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financial statements for the year ended 31 July 2011


introduction contents The Financial Statements for the year ended 31st July 2011 represent another strong financial performance for the University. The University has continued to invest in key areas of activity with a common focus to enhance the positive experience of students studying at our institution. Despite the financial climate the University has continued to invest in its capital programme with significant advances in supporting the Tom Reilly Building, supporting Sport and Exercise Sciences, and the Redmonds’ Building that will open in the summer of 2012 and provide excellent general teaching facilities for Business, Law, Media, Arts and the Social Sciences. The Balance Sheet has maintained its strength. Income and Expenditure Reserves are showing a significant increase compared with the previous year. Total reserves have been strengthened. We are entering a period of decline in public spending and this is likely to continue for some years. In addition, the introduction of the new student fees regime in 2012, and other changes to core funding, contribute to further financial uncertainty. The University will be required to make some significant decisions in the near future both in terms of its future strategy and direction and how it will continue to be able to finance its plans. We are not alone in facing such challenges, but we are in a strong position moving forward and we will deal with the challenges and look to capitalise on new opportunities. I want to thank the staff across the University for the excellent results achieved this year – academic, financial and strategic. As already commented, these are uncertain times, but we can build upon our sound base and look to the future with confidence. Professor Nigel P. Weatherill, FREng, DSc Vice-Chancellor and Chief Executive 1

Operating and Financial Review

2

Public Benefit Statement

32

Board of Governors

40

Officers and Advisors of the University

41

Responsibilities of the Board of Governors

42

Corporate Governance

43

Report of the Auditors

47

Statement of Principal Accounting Policies

49

Consolidated Income and Expenditure Account

51

Balance Sheets

53

Consolidated Cash Flow Statement

54

Statement of Consolidated Total Recognised Gains and Losses

55

Notes to the Financial Statements

56


scope of the

2


operating and financial review

Financial Statements These are the consolidated statutory accounts of Liverpool John Moores University and its subsidiaries for the year ended 31 July 2011.

3


mission 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 is working towards a new future where it will be recognised nationally and internationally for its graduate career opportunities, a university of choice for organisations in search of research and consultancy that will help them compete in an increasingly global economy. We believe we can achieve these goals. The foundations are already in place, and the supporting structures well developed.

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strategic objectives The mission, core purpose and values are the explicit platform for the University's Strategic Statement and Plan for the period 2007-2012; and articulate the Fundamental Concepts of Excellence, as defined by the European Foundation for Quality Management (EFQM), in ways meaningful to LJMU.

cer tified independently of their academic study, giving prospective employers absolute confidence of the value of an LJMU graduate, whether this be in the private, public, or voluntary and social employment sectors. To achieve this successfully we believe that it is critical that employers are actively involved in the process.

We have introduced a major new initiative that will deliver to our students high quality academic programmes connected to the world of work and business plus a range of measures and cer tified experiences and personal skills that will best equip them for successful careers. Specifically, the strategic plan focuses on an innovative concept, which, internally, we call World of Work (WoWŽ) that centres on employer engagement and graduate careers. For this reason World of Work has been devised as the means by which our students can accumulate broader high-level ‘world-ofwork’ skills; to have these assessed and

We are also continuing to maintain growth in our traditional public income sources whilst increasing significantly growth rates in income from non-public sources, such as contract research, commercial enterprise and knowledge transfer. We are also focussed on maintaining our reputation for excellence in governance and management, through continuous development and improvement against the rigours of the EFQM Excellence Model, and through the continued development of a strong strategic management focus.

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students LJMU is the tenth largest University in the UK with 25,068 students in Liverpool plus a further 4,500 students enrolled on accredited University courses overseas. Actual full time equivalent numbers for 2010/11 were 19,658 a decrease of 4% compared with 2009/10. The drop in numbers is primarily due to the large cohorts at levels 2 and 3 in 2009/10 now only occurring at level 3. Actions were taken in respect of recruitment targets for 2010/11 onwards which caused the contraction by around 5% per annum in the coming years to reflect the planning intention for a managed reduction in student numbers. The large actual intake at level 1 for 2011/12 may however counteract this.

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35000 30000 25000 20000 15000 10000 5000 0

Student Applications

05/06

10/11 Student FTEs

21000 20000 19000 18000 17000 16000

05/06

10/11 9


Several key business decisions have been taken in relation to the academic portfolio. These include changes to the Academic Framework and the closure of a number of programmes all designed to ensure the efficient delivery of a quality offering that is fit for purpose as we enter a period of uncertainty within an increasingly competitive market place. Graduate Skills and the WOW Programme have seen significant successes this year: The WoW Programme continues to be recognised as a best practice case study in nationally important publications and conferences in 2011 including CBI and COGENT: (Sector Skills Council for the Science Based Industries) and National Union of Students National Report and hosting many VIP visitors who have been keen to see what LJMU is doing.

During the year 5,500 students, from all year groups, voluntarily registered for the WoW skills certificate module with students submitting 1600 Bronze, Silver or Gold statements.The WoW certificate continues to be designed, developed and delivered collaboratively with many employer partners and is being modified and improved following feedback. 10

Over 3,500 students are actively engaged in reflecting on and recording key graduate skills.


In 2011 LJMU recorded its highest number of graduates in employment or education/training for 3 years at 89.1%, the number in graduate jobs rose by 1.6% and unemployment fell by 1.6%

The Graduate Development Centre has received outstanding feedback from student users e.g. 96% (665) said they would recommend GDC sessions to a friend, 98% (924) said the session were well delivered, 89% agreed that they were more confident about managing their future and moving their career forward etc.

In a successful quality assurance visit conducted by the Department of Business, Innovation and Skills the Assessor said: “The GDC puts students first and this approach provides a platform of excellence and support”. A student said: “The support for students here is very good. It’s much more than just a careers service”.

Collaborative relationships with the WoW National Employers Group continue to flourish with members of National and Local WoW Employer Advisory Groups including Barclays, Royal Mail, GKN, Oracle, Liverpool Chamber of Commerce, Co-operative Group, Enterprise Rent-A-Car and Ford. Over 160 Employee Verifiers have been trained and are delivering the critical final 1:1 interview stage of the WoW certificate.

The Graduate Development Centre has achieved major successes in employer relations brokerage and work related learning including placements with Lovell Construction, Liverpool City Council, Datel Group Computing, and Lake Technologies (SME). A new job vacancy portal has attracted over 1,500 vacancies from 1,000 different employers.

The European Social Fund supported Graduate Accelerator Programme has delivered all outputs and developed the employability of 450 unemployed graduates. 11

LJMU is exporting its knowledge and enhancing its international reputation by running a Malaysian Ministry of Higher Education funded WoW skills certificate pilot programme at Malaysia’s largest public university – Universiti Teknologi Mara.This was successfully completed in the autumn of 2011.The GDC has delivered WoW related sessions in the USA, Vietnam, Spain, and France,The Philippines and Thailand


research Following on from the results of RAE2008, the University continues to focus its research efforts and resources in areas of demonstrable research excellence. Core HEFCE research funds are devolved to Faculties and are now largely used to support academic staff costs in research-active schools. In 2010 (to reflect the current economic climate), the target for future year on year growth was reduced to 5%.

Particular research strengths remain in STEM (e.g., electrical and general engineering, maritime, astrophysics, built environment, life sciences, public health) and STEM-related subjects (e.g., biological anthropology, sports sciences). Together these account for >90% of external research income to LJMU.

The institutional target for research income has not been met. External research grant income fell by 16.5% in 2010/11 compared to the previous year. HESA research income (a more broadly defined measure including commercial (contract research) and KTP income) fell by 17.5%.

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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 interUniversity competition has had considerable impact on the levels of external funding available. LJMU is also heavily reliant on a small number of research areas / staff for the bulk of its grant income.


Expenditure/Income (£’000)

15000

10000

5000

0 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 Year

R-coded research expenditure

Despite the fall in grant income over recent years, LJMU remains 54th in the UK for research grant income (as measured by benchmarking HESA research income for 2009/10 – the latest comparative dataset available), well ahead of the majority of post-1992 HEIs and ahead of some well-established researchled Universities.

HESA R income

UK Research Council income (the most competitive source of research funding) accounts for approximately 16% of our total research income. 13


Academic staff continue to submit substantive research grant bids to external organisations at a rate in excess of 230 grant bids per annum. The 5-year average rate of growth of external research grant income is second highest of North West Universities and remains amongst the highest in the UK.

Research grant income is a significant driver for LJMU’s HEIF income.

LJMU continues to lever external research grant income using core HEFCE research income at a rate at > 3.3:1 (well ahead of the sector average). Plans for the use of HEFCE RCIF2 funds for research capital were approved. These will be used to strengthen selected areas of research excellence within the institution and use of these funds will, where appropriate to do so, align with on-going capital.

Planning for the next round of research assessment (the Research Excellence Framework, REF2014) is well underway and all Units of Assessment being considered for submission have been subject to at least one round of expert external reviews over the last 12 months. 14


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 suppor t 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. During the year the annual Higher Education Business and Community Interaction survey (HEBCIS) was published and showed the total annual value of LJMU’s interaction with business and the community reached £16.6m. Ranked against the 165 UK HEIs in the survey, LJMU was 46th (2009 48th) for the total value of interaction with business and the community.

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Enterprise Income

6

ÂŁm

4 2 0

03/04

05/06

07/08

16

09/10


In 2010/11 the University’s commercial enterprise turnover reached £4.5m. During the year, 26% of income from commercial enterprise and technology transfer activity came from international contracts. Average contract value was £25.6k (up from £20.5k in 2009/10) In 20010/11 the number of students undergoing bespoke entrepreneurship training grew to over 1,600, the high profile and popular Start-Up Network attracted 249 new members (making membership of nearly 1,500) and Enterprise Fellowships were awarded to support the establishment of more than 21 student businesses. During the year, preparations were made for the opening of LJMU’s dedicated Centre for Entrepreneurship. A Knowledge Transfer Partnership between LJMU’s School of Engineering, Technology and Maritime Operations and Risktec Solutions won NW Regional Partnership Award 2011.The project saw the development of a range of accredited qualifications (Certificate, Diploma and MSc) in Risk and Safety Management for high hazard industries. Other successful KTPs completed during the year included 2 year partnerships with Alder Hey Children’s NHS Foundation Trust, Merseyside Fire and Rescue Service and the British Red Cross. During the year, LJMU partnered with Cheshire Constabulary to jointly design a Postgraduate Certificate in Forensic CCTV Analysis. This unique, accredited programme will be delivered by practitioners from Cheshire Constabulary and academics from the School of Computing and Mathematical Sciences. 17


The year saw a rationalisation of the LJMU spin out company portfolio and a number of encouraging developments with remaining companies, including Forsigs and Microsense. A range of commercialisation opportunities also emerged for the Pharmalucia technology which uses light-activated compounds principally for the infection control market. LJMU secured contracts relating to public health, such as the development of a partnership with Liverpool Primary Care Trust and Liverpool City Council to develop strategies to improve the nutritional value of takeaway foods and work with Liverpool First for Health and Wellbeing Partnership to train nursery staff around nutrition for the under 5’s. LJMU was the provider of choice for over 70 SMEs who engaged with the University via the NWDA Innovation Vouchers Scheme which drew to a close during the year.

LJMU’s Summer Semester programme was the most successful ever with nearly 700 students from seven partner institutions studying at LJMU for 14 weeks to top up their current awards to Honours level. Academic partnerships strengthened through geographically targeted initiatives in, for example, Malaysia and China. Academic Partnership income showed 9% growth since 2009/10. Conference and Events Services income showed 21% growth since 2009/10 and the team’s expertise in event management was demonstrated in three successful graduation events during the year. 18


resources capital development highlights Despite the financial climate the University has continued to invest in its capital programme and work has been ongoing at all three Campus areas. Continuing on from the opening of the ÂŁ25.5m Tom Reilly Building during 2009/10, this state-of-the-art building, which houses the School of Sports and Exercise Sciences and the School of Natural Sciences and Psychology, offers some of the best facilities in the world.These include appetite laboratories, psychology testing labs, neuroscience labs, an indoor 70-metre running track, physiology suites, a DEXA scanner for measuring body fat, muscles and bone density, a driving simulator and a chronobiology lab.

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Development of the Redmonds’ Building, a £34m general teaching and screen academy development for the Faculties of Business and Law and Media, Arts and Social Science, is ongoing. Demolition of the existing building has been completed and the new build work has commenced.The project is on time and cost and is due for completion in June 2012. Students and staff will be using the building and its facilities from the beginning of the 2012 academic year.

On City Campus the window replacement and cladding project, 3rd floor refurbishment of teaching accommodation, 2 lecture theatre refurbishment projects and the high voltage infrastructure are complete. A further £2m funding has been released to continue with the next phase of this refurbishment work and this will include refurbishment of all general teaching accommodation on the first floor and also a number of lecture theatre enhancements. Max Perutz Building - the University has received confirmation from Liverpool City Council that planning approval has been granted. It is anticipated that the total project cost will be £6.5 million and work will commence on site in January 2012. 20

The University has now acquired the former Royal Mail Site at Copperas Hill for the sum of £2.6 million. The acquisition of this major building now provides a solution to the challenge of relocation of the Faculty of Education Community and Leisure, currently located in the IM Marsh Campus for which the Master planning work is now underway.


resources IT developments Significant progress has been made on the new student system, Campus Solutions, with some modules going live in September 2010 and the remainder over the course of the academic year with all students enrolling through the system for the 2011/12.

IT resilience has been further secured by the purchase and installation of an innovative Hewlett Packard Performance Optimised Datacenter (POD).The overall system of power supply and storage, the first of its kind deployed in the UK, represents a huge step forward for LJMU’s computing network users, not only in terms of energy efficiency and sustainability, but also reliability and peace of mind for its end users. 21


resources environmental sustainability

A Carbon Management Project Board is established to oversee the University’s commitment to the carbon management programme, carbon reduction commitment, Ecocampus and the ‘People and Planet’ green league table, as part of the University’s corporate and social responsibility agenda. The University has developed and approved a comprehensive Carbon Management Plan and Programme 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 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. 22


We have registered as a mandatory participant to the Carbon Reduction Commitment (CRC) scheme. During the year our efforts have been rewarded through being awarded the Ecocampus environmental management system Bronze award in April 2011 (just six months after registering), received a First Class Honours in the People and Planet Green League Table (the highest rating of the Liverpool based Universities), we were also presented with a certificate by the Chief Executive of the Carbon Trust in recognition of our work in reducing emissions, cutting costs and the mitigation of climate change during 2010 and we are finalists in the 2011 North West Excellence Awards within the Sustainability category.

The first two years of the carbon management plan should deliver a saving of approximately 2,620 tonnes CO2 which equates to 70% of our 25% target.

The majority of 2010/11 carbon reduction projects have been completed and the 2011/12 programme is underway.

An additional year has been added to the project plan which increases our target from 25% by 2013/14 to 28% (4,190 tonnes CO2) by 2014/15. (This continues to move our target closer to the governments targets of 34% by 2020 and 80% by 2050 based on 1990 emissions, and HEFCE targets of 43% by 2020 and 83% by 2050 based on 2005/6 Scope 1 and 2 emissions.) 23


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

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 LSU to provide facilities for its club and societies, presently provided either at IM Marsh or purchased from private providers. 24


results for the year The University’s consolidated Income, Expenditure and Results for the year to 31 July 2011 are summarised as follows: 2010/11 £000

2009/10 £000

Income

176,267

178,971

Expenditure

167,270

176,672

8,997

2,299

-

(3,114)

8,997

(815)

15

58

-

-

9,012

(757)

-

(8,009)

9,012

(8,766)

96

(153)

Surplus/(deficit) for the year

9,108

(8,919)

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

9,838

(5,180)

Surplus after depreciation of assets at valuation and before tax Loss on disposal of fixed assets Surplus/(deficit) after depreciation of tangible fixed assets at valuation and disposal of fixed assets and before tax Share of Operating (loss)/profit in associate Taxation Surplus/(deficit) before Exceptional Item Fundamental Restructuring Costs Surplus/(deficit) on continuing operations 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

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Historical cost surplus for the year £9.84m

An underlying operating surplus of £12.7m

Capital Income expenditure decrease £21.1m of 1.5% to £176.3m Net worth at £101m before pension liabilities

Decreased expenditure of 5.3% to £167.3m 27


income and expenditure account 2010/11 has been an excellent year as a result of the continuing strategic approach to the finances of the university with an outturn surplus of £9.8m for the year. An underlying operating surplus of £12.7m was achieved. The annual FRS17 charge was £2.86m with the Pension liabilities in the Balance Sheet increasing by £1.1m.

Expenditure decreased by 5.3% to £167.3m. Staff costs have decreased by 5.5% which reflects the fundamental restructuring which took place last year and has assisted with the delivery of significant savings in this and future years. Other operating costs also decreased as part of the overall savings targets achieved throughout the university. The impact of FRS17 (Retirement Benefits) was a decrease to group surplus of £2.86 (2009/10 £4.2m).

Total Income decreased by 1.5% to £176.3m. The main decrease was due to HEFCE core funding of £5.2m, research income and capital grants. This was partly compensated by HEFCE and TDA earmarked grant increase of £1.5m. Decreases in Research Council, and Health contracts were compensated by equivalent increase in collaborative income.

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200

Income and Expenditure

£m

150 100 50 0 03/04

05/06

07/08

09/10

balance sheet The Balance Sheet has maintained its strength. Income and Expenditure Reserves excluding the Pension Reserve (associated with FRS17) are £53.9m showing a significant increase of £12.7m compared with the previous year. However following the increase in revaluation reserve last year as a result of the property valuation, the revaluation reserve has decreased this year by £0.7m to match depreciation with the revaluation.The pension liability reserve has increased by £1.1m.Total reserves are now £36.3m compared to £25.4m the previous year. Fixed Assets have increased by £11.7m. Assets under Construction are £17.3m (09/10 £6.7m) following the reclassification of the building works at Tithebarn and Byrom Street and the current value reflects in the main the spend on the Redmonds’ Building. Cash deposits have increased by £6.83m during the year and a further tranche of £10m of borrowing was drawn down. Capital expenditure was £21.1m.

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governance and risk 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.

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.

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

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.

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future During the last 12 months the political and economic climate has continued to change significantly.The university has determined its fee level to be ÂŁ9,000 and acknowledges that there remains continued uncertainty surrounding funding levels, costs and tuition fees. The next 4 years will be an extremely difficult period. The University is however determined to deliver its strategic plan and continue with its ambitious capital programme.This will require focus and hard decisions. The SMG have a plan of activities over the next 6 months which will have both short and medium term impact on sustainability.

conclusion 2010/11 has been an extremely successful year and this along with our strong leadership and strategic direction places LJMU in a strong and robust position to deal with the challenges and difficulties we will face in the financial climate ahead.

Sir M Thornton, Chairman

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delivering the public benefit Liverpool John Moores University (LJMU) is a Higher Education Corporation (HEC), as defined by the Education Reform Act 1988. The powers of the HEC are defined in Section 124 of the 1988 Act as amended by the Further and Higher Education Act 1992, and subject thereto any relevant regulations, orders or directions made by the Secretary of State or Privy Council. These powers include the power to provide higher and further education and to carry out research and to publish the results of such research. The corporation has exempt charitable status as defined under the Charity Act 1993. As an exempt charity the University is regulated by HEFCE by virtue of the Charities Act 2006.

statement of public benefit The Board of Governors has complied with its 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 HEFCE acting as principal regulator of English higher education institutions under the Charities Act 2006. 32


mission, vision and values The University’s mission, vision and values reflect LJMU’s commitment to the public benefit. 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. Since becoming a university, LJMU has grown substantially to extend the scope and accessibility of higher education in the UK. From around 8,000 students in 1988, LJMU now has more than 25,000 students studying across its 5 faculties, with approximately 8,000 students graduating this year. LJMU’s core values are embedded in the University’s Strategic Plan which illustrates clearly the University’s commitment to the public benefit:

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. 33


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. 34


This section highlights areas in which LJMU has carried out its activities for the public benefit during the year in furtherance of its mission to serve and enrich students, clients and communities.

Research: LJMU is one of the leading UK Universities for Sport & Exercise Sciences; General Engineering; Public Health; and Astrophysics research; for example, LJMU designed, built, and now operates the world’s largest robotic astronomical telescope. The Liverpool Science Park is a joint venture with the University of Liverpool and Liverpool City Council, fostering and facilitating growth in the knowledge economy in Liverpool. 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.

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: Under the Government fair access initiative two-thirds of students are eligible

for LJMU bursaries, of which 65% come from low income households. The University was accredited by the Frank Buttle Trust in recognition of its record of providing higher education to young people leaving social care. In 2009, the University received an endowment of £260,000 from Yoko Ono, widow of John Lennon who was a student at a predecessor institution to LJMU, to continue this work. 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 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.

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Excellence: LJMU has been using the principles of Business Excellence since 1997, when the University became EFQM Member. LJMU has been actively using the EFQM Excellence as the basis for its management system since 2002. LJMU won the UK Excellence Award in October 2008 and were Finalists in the EFQM (European level) Excellence Award in 2009 and 2010, going on to be announced as a Prize Winner in the category of ‘Building Partnerships’ at the awards ceremony in Munich in October 2011. 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:

Responsible Employer: LJMU was the first University ever to achieve the Investors in People Work Life Balance recognition, features in the 2011 Stonewall 100 list of Britain’s top employers for lesbian, gay and bisexual staff, and has recently been awarded the Migrant Workers Charter Certificate. LJMU has invested in a ground breaking partnership with Liverpool City Council to provide all students and staff with free access to the City Council’s Lifestyles fitness centres, thus encouraging students and staff to adopt a healthy lifestyle.

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.

Community:

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.

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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. LJMU’s World of Work (WoW®) is a strategic employability initiative that engages hundreds of local employers and provides the City/Regional economy with a graduate talent pipeline that produces talented workers who have the skills employers are looking for. Business and other employers, (international, national and local) work with the University through visiting lectures, work-based opportunities and assessing and certifying the skills students have developed. As a flag-ship of LJMU’s community engagement, the Roscoe Foundation for Citizenship promotes good citizenship amongst the young people in the Greater Merseyside region. More than 900 schools are engaged in the scheme, to promote good citizenship to school children by making awards to role models in society. The Foundation also runs the prestigious Roscoe Lecture series, securing high profile speakers from the national and international community to present thought-provoking public lectures that are free and open to the community in the North West. Audiences typically number over 1,000 (and sometimes reach 2,500) and tickets are free of charge. Speakers have included notable people from the fields of national and international politics and diplomacy, academe, religion and belief, journalism and entertainment. 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.

Sustainable Environment:

Liverpool John Moores University (LJMU) has long recognised the importance of sustainability and it is integral to the University’s Corporate Social Responsibility (CSR) agenda. For many years, LJMU has demonstrated best practice within the Higher Education sector across a wide range of sustainability activities. These include: n Reducing LJMU’s adverse impact on the environment n Being a positive force in Liverpool and the wider community n Being a responsible employer and a trusted and ethical trading partner n Striving for continuous environmental improvement throughout all staff and student activities 37


The LJMU estate portfolio includes a wide range of buildings of various ages, type, and construction within the vibrant city of Liverpool. The three main campus areas consist of over 45 buildings, 24,500 students and 2,500 staff. Our operations have a local, national and global environment impact. The role of sustainability is to reduce this impact through an extensive programme of environmental improvements and carbon reduction initiatives that impact on all activities and stakeholders across the institution.

In 2007 the University established a sustainability web site and a Sustainability Facilitators Group. The aims of the group are to assist in implementing the Environmental Policy by raising awareness and assist in minimising the university’s impact on the environment. The group of volunteers comprises of representatives of staff and students. LJMU also won the Best Travel Plan Award in 2007 from Merseyside Integrated Transport Authority for its work in promoting sustainable travel choices. Work on these plans has continued and the results of the 2009 Travel Survey showed reductions in single car occupancy rates between 2005 and 2009 (16% for staff and 7% for students). LJMU is currently participating in the Carbon Trust’s Higher Education Carbon Management Programme (Phase 5 2009/10). LJMU has already gained accreditation from the Carbon Trust Energy Efficiency Scheme (2007) and was awarded the Carbon Trust Standard in 2009. LJMU has a successful Waste and Recycling programme, a PRINT strategy to reduce paper and energy consumption, a Sustainable Procurement Policy and has Fairtrade status. These improvements are consolidated into LJMU’s Carbon Management Plan, which addresses the need to conserve energy and water, save money, maintain finite resources for longer and contribute towards reducing climate change. LJMU also won the Best Travel Plan Award in 2007 from Merseyside Integrated Transport Authority for its work in promoting sustainable travel choices. Work on these plans has continued and the results of the 2009 Travel Survey showed reductions in single car occupancy rates between 2005 and 2009 (16% for staff and 7% for students). LJMU is currently participating in the Carbon Trust’s Higher Education Carbon Management Programme (Phase 5 2009/10). LJMU has already gained accreditation from the Carbon Trust Energy Efficiency Scheme (2007) and was awarded the Carbon Trust Standard in 2009. LJMU has a successful Waste and Recycling programme, a PRINT strategy to reduce paper and energy consumption, a Sustainable Procurement Policy and has Fairtrade status. These improvements are consolidated into LJMU’s Carbon Management Plan, which addresses the need to conserve energy and water, save money, maintain finite resources for longer and contribute towards reducing climate change.

The Carbon Management Plan brings together policies into a cohesive framework with ongoing rolling targets. The targets seek to exceed existing governmental targets. The Carbon Management Plan acts as the catalyst for driving forward further improvements and cultural change across the University, demonstrating LJMU’s commitment to becoming a low carbon university. In addition, LJMU is currently moving towards ISO14001 accreditation via the nationally recognised EcoCampus scheme and the development of an Environmental Management System. 38


The Carbon Management Plan (CMP) was approved by the Strategic Management Group and the Board of Governors in March 2010. This demonstrates the senior level of commitment and monitoring. The main objectives of the Plan are to establish a strategic implementation of carbon reduction measures and embed awareness into all processes and practices. The initial target was a 25% reduction in carbon emissions against a baseline year of 2008/09 over a period of five years to 2013/2014. The CMP is a rolling programme of initiatives and a further year has been added to the plan which has increased the target from 25% by 2013/14 to 32% by 2014/15. This continues to move our target closer to the government’s targets of a 34% reduction by 2020 and 80% reduction by 2050.

The University achieved its Bronze EcoCampus award in April 2011 just 6 months after registering on the scheme. This completed the planning stage of the phased approach towards ISO14001 (Platinum Stage) and a fully developed Environmental Management System. LJMU received a First Class Honours in the People and Planet Green League table, with a rating of 31st out of 142 universities. This was a move up from the previous year’s award of a 2:1 and the highest rating of all the Liverpool-based universities.

LJMU works closely with the Liverpool Students Union (LiverpoolSU) with regards to all sustainability issues and assisted them in gaining their Silver Award in the environmental Sound Impact Awards in 2010. This work is ongoing and being further developed through the Getting Greener campaign. 39


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 states that the Board shall consist of not less than twelve and not more than twenty-four 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 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 2010 membership of the Board of Governors has been as follows: -

40


Ex-officio Members

External Co-opted Members

Professor M A Brown

Vice Chancellor & Chief Executive (Retired 31st August 2011)

Mr A Bell

Co-opted Governor from Health Sector

Mr P Holme

Professor Nigel Weatherill

Vice Chancellor & Chief Executive (Appointed 1st September 2011)

Co-opted Governor from Education Sector Deputy Chairman of Employment Committee

Nominee Members

External Independent Members Sir M Thornton

Chairman and Pro Chancellor Chairman of Remuneration Committee Chairman of Nominations Committee Final term extended upon approval of the Board on 20th September 2010

Ms K Byrne Mr J Carson Ms C Dove

Re-appointed 1 August 2010

Sir J Dwyer

Retired 11 September 2011

Staff Governor (Academic Board Nominee) (Retired 17 April 2011)

Ms L Rumsey

Student Governor (Student President) (Retired 13 June 2011)

Dr T Livsey

Staff Governor (Academic Board Nominee) Appointed 18 April 2011

Mr D McCabe

Student Governor (Student President) Elected 27 June 2011

Staff Members

Sir D Henshaw Mr R Hill

Ms K Johnston

Mr M Grayshon

Staff Governor (Non Teaching Staff) Retired 25 September 2011

Professor P Lisboa

Staff Governor (Teaching Staff)

Chairman of Finance Committee

Mr A Holroyd Sir B Massie

Re-appointed 1 February 2011

Mr G Morris

Deputy Chairman Finance Committee

Mrs A Redmond

Deputy Chairman Audit Committee

Ms D Shackleton

Chairman of Audit Committee

Judge Elizabeth Steel

Chairman of Employment Committee Final term extended upon approval of the Board on 20 September 2010

The Board of Governors are the Trustees of the University.

officers and advisors of the university Vice-Chancellor and Chief Executive: Professor Michael Brown (retired 31st August 2011) Professor Nigel Weatherill (appointed 1st September 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 Auditors: Deloitte & Touche LLP, Horton House, Exchange Flags, Liverpool L2 3PG

41


RESPONSIBILITIES OF THE BOARD OF GOVERNORS OF LIVERPOOL JOHN MOORES UNIVERSITY In accordance with the Education Reform Act 1988, the Board of Governors of the University is responsible for the administration and management of the affairs of the University and is required to present audited financial statements for each financial year. The Board of Governors is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the University, and to enable it to ensure that the financial statements are prepared in accordance with the Education Reform Act, the Statement of Recommended Practice on Accounting for Further and Higher Education Institutions and relevant Accounting Standards. In addition, within the terms and conditions of a Financial Memorandum agreed between the Higher Education Funding Council for England and the Board of Governors of the University, the Board of Governors, through its designated office holder, is required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the University and of the surplus or deficit and cash flows for that year. In causing the financial statements to be prepared, the Board has ensured that: n

Suitable accounting policies are selected and applied consistently.

n

Judgements and estimates are made that are reasonable and prudent.

n

Applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.

n

Financial statements are prepared on the going concern basis unless it is inappropriate to presume that the University will continue in operation. The Board is satisfied that the University has adequate resources to continue in operation for the foreseeable future; for this reason the going concern basis continues to be adopted in the preparation of the financial statements.

The Board has taken reasonable steps to: n

Ensure that funds from the Higher Education Funding Council for England and the Training and Development Agency are used only for the purposes for which they have been given and in accordance with the Financial Memorandum with the relevant Funding Council and any other conditions which the Funding Council may from time to time prescribe.

n

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

n

Safeguard the assets of the University and prevent and detect fraud.

n

Secure the economical, efficient and effective management of the University's resources and expenditure.

Sir M Thornton Chairman 21 November 2011

42


CORPORATE GOVERNANCE

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 materially interfere with the exercise of its independent judgement.

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 Chairmen (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 is applicable to the higher education (HE) sector for the first time for the year ended 31 July 2011. The Board of Governors has considered the new Code and how this applies to the University.

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 expected to update their entry at any time as and when their circumstances change and the University 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. In accordance with the introduction of the new 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.

Summary of the University’s Structure of Corporate Governance The University is an exempt charity and as such is required to undertake activities which are in accordance with its aims and objectives and 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 purposes for the public benefit is set out on page 32.

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 anti-bribery law, corruption or unethical behaviour.

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 41. 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 Scheme of Delegation and under the Financial Memorandum (FM) with the Funding Council for England (HEFCE).

The Board of Governors meets a minimum of four times a year and has 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 ViceChancellor is not a member of the Audit Committee and attends that Committee in his capacity of Chief Executive. The Board of Governors and its Committees review their terms of reference on a regular basis with a view, inter alia, to ensuring that they are embedding risk effectively into their work. In addition to its formal meetings, the Board holds workshops and a residential strategic event during the year, at which items of strategic importance are disclosed. The Chairman of the Board of Governors is Sir Malcolm Thornton. The full Board of Governors met on

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 influence strategic issues at an early stage in their development. The Board is also responsible for approval of major developments, including property developments, and is in receipt of regular reports from Executive Officers on the day-to-day operations of the University’s business and its subsidiary companies. 43


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 its specific implications for the work and responsibilities of the Audit Committee. The FM sets out the formal relationship 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 is Mrs Alexis Redmond. The Audit Committee met on 4 October 2010, 1 November 2010, 21 February 2011, 13 June 2011 and 18 July 2011.

20 September 2010, 11 October 2010 (Governors Workshop), 22 November 2010, 6 December 2010, 10 January 2011 (Networking Event), 26 and 27 January 2011 (Overnight Strategic Event), 14 February 2011, 28 March 2011 and 4 July 2011. 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. The Chairman of the Finance Committee is Mr Rod Hill and the Deputy Chairman is Mr Graham Morris. The Finance Committee met on 8 November 2010, 14 March 2011, and 20 June 2011. The Employment Committee meets at least 4 times a year and considers issues related to staffing and employment 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 23 September 2010, 18 October 2010, 14 February 2011, 7 March 2011 and 6 June 2011.

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 superseded by the UK Corporate Governance Code in May 2010, with the following exception: that in light of the unprecedented challenge in the HE sector, it is clearly of fundamental importance that the Board should ensure continuity, stability and continuing effective governance, and 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 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 the Governors would have completed their final term before 31 July 2011. The Board of Governors approved the appointment of the new ViceChancellor and Chief Executive at its meeting held on 14 February 2011 and he took up post on 1 September 2011.

The Remuneration Committee, which meets at least once a year, considers the performance and determines the annual remuneration of the Vice Chancellor and Senior Officers of the University. The Chairman of the Remuneration Committee is Sir Malcolm Thornton. The Remuneration Committee met on 9 February 2011 and 9 March 2011. 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 Nominations Committee met on 16 September 2010.

During 2009 the Board of Governors conducted an in-depth review of the effectiveness of institutional governance arrangements of the University. Such an intensive improvement review is conducted every 4 years with any actions/enhancements implemented in the meantime and as and when the need arises. The review determined that there continues 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

The Audit Committee, which meets at least four times a year, is responsible for overseeing the work of the external auditors and internal auditors and considers detailed reports together with recommendations for the improvement of the University’s systems of internal control and management’s responses and implementation plans. The Committee also receives and considers reports from HEFCE as they affect the University’s business, monitors adherence with the regulatory requirements and reviews the University’s accounting policies. Whilst the Vice-Chancellor and other managers attend meetings of the Audit Committee as 44


governance arrangements is an ongoing process and a programme of governance work was undertaken in 2010/11, in addition to the implementation of the recommendations of the Governance Effectiveness Review. 2010/11 saw an exceptionally busy year for Governors during a period of great change for the HE sector with particular reference to the external environment, including the decision on fees and the access agreement.

3.

The Board of Governors and its Committees review their terms of reference on a regular basis with a view, inter alia, to agreeing how best to embed 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.

4.

The Board of Governors’ agenda includes a regular item for consideration of risk. The Board receives reports on risk and the Enterprise Risk Management arrangements from SMG and the Audit Committee.

5.

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 Strategic Plan, risk register and previous internal audit reports.

6.

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

7.

SMG 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 and reinforced by risk awareness training.

8.

All SMG members included a section on identification, evaluation and management of risk areas in their monthly reports to the ViceChancellor during 2010/2011.

9.

Risk management is incorporated into the corporate planning and decision making process of the institution. The Enterprise Risk Management Strategy contains a description of the institution’s risk appetite, reflecting informal advice from the University’s internal auditors.

Internal Control The University’s Board of Governors is responsible for the University’s system of internal control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. It is based on a framework of regular management information, administrative procedures including the segregation of duties, and a system of delegation and accountability. 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: n

Governance

n

Financial Management

n

Risk Management

Processes and control arrangements: The University has the following processes in place: 1.

2.

The University remains committed to best practice in Governance and Management. In 2002 the University adopted the EFQM Excellence Model Framework and a strong strategy is in place, based on the core business processes of Student Recruitment; Development and Support; Learning, Teaching and Assessment; Research and Scholarship; and Commercial Enterprise and Knowledge Transfer. The Strategic Management Group (SMG) continues to test the strength of its management system through both internal and external award assessment.

10. The Risk Moderation Panel has formal terms of reference as a working group of SMG. A combination of core and rotating membership ensures consistency whilst at the same time as allowing fresh perspectives on risk issues. 11. The Institutional Risk Register is reviewed on a regular basis and procedures for identifying risks refined.

The Strategic Management System ensures a regular review of the University’s strategic direction. This has been reviewed over the last 18 months in response to the change of HE funding policy under the coalition government and a new strategic plan for the period 2012 to 2017 is in preparation.

12. The principles of PRINCE2 methodology are applied in the management of institutional projects. 45


Particular indicators of the effectiveness of the internal control systems during 2010/11

finalised ready for delivery in autumn 2011. In addition, Internal Audit ran a workshop on identifying fraud risks. A further workshop in 2011/12 will help to consolidate a comprehensive framework of counter-fraud and anti-corruption arrangements.

These include: 1.

The overall assessment from the HEFCE Assessment of Institutional Risk, dated 3 June 2011, is that LJMU is not at higher risk and is meeting the accountability obligations set out in the Financial Memorandum between HEFCE and Institutions.

2.

A UK Excellence Award winner in 2008, the University has also been a finalist in the EFQM (European level) Excellence Award in 2009 and 2010, going on to be announced as a Prize Winner in the category of ‘Building Partnerships’ at the awards ceremony in Munich in October 2011. This ongoing achievement of high-level external recognition represents a positive independent assessment of the University’s approach to governance and management.

3.

The most recent annual assessment statement by the Internal Auditors of the University’s system of internal control, including risk management and governance concludes 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’.

4.

5.

6.

Assessment gradings for all audits in 2010/11 were either full or substantial. A review by the Internal Auditors into ‘Information for Decision Making’ focussed on information required by Governors to discharge their roles and responsibilities, with specific attention to decision making in the current climate and assessing whether the information currently provided is timely, accurate and appropriate to facilitate an informed and efficient decision making process. This review, together with a review of Performance Management KPIs, received a full assessment grading.

7.

The University has met the reporting requirements of both the Freedom of Information Act and the Data Protection Act for the requests received.

8.

Liverpool John Moores University continues to manage its health and safety risks effectively and further consolidated its statutory occupational health provision for staff and students, having made significant progress against the targets contained in the LJMU Health and Safety Action Plan 2010/11. The University’s insurer concluded in its audit report that there has been an improvement in health and safety management since its previous visit in 2009. There was a slight increase in the total number of workplace accidents resulting in minor injuries. However, the number of accidents that were reported to the Health and Safety Executive (HSE) fell, along with the corresponding staff incidence rates (used by HSE as an indicator of an organisation’s Health and Safety performance).

9.

There has been continued low referral of cases to the Office of the Independent Adjudicator in relation to student complaints and appeals.

10. Planning and Information (PLN) have put in place a policy that all requests for software solutions and developments are to be submitted to the PLN Service Desk and where appropriate go with a business case to the Development Programme Steering Group (DPSG) for consideration. 11. A P2P (Procure to Pay) project has introduced an e-marketplace system: i-procurement and i-buy. Two faculties are the pilot areas for the system that improves the efficiency of purchasing, receipting and invoice matching, relies upon workflow processes and strengthens controls.

The Carbon Management Project Board received the first year report, for 2009/10, on progress with the Carbon Management Programme (CMP). This showed that the potential to save carbon amounting to 45% of the five years 25% target has been identified and may be realised through the projects completed within the programme’s first year. The Project Board reports to SMG and to the Board of Governors or its Committees because of the importance of the CMP and in accordance with requirements of the HEFCE Financial Memorandum and HEFCE Good Practice Guidance 2010/12 on Carbon Management strategies and plans.

12. The Audit Committee conducted a self assessment. The undertaking of the self assessment is a demonstration 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 Board is of the view that there is an ongoing process for identifying, evaluating and managing the University’s significant risks, that it has been in place for the year ended 31 July 2011, 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.

An Anti-Bribery Policy was agreed by the Board of Governors on 28 March. A Working Group has been 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 has been 46


Going Concern

Scope of the audit of the financial statements

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.

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.This includes an assessment of: whether the accounting policies are appropriate to the groups and University’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Board of Governors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Operating and Financial Review to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Independent Auditor’s Report to the Board of Governors of Liverpool 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 2011 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.

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

Opinion on financial statements In our opinion the financial statements: n

give a true and fair view of the state of the affairs of the Group and University as at 31 July 2011 and of the Group’s income and expenditure, recognised gains and losses and cash flows for the year then ended;

n

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

n

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

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: n

funds from whatever source administered by the University for specific purposes have been properly applied to those purposes

n

funds provided by HEFCE have been applied in accordance with the Financial Memorandum and any other terms and conditions attached to them.

47


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: n

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

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

Date: 28th November 2011

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.

48


STATEMENT OF PRINCIPAL ACCOUNTING POLICIES

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

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. Basis of accounting The financial statements have been prepared under the historical cost convention, modified by the revaluation of certain land and buildings. Basis of consolidation The consolidated financial statements include the University and its subsidiary undertakings for the financial year to 31 July 2011. Intragroup sales and purchases are eliminated fully on consolidation. In accordance with FRS2, the activities of the Students Union have not been consolidated because the University does not control nor have significant influence over their managerial and financial policy decisions.

Tangible fixed assets 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.

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.

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.

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.

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.

Recurrent grants from the Funding Council are recognised in the period in which they are receivable.

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

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.

49


d. Equipment Equipment, including computers and software, costing less than ÂŁ10,000 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.

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.

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. 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.

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.

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.

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.

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.

50


Note

2010/11 ÂŁ000

2009/10 ÂŁ000

1 2 3 4 5

78,192 74,809 10,320 12,661 285

82,173 73,181 12,509 10,907 201

176,267

178,971

6 8 12 11 7

101,984 52,957 7,877 4,452

107,881 54,282 7,578 1,492 5,439

8

167,270

176,672

8,997

2,299

Income Funding council grants Tuition fees and education contracts Research grants and contracts Other income Endowment and Investment income Total income Expenditure Staff costs Other operating expenses Depreciation Impairment Interest payable Total expenditure Surplus after depreciation of tangible fixed assets at valuation and before tax Loss on disposal of fixed assets

12

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

9

Surplus/(Deficit) before exceptional items Fundamental Restructuring Costs

-

(3,114)

8,997

(815)

15

58

-

-

9,012 10

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

(757)

-

(8,009)

9,012

(8,766)

Transferred from/(to) endowment funds

21

96

(153)

Surplus/(Deficit) for the year

23

9,108

(8,919)

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

51

financial statements 2011

CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT For the year ended 31 July 2011


CONSOLIDATED STATEMENT OF HISTORICAL COST SURPLUSES AND DEFICITS For the year ended 31 July 2011

financial statements 2011

Note Surplus/(Deficit) after depreciation of fixed assets at valuation and tax Difference between historical cost depreciation charge and the actual depreciation charge for the year calculated on the revalued amount Realisation of property revaluation gains of previous years on disposal of assets Historical cost surplus/(deficit) for the period after tax

2010/11 £000

2009/10 £000

9,108

(8,919)

22

730

751

22

-

2,988

9,838

52

(5,180)


As at 31 July 2011

Fixed assets Tangible assets Investments Investment in associate: Share of net assets/(liabilities) Endowment asset investments Current assets Assets held for resale Stocks and work in progress Debtors Short-term deposits Cash at bank and in hand Creditors: Amounts falling due within one year

Note

Group

University

2011 £000

2010 £000

2011 £000

2010 £000

12 13

174,463 39

162,771 39

174,463 16,383

162,771 16,372

13

61 174,563

25 162,835

190,846

179,143

14

1,979

1,646

1,979

1,646

12

1,081 51 9,108 32,128 5,253 47,621

45 11,460 27,854 2,710 42,069

1,081 49 8,786 32,128 4,851 46,895

40 10,800 27,854 1,923 40,617

38,734

41,450

37,744

39,753

8,887

619

9,151

864

185,429

165,100

201,976

181,653

15 18 18 16

Net current assets

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

17

36,666

26,963

52,824

43,121

Provisions for liabilities and charges

19

14,996

17,323

14,996

17,323

133,767

120,814

134,156

121,209

(62,908)

(61,763)

(62,908)

(61,763)

70,859

59,051

71,248

59,446

20

32,609

31,958

32,609

31,958

21 21

12 1,967

12 1,634

12 1,967

12 1,634

1,979

1,646

1,979

1,646

23

53,897

41,199

54,286

41,594

27

(62,908)

(61,763)

(62,908)

(61,763)

(9,011)

(20,564)

(8,622)

(20,169)

45,282

46,011

45,282

46,011

36,271

25,447

36,660

25,842

70,859

59,051

71,248

59,446

Net assets excluding pension liability Pension Scheme liability

27

Net assets including pension liability

Represented by: Deferred capital grants Endowments Permanent Expendable Total Endowments Reserves Income and Expenditure Account excluding pension reserve Pension Reserve Income and Expenditure Account including pension reserve Revaluation Reserve

22

Total Reserves

The financial statements on pages 21 to 45 were approved by the Board of Governors on 21 November 2011.

Sir M Thornton Chairman

Professor Nigel Weatherill Vice Chancellor & Chief Executive

53

financial statements 2011

BALANCE SHEETS


financial statements 2011

CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 July 2011 Note

2010/11 £000

2009/10 £000

Net cash inflow from operating activities

24

17,290

9,425

Returns on investments and servicing of finance

25

(1,813)

(1,395)

Taxation

-

Capital expenditure and financial investment

25

Cash outflow before use of liquid resources and financing

-

(18,256)

(17,930)

(2,779)

(9,900)

Management of liquid resources

25

(4,274)

(7,413)

Financing

25

9,807

19,462

2,754

2,149

2010/11 £000

2009/10 £000

Increase in cash in the year

Reconciliation of net cash flow to movement in net debt

Increase in cash in the year

26

2,754

2,149

Cash (outflow)/inflow from increase in debt and lease financing

26

(9,807)

(19,462)

Cash inflow from movement in liquid resources

26

4,274

7,413

(2,779)

(9,900)

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

26

Movement in net debt for year 2011 Net debt at 1 August 2010 26

Net debt at 31 July 2011

54

15

14

(2,764)

(9,886)

4,709

14,595

1,945

4,709


Note Surplus/(deficit) after depreciation of fixed assets at valuation and tax Endowment additions Endowment reclassification Actuarial gain/(loss) in respect of pension scheme Actuarial gain in respect of RPI to CPI adjustment * Unrealised surplus released on revaluation of assets

14 14 23 23 22

Total recognised gains relating to the year

2010/11 £000 9,012 681 (252) 1,715 -

2009/10 £000 (8,766) 130 (5,886) 12,324 8,983

11,156

6,785

2010/11 £000

2009/10 £000

Opening reserves and endowments

27,092

20,307

Total recognised gains in year

11,156

6,785

Closing reserves and endowments

38,248

27,092

Reconciliation

* In its June 2010 budget, the government announced that it intended for future increases in public sector pension schemes to be linked to changes in the Consumer Prices Index (CPI) rather than, as previously, the Retail Price Index (RPI). In the year ended 31st July 2010 the University considered the LGPS scheme rules and associated members’ literature and concluded that, as a result, a revised actuarial assumption about the level of inflation indexation should be made, with the resulting gain recognised through the Statement of Total Recognised Gains and Losses (‘STRGL’) in the 2009/10 financial statements. Following the issue of Urgent Issues Task Force (‘UITF’) Abstract 48 in December 2010, the University has reconsidered its position in respect of the above and has concluded that the above treatment of the gain remains appropriate.

55

financial statements 2011

STATEMENT OF CONSOLIDATED TOTAL RECOGNISED GAINS AND LOSSES For the year ended 31 July 2011


NOTES TO THE FINANCIAL STATEMENTS 31 July 2011

financial statements 2011

1

Funding Council grants

HEFCE £000

TDA £000

2010/11 £000

2009/10 £000

Recurrent grant

67,020

5,061

72,081

74,617

Specific grants

3,301

979

4,280

5,429

837 982

12

837 994

753 1,374

72,140

6,052

78,192

82,173

Deferred capital grants released in year Buildings (note 20) Equipment (note 20)

2

Tuition fees and education contracts

2010/11 £000

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

3

Research grants and contracts

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

4

Other income

Residences and Catering Other Services rendered Released from deferred capital grant (note 20) Other Income

5

Endowment and Investment income

Income from expendable endowments Income from permanent endowments Income from short-term deposits

56

2009/10 £000

49,253 8,988 2,533 14,035

47,600 9,038 2,942 13,601

74,809

73,181

2010/11 £000

2009/10 £000

1,541 294 4,290 1,791 2,404

1,611 672 5,469 3,081 1,676

10,320

12,509

2010/11 £000

2009/10 £000

897 9,881 353 1,530

1,008 7,223 371 2,305

12,661

10,907

2010/11 £000

2009/10 £000

15 270

12 189

285

201


6

Staff Costs

Salaries and wages Social security costs Pension costs (including FRS17 adjustment) Severance: Restructuring costs

Pension costs relating to enhanced pension provision (note 19)

2010/11 £000

2009/10 £000

81,769 6,268 11,443 99,480

88,717 6,947 11,731 107,395

1,624

322

101,104

107,717

880

164

101,984

107,881

2010/11 £

2009/10 £

229,626 1,788

270,000 714

231,414

270,714

25,380

38,070

Emoluments of the Vice Chancellor Salary Benefits in kind

Pension contributions

The Vice Chancellor opted out of the Teacher’s Pension Scheme as at 31st March 2011. From 1 April 2011 to 31 July 2011 he chose to take a reduced salary. 2010/11 Number

2009/10 Number

1,002 1,130 166

1,055 1,234 176

2,298

2,465

2010/11 Number

2009/10 Number

3 3 2 4 6

2 1 3 1 7 4

The average number of persons employed by the University during the year as expressed in full time equivalents was: Academic Support Other

Remuneration of higher paid staff other than the Vice Chancellor, excluding pension contributions: £100,000 - £109,999 £110,000 - £119,999 £120,000 - £129,999 £130,000 - £139,999 £140,000 - £149,999 £150,000 - £159,999

57

financial statements 2011

NOTES TO THE FINANCIAL STATEMENTS 31 July 2010 (continued)


NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)

financial statements 2011

7

Interest payable

On bank loans, overdraft and other loans: Wholly repayable within five years Not wholly repayable within five years Interest on VAT Assessment

FRS17 Adjustment: Net interest on pension liabilities (note 27)

8

Analysis of 2010/11 expenditure by activity

Academic Academic services Research grants & contracts Residences & catering Premises Administration & central services General education Staff student facilities Other expenses

2010/11 £000

2009/10 £000

3 2,093 2

32 1,541 -

2,098

1,573

2,354

3,866

4,452

5,439

2010/11 £000 77,515 18,813 9,267 1,982 24,187 11,516 15,705 4,775 3,510

2009/10 £000 81,183 19,880 11,066 2,093 24,447 12,935 15,659 4,549 4,860

167,270

176,672

2010/11 £000

2009/10 £000

50

42

91 26 90 504 8,202

42 7 8 15 89 497 7,643

Total per income and expenditure account

Other operating expenditure includes: Auditors remuneration External audit (of this amount £49k relates to the University) External auditors provision of non audit services: Taxation Grant audits Other work Grant audits Internal audit Operating leases Special support bursaries

The total expenses paid to or on behalf of 24 governors was £10,000 (2010 - £8,000 on behalf of 24 governors). This represents travel and subsistence expenses incurred in attending Board of Governors, Committee meetings and Charity events in their official capacity. 9

Taxation 2010/11

2009/10

Group £000

University

University

£000

Group £000

-

-

-

-

-

-

-

-

£000

Current Tax: UK Corporation taxation at 30% Under/(Over) provision of taxation in prior years

58


10

Fundamental Restructuring Costs

Restructuring costs

2010/11 £000

2009/10 £000

-

8,009

Restructuring costs incurred in the prior year relate to the cost of payments to staff under the University’s voluntary severance scheme, including any pension liabilities. The scheme came into effect in the first half of 2010 and closed at the end of May 2010 and was a proactive exercise to prepare for significant reductions in funding. There is further reference to restructuring in the operational and financial review. 11

Impairments

During 2009-10 the freehold and some leasehold land and buildings of the University were revalued in accordance with accounting policy at open market value for existing use or depreciated replacement cost. This revaluation resulted in an impairment in the cost of three buildings totalling £1.492m. This amount was written off in the Income and Expenditure account for the year. 12

Tangible fixed assets

Group and University Freehold Land and Buildings

Leasehold Land and Buildings

£000

£000

Additions Re-classified Disposals Write off

140,495 2,278 1,162 -

7,703 1,685 -

At 31 July 2011

143,935

9,388

Assets Under Construction £000

Telescope

Equipment

Total

£000

£000

£000

6,652 16,093 (5,039) (456)

4,334 279 -

16,816 2,456 1,087 -

176,000 21,106 (1,105) (456)

17,250

4,613

20,359

195,545

Cost or valuation At 1 August 2010

Depreciation At 1 August 2010

financial statements 2011

NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)

Charge for the year Re-classified Disposals

1,103 3,246 (24) -

1,313 331 -

-

1,510 260 -

9,303 4,040 -

13,229 7,877 (24) -

At 31 July 2011

4,325

1,644

-

1,770

13,343

21,082

41,976 28,059 69,575

6,213 1,204 327

17,250

1,655 1,188

1,691 5,325

48,189 32,609 93,665

At 31 July 2011

139,610

7,744

17,250

2,843

7,016

174,463

At 1 August 2010

139,392

6,390

6,652

2,824

7,513

162,771

Net book value Inherited Financed by capital grant Other

The University’s freehold and some leasehold land and buildings were valued at 30 June 2010 at open market value for existing use or depreciated replacement cost at £136.442m. In addition the remaining leased buildings are shown at the value of the lease. Included in land and buildings is land to the value of £12.85m that is not depreciated. At 31st July 2011 property with a net book value of £1.081m has been transferred to current assets. The University sold this property in September 2011.

59


NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 12

Tangible fixed assets (continued)

financial statements 2011

During the year ended 31st July 2010 a building with a net book value of £3.235m (historic cost £0.247m) was disposed of by way of demolition as part of the University’s Property Strategy. A grant of £0.121m was released on disposal. The resulting loss on disposal is £3.114m. Should land and buildings that have been financed by exchequer funds be sold, the University may be required, under the terms of the Finance Memorandum with HEFCE, to surrender the proceeds. As at 31st July 2011 the net value of assets financed by exchequer funds is: 2011 2010 £000 £000 Freehold Land and Buildings Leasehold Land and Buildings Telescope Equipment

23,357 1,000 679 1,686

22,879 440 2,150

26,722

25,469

The University holds heritage assets, donated to the University with an insurance value of £57,000, and loaned to the University with an insurance value of £26,500. Heritage assets include paintings, vases and ceremonial maces. These assets are not recognised on the balance sheet. 13

Investments

Group

Other Investments

£000 Cost or valuation At 1 August 2010 and 31 July 2011

39

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

University

Interest in Group Undertakings £000

Other Investments £000

Investment in Associates £000

Total £000

Cost or valuation Net book value at 1 August 2010 Additions

15,990 -

39 -

343 11

16,372 11

Net book value at 31 July 2011

15,990

39

354

16,383

During the year the University made further investments in Microsense Limited, Forsigs Limited and Pharmalucia Limited. These companies are spinout companies which have been set up as a vehicle for exploiting proof of concept ideas. Investments in Associates are in respect of shares in: Company

Principal Activity

Share Holding

Microsense Limited

Non invasive blood monitoring medical devices Antimicrobial photodynamic therapies Novel energy efficient water heating systems Novel microwave waste management system Developing forensic software applications

83.33 % owned

Pharmalucia Limited Hotwaves Innovations Ltd Microwaste Ltd Forsigs Ltd

60

49.97% owned 49.97% owned 49.97% owned 62.50% owned


13 Investments (continued) Liverpool Science Park Limited is a company limited by guarantee. The company was incorporated on the 13 June 2003. Liverpool John Moores University, University of Liverpool and Liverpool City Council’s interest in the company is 24.5%, 24.5% and 51% respectively. The company commenced trading in November 2005. The net assets of the company for the year ended 31 March 2011 are £229,910 (2010 £133,162), the group share of these being £56,328 (2010 £9,189). The company’s financial year end was 31st March 2011. Investment in associate - group Share of net assets/ (liabilities) at

Share of net assets/ (liabilities) for the year

1 August 2010

Share of net assets/ (liabilities) at 31 July 2011

Liverpool Science Park Limited

9

47

56

Pharmalucia Limited

5

(2)

3

Microwaste Limited

(1)

-

(1)

Microsense Limited

4

(2)

2

Hotwaves Innovations Limited

1

(1)

-

Forsigs Limited

7

(6)

1

25

36

61

14

Endowment asset investments

2011 £000

2010 £000

At 1 August 2010 Additions for the year Expenditure for the year Interest for the year Re-classification

1,646 681 (111) 15 (252)

1,363 389 (118) 12 -

Balance at 31 July 2011

1,979

1,646

Group and University

Represented by: Cash Deposits Debtors

15

Debtors

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

1,872 107 1,979

Group 2011 £000

2010 £000

1,443 203 1,646

University 2011 £000

2010 £000

3,123 2,671 3,262 52 -

4,129 1,734 5,448 149 -

2,394 2,662 3,261 52 417

3,202 1,717 5,442 149 290

9,108

11,460

8,786

10,800

61

financial statements 2011

NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)


NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)

financial statements 2011

16 year

Creditors: Amounts falling due

Group 2011 £000

within one

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

University 2011 £000

2010 £000

5,497 13,743 2,907 538 104 3,261 12,684

9,302 12,540 3,363 538 4,016 11,691

5,497 13,061 2,907 538 104 1,156 3,246 11,235

9,302 11,868 3,363 538 670 3,932 10,080

38,734

41,450

37,744

39,753

Group 17

Creditors: Amounts falling due after one year

Bank loan Salix Loan Intercompany leases

18

2010 £000

University 2011 £000

2011 £000

2010 £000

2010 £000

36,425 241 -

26,963 -

36,425 241 16,158

26,963 16,158

36,666

26,963

52,824

43,121

Interest rate risk profile of financial liabilities Cash at Bank and in hand Group University 2011 £000

2010 £000

2011 £000

2010 £000

Short Term Deposits Group University 2011 £000

2010 £000

2011 £000

2010 £000

Floating Rate Fixed Rate

5,253 -

2,710 -

4,851 -

1,923 -

32,128

27,854

32,128

27,854

As at 31 July 2011

5,253

2,710

4,851

1,923

32,128

27,854

32,128

27,854

The short-term deposits are placed with banks at rates based on prevailing market rates at the time of the deposit. All balances were held in sterling. 2011 2010 £000 £000 Maturity of financial liabilities Within 1 year or on demand Between 1 & 2 years Between 3 & 5 years Over 5 years

All financial liabilities relate to bank and loan debt.

62

642 642 1,718 34,306

538 538 1,614 24,811

37,308

27,501


18

Interest rate risk profile of financial liabilities (continued)

The Bank loans are as follows: Original Value £m

Term Years

Fixed/Variable

Security

Interest rate

10.4 3.0 3.0 20.0 10.0

25 25 25 25 from 2013 18 from 2015

Fixed to 2009 Variable Variable Fixed to 2038 Fixed to 2033

Aldham Robarts LRC Assorted Properties Avril Robarts LRC Art and Design Academy Art and Design Academy

8.11% 6.41% 6.86% 6.065% 6.36%

There is also a 21 year lease in respect of the Avril Robarts Learning Resource Centre. Borrowing facilities The group has £30m undrawn borrowing facility available as at 31 July 2011. Total £000

Floating Rate Financial Liabilities £000

Fixed Rate Financial Liabilities £000

As at 31 July 2011

37,308

2,940

34,368

As at 31 July 2010

27,501

3,180

24,321

All the group’s creditors falling due within 1 year (other than bank and other borrowings) are excluded from the above table. 19

Provisions for liabilities and charges

Group and University

Pension Enhancements £000

Other £000

Total £000

11,759

5,564

17,323

(3,043)

(3,776)

At 1 August 2010 Utilised in the year

(733) 880

Transfer from/(to) income and expenditure account

11,906

569 3.090

1,449 14,996

At 31 July 2011

The pension provision is in respect of pension enhancements payable to staff that have taken early retirement. The provision has been revalued at 31 July 2011. Included within other provisions is a provision for restructuring costs of £2.793m (2010 £5.117m). Restructuring costs incurred in the current year totalled £1.624m (2010 £8.009m) and relate to the cost of payments to staff under the University’s voluntary severance scheme, including any pension liabilities. The scheme came into effect in the first half of 2010 and closed at the end of May 2010 and was a proactive exercise to prepare for significant reductions in funding. During the year £2.884m (2010 £2.892m) was paid out.

63

financial statements 2011

NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)


NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)

financial statements 2011

20

Deferred capital grants

Group and University Funding Council £000

Other £000

Total £000

At 1 August 2010 Buildings Equipment

22,879 2,150

5,474 1,455

28,353 3,605

Total

25,029

6,929

31,958

Income Buildings Equipment

2,315 517

18

2,315 535

Total

2,832

18

2,850

Adjustment to Other Equipment

-

(27)

(27)

(837) (982)

(110) (243)

(947) (1,225)

Total

(1,819)

(353)

(2,172)

At 31 July 2011 Buildings Equipment

24,357 1,685

5,364 1,203

29,721 2,888

Total

26,042

6,567

32,609

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

Included in the Buildings total of £29,721k is £1,655k relating to the Telescope enclosure which is shown in the Telescope category in Fixed Assets (Note 12). 21

Endowments

Group and University Restricted Permanent £000

Restricted Expendable £000

Total 2011 £000

Total 2010 £000

12 12

1,542 92 1,634

1,554 92 1,646

1,283 80 1,363

Additions for the year

-

681

681

389

Interest for the year Expenditure for the year Net

-

15 (111) (96)

15 (111) (96)

12 (118) (106)

Reclassification

-

(252)

(252)

-

Balances at 31 July 2011

12

1,967

1,979

1,646

Represented by: Capital Accumulated income

12 -

1,860 107

1,872 107

1,554 92

12

1,967

1,979

1,646

Balances at 1 August 2010 Capital Accumulated income

64


22

Revaluations

Group and University 2011 2010 £000 £000

At 1 August 2010 Revaluation during the year Disposals (note 23) Contributions to depreciation: Released in year (note 23)

46,011 (730)

40,767 8,983 (2,988) (751)

At 31 July 2011

45,281

46,011

23

Revaluation reserve

Income and expenditure account

At 1 August 2010 Surplus/(deficit) retained for the year Transfer from revaluation reserve Actuarial gain/(loss) in respect of pension scheme Actuarial gain in respect of RPI to CPI adjustment At 31 July 2011 Balance represented by: Pension Reserve Income and Expenditure account excluding pension reserve

24

Group 2011 £000

Group 2010 £000

University 2011 £000

University 2010 £000

(20,564)

(21,822)

(20,169)

(21,385)

9,108 730 1,715

(8,919) 3,739 (5,886)

9,102 730 1,715

(7,469) 2,247 (5,886)

-

12,324

-

12,324

(9,011)

(20,564)

(8,622)

(20,169)

(62,908) 53,897

(61,763) 41,199

(62,908) 54,286

(61,763) 41,594

(9,011)

(20,564)

(8,622)

(20,169)

Reconciliation of consolidated operating surplus to net cashflow from operating activities 2010/11 £000

Operating Surplus/(deficit) before taxation Redundancy Costs FRS 17 Depreciation (note 12) Impairment Loss on disposal of fixed assets Deferred capital grants released to income (note 20) Interest receivable (note 5) Interest payable less net interest on pension liabilities (increase)/ decrease in stock (Increase)/ decrease in debtors (Decrease)/ increase in creditors (Decrease)/ increase in provisions (note 19) Endowment reclassification Fixed assets write off Share of profits of associates

8,997 2,860 7,877 (2,172) (285) 2,098 (6) 2,375 (2,820) (2,327) 252 456 (15)

Net cash inflow from operating activities

17,290

65

2009/10 £000 (815) (8,009) 4,242 7,578 1,492 3,114 (2,496) (201) 1,573 (3,187) 1,630 4,388 116 9,425

financial statements 2011

NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)


NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)

financial statements 2011

25

Analysis of cash flows for headings netted in the cashflow statement

Returns on investments and servicing of finance Interest received Interest paid

Capital expenditure and financial investment Purchase of tangible fixed assets (note 12) Receipt of deferred capital grants (note 20)

Management of liquid resources Cash placed on short term deposit (note 26) Financing Repayment of secured loan Repayment of Salix Loan Salix Loan received in year Secured bank loan drawn down in year

26

2010/11 £000

2009/10 £000

285 (2,098)

178 (1,573)

(1,813)

(1,395)

(21,106) 2,850

(25,636) 7,706

(18,256)

(17,930)

4,274

7,413

(538) (53) 398 10,000

(538) 20,000

9,807

19,462

Non Cash Change £000

At 31 July 2011 £000

Analysis of net debt At 1 August 2010 £000

Cash Flow £000

1,646 2,710 4,356

211 2,543 2,754

15 15

1,872 5,253 7,125

Debt due after one year Debt due within one year

(26,963) (538) (27,501)

(10,241) 434 (9,807)

538 (538) -

(36,666) (642) (37,308)

Current asset investments

27,854

4,274

4,709

(2,779)

Cash in hand and at bank: Endowments General

66

-

32,128

15

1,945


27

Pension schemes

The pension schemes for the University’s staff are the Teachers’ Pension Scheme (TPS), which is administered by the Teachers’ Pension Agency (TPA), the Universities Superannuation Scheme (USS), which is administered by Universities Superannuation Scheme Limited and the Merseyside Pension Fund (MPF), which is administered by Wirral Metropolitan Borough Council. Teachers’ Pension The Teachers’ Pension Scheme is an unfunded defined benefit scheme. Contributions for the year ended 31 July 2011 amount to £5,271,737 (2010 – £5,795,271). Contributions on a pay as you go basis are credited to the exchequer under arrangements governed by the Superannuation Act 1972. The pensions cost is assessed every five years in accordance with the advice of the government actuary. The assumptions and other data that have the most significant effect on the determination of the contribution levels are as follows: Latest actuarial valuation Actuarial method Gross rate of return Rate of real earnings growth Market value of assets at date of last valuation Proportion of members’ benefits covered by the actuarial value of the assets

31 March 2004 Prospective Benefits 6.5% per annum 1.5% per annum £163,240m 100%

Following the implementation of Teachers’ Pensions (Employers’ Supplementary Contributions) Regulations 2000 the government actuary carried out a further review on the level of employers’ contributions. With effect from 1 January 2007 the employers and employees contributions were 14.1% and 6.4% respectively, Under the definitions set out in Financial Reporting Standard 17 (Retirement Benefits), the TPS is a multi-employer pension scheme. The University is unable to identify its share of the underlying assets and liabilities of the scheme. Accordingly, the University has taken advantage of the exemption in FRS 17 and has accounted for its contributions to the scheme as if it were a defined contribution scheme. Universities Superannuation Scheme (USS) The University participates in the Universities Superannuation Scheme (USS), a defined benefit scheme which is contracted out of the State Second Pension (S2P). The assets of the scheme are held in a separate fund administrated by the trustee, Universities Superannuation Scheme Limited. USS has over 130,000 active members and the University has 27 active members participating in the scheme. Because of the mutual nature of the scheme, the University is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by FRS 17 “Retirement Benefits”, accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the accounting period. The latest actuarial valuation of the scheme was at 31 March 2008. This was the first valuation for USS under the new scheme-specific funding regime introduced by the Pensions Act 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover their technical provisions. At the valuation date, the value of the assets of the scheme was £28,842.6 million and the value of the scheme’s technical provisions was £28,135.3 million indicating a surplus of £707.3 million. The assets therefore were sufficient to cover 103% of the benefits which had accrued to members allowing for expected future increases in earnings. The University contribution rate required for future service benefits alone at the date of the valuation was 16% of pensionable salaries and the trustee company, on the advice of the actuary, agreed to increase the University contribution to 16% of pensionable salaries from 1 October 2009. Since 31 March 2008 global investment markets have continued to fall and at 31 March 2009 the actuary has estimated that the funding level under the new scheme specific funding regime had fallen from 103% to 75%. By comparison the 12 months from April 2009 to March 2010 has shown an improvement in the funding level from 75% to 91% as at 31 March 2010. This estimate is based on the funding level at 31 March 2008, adjusted to reflect the fund’s actual investment performance over the year and changes in market conditions (market conditions affect both the valuation rate of interest and also the inflation assumption which in turn impacts on the salary and pension increase assumptions).

67

financial statements 2011

NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)


NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)

financial statements 2011

On the FRS17 basis, using an AA bond discount rate of 5.6% per annum based on spot yields, the actuary estimated that the funding level at 31 March 2010 was 80%. An estimate of the funding level measured on a buy-out basis at that date was approximately 57%. Surpluses or deficits which arise at future valuations may impact on the University’s future contribution commitment. A deficit may require additional funding in the form of higher contribution requirements, where a surplus could, perhaps, be used to similarly reduce contribution requirements. USS is a “last man standing” scheme so that in the event of the insolvency of any of the participating employers in USS, the amount of any pension funding shortfall (which cannot otherwise be recovered) in respect of that employer will be spread across the remaining participant employers and reflected in the next actuarial valuation of the scheme. The next formal triennial actuarial valuation is due as at 31 March 2011. The contribution rate will be reviewed as part of each valuation and may be reviewed more frequently. The total pension contribution to USS for the University was £219k (2010 £185k). The employer contribution rate payable by the University for the financial year was 16%. Surpluses or deficits, which arise at future valuations, may impact on universities’ future contribution commitment. Local Government Pension Scheme (LGPS) - Merseyside Pension Fund The LGPS is a funded defined benefit scheme, with the assets held in separate trustee administered funds. The total contribution made for the year ended 31 July 2011 was £5,231,423 (2010 £5,373,973). The agreed contribution rate for employers for the financial year was 14.8% from 1 August 2010 to 31 March 2011, and 10.5% thereafter. The employee rate paid is based on the whole time equivalent pensionable pay in accordance with the following table: Salary

Pension Contribution Rate

£0 – 12,000 £12,000.01 – 14,000 £14,000.01 – 18,000 £18,000.01 – 30,000 £30,000.01 – 40,000 £40,000.01 – 75,000 More than £75,000.01

5.5% 5.8% 5.9% 6.5% 6.8% 7.2% 7.5%

The pensions cost is assessed every three years in accordance with the advice of a qualified independent actuary. All revisions to contributions were implemented from 1 April 2008. The assumptions and other data that have the most significant effect on the determination of the contribution levels are as follows: Latest actuarial valuation Actuarial method Investment returns per annum Pension increases per annum Salary scale increases per annum Market value of assets at date of last valuation Proportion of members’ accrued benefits covered by the actuarial value of the assets

31 March 2010 Projected Unit 6.75% per annum 3.0% per annum 4.5% per annum £4,706 million 78%

The following information is based upon a full actuarial valuation of the Fund at 31 March 2008 updated to 31 July 2011 by a qualified independent actuary. At 31 July 2011 3.4% 4.4% 2.9% 5.3%

Inflation Rate of increase in salaries Rate of increase for pensions Discount rate for liabilities

68

At 31 July 2010 3.3% 4.55% 2.8% 5.5%


The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are: At 31 July 2011 Years

At 31 July 2010 Years

21.4 24.1

20.4 23.2

22.8 25.7

21.3 24.1

Value at 31 July 2010

70,321 17,438 4,787 7,750 2,735 10,941

Retiring today Males Females Retiring in 20 years Males Females The University’s share of the assets in the scheme and the expected rates of return were: Long term rate of return expected at 31 July 2011

Value at 31 July 2011 £000

Long term rate of return expected at 31 July 2010

7.0% 3.9% 4.9% 6.0% 0.5% 7.0%

82,862 17,404 4,935 11,689 2,987 10,001

7.5% 4.2% 5.1% 6.5% 0.5% 7.5%

Equities Government Bonds Other Bonds Property Cash/liquidity Other Total Market Value of assets

129,878

£000

113,972

Analysis of the amount charged to income and expenditure account Year Ended 31 July 2011 £000

Year Ended 31 July 2010 £000

Employer Service cost Curtailment costs/Past service

5,787 408

5,641 88

Total operating charge

6,195

5,729

Year Ended 31 July 2011 £000

Year Ended 31 July 2010 £000

Expected return on pension scheme assets Interest on pension liabilities

7,373 (9,727)

6,242 (10,108)

Net pension finance (costs)

(2,354)

(3,866)

Analysis of net pension finance (costs)

69

financial statements 2011

NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)


NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)

financial statements 2011

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

Actual return less expected return on pension scheme assets Change in financial and demographic assumptions underlying the scheme liabilities Actuarial gain/(loss) recognised in STRGL Actuarial gain in respect of RPI to CPI adjustments Total effect of Actuarial gains on STRGL

Year Ended 31 July 2011 £000

Year Ended 31 July 2010 £000

6,380 (4,665)

9,124 (15,010)

1,715

(5,886)

-

12,324

1,715

6,438

Movement in deficit during the year Year Ended 31 July 2011 £000

Year Ended 31 July 2010 £000

Deficit in scheme at 1 August 2010 Movement in year: Current service charge Contributions Past service/Curtailment cost Actuarial gain in respect of RPI to CPI adjustment Net interest on assets Actuarial gain/(loss)

(61,763)

(63,959)

(5,787) 5,689 (408) (2,354) 1,715

(5,641) 5,353 (88) 12,324 (3,866) (5,886)

Deficit in scheme at 31 July 2011

(62,908)

(61,763)

In accordance with the revised FRS17 accounting standard, assets have been valued at realisable (i.e. bid) values for the year ended 31 July 2011. Previously assets were valued at fair (in effect mid market) value. Given the immaterial nature of the adjustments, a prior period adjustment has not been made for the change in valuation method. Analysis of the movements in the present value of the scheme liabilities Year Ended 31 July 2011 £000

Year Ended 31 July 2010 £000

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

175,735 5,787 9,727 2,297 4,665 (5,833) 408

158,024 5,641 10,108 2,548 15,010 (3,360) (12,324) 88

At the end of the year

192,786

175,735

70


Analysis of movement in the market value of the scheme assets Year Ended 31 July 2011 £000 At the beginning of the year Expected rate of return on scheme assets Actuarial (losses) and gains Contribution by the employer Contributions by scheme participants Benefits paid

113,972 7,373 6,380 5,689 2,297 (5,833)

At the end of the year

129,878

Year Ended 31 July 2010 £000 94,065 6,242 9,124 5,353 2,548 (3,360) 113,972

Reserves

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

Year Ended 31 July 2011 £000

Year Ended 31 July 2010 £000

Year Ended 31 July 2009 £000

Year Ended 31 July 2008 £000

Year Ended 31 July 2007 £000

129,878 (192,786)

113,972 (175,735)

94,065 (158,024)

95,784 (159,440)

94,546 (122,055)

(62,908)

(61,763)

(63,959)

(63,656)

(27,509)

Year Ended 31 July 2011 £000

Year Ended 31 July 2010 £000

Year Ended 31 July 2009 £000

Year Ended 31 July 2008 £000

Year Ended 31 July 2007 £000

(6,380) 4.9%

(7,124) 8%

12,591 13.4%

9,249 9.7%

2,774 2.9%

(15,010) 8.5%

17,202 10.9%

(23,614) 14.9%

4,264 3.5%

(5,886) 3.3%

4,611 2.9%

(32,863) 20.7%

7,038 5.8%

History of experience gains and losses

Difference between the expected and actual return on assets: Amount % of scheme assets Change in assumptions Amount % of scheme liabilities Total amount recognised in STRGL Amount % of scheme liabilities

(4,665) 2.4% 1,715 0.9%

71

financial statements 2011

NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued


NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)

financial statements 2011

28

Access funds

Balance at 1 August 2011 Funding Council grants Interest earned Disbursed to students

Balance at 31 July 2011

2010/11 £000

2009/10 £000

39 537 576

190 579 3 772

(484)

(733)

92

39

Funding Council grants are available solely for students; the University acts only as paying agent. related disbursements are therefore excluded from the Income and Expenditure Account. 29

The grants and

Training and Development Agency bursaries 2010/11 £000

2009/10 £000

(239) 3,045

295 2,560

2,806

2,855

(55) (2,785)

(56) (3,038)

(34)

(239)

2010/11 £000

2009/10 £000

508 889 -

505 1,397 -

1,397

1,902

2010/11 £000

2009/10 £000

Capital expenditure contracted for, but not provided for in the financial statements Capital expenditure authorised by Board of Governors, but not yet contracted for

21,000 9,100

26,000 4,100

Balance at 31 July 2011

30,100

30,100

Balance at 1 August 2010 Training and Development Agency grants

University administration fee Disbursed to students Balance at 31 July 2011

30

Operating Leases

Non-cancellable operating lease rentals are payable as follows:

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

31

Capital commitments

72


32

Related party transactions

No transactions in 2010/11 were identified which should be disclosed under Financial Reporting Standard 8 ‘Related Party Disclosures’. The Group has taken advantage of the exemption set out in FRS 8 and has not disclosed intra-group transactions. 33

Subsidiary undertaking

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

Principle Activity

Status

JMU Property Development Company Ltd JMU Services Ltd JMU Learning Resource Centre Ltd

Property Development Company Academic enterprise Leasing of the Avril Robarts Learning Resource Centre Promotion of the advancement of education By provision of funds to the University Dormant Promote and support collaborations within Malaysia

100% owned 100% owned 100% owned

JMU Building Services and Maintenance Ltd Liverpool Business School Ltd Liverpool John Moores (Malaysia) SDN.BHD

100% owned 100% owned

The University exercises a significant influence over the operations of JMU Building Services and Maintenance Limited, a company limited by guarantee. The University is the guarantor and the directors of the company must be appointed from officers or governors of the University, or members of the Company. 34

Ultimate Parent Organisation

Liverpool John Moores University is the ultimate parent organisation. Copies of the group accounts are obtainable from the Finance Director, 4th Floor, Kingsway House, Hatton Garden, Liverpool, L3 2AJ. 35

Post Balance Sheet Events

On 30 August 2011, the University drew down £10m, as part of a £60m loan facility, agreed with Barclays Bank Plc. This loan facility was arranged as part of the University’s Property Strategy. On 26 September 2011, the University sold a property on Myrtle Street for £1.316m. This sale was arranged as part of the University’s Property Strategy.

73

financial statements 2011

NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued)


74


www.ljmu.ac.uk

Liverpool John Moores University, Egerton Court, 2 Rodney Street, Liverpool L3 5UX

Š Corporate Communications Date of publication March 2010

LJMU Financial Statement  

For the year ending July 2011