programmes has steadily increased and will remain an important source of funding. Academic staff continue to submit substantive research grant bids to external organisations at a rate in excess of 230 grant bids per annum. Success rates are in line with our peer group.

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HEFCE altered the funding formula across the sector for the allocation of QR funds (reflecting performance in RAE2008 by each HEI). The more selective approach, funding only the very best subjects, resulted in a drop in QR income for LJMU in 2011-12 of 9%.

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Significant planned 2012-13 strategic investment in academic posts in targeted areas of LJMU building on research excellence (notably Astrophysics and Sports Science) should have a significant positive effect on research grant income and in future HEFCE QR income following REF2014.

LJMU welcomed over 700 international students to the University as part of the 2012 Summer Semester programme. In 2011/12 the number of students undergoing bespoke entrepreneurship training was 1,313, the high profile and popular Start-Up Network attracted 412 new members (making membership of nearly 2,000) and 46 Enterprise Fellowships were awarded to support the establishment of student businesses. Academic Partnership income of £6.5m is 4% above 2010/11. Conference and Events Services income is 22% above 2010/11. LJMU worked with Merseyside Fire and Rescue Service to undertake the largest research project ever conducted in the UK around Carbon Monoxide poisoning. The ground breaking research is expected to influence policy and practice around Carbon Monoxide safety.

Resources Capital Development n The University continues to invest significant amounts of capital and has made excellent progress delivering its capital development strategy.

LJMU was selected as one of the UK Universities to help deliver a new PhD program for the Republic of Iraq. Approximately 50-60 PhD students are expected at LJMU as part of this scheme, initially to study English for one year before embarking on their PhDs. The first wave of students is expected in January 2013

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Commercial Enterprise, Technology Transfer and Student Entrepreneurship The University combines Higher Education Innovation Fund (HEIF) funding and core funds to ensure continuation of a range of support for Commercial Enterprise, Technology Transfer and Student Entrepreneurship activity across the University. Successful complementary European Union funding bids are used to further develop the support for student and alumni start-up businesses.

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During the year the annual Higher Education Business and Community Interaction survey (HE-BCIS) was published and showed the total annual value of LJMU’s interaction with business and the community reached £14.3m. Ranked against the 164 UK HEIs in the survey, LJMU was 61st for the total value of interaction with business and the community.

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Highlights n In 2011/12 the University’s commercial enterprise turnover reached £2.5m of which 28% came from international contracts. 23

The Redmonds Building is now home to three of LJMU’s largest academic schools: the Liverpool Screen School, the Liverpool Business School and the School of Law, and is specifically designed to give students access to ‘real world’ environments where they can hone their professional skills before entering the job market. Other facilities on offer to the 2,000 students using the building include: three large lecture theatres, a range of flexible teaching spaces, a lounge area and roof terraces. There are also several social learning areas and IT suites, all of which create not only a contemporary business environment, but also a resourceful and comfortable space where students may stay and work after lectures. The investment strategy for the Byrom Street Campus continues to progress well with the refurbishment of general teaching space and the refurbishment of the remaining large lecture theatre. The University has received confirmation from Liverpool City Council that planning approval has been granted and work is on-going to develop state of the art research and teaching laboratories in the Max Perutz Building. Planning approval has been granted for the development of a new building to provide student social space and catering facilities. This will take the form of a new building in the courtyard in the heart of Byrom Street Campus which will extend the existing coffee bar which currently provides seating for 45


Liverpool John Moores University

people, to a facility which provides seating for 240 people. n

The refurbishment of the 1st and 2nd floors of Tithebarn Street and the Stanton Fuller Lecture Theatre is complete and feedback continues to be very positive from both students and staff. IT Developments

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Significant progress has been made in the introduction of mobile technologies with further enhancements to the CampusM pastoral LJMU App and go live with Blackboard Mobile Learn, an app providing mobile access to learning materials and communications. A PC Availability system has been rolled out enabling students to find out where PCs are available prior to travelling to University locations, addressing a significant customer requirement; mobile access is available via the LJMU App. The innovative JISC/HEFCE funded Digital Academic Records Exchange (DARE) project reached a successful conclusion with seven partner institutions demonstrating the ability to deliver secure academic documents, such as the ‘HEAR’ in the Cloud; this has resulted in the delivery of an operational service and has attracted additional funding to support further development and take up. The project is cited externally as an innovative and pragmatic cloud-based approach to service delivery and has attracted a lot of attention. An LJMU Portal Strategy has been developed with the support of an external partner, aimed at providing integrated services for staff and students, and an associated Applicant Portal project has been initiated

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.

In the area of Learner Services, projects to support digital repositories and enhanced vertical search facilities have been initiated Significant investment of around £250,000 has been made in storage infrastructure to increase system resilience

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

Environmental Sustainability LJMU has been awarded the Ecocampus environmental management system Silver award in 2012.

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LJMU has received a First Class Honours in the People and Planet Green League Table.

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The University continues to deliver against its Carbon Management Plan which is assisting the University to face the future challenges, such as rising utility costs and compliance with legislation. It will also assist in controlling operating costs and making a significant contribution to government and HEFCE carbon reduction targets. The Plan is underpinned by various policies and strategies including the

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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 Wavertree Centre. 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.


Liverpool John Moores University

Results for the Year The University’s consolidated Income, Expenditure and Results for the year to 31 July 2012 are summarised as follows: 2011/12

2010/11

ÂŁ000 Income Expenditure

170,426 165,497

176,267 167,270

Surplus after depreciation of assets at valuation and before tax Loss on disposal of fixed assets

4,929 (250)

8,997 -

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

4,679

8,997

Share of Operating profit/(loss) in associate

(59)

15

Taxation

(57)

-

4,563

9,012

29

96

4,592

9,108

708

730

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

1,402

-

Surplus/(deficit) for the year on a historical cost basis

6,702

9,838

Surplus/(deficit) after depreciation of tangible fixed assets at valuation, disposal of assets and tax Surplus/(deficit) for the year transferred to accumulated income in endowment funds Surplus/(deficit) for the year Difference between historical cost depreciation charge and the actual depreciation charge for the year on the revalued amount

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Liverpool John Moores University

Fixed Assets have increased by £22m. Assets under Construction are £37.3m (10/11 £17.3m). The increase was mainly due to costs incurred on the Redmonds Building which was completed in August 2012.

Financial Headlines n

An underlying operating surplus of £8.0m

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Historical cost surplus for the year £6.7m

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Capital expenditure £30.1m

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Income decrease of 3.3% to £170.4m

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Decreased expenditure of 1.0% to £165.5m

Cash deposits have increased by £6m during the year, and the final mandatory tranche of borrowings of £10m was drawn down in August 2011. Capital expenditure was £30.1m. Governance and Risk

Income and Expenditure Account 2011/12 has been an excellent year as a result of the continuing strategic approach to the finances of the university with an outturn surplus of £4.6m for the year. An underlying operating surplus of £8.0m was achieved. The annual FRS17 charge was £2.6m with the Pension liabilities in the Balance Sheet increasing by £15.9m.

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Total Income decreased by 3.3% to £170.4m. The main decrease was due to HEFCE core funding and earmarked grants reducing by a further £4.9m. Research income reduced by £2.2m. These decreases were partly offset by the increase in student numbers and associated fee income. Expenditure decreased by 1.0% to £165.5m. Staff costs have decreased by 3.0% which reflects the fundamental restructuring which took place during 2009/10 and 2010/11 and has assisted with the delivery of significant savings in this and future years. Other operating costs remained stable, but with additional interest costs of £1.3m as expected, in line with the additional bank loans. The impact of FRS17 (Retirement Benefits) was a decrease to group surplus of £2.62 (2010/11 £2.86m).

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Balance Sheet The Balance Sheet has maintained its strength. Income and Expenditure Reserves excluding the Pension Reserve (associated with FRS17) are £63.2m showing a significant increase of £9.3m compared with the previous year. The revaluation reserve has decreased further this year by £2.1m due in the main to the sale of the property at 2A Myrtle Street. The pension liability reserve has increased by £2.8m. Total reserves are now £27.5m compared to £36.3m the previous year. This is largely due to the £15.9m increase in the FRS17 Pension reserve.

The University’s governance practices are consistent with the revised “Guide for Membership of Higher Education Governing Bodies in the UK” by the Committee of University Chairman (CUC), published in November 2004. The University remains strongly committed to adopting best practice in terms of Governance and Management. The management system has been developed and improved since 2002 using the EFQM Excellence model framework. Building on the success of becoming the only university in Europe ever to reach the standard required to win a full excellence award (winning the UK Excellence Award in 2008) The University has since been a finalist in the European Excellence Award, going on to be announced as a Prize Winner in the category of ‘Building Partnerships’ at the awards ceremony in Munich in October 2011. Risk management has been incorporated into the corporate planning and decision making processes of the University. The Institutional Risk Register is reviewed on a regular basis in conjunction with the periodic assessment of performance against objectives.

Future During the last 12 months, LJMU has worked extremely hard 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 has fully achieved its targeted home student control numbers for 2012/13 whilst demonstrating enhanced retention rates for existing students. This is a significant achievement. Notwithstanding, we will need to continue to work hard to ensure that this level of success is delivered in 2013/14 and onwards. This will be achieved by successful implementation of the 2012-17 Strategic Framework. This clearly sets out our ambitions for the coming 5 years. Conclusion 2011/12 has been an extremely successful year for LJMU. Significant investment in infrastructure has continued as demonstrated by the successful opening of the Redmonds 26


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Building. A surplus significantly in excess of budget has increased LJMU’s net worth before pension liabilities.

Since becoming a university, LJMU has grown substantially from around 8,000 students in 1988 to now more than 25,000 students studying across 5 faculties, with approximately 9,000 students graduating this year. This represents a substantial contribution to accessible Higher Education in the UK.

This, coupled with the implementation of the 2012-17 Strategic Framework and a significantly 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.

The University’s vision gives a particular focus to the benefits that both the student and society receive as a result of the University’s education. The vision is:

Sir M Thornton Chairman

‘To be recognised as a modern Civic University delivering solutions to the challenges of the 21st century’.

Delivering the Public Benefit 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 purpose by creating 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. The Corporation is regulated by HEFCE by virtue of the Charities Act 2006, now consolidated into the Charities Act 2011.

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 has recently approved the new Strategic Framework 2012-2017. The new framework reflects the Board of Governors’ commitment to the public benefit as illustrated in the University’s mission statement and vision (above) and charitable purposes below: At LJMU our mission is to serve and enrich our students, clients and communities by providing opportunities for advancement through education, training, research and the transfer of knowledge. LJMU’s charitable purpose, as perceived by its members and stakeholders can be summarised as follows:

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 employers and businesses; school children and alumni of LJMU who can engage in educational events organised by the University or use its academic facilities; the general public who are also able to attend various educational activities in the University such as exhibitions and public lectures. These activities contribute to the cultural and economic enrichment of our city, region and beyond.

n

n

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 in the induction of new governors.

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n

n

Mission, Vision and Values LJMU’s mission is “to serve and enrich our students, clients and communities by providing opportunities for advancement through education, training, research and the transfer of knowledge”. The University’s mission, vision and values therefore reflect LJMU’s commitment to the public benefit. 27

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. 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. 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. 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. 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.


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a science-related career. This is part of a continuing programme of outreach activity by LJMU with local schools.

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. The World of Work Careers Centre offers a range of services designed to support graduates in their job hunting and these services are available to LJMU alumni who graduated up to 3 years ago.

Open Labs is a European-funded initiative at LJMU tasked with developing successful research collaborations between University academics and small technology businesses. It is led by the Faculty of Arts, Professional & Social Studies. It aims to stimulate and support business/HEI collaboration and knowledge transfer. Higher education has a key role to play in developing the entrepreneurial capacity of the creative industries and encouraging enterprise activity. Open Labs develops partnerships with these businesses and works with areas of expertise within the University to take advantage of technology-enabled transformations in Internet technologies. SMEs have access to University R&D with the potential to be turning into high growth opportunities with a global market reach.

The Centre for Entrepreneurship supports students and graduates who want to set up their own businesses and is part of the NW HE 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.

There are many examples of providing public benefit across the University and a select few are given below as illustrations:

The Faculty of Technology and Environment’s ERDF funded outreach programme project brings together the staff and technical equipment of LJMU’s internationally renowned General Engineering Research Institute (GERI) within a centralised research laboratory complex in order to provide a dedicated facility for engineering research. The facility provides a high quality resource and knowledge base providing expertise in measurement, sensing, materials processing, advanced manufacturing and biomedical engineering in order to engage NW based SMEs as core partners in collaborative RTD and Knowledge Exchange partnerships.

LJMU’s Astrophysics Research Institute (ARI) recently played host to nearly a hundred astrophysicists from 18 countries who met to discuss the latest results on the most distant and powerful explosions in the universe, Gamma Ray Bursts (GRBs), with some of the research in this area unveiled for the first time and covered by the BBC and other international media. The ARI is at the forefront of Gamma Ray research, with the robotic Liverpool Telescope on the Canary Island of La Palma having a uniquely powerful capability to react rapidly to notifications from Gamma-Ray detector satellites – such as NASA’s Swift – and catch the optical counterpart and fading afterglow of the explosion.

The European Institute of Urban Affairs within the Faculty of Technology and Environment is a long established, high profile research and consultancy group with LJMU. Its key aims are to be a centre of international academic research excellence; a leading urban policy research group influencing national and international policy development and a resource for policy-makers and communities in the Liverpool city region, North West region and the UK. Some of its key projects have significantly influenced the decisions and behaviour of governments and major public organisations, including setting the government policy agenda for cities in the UK and Europe.

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-theart laboratory facilities. It is the only Sport and Exercise Science Department in the UK designated as a Centre of Excellence in Teaching and Learning. More than 90 children from schools across the region were recently invited to LJMU to see how science would be used during the London 2012 Olympic and Paralympic Games, providing pupils with a unique university experience, inspiring them to study science and pursue

The findings of the 2010/11 HE-BCI (Higher Education Business and Community Interaction Survey) have confirmed that LJMU’s mutually beneficial relationships with business and the community continue to be as strong as ever. The University’s reputation for successful engagement with organisations in the private, public and social sectors is reflected in its ranking of 61st out of 164 HEIs in the UK for this activity, with the value of LJMU’s interaction with business and the community totalling £14.3m. The survey, managed by HEFCE, is an essential source of information on the exchange of

Members of staff at LJMU engage actively in public debates on their area of expertise. Their insights into current events and discoveries help to shape and inform public opinion and benefit the local community and society as a whole.

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knowledge that takes place between HEIs and the world of business and the community. Data reported in the survey provides invaluable intelligence for knowledge exchange practitioners and policy-makers alike, providing an in-depth commentary on the extent of trends in knowledge exchange activity in the UK.

Under an initiative entitled ‘inspire’, the University has invested significantly in new research staff and is making careful and progressive preparations for the REF 2014. Benefit related to teaching and learning

‘Business’ in this context refers to public, private and social sector partners of all sizes and ‘Community’ is taken to mean society as a whole outside the HEI, including all social, civic and cultural organisations and individuals.

Some illustrations of the University’s contributions are: The Centre for Public Health has an international reputation for quality in leading-edge research activities. Projects range from working with local organisations and partnerships to national and international work programmes across the University’s areas of expertise including alcohol, drugs, violence, dental health and sexual health. The applied nature of the University’s work ensures that many of the key issues that affect the public are identified and highlighted. Much of the intelligence and research findings are used to develop and deliver effective services and interventions that benefit people’s lives and help address inequalities in health. While the work has a national relevance and application, some of the most deprived local communities benefit directly from the University’s work. Engagement with the public is an essential part of the University’s work and the research findings, together with their implications for health and wellbeing, are communicated directly to the public in a meaningful and accessible format via the University’s media and communication strategy. Recent work undertaken by the Centre for Public Health for the public benefit includes studies into:

LJMU’s key benchmarks include: n n

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1st among post-92 UK universities and 42nd from the UK for income from contract research. 17th in the UK for number of formal (not HEI owned) spin-offs established and 21st for the current turnover of these firms. 37th in the UK for number of staff start-ups established and 23rd for the current turnover of these firms. 35th in the UK for number of graduate start-ups established and 21st for the current turnover of these firms. 44th in the UK for value of bespoke Continued Professional Development (CPD) for business and community. 72nd in the UK for the value of consultancy contracts.

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58th in the UK for income from collaborative research.

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55th for the value of contracts from facilities and equipment related services.

The Survey results show that LJMU continues to perform strongly across all areas of entrepreneurship and knowledge and technology exchange. LJMU is firmly focused on optimising its return on investment from these activities, be that return income, reputation enhancement and most importantly, benefit to our student community.

Whether parents should give alcohol to children and how much The risks and harms associated with different forms of drug use

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Where best to base different health care services

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How to make city centres safe at night

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How many lives would be saved if 20mph speed limits were implemented in residential areas

The Faculty of Education, Community and Leisure provides Teacher Education programmes that produce high quality teachers to meet local, regional and national needs in schools and other educational settings, with a focus on identified priority (shortage) areas such as STEM subjects, modern foreign languages and primary/early years teaching. The Faculty also makes a significant contribution to the continuing professional development of serving teachers with particular expertise at post-graduate level in Special Educational Needs, Leadership and Management and Mentoring and Coaching. In addition, it is a government partner in the ‘Teach First’ programme, which seeks to tackle educational disadvantage and this commitment is reflected in a range of research and outreach work undertaken

Research 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 feed 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.

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within local socially and economically deprived communities. This work includes leadership of collaborative action research projects with partner schools and third sector organisations such as Everton in the Community, engagement with local community groups to undertake applied research into looked after children and social inclusion and the promotion of safer schools in partnership with Merseyside Police.

was invested in bursaries and scholarships for 10,053 students. This includes £3.158 million that was paid to new entrants. The University also provides funds to support students experiencing financial hardship and is part of an initiative set up by the Financial Services Authority to improve the financial management/awareness of students.

The Faculty of Health and Applied Social Sciences delivers a range of courses that supply graduates to the health, social care and third sector workforce to meet local, regional and national demands. Pre and post registration programmes include adult, child and mental health nursing, paramedic, midwifery, health visiting and social work as well as social care, environmental health and counselling courses. The Faculty also offers a wide range of short CPD courses and masters level programmes including non-medical prescribing, Advanced Paediatric Practice and Bowel Cancer Screening. Much of this CPD work is carried out in collaboration with local partnerships with local NHS Trusts which play an active part in delivery of programmes. An MSc. In Public Health develops practitioners with both UK and international interests.

The University provides a range of personal support services to its students, such as guidance and advice on essential academic and personal skills, individual teaching and learning plans for students with a declared disability, and student counselling. LJMU continues to offer public benefits under the terms and guidance of the Charity Commission, to students, staff, the local community and wider society by way of a number of activities and initiatives: Trading with Integrity 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 Fairtrade 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.

The Research Unit for Financial Inclusion works in partnership with communities and external organisations to address current issues related to poverty, financial exclusion and credit unions. This work has contributed to discussion at UK and European policy level and in the financial services sector.

Community Engagement As a major employer in the region, with some 2,500 staff and 25,000 students in Liverpool, LJMU contributes significantly to the local economy. The University is mindful of its obligations to be a good neighbour, and engages frequently with the Local Authority and community groups to consult on the impact of LJMU operations. This includes an imaginative partnership with the Liverpool Students’ Union through which student community representatives help to manage the relationship between local residents and the student population. There is also a staff and student volunteering scheme, which helps teams of LJMU people to work on valuable projects for the benefit of the community.

The faculty is a key partner in the pan-European Innovate Dementia project, funded by the EU, which commenced in July 2012 and will run until 2016. The project focus is to develop and test innovative models for dementia care across Europe. Economic Development LJMU manages European Development Fund Contracts worth £34m for the benefit of the regional economy, and generates about 4 pence in every pound of Liverpool’s economic output per head of population. Since 2003, LJMU graduates have started over 40 companies. 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 invests substantially in carefully targeted financial support for students from lower income backgrounds offering a holistic approach to help aid retention and progression. 67.6% of LJMU’s home undergraduate students benefited from this support in 2010/11 and a total of £8.555 million

LJMU takes an active role in supporting the region, with many LJMU staff taking roles in local companies, agencies, arts groups, charities, schools and colleges, thereby contributing to economic growth, as well as the social and cultural wellbeing of the region. 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 32


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Biennial was a great opportunity for LJMU students and members of the public to experience an international arts festival of this calibre.

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, journalism and entertainment.

LJMU’s School of Sports Science, which has been involved with most Sport Relief challenges, giving 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. John Bishop was hoping to raise enough money to pay for a vaccine against five deadly diseases for 250,000 children in Africa, but also to help people living incredibly tough lives in the UK. The amount raised so far, £1.6 million, well exceeded this expectation.

LJMU’s academic activity also has many public benefits. For example, LJMU’s world-leading Astrophysics Research Institute owns and operates the World’s largest and most sophisticated Robotic Telescope, based in the Canary Islands, and time on this telescope is made available to the National Schools' Observatory alongside its function as a National Facility for research. The LJMU-led project in turn brings leading edge astronomy into British classrooms in over 1,000 schools in order to stimulate and enhance young peoples’ enthusiasm for science and technology. The Institute also helped found, and continues to provide knowledge input to, ‘Spaceport’, a locally based major tourist attraction, owned by Mersey Travel. A joint venture between Everton in the Community (EITC), Everton Football Club (EFC) and LJMU’s School of Sport and Exercise Sciences (SPS) has seen the development of a unique satellite site within Goodison Park (EFC Football Stadium). Equipped with gym and fitness equipment, the Centre offers the local community the opportunity to be made aware of health and fitness issues in a friendly environment. The Centre bids to promote ‘real’ health and behavioural change to improve the quality of life and the wellbeing of people within our community alongside cutting edge research to evaluate the impact of our health and wellbeing projects. LJMU joined Merseyside Black History Month Steering Group, Liverpool City Council, NHS, Merseyside Police and other key private and public sector organisations to host the 2011 Black Achievers’ Award, celebrating the achievement of members of the black and other minority (BME) communities and to recognise the contributions made by individuals, groups and organisations to the development of Merseyside BME communities. LJMU played host to the Liverpool Biennial which saw one of Liverpool’s landmark buildings open to the public for the first time in history. The University’s Copperas Hill Building – formerly home to the Royal Mail – exhibited three major exhibitions during the Liverpool Biennial 2012, the largest contemporary art festival in the UK. This partnership with Liverpool 33


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 2012 membership of the Board of Governors has been as follows: -

Ex-officio Members Professor M A Brown Professor Nigel Weatherill External Independent Members Sir M Thornton

Ms N. Benson Ms K Byrne Mr J Carson Ms C Dove Sir J Dwyer Sir D Henshaw Mr R Hill Mr A Holroyd Mr P Hyland Sir B Massie Mr B McCann Mr G Morris Mrs A Redmond Ms D Shackleton Judge Elizabeth Steel Mr J Stopforth

Vice-Chancellor & Chief Executive (Retired 31st August 2011) Vice-Chancellor & Chief Executive (Appointed 1st September 2011)

Chairman and Pro Chancellor Chairman of Remuneration Committee Chairman of Nominations Committee Appointed 2 July 2012

Retired 11 September 2011 Retired 30 April 2012 Chairman of Finance Committee Appointed 2 July 2012 Deputy Chairman of Audit Committee Appointed 26 March 2012 Deputy Chairman Finance Committee Deputy Chairman Audit Committee Retired 14 February 2012 Chairman of Audit Committee Chairman of Employment Committee Appointed 15 February 2012

It was noted that the Instrument of Government allowed for the appointment of a successor Governor within 6 months of an Independent Member ceasing to hold office. In this respect it was agreed that Ms N Benson would succeed to the vacancy that would be left by Judge E Steel, who would cease to hold office in December 2012.

External Co-opted Members Mr A Bell Mr P Holme

Nominee Members Dr T Livsey Mr D McCabe Mr J McGarvey

Co-opted Governor from Health Sector Retired 23 January 2012 Co-opted Governor from Education Sector Deputy Chairman of Employment Committee

Mr P Abernethy Mr T Aldus

Staff Governor (Academic Board Nominee) Student Governor (Student President) - Retired 6 July 2012 Student Governor (Vice President Community) Elected 11 November 2011, Retired 6 July 2012 Student Governor (Student President) Elected 7 July 2012. Student Governor (Vice President Activities) Elected 7 July 2012.

Staff Members Mr M Grayshon Professor P Lisboa Mr R McGee

Staff Governor (Non Teaching Staff) Retired 25 September 2011 Staff Governor (Teaching Staff) Staff Governor (Non Teaching Staff) Appointed 24 October 2011

The Board of Governors are the Trustees of the University. 34


Liverpool John Moores University OFFICERS AND ADVISORS OF THE UNIVERSITY

Vice-Chancellor and Chief Executive

Professor Nigel Weatherill (appointed 1st September 2011) Professor Michael Brown (retired 31st August 2011)

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: -

Suitable accounting policies are selected and applied consistently. Judgements and estimates are made that are reasonable and prudent. Applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements. 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: -

-

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. Ensure that there are appropriate financial and management controls in place to safeguard public funds and funds from other sources. Safeguard the assets of the University and prevent and detect fraud. Secure the economical, efficient and effective management of the University's resources and expenditure.

Sir M Thornton Chairman - 19 November 2012 35


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Corporate Governance 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 as the Combined 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. The Combined Code was superseded by the UK Corporate Governance Code in May 2010 and applies to year ends beginning on or after 29 June 2010. Therefore the new Code was applicable to the higher education (HE) sector for the first time for the year ended 31 July 2011 and has been considered as relevant guidance in the compilation of this report. 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 for the public benefit is set out on page 27. The University’s Board of Governors comprises lay, academic, student and other staff persons appointed under the provisions of the Education Reform Act 1988, the majority of whom are independent and nonexecutive. The composition of the Board of Governors is set out on page 34 and the University increased the number of Student Governors from one to two at the start of the 2011/2012 year. The role of Chairman of the Board of Governors is separate from the role of the University’s Chief Executive, the Vice-Chancellor. The matters reserved specifically to the Board of Governors for decision are set out in the Articles of Government of the University, the terms of reference of the Board and its Committees and under the Financial Memorandum (FM) with the Funding Council for England (HEFCE). 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, in addition to its formal Board and Committee meetings, 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, and is in receipt of 36


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regular reports from Executive Officers on the day-today operations of the University’s business and its subsidiary operations.

Committee in his capacity of 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 Sir Malcolm Thornton. The full Board of Governors met on 10 October 2011 (Governors’ Workshop), 21 November 2011, 5 December 2012 (Workshop), 25 and 26 January 2012 (Residential Strategic Event), 15 February 2012 (Extraordinary Meeting), 26 March 2012, 30 April 2012 (Workshop) and 2 July 2012.

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. 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 University’s Senior Management are published on the University website. Upon appointment, Governors are also required to sign a statement of confidentiality.

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, which is a separate legal entity. The Chairman of the Finance Committee is Mr Rod Hill and the Deputy Chairman is Mr Graham Morris. The Finance Committee met on 31 October 2011, 12 March 2012 and 18 June 2012.

In accordance with the introduction of the Bribery Act 2010, the 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; Communication (including training); and Monitoring and Review.

The Employment Committee meets at least 3 times a year and considers issues related to staffing and employment, including Health and Safety, in the University. 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 Her Honour E Steel DL and the Deputy Chairman is Mr Paul Holme. The Employment Committee met on 17 October 2011, 5 March 2012 and 11 June 2012.

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. 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 ViceChancellor and Senior Officers of the University. The Chairman of the Remuneration Committee is Sir Malcolm Thornton. The Remuneration Committee met on 18 June 2012. The Nominations Committee meets at least once a year, 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. The Chairman of the Nominations Committee is Sir Malcolm Thornton. The

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. The Chairman is not a member of the Audit Committee and there is no overlap in membership of the Audit and Finance Committees. The Vice-Chancellor is not a member of the Audit Committee and attends that 37


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Nominations Committee met on 3 October 2011, 1 November 2011, 6 March 2012 and 29 June 2012.

University’s 7 most experienced Governors, (which included the Chairman), defined as those serving in their (final) third term as at 1 September 2010, would be extended in office by 2 years from the date when their individual term of office normally would have concluded. Without this action 3 of those Governors would have completed their final term before 31 July 2011 and would have been accordingly unavailable to act in the succession plan and in the transitionary period following the new Vice-Chancellor’s appointment.

The Audit Committee, which meets at least four times a year (five in 2011/12), is responsible for overseeing the work of the external auditors (currently KPMG) and internal auditors (currently Deloittes) and 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. 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 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. In 2010 the Terms of Reference for the Audit Committee were reviewed and amended to take account of the new requirements within the FM for regulation under the Charities Act 2006 and the specific implications for the work and responsibilities of the Audit Committee. The Terms of Reference were also amended in 2011 to include oversight of the policy on bribery in relation to the Bribery Act 2010. The FM sets out the formal relationship between HEFCE and the governing bodies and designated officers of higher education institutions (HEIs) it funds. It reflects HEFCE’s responsibility to provide annual assurances to Parliament that: funds are being used for the purposes for which they were given; risk management, control and governance in the sector are effective; and value for money is being achieved. The Chairman of the Audit Committee is Ms Deborah Shackleton and the Deputy Chairman was Mrs Alexis Redmond up until the Audit Committee meeting of 7 November 2011, and Sir Bert Massie onwards from the Audit Committee of 27 February 2012 to date. The Audit Committee met on 3 October 2011, 7 November 2011, 27 February 2012, 7 June 2012 and 16 July 2012.

The Board of Governors approved the appointment of a new Vice-Chancellor and Chief Executive at its meeting held on 14 February 2011 and Professor Nigel Weatherill FREng, DSc took up post on 1 September 2011. In addition, one Audit Committee took place without the criterion being fulfilled for a member of the Audit Committee to have financial expertise and qualifications. This was an exceptional case due to two members of the Audit Committee having resigned to fulfil other commitments. Having assessed the risk of holding the Committee without this specific expertise, it was decided by the Chairman of the Board and the University Secretary that the meeting should go ahead, noting the agenda concerned did not include any detailed scrutiny in relation to financial and accounting matters, and on the basis that the situation should be declared and minuted. The skills gap was rectified by the time the next Audit Committee took place. During 2009 the Board of Governors conducted an indepth 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 4 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 on-going process and a programme of development in governance work was undertaken and implemented in 2010/11.

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, with the following exceptions: that in light of the unprecedented challenges in the HE sector, it was clearly of fundamental importance that the Board should ensure continuity, stability and continuing effective governance, and that this need was heightened exceptionally at LJMU when, during the same period, the critically important succession to the position of Vice-Chancellor and Chief Executive took place. In this respect, therefore, it was agreed at the Board of Governors Meeting on 20 September 2010 that the

2010/11 and 2011/12 was an exceptionally busy period for Governors during a time of great change for the HE sector with particular reference to the external environment, including the decision on fees and the subsequent access agreement.

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From October 2012 the Board of Governors’ agenda will include an explicit standing item for consideration of any relevant risk issue. The Board receives regular reports on risk and the Risk Management arrangements from SMT and the Audit Committee.

Internal Control 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 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 Strategy Map and Plan, risk register, pipeline of possible audits and previous internal audit reports.

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: n

Governance

n

Financial Management

n

Risk Management

SMT and the Audit Committee receive regular reports from internal audit, which include any recommendations for development or improvement. Since May 2012, SMT has received the full detail of audit reports as they have been completed rather than as part of a regular reporting schedule towards a Board meeting (as previously). Key auditees have always received audit reports straight away. 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 development or improvement.

Processes and control arrangements The University has the following processes and control arrangements in place: The University remains committed to best practice in Governance and Management and its aims and objectives are enshrined in a new strategic framework and plan, agreed during the year. The principles of excellence underpin the University’s strategy (2012 to 2017), which itself is based on the four core themes of Establishing and Enhancing the Student Partnership; Excellence in Learning, Teaching and Assessment; Embedding Research and Scholarship; and, Social and Economic Engagement.

SMT receives 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. Risk management is incorporated into the corporate planning and decision making process of the institution. The Risk Management Strategy contains a description 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. Following review in the year, the risk management system was enhanced to take account of a more dynamic external environment and to clarify and simplify the methodology and scoring process.

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 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.

Particular indicators of the effectiveness of the internal control systems during 2011/12. These include:

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.

1. The most recent overall assessment from the HEFCE Assessment of Institutional Risk, dated 30 September 2012, was that LJMU was not at higher risk and was meeting the accountability obligations set out in the Financial Memorandum between HEFCE and Institutions. 2. The 2011/12 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 39


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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’.

action plan to meet the recommendations of the 2009 QAA Institutional Audit in conjunction with an Assistant Director of the QAA. The final outcome is scheduled to be announced in Spring 2013. 9. In support of the work being undertaken in respect of the limited confidence outcome of the QAA Institutional Audit, Deloitte, the University’s Internal Auditors, undertook a review of the end-to-end process of managing collaborative partnerships. The review focused on the overarching framework of governance and control for strategy setting, development of new collaborations and the management of existing collaborations. The proposals remain available for use in the forthcoming review of operations in this area to meet the objectives in the strategic plan.

3. Assessment gradings for audits in 2011/12 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 planned to resolve issues and 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. 4. The office of Fair Access (OFFA) approved the University’s Access Agreement, which had been recommended by the SMT and endorsed by the Board of Governors. The Widening Participation Strategic Assessment for OFFA was approved under the same governance arrangements.

10. To support the management of the UKBA Highly Trusted Status Licence the University engaged the services of consultants to undertake an audit of both Tier 2 and Tier 4 activity. As a result of the audit the University produced an action plan to ensure that best practice processes were fully implemented.

5. 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 University’s Carbon Management Plan is currently 45% in progression towards achieving its 2015 target. The University has recently reviewed its committee structure and a new Estate Committee has been set up which, inter alia, will monitor the Carbon Management Strategy.

11. During the year the University identified a potential issue within the Faculty of Health and Applied Social Studies which required internal investigation and appropriate consultation with relevant external agencies including UKBA. The decisive management action that was taken ensured that the University at no time was in breach of its Highly Trusted Status Licence and UKBA was satisfied with the pro-active responses of the University. The University also dealt effectively with the HR consequences of the issues that had arisen. 12. The University has now formally changed the Licence Holder for the HTS Licence to the Registrar and Chief Information Officer. Confirmation has been received from UKBA that the University has maintained its Category A Sponsor Licence until November 2016, and also that a routine UKBA Audit scheduled for November 2012 will not now take place.

6. An Anti-Bribery Policy was agreed by the Board of Governors on 28 March 2011 and implemented thereafter. A Working Group was established to identify high risk areas and to prepare plans for implementing the policy. References to the Bribery Act 2010 have been included in documents and policies and a programme of communication about the Act was delivered in autumn 2011. Staff are required to undertake an online training module on the Bribery Act 2010. An Anti-Bribery Follow Up internal audit has recently taken place and was reported at the Audit Committee in July 2012, receiving an overall substantial assessment. A risk assessment of high risk areas and the controls in place to counter fraud and prevent bribery is to be conducted in October.

13. E-learning modules on data protection and freedom of information and on diversity in the workplace have been introduced as essential training for all staff. 14. The University has met the reporting requirements of both the Freedom of Information Act and the Data Protection Act for the requests received, including handling the requests effectively.

7. Policies in relation to Due Diligence, Anti Money Laundering and Terrorist Financing, and Gifts and Hospitality have been reviewed and where appropriate developed with any changes implemented during the year. 8.

15. The University managed its occupational safety and health risks effectively, having made the required progress against the targets contained in the Health and Safety Action Plan 2011/12. The Occupational Health Unit meets the Faculty of Occupational Medicine’s service standards, along with the

The University continued to implement its agreed 40


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submitted to the Planning and Information Service Desk. Where appropriate these go with a business case to the Development Programme Steering Group (DPSG) for consideration. An instance of noncompliance has led to a restatement of the policy.

University’s statutory requirements and those of professional bodies for students in vocational programmes. There was a slight decrease in the number of workplace accidents resulting in minor injuries. The number of accidents that were reported to the Health and Safety Executive remained constant (2). The corresponding incidence rate for reportable accidents per 1,000 staff rose from 0.82 to 0.95, due to a reduction in staff numbers. The rate is below the most recently published sector rate of 2.36 per 1,000 staff in 2011.

21. The P2P (Procure to Pay) e-marketplace system - iprocurement and i-buy - has been used within the University since April 2011 and is being rolled out across all faculties and professional service teams. Currently two faculties and elements of several professional services teams use the system. 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.

16. 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. In the calendar year 2011, seven complaints were closed by the OIA compared with eight in 2010. Of the seven complaints, the OIA decided that four were not justified, two were partly justified and one was ineligible.

22. The Diamond Report (Efficiency and Modernisation Task Group) from Universities UK (UUK) has set a target of 30% of Non Pay spending to be achieved through collaborative procurement. LJMU is already making good progress towards this target with 24.1% of influenceable spend through collaborative procurement in 2010/11.

17. A HEFCE audit of the Access to Learning Fund processes and procedures was carried out in May 2012. The final audit report raised seven recommendations for action. The majority of these have been addressed during the annual internal policy review process in the summer of 2012. The final recommendations framework document was submitted in September.

23. The Audit Committee conducts a self-assessment every 2 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 in September 2012 and the outcome reported to the Audit Committee on 5 November 2012. No issues of serious concern had been identified from the review.

18. IT decision-making and strategy development continued to be managed through the Information Governance Structure, consisting of the Information Management, IT and Development Programme Steering Groups and reporting to SMT through the Chief Information Officer as Chair of the Information Management Steering Group. An Information Security Policy was progressed through the governance structure during the year and agreed by SMT in June 2012. Other issues identified through the Internal Audit reviews of Date Security and Records Management and Identity and Access Management are being addressed. These audits were requested by management to assist development activity in these areas.

The Board is of the view that there is an on-going process for identifying, evaluating and managing the University’s significant risks, that it was in place for the year ended 31 July 2012, that it is regularly reviewed by the Board of Governors and that it accords with the internal control guidance for directors on the Combined Code as deemed appropriate for HE. The Risk Management Policy and Framework has recently been updated to reflect and align closely with the new Strategic Framework 2012/17.

19. Further developments of the Student Information System were implemented in 2011/12. However, there were a number of inadequacies which have been the subject of a review report and considerable input to rectify the problems that emerged. Work continues to ensure that the system can achieve the functionality required and that staff are supported in using the system effectively and realising the benefits that are available in the system. Internal Audit has been asked to audit the Student Information System process and data in 2012/13.

Going Concern 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.

20. It is institutional policy that all requests for software solutions and developments have to be 41


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Opinion on financial statements In our opinion the financial statements: • give a true and fair view of the state of the affairs of the Group and University as at 31 July 2012 and of the Group’s income and expenditure, recognised gains and losses and cash flows for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the Statement of Recommended Practice – Accounting for Further and Higher Education.

INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF GOVERNORS OF LIVERPOOOL JOHN MOORES UNIVERSITY We have audited the group and University financial statements (the ‘‘financial statements’’) of Liverpool John Moores University for the year ended 31 July 2012 which comprise the Group Income and Expenditure Account, the Group and University Balance Sheets, the Group Cash Flow Statement, the Group Statement of 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.

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: • funds from whatever source administered by the University for specific purposes have been properly applied to those purposes • funds provided by HEFCE have been applied in accordance with the Financial Memorandum and any other terms and conditions attached to them. 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: • the statement of internal control included as part of the Corporate Governance Statement is inconsistent with our knowledge of the University and group.

Respective responsibilities of the Board of Governors and auditor As explained more fully in the Statement of Responsibilities the Board of Governors on page 35 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.

Stephen Clark For and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants St James’ Square Manchester M2 6DS

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 nonfinancial information in the Operating and Financial Review to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Date: 23/11/2012 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. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 43


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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.

STATEMENT OF PRINCIPAL ACCOUNTING POLICIES 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 Institutions and in accordance with applicable accounting standards.

Tangible fixed assets

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

a. Land and buildings 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 30 June 2010. Valuations normally take place every 5 years. Freehold land is not depreciated. Buildings are depreciated over their expected useful lives of 50 years and leasehold buildings over the life of the lease. Assets in the course of construction are not depreciated.

Basis of consolidation The consolidated financial statements include the University and its subsidiary undertakings for the financial year to 31 July 2012. Intra-group 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.

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.

Recognition of income 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.

b. Maintenance of premises The cost of routine corrective maintenance is charged to the income and expenditure account in the period in which it is incurred. c. Telescope The Liverpool Telescope has been capitalised at cost and is being depreciated over 20 years.

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.

d. Equipment Equipment, including computers and software, costing less than £10,000 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.

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.

From 1st August 2012 the University has changed its accounting policy with regard to Equipment. The value at which equipment will be capitalised from this date is £5,000, reduced from £10,000.

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

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.

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e. 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.

Provisions 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.

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 considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it 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 Chapter 3 Part 11 Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. Subsidiary companies are liable to corporation tax. The University is partially exempt in respect of Value Added Tax, so that it can only recover a minor element of VAT charged on its inputs. Irrecoverable VAT on inputs is included in the costs of such inputs and added to the cost of tangible fixed assets as appropriate, where the inputs themselves are tangible fixed assets by nature. The University’s subsidiary companies with the exception of JMU Building Services and Maintenance Ltd (which has the same taxation status as the University) are subject to corporation tax and VAT in the same way as any commercial organisation. Cash flows and liquid resources Liquid resources include sums on short-term deposits with recognised banks and building societies and government securities.

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The financial statements on pages 44 to 69 were approved by the Board of Governors on 19 November 2012.


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www.ljmu.ac.uk LJMU Marketing and Corporate Communications Š May 2013

annual report andfinancial statementsfor the year ending 31 July 2012  

Liverpool John Moores University Financial Statement

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