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2023-03-31-accounts

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Trustees’ report and financial statements For the year ended 31 March 2023

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Index to the financial statements

Foreword 3
Report of the Trustees - Impact Report 4-10
Report of the Trustees – continued 11-20
Report of the independent auditor 21-23
Statement of financial activities 24
Balance sheet 25
Cash flow statement 26
Notes to the financial statements 27-42
Legal and administrative details 43-44

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Foreword

Times have been tough for many across the last year. A cost-of-living crisis coming after a decade of low growth in productivity and the economy has hit those on low incomes the hardest and left many public services struggling. Overall, employment rates remain relatively high, but the UK is the only G7 country to see economic inactivity higher now than pre-pandemic and too many people are in low paid or insecure work.

Our work has highlighted these issues and generated ideas for change. Our Better Work Network showed the impact of expected hikes in energy prices on low-income Londoners and made the case for Government support which came through the Energy Price Guarantee.

We argued the UK should aim for the highest employment rate in the G7, an extra 1.2 million people in work. Our analysis highlighted that there are one million workers missing from the workforce compared to pre-pandemic trends, with gender and class differences in the main causes of this. That helped to inform the Government’s response to rising economic inactivity.

Our analysis showed the UK continues to underinvest in skills. In England, government investment is set to be £1 billion lower in 2025 than in 2010. We showed that employers are investing 28% less in training per employee than in 2005. We argued for increased public investment in learning to boost growth and opportunity, and a new skills tax credit and reforms to the apprenticeship levy to encourage employers to invest.

Yet we know adults remain interested in learning. Our Adult Participation in Learning Survey showed a continued recovery in the proportion of adults taking part in learning, particularly driven by self-directed and online learning but with stark inequalities between groups and areas. Our Inspire! awards in Wales and Festival of Learning in England celebrated the achievements of adult learners. And we were delighted to give a special recognition award to adult educators in Ukraine, who continue to support people and their country.

We cover a wide range of policy areas and there are so many ways in which learning and work can make a difference – to individual opportunity, business success, economic growth, health, wellbeing and inclusion and more. But funding for this work is ever tighter and more challenging to come by.

That makes us even more proud of our work and the difference it continues to make. We are grateful for the hard work and dedication of our excellent team, who have faced the same cost of living pressures as everyone else, and for the expertise and commitment of our trustees.

In the year ahead we will redouble our efforts to make the case for learning and work, build the evidence base, shape policy, and test new ways of working.

Jeremy Moore and Stephen Evans

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Report of the Trustees: impact report

The following pages summarise the key impacts we have achieved over the year.

Strategic priorities and impact

Our vision is for a prosperous and fair society in which learning and work provide opportunities for everyone to realise their potential and ambitions throughout life.

Our strategic plan sets out how we seek to achieve our vision, including our mission, and values. Our work is organised into six priorities:

1. Lifelong learning.

Learning through life, for any reason and none, improves work, health, wellbeing and citizenship. People learn in many ways, including family and community learning. Yet participation in learning is unequal. Our focus is on the case for participating in learning and policy and practice to achieve this.

2. Employment and social security.

The pandemic increased inequalities and, while Government action helped limit the economic impact, labour market inactivity has risen and some groups have fared worse than others. Our focus is on those such as older people, disabled people and young people who are often excluded from or disadvantaged in the labour market.

3. Essential and life skills.

Capabilities like literacy, language, numeracy, digital, citizenship and health and financial skills are fundamental to life and work. Yet nine million adults lack functional skills and participation in learning has fallen sharply. Our focus is on developing new ways to engage people and deliver learning.

4. Pay, progression and security.

Work should be good quality and provide opportunities for progression and development. Yet five million people are low paid, and too many people become stuck in low pay. Our focus is on support for people in low pay to progress, including careers advice and skills improvements, and developing and spreading best practice on the quality of work.

5. Apprenticeships and technical education.

High-quality apprenticeships and world-class technical education should be open to all who can benefit from them. Yet the number of apprenticeships has fallen, access to them is unequal and the quality of provision variable. Our focus is on the quality of and access to apprenticeships, and technical education that works for adults and young people.

6. Social justice and inclusion.

Everyone should have the chance to go as far as their efforts will take them - life chances should not be constrained by background. Yet social mobility is lower than in other countries. Our focus is on advocating for better support for groups that often miss out and trying new ways of delivering this with partners.

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

We have helped shape policy and practice nationally, regionally and locally.

Policy and advocacy

We encourage evidence-based policy development and use our insights to improve service design and delivery. We help to shape the debate by working closely with our partners and testing out new approaches, and engaging across the political spectrum with elected representatives, government officials and others across the UK.

A significant part of our work this year has been deepening understanding of what’s needed for social and economic renewal and recovery following the pandemic. Highlights of our achievements include:

In addition, we responded to inquiries and Government consultations , and submitted evidence to, and presented at, All-Party Parliamentary Groups including on Youth Employment and on Adult Education.

We built engagement with key audiences through media and social media.

We received around 1,900 pieces of media coverage in 2022-23 for our campaigns and unique research and analysis, with our commentary of labour market statistics featuring regularly in national news. We achieved significant national media coverage in print, online and broadcast for our policy research, including in The Telegraph, The Times, The Mirror, The Financial Times, The Economist, BBC News Channel and GB News. Our work has also been featured in sector press including FE Week, FE News, Education Journal, People Management and Local Government Chronicle. We received notable coverage for our ‘Missing workers’ report on economic inactivity, including in the Daily Mirror, and our publication on employer investment in skills, including in the Daily Telegraph.

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Our website received around 190,000 views in the year . We had spikes around report publications, including the Adult Participation in Learning Survey and our events, including Maximising Multiply, Festival of Learning Awards ceremony and our Housing, Learning and Work Conference.

The number of followers for our @LearnWorkUK Twitter account rose 200 in the year, to 18,400 and our @LearnWorkCymru Twitter account rise 40 to 4,712 . Our YouTube channels had 14,700 views with 84,000 minutes of footage viewed .

We’ve been building our presence on LinkedIn as a way to connect to others. In the eight months from July 2022 – March 2023, we increased our followers by 790 , and we had 3,739 page views and 1,554 unique visitors .

Wales figures show that @LearnWorkCymru account received over 56,422 profile visits and L&W Wales YouTube had over 190.5k views with over 584,000 minutes of footage viewed by users.

Bringing people together

We maintain a range of networks, advocate through coalitions, and convene people and organisations to focus on burning issues, and to increase our influence and impact. We secure Ministers, senior political figures, and industry leaders to speak at our online and in-person events throughout the year.

Events

In November, Andy Street, Mayor of the West Midlands , and Alison McGovern MP, Shadow Minister for Work and Pensions , headlined our Employment and Skills Convention , which was held in person for the first time since 2019 and welcomed 200 delegates . Our annual English, Maths and ESOL conference , delivered online to 300 participants , focussed on adult numeracy and Multiply delivery. We also held roundtables and a webinar with 250 attendees to support local authorities to help develop their Multiply investment plans. In Wales we held an ESOL Development Day to reflect on the findings of our ESOL review for Welsh Government with over 70 attendees . Finally, our Housing, Learning and Work Conference held jointly with Communities that Work attracted around 200 delegates to explore inclusive economic growth, devolution of policy and funding and the transition to a net zero economy. In-between conferences, we held webinars and shorter events, to mark the publications of reports and external events, and our senior team shared platforms at events hosted by other organisations.

We inspired more adults to take up learning for life.

Festival of Learning in England and Adult Learners’ Week in Wales have celebrated the best in adult learning and inspired people to learn for 30 years, inspiring similar celebrations around the world.

This was a year of firsts. We worked with the team at City Hall to deliver the Mayor of London’s inaugural Adult Learning Awards , with a celebration in October for adult learners and their supporters. In January 2023, we worked with the West Midlands Combined Authority to open nominations for the first-ever West Midlands Adult Learning Awards .

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

In England, Festival of Learning was supported by Department for Education, NOCN, City Lit, the Education and Training Foundation, and Skills and Education Group, and we worked with organisations such as HOLEX, Association of Colleges, AELP and WEA. Award winner announcements took place in July, and the ten winners and five finalists were selected from nearly 200 nominations. The awards ceremony livestream has been viewed more than 1,500 times and our Twitter hashtag achieved 420,000 impressions . Award winner stories received widespread sector press coverage . Lifelong Learning Week took place from 7-11 November 2022 and featured a range of activities including launch of the 26[th] edition of the annual Adult Participation in Learning survey , a celebration of the arts and learning, and an ‘Employer Takeover Day’ led by Business in the Community.

In Wales, Adult Learners’ Week worked with over 100 partners to provide a mix of 500 online courses, events and community-based outreach and taster activity, and over 15,000 people engaged with the campaign . Learning opportunities were delivered by a range of stakeholders including Adult Learning Wales, Wales TUC, Big Ideas Wales, Digital Communities Wales and the network of community learning, further and higher education, training and voluntary learning providers. We worked with Welsh Government to promote the campaign and to signpost people to advice and guidance at Working Wales and to the Adult Learners’ Week/Change Your Story platform. Our online platform hosting course listings, special events, learner stories and links to further information, advice and support had over 55,131 page views and our content generated over 8.5 million impressions on Twitter .

We held the Inspire! Learning and Tutor awards in October and March respectively with contributions from the Minister for Education Jeremy Miles and John Griffiths MS . The awards were attended by 180 guests and led to 20 pieces of media coverage with 414k impressions on our Twitter hashtag #InspireCymru2022.

We developed solutions to meet the big challenges.

Here is a snapshot of our wide-ranging research and development work . We are proud to partner with national and local government, businesses and charities, maintaining our reputation for high quality research and analysis.

Valuing lifelong learning. In its 26[th] year, our survey showed that, after a decade of decline during the 2010s, participation in learning remains back at levels last seen in the early 2000s: around two in five adults (42%) say they have taken part in learning in the last three years. The survey also demonstrates a shift in the number of adults learning independently and informally, with interest sparked during the pandemic and helping to fill the gap as formal and publicly funded learning fell over the previous decade. However, the survey continues to highlight stark inequalities in who participates in learning, meaning there is much more to do to ensure fair access to opportunities. In January 2023 we launched a multi-year strategic partnership with Ufi VocTech Trust. Our planned programme of work includes place-based collaborations, funding, evaluation and advocacy and is designed to use the power of VocTech (Vocational Technology) to increase adult participation in learning.

Our wide-ranging work in partnership with Welsh Government has led to increased profile of and access to adult learning opportunities. In Wales, we have undertaken a review of adult learning partnerships to inform governance of the sector as it transitions towards regulation by the Commission on Tertiary Education and Research. We continue to support the work of the adult education External Reference Group and the aim of increasing the number of adult learners in Wales. We coordinated the work of Taith, the new international learner exchange

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

programme in Wales for adult education. Our work has encouraged adult learning organisations to develop and submit proposals for international exchange and to widen opportunities for disadvantaged learners.

Improving outcomes for young people. As co-chairs of the Youth Employment Group, we continued to bring stakeholders together to improve support for young people. Building on our partnership with The Prince’s Trust, we shone a light on economic inactivity among young people and the high cost of mental health difficulties in holding them back from opportunities. This research has been widely utilised by others and referenced in Parliament. Our evaluations of the Prince’s Trust Future Workforce Fund, UK Government’s Occupational traineeships and Welsh Government’s supported employment pilot built the evidence base on helping young people into work. We designed a framework for the DfE’s Academic Progression Pathway pilot, which is now being trialled across England to support young people into academic learning. We worked with 39 colleges and three universities across the UK as part of our Driving Change in Further Education project, which has improved the support that young adult carers receive in colleges and higher education across the UK. By working directly with young people we have highlighted care leavers’ lived experience of the welfare system and enabled them to advocate for change that will give them the support they need to achieve their potential.

High quality, accessible apprenticeships and technical education. To work for employers and people, apprenticeships and technical education need to be high quality and accessible. As a result of our work with JP Morgan on pre-apprenticeships, providers set up new programmes and adapted existing provision to meet the needs of young people who face barriers to work. We have continued working with the Strategic Development Network (SDN) to deliver the Government’s T-Level employer support programme. We presented our research undertaken on behalf of St Martin’s Group to explore the experiences, outcomes and destinations of apprentices who complete their programmes compared to those who do not, at an industryleaders’ event. This has led to further partnership working. We informed the wider roll out of Local Skills Improvement Plans (LSIP) through our partnership with IFF to evaluate the Department for Education’s Skills Accelerator Development Fund pilot.

Understanding what works. We completed the evaluation of the Catch 22 Horizons programme, designed to help people overcome social barriers to work such as homelessness, mental health or poor education. We presented the findings of the second wave of the evaluation of the Restart Scheme to DWP, which has informed the design of future employment programmes.

Our flagship programme, New Futures, is testing ways of helping people reskill and change career through four pilots across the UK – in Edinburgh, Belfast, Tees Valley and Wales. We established an external stakeholder reference group of experts from across sectors which has increased our reach with the programme. More than 50 people have started in jobs or industries that are new to them after receiving support from the pilots. We secured funding from the Health Foundation, via its Health Equals coalition, for a one-year policy post plus activities that will focus on health and work, synthesising evidence to develop new public policy solutions and influence for change.

Improving skills and employment opportunities. We are influencing conversations about the future landscape of employment support through evaluations, research and our policy proposals. Our research shows that Jobcentre Plus and DWP-commissioned provision only support one in ten out-of-work 50-64 year olds and disabled people, and we fed this in to the Government’s economic inactivity review. We worked with Barking and Dagenham Council to design a new supported employment programme, which is now helping people with learning

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

difficulties and mental health needs across the borough to gain vital skills for work. We also delivered employment and skills journey mapping and user needs analysis for the Central London Integration Hub, which will inform employment support for refugees and disabled people across a number of Boroughs. We have continued to work with social landlords who provide employment support, with our Building Opportunities report published together with Communities that Work, National Federation of ALMOs, National Housing Federation, and Institute for Employment Studies (IES). We engaged employers in National Foundation for Educational Research (NFER)’s five-year Nuffield-funded research programme on The Skills Imperative 2035: Essential skills for tomorrow's workforce, and supported the launch of its second working paper. We contributed to wider discussions on Net Zero and jobs for the future, including through our research for WorldSkills UK on young people and technical green skills.

Helping people on low pay to progress and build skills. Around five million people in Britain are low paid – relatively high by international standards, though falling as the minimum wage rises. Our Better Work Network – a policy and practice-based initiative in London and across the UK – has increased membership to over 800 members. We published a report examining the impacts of the cost of living crisis on low paid workers and held a seminar with the Communities and Social Policy Unit at Greater London Authority (GLA). We partnered with Trades Union Congress (TUC) to host a webinar on worker voice and representation in the workplace, and collaborated with the GLA to convene a private roundtable at City Hall with businesses and other stakeholders to explore effective mechanisms for supporting employer investment in skills. We continued to work in partnership with Peabody Trust to produce the Peabody Index, tracking pay and employment for low paid Londoners.

Improving literacy, numeracy and life skills. One in five adults have low essential skills like literacy and numeracy and fewer adults are in learning to improve these skills. To support providers and local commissioners with Multiply delivery, we launched the Multiply Effective Practice Network at our English, maths and ESOL conference in November 2022. The network has attracted over 250 members and held its inaugural webinar in February 2023. We helped to inform local Multiply delivery plans through extending our essential skills data map to the whole of England, and publishing research commissioned by the Greater London Authority on effective practice in English and maths for adults. Together with HOLEX, we convened the Skills for Life Alliance, bringing together key sector stakeholders, along with observers from the Department for Education (DfE) and DWP, to argue for a greater focus and action on adult essential skills in skills policy and practice.

Working with the University of South Wales we reviewed ESOL policy for the Welsh Government leading to a clear set of recommendations for further action. We also held an ESOL Development Day in Cardiff and Vale College bringing together the sector and Welsh Government to take our recommendations forward. We continued to grow our ESOL Network in Wales by coordinating professional learning, and helping practitioners to come together with policymakers to understand the challenges facing the sector, which will continue with further activity next year.

International work. We continue to play an active role in the European Association for the Education of Adults and the European Basic Skills Network. We shared our work on essential skills screening with over 60 European stakeholders at the EBSN annual conference in Vienna. In the Regional Capacity for Adult Learning and Education (RegALE) project, we organised a two-day study visit at City Lit, focused on advocacy and campaigns, and a webinar on impact measurement and evaluation in adult learning. We acted as the Sector Organising Body for Adult Education for Taith, the Welsh Government’s international exchange programme, to

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

European partners, including dedicated sessions with international partners on how to link with organisation in Wales. We’ve also secured funding for an exchange between partners in Wales and Aontas in the Republic of Ireland.

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Report of the Trustees - continued

The Company Board who are the Directors of the Company and Trustees of the Charity present their report together with the audited financial statements for the year ended 31 March 2023. This report constitutes the Trustees’ Annual Report for the purposes of charity law, and both the Directors’ report and Strategic Report for the purposes of company law. The Strategic (Impact) Report is on pages 4-10.

Results

The statement of financial activities is set out on page 24 and shows the net movement in funds for the year.

Tax status

The Company is a registered charity, number 1002775, and is exempt from corporation tax and income tax.

Our objectives

Learning and Work Institute is established for the advancement of all forms of adult education and the relief and prevention of unemployment and poverty.

Our vision

A prosperous and fair society in which learning and work provide opportunities for everyone to realise their potential and ambitions through life.

Our mission

Our values

Learning and Work Institute’s work is informed by core values, notably:

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Public benefit

The Trustees confirm that they have complied with the duty in section 17 of the Charities Act 2011 to have due regard to public benefit guidance published by the Charity Commission in determining the activities undertaken by the organisation.

The Trustees review the activities of the organisation against its aims on an ongoing basis and are satisfied that all activities continue to be related to the aims.

Learning and Work Institute seeks to benefit all members of the public in England and Wales, with no exclusions. Its focus is on those adults who have benefited least from initial education and training. For further information please see the impact report on page 4.

Structure, governance & management

Constitution

The Company is incorporated as a company limited by guarantee (Registered No. 02603322). It is governed according to the provisions contained in the Memorandum and Articles of Association. The liability of the members in the event of a winding up is limited to £1.

Governance structure

The Company Board consists of a maximum of 10 members, including the L&W President as specified in the Articles of Association. The Board membership comprises:

Currently the Company Board has ten members.

All members of the Company Board exercise their authority in their capacity as Trustees under the relevant companies’ legislation and as Trustees of the charity.

The Company Board maintains a strategic overview of the work of the organisation and its annual work programme and is responsible for all National Learning and Work Institute governance, regulatory and accountable functions, including financial and legal matters, and may establish standing committees with delegated authority to carry out specific and detailed work on its behalf. Whilst delegating the detailed consideration of policies and work programmes to standing committees, of which the designated Board members may be ex-officio members, the Board members may call in any matter for their determination.

However, the Company Board establishes as standing committees:

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Each Committee’s constitution includes designated representatives of the Company Board ex-officio, plus a balance of elected and co-opted members, with specific terms of reference. The members of the Committees are listed on pages 43 and 44.

The Chief Executive of L&W is appointed by the Company Board, which is responsible for all the arrangements relating to this appointment. The Chief Executive is the Company Secretary. It is the responsibility of the Chief Executive to carry forward the agreed policies and work programmes of L&W and to ensure continuity of action and policy between meetings of the governing bodies. The Chief Executive is the accounting officer of L&W and is responsible, with the senior management team, for the establishment and supervision of suitable systems of financial and resource management and control in respect of all its activities.

The Haldane Trust

Two trustees of L&W are also the sole trustees of the Haldane Trust, created in 1934 to commemorate the work of Viscount Haldane of Cloan in connection with Adult Education. The Haldane Trust holds investments with a market value of £113,000 at 31 March 2023 (£122,000 at 31 March 2022). Due to the common control and materiality, the investments of the Haldane Trust are consolidated into the L&W accounts. Further details are provided in note 21 to the financial statements.

Recruitment, induction and training of Trustees

A Search Committee is established to identify nominations to the Company Board, including the post of President, which are proposed to the membership by the Board. Members can also nominate Trustees.

Most Trustees are already familiar with the work of L&W when appointed, having served on other committees or been involved in its work, and many also serve on other charity boards.

The members’ handbook details the responsibilities of New Directors and Trustees are inducted and given the members’ handbook detailing their responsibilities.

L&W hosts an annual residential meeting for Board Members to discuss strategy and various issues of policy and practice.

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Periodically the Board self-assesses its effectiveness by way of a survey and has a follow up discussion. Any knowledge gaps or other concerns are identified and acted on.

Financial review for the year ended 31 March 2023

Trustees are confident that L&W continues to operate on a going concern basis. The organisation is in control of its annual income and expenditure and enters 2023-24 having already secured a very significant proportion of the income required for the year ahead. Furthermore, resilience is derived from reserves held in the form of investments that have a current market value in excess of one year of income.

More generally, as for many organisations in the third sector, L&W continues to experience funding pressures. Focus continues to be placed on pipeline development to increase funding from sources other than government grants. L&W continues to have a positive impact and uses its funds carefully to deliver on all contracts and grant agreements.

Our major funders include the Department for Education who provide a core grant which is used to fund the successful Festival of Learning in England. The Welsh Government provides ongoing funding under a grant arrangement, supporting a range of work as well as Adult Learners’ Week activities in Wales. We are grateful to all our funders including but not limited to Association of Colleges, Barrow Cadbury Trust, the Black Stork Charity, Catch 22, Charities Aid Foundation, Department of Work and Pensions, the Education and Training Foundation, European Commission, EY Foundation, Greater London Authority, Institute for Employment Studies, Lloyds Bank Foundation, Local Government Association, Ministry of Defence, NESTA, National Lottery Community Fund, Princes Trust, Trust for London and many others.

Year on year headline income increased by £557,000 through greater contract sales in both Wales and England. Diversification of income sources and a focus on pipeline have each contributed to this higher level of income for the year.

L&W also raises income from conference activities and sponsorship. Any surplus generated from these and other sources is used to fund L&W’s advocacy and information work and initiatives of importance to our strategic objectives and to strengthen the reserves as specified in the Reserves Policy. Expenditure supporting each activity is a combination of direct costs, salary costs for staff directly employed on that activity and support costs. Direct costs are incurred as part of contracts or are specific to an event or campaign.

Net expenditure before unrealised gains/losses on investments and changes in the valuation of the pensions scheme under FRS102 assumptions was a deficit of £989,000. The prior year net income was a deficit of £1,344,000. This improvement of £355,000 is largely attributable to higher income.

This year the pension scheme valuation as calculated under the requirements of FRS 102 is a surplus of £4,667,000 as a result changes in financial assumptions used by the actuary to calculate the value. The Balance Sheet reports a valuation of zero due to the accessibility of this fund being at the discretion of the London Pension Fund Authority and not a contractual obligation.

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

The FRS 102 adjustment leads to a net improvement in funds for the year of £10,392,000, last year this was also an improvement of £4,722,000.

Pension schemes

The organisation operates the Local Government Pension Scheme (LGPS) which is administered by the Local Pensions Partnership (LPP),

The LGPS scheme is a funded multi-employer defined benefit pension scheme. The March 2023 FRS 102 calculation from the scheme’s actuaries showed a surplus of £4,667,000 through higher government gilt and bond rates and higher interest rates (2022 £11,863,000 deficit, 2021 £17,090,000 deficit, 2020 £10,751,000 deficit, 2019 £12,098,000 deficit).

Asset values increased by £543,000 in the year, and the actuary’s calculation of the present value of the defined benefit obligation reduced by £15,987,000 underpinned by an increase in the discount rate applied from 2.6% in 2022 to 4.8% for 2023. The FRS 102 calculation is sensitive to the discount rate used by the actuaries, note that a 0.1% increase in the discount rate improves the calculated liability by approximately £1m. For the 2023 calculation the actuary also assumed an increases in pensions and salaries of 2.90% compared to the prior year of 3.25%, The assumption for salaries only was 3.90% compared to 4.25% for the prior year.

It should be noted that the scheme’s administrator (LPP) performed a triennial valuation as of 31 March 2022. This was calculated using different methodology and assumptions to the FRS102 valuations. The triennial valuation is used by the LPP to set the contribution rates paid by the organisation for three years from 1 April 2023 to fund the pension scheme. The 2022 triennial valuation was a surplus of £1,750,000 with a 105.5% funding level (2019 £1,231,000 deficit, 96%).

In February 2017, the organisation provided the LPP with a first charge over investments capped at £1,000,000 and continues to work closely with the LPP in an open and collaborative manner to discuss future funding and financial management when appropriate.

Although the fund has returned to a surplus any future return to a deficit poses a serious issue for L&W. The trustees continually manage the risk on a proactive basis in partnership with the LPP.

Reserves policy

The Trustees reviewed their desired reserves policy in December 2022. The overriding principle is that L&W should use its reserves to maintain financial stability of the organisation and meet the needs of the organisation’s beneficiaries both current and future. Reserves are held for the following

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Required level of reserves

The targeted level of reserves is calculated as follows:

The reserves target is therefore the cap of £5,000,000 following the pension valuation becoming a surplus.

Organisation reserves at the end of March 2023 before the FRS 102 calculated pension surplus were £7,087,000 (March 2022 £8,561,000). After the FRS 102 pension valuation the net balance sheet asset remains £7,087,000 (March 2022 liability £3,302,000).

The organisation has returned to a position whereby there is sufficient reserves to meet its policy requirement following the FRS 102 surplus valuation. The Trustees note that the organisation holds investments with a market value of £6,014,000 as of 31 March 2023. In conjunction with a viable three year financial plan underpinned by a funding plan and ability to flex the cost base the Trustees consider the organisation to be a going concern.

Investment policy

Investment performance is overseen by a nominated Trustee, the CEO and Director of Finance and Operations. Reviews are held with the Investment Managers and reports are made to the Board of Trustees. The Trustees have approved an Investment Policy that has the objective of increasing reserves towards and to meet the reserves policy. The Investment Policy was last reviewed in December 2022. The current investment approach is to achieve a target return in a well-diversified portfolio comprising the appropriate asset classes and individual investments for a UK charity, which are quoted on the most widely used stock exchanges and regulated markets. The risk profile is medium, which allows for significant exposure to global equities and other diversifying investments, that will be held within a balanced portfolio. The objective is to increase the value of the portfolio by targeting total nominal return of 5-6% over the longer term of 5-10 years. Trustees consider performance is on track to meet this objective.

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National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Risk management

The Trustees have overall responsibility for ensuring that the organisation has an appropriate system of controls to manage risk and safeguard its assets. A risk management framework and process is in place to assess business risks and implement risk management strategies. This involves identifying the types of risks the organisation faces, prioritising them in terms of potential impact and likelihood of occurrence, and identifying means of mitigating the risks. The identified risks and the consequent risk management activities are reviewed by the Audit Committee at each of their meetings. Any risks that could have a significant impact on the organisation's success in achieving its objectives are considered by the Trustees.

The strategic risk register includes a clear articulation of the specific actions that will be undertaken to mitigate risk. The major risks and mitigations are summarised as follows:

Risk Mitigation
Failure to influence the policy
changes we want to see.		 Maintenance of strong relationships with
officials. Controls on external communication.
Strategic plan sets clear priorities.
Failure in Governance A rigorous process of self-audit, independent
internal audit and Charity Commission
checklists is in place. Non-Exec Audit
Committee sits three times a year.
Failure to secure adequate
income to offset costs and
break even		 Strategic plan underpinned by funding plans
which are regularly reviewed. Plan to reduce
overhead costs.
Cashflow – inability to pay
staff and suppliers on time		 Regular cashflow reviews by management and
Board. Ability to call on £6m+ of investments.
Failure to service pension
scheme		 Three-year agreement in place with the
Scheme’s Administrator from March 2023.
Scheme actuarial valuation surplus £3m.
Failure of IT systems and
GDPR breach		 Cyber essentials accredited and external IT
security audited. Staff mandatory training of
threats.
Staff are not engaged, and
we lack sufficient capacity &
capability to deliver our
strategy.		 Mechanisms to monitor capacity in place.
Engagement of staff monitored through the
Investors in People survey.

The internal audit programme for the following year is approved by the March sitting of the Audit Committee on an annual basis and the findings and conclusions are reported to the Audit Committee. The Audit Committee reports to the Board on the overall efficiency of the risk management process and the adequacy of the internal control systems.

17

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Financial risk

L&W uses cash and other liquid resources to fund its operations. Investments are maintained as part of the reserves for funds which are not required as working capital. The Trustees review the levels of investments and working capital required under the reserves policy.

The main risk is from any potential shortfall in funding. The organisation has a strategic plan which is underpinned by programmes of work. These in turn are underpinned by a funding plan. Funding is reviewed every month by the Management team of L&W and on a quarterly basis by the Trustees. A significant proportion of funding required for the year ahead has already been secured. As mentioned earlier in this report, further comfort is derived from having investments valued at over a year’s worth of income.

Grant making

Occasionally L&W manages and distributes grants on behalf of other agencies and government departments. L&W may distribute the grant, provide support to the recipient, and monitor the outcomes as part of the contract with the funder. All such grants will be made in accordance with the contract requirements. Receipt of funding by L&W and payment to the grant recipients are recognised in the accounts at the time of entitlement. The reader will have already noted in the financial review the impact of the £2.145m grant received in February 2021 from the Charities Aid Foundation which was recognised in full in the accounts to the year 31 March 2021 despite the delivery of the project materially occurring during the years to 31 March 2022 and 31 March 2023.

Remuneration policy

Sets out the principles and process of the remuneration relationship with staff and unions. It also includes the process of determining annual awards. Remuneration of the CEO and his direct reports are also determined by the Remuneration Committee who make an objective assessment of the appropriate level considering factors such as the market, needs of the organisation and comparable benchmarks. This was fully reviewed in 2022/23 in consultation with staff and recognised unions then reviewed again each year in September. L&W seeks to offer a competitive salary and benefits package to attract and retain quality staff in the context of:

Disability policy

L&W promotes Inclusion, Equality and Diversity throughout its work and this commitment underpins the organisation’s staffing policies and recruitment and selection processes. This is articulated through L&W’s People Strategy.

L&W has processes in place to support staff with disclosed disabilities; including for example making reasonable adjustments to the workplace and taking advice and guidance from Access to Work. We also work closely with staff to review working patterns and ways of working.

18

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Staff training and continuous professional development

L&W’s staff development plan is part of our wider commitment to continuous quality improvement. The plan is based on input from our personal development review process and an organisational skill needs analysis. Learning and development starts with the induction process and continues throughout the lifecycle through role specific development, individual career paths and any other development in pursuit of our strategic aims. During the year a range of formal and informal learning took place. Within our performance review process, objectives are cascaded from the strategic plan to all staff ensuring everybody understands how their role contributes to L&W’s strategic aims.

Sharing information with employees

Trustees' responsibilities for the financial statements

The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the organisation and of the profit or loss of the organisation for that period.

19

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the Trustees are aware there is no relevant audit information of which the charitable company’s auditors are unaware and the Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information

Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Trustees' liability insurance

L&W maintained Trustees liability insurance cover during the year and continue to do so within the Management liability package.

Creditor payment policy and practice

It is the policy of L&W to follow standard payment terms of 30 days (or as otherwise agreed with the supplier) unless there are reasons to dispute the amounts with suppliers. Trade creditors at the end of the year were £303,000 equating to 26 creditor days (2022 £230,000 and 20 days).

Auditors

Haysmacintyre LLP offer themselves for reappointment as auditors in accordance with section 485 of the Companies Act 2006.

Future plans

L&W’s strategic plan 2021-24 is available at www.learningandwork.org.uk. L&W seek a prosperous and fair society in which learning and work provide opportunities for everyone to realise their potential and ambitions throughout life. To progress this, L&W will prioritise work in the areas of lifelong learning, employment and social security, essential and life skills, good work and progression, apprenticeships and technical education, social justice and inclusion. Trustees consider the combination of the strategic plan, careful financial and operational management and reserves will ensure any challenges will be overcome. This report which includes the Strategic Report required by company law, has been approved by the Board both as company directors and charity Trustees.

ON BEHALF OF THE TRUSTEES

Jeremy Moore Chair of Company Board 13[th] July 2023

Stephen Evans Company Secretary 13[th] July 2023

20

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Independent auditor’s report to the members of National Learning and Work Institute

Independent auditor’s report to the members of National Learning and Work Institute

Opinion

We have audited the financial statements of National Learning and Work Institute for the year-ended 31 March 2023 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Organisation Balance Sheets, the Consolidated Statement of Cash Flows, and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The trustees are responsible for the other information. The other information comprises the information included in the Trustee and Strategic Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

21

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustee and Strategic Report (which incorporates the strategic report and the directors’ report prepared for the purpose of company law).

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees for the financial statements

As explained more fully in the trustees’ responsibilities statement set out on pages 19-20, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group’s and the parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the group/charitable company and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to registered charities, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and the Charities Act 2011, and other factors such as income tax, payroll tax and sales tax.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to areas of estimation uncertainty and to manual accounting journals. Audit procedures performed by the engagement team included:

22

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them 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 charitable company and the charitable company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Richard Weaver (Charity and not for profit Partner) For and on behalf of Haysmacintyre LLP, Statutory Auditor

10 Queen Street Place London EC4R 1AG

Date: 27 July 2023

23

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Consolidated statement of financial activities (incorporating the income and expenditure account)

2023 2022
Note Unrestricted
funds		 Restricted
funds		 Endowed
funds		 Total
funds		 Total
funds
£'000 £'000 £’000 £'000 £'000
Income
Investment income 2 94 94 72
Income from charitable
activities – from core 3 2,598 532 3,130 2,644
projects
Income from other
charitable activities		 4 111 111 62
Total income 2,803 532 0 3,335 2,778
Expenditure
Cost of raising
investment funds		 5 38 38 38
Cost of core charitable
activities		 5 2,614 1,508 4,122 4,009
Cost of other charitable
activities		 5 164 164 75
Total expenditure 2,816 1,508 0 4,324 4,122
Net income
(expenditure) before
gains on investment		 (13) (976) 0 (989) (1,344)
assets
Realised and unrealised
gains / (losses)		 (473) (9) (482) 29
Net income
(expenditure)		 (486) (976) (9) (1,471) (1,315)
Change in financial
assumptions on defined 11,863 11,863 6,037
benefit pension scheme
Net movement in
funds for the year		 11,377 (976) (9) 10,392 4,722
Reconciliation of funds
Total funds brought
forward		 (5,366) 2,052 122 (3,192) (7,914)
Total funds carried
forward		 6,011 1,076 113 7,200 (3,192)

All activities are continuing and are in furtherance of the objectives of the organisation. The net expenditure for the purposes of the Companies Act was £989,000 (2022: £1,344,000 net income).

24

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Balance sheet

Note
Fixed assets
Tangible assets
10
Investments
11
Total fixed assets
Current assets
Debtors
12
Cash at bank and in hand
Total current assets
Creditors falling due within one year
13
Net current assets
Total assets less current liabilities
Creditors falling due after more than one
year
15
Net assets excluding pension liabilities
Defined benefit pension scheme liability
19
Net assets including pension liability
The funds of the charity
Unrestricted funds excluding pension liabilit
Pension reserve
Restricted funds
16
Haldane Trust endowment
21
Total charity funds		 2023
2022
£'000
£'000
7
7
6,014
7,031
6,021
7,038
878
1,122
1,201
1,809
2,079
2,931
987
1,382
1,092
1,549
7,113
8,587
26
26
7,087
8,561
0
(11,863)
7,087
(3,302)
6,011
6,497
0
(11,863)
1,076
2,052
-
-
7,087
(3,314)
Organisation		 2023
2022
£’000
£’000
7
7
6,127
7,153
6,134
7,160
878
1,122
1,201
1,809
2,079
2,931
987
1,382
1,092
1,549
7,226
8,709
26
26
7,200
8,683
0
(11,863)
7,200
(3,180)
6,011
6,497
0
(11,863)
1,076
2,052
113
122
7,200
(3,192)
Group		 2023
2022
£’000
£’000
7
7
6,127
7,153
6,134
7,160
878
1,122
1,201
1,809
2,079
2,931
987
1,382
1,092
1,549
7,226
8,709
26
26
7,200
8,683
0
(11,863)
7,200
(3,180)
6,011
6,497
0
(11,863)
1,076
2,052
113
122
7,200
(3,192)
Group
7,160
1,122
1,809
2,931
1,382
1,549
8,709
26
8,683
(11,863)
(3,180)
6,497
(11,863)
2,052
122
(3,192)

The financial statements were approved and authorised for issue by the Board of Trustees on 13 July 2023

Jeremy Moore Trustee

Tim Render Trustee

25

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Consolidated cash flow statement

----- Start of picture text -----
Note 2023 2022
£’000 £’000
Cash used in operating activities 18 (1,086) (1,224)
Cash flows from investing activities
Interest and dividend income 94 72
Sales of investments 1,888 5,375
Purchase of investments (1,504) (5,203)
-
Purchase of tangible fixed assets (11)
Cash provided by (used in)
478 233
investing activities
Increase (decrease) in cash in the year (608) (991)
Cash at the beginning of the year 1,809 2,800
Total cash at the end of the year 1,201 1,809
----- End of picture text -----

The accompanying accounting policies and notes form an integral part of these financial statements. The company had no borrowing; therefore no statement of net debt is shown.

26

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Notes to the financial statements

1 Accounting policies

L&W is a Private company by guarantee incorporated in England and Wales with the registered office detailed on Page 43. It meets the definition of a public benefit entity as defined by FRS 102. The principal accounting policies adopted in the preparation of the financial statements are as follows;

a) Basis of preparation

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK (FRS102) (effective 1 January 2019) -(Charities SORP(FRS102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) and the Companies Act 2006. The financial statements are prepared in thousands of pounds (£’000s).

b) Basis of consolidation

In 2021 the trustees reviewed the accounting treatment in respect of the Haldane Trust, a charity controlled by L&W. On the basis that the Haldane Trust was material as of 31 March 2021 and remains material as of 31 March 2023, it is consolidated into L&W’s financial statements on a line-by-line basis.

c) Preparation of the accounts on a going concern basis

Trustees have reviewed the forecast results, cashflow and reserves for the foreseeable future and a minimum period of twelve months and consider factors that may influence income such as a reduction in Government funding. Trustees are confident L&W will continue and there is no material uncertainty over its ability to operate as a going concern. More information can be found in the Trustees report on page 16.

d) Estimates and judgements

The financial statements include estimates and judgements which are susceptible to change in subsequent periods. The defined benefit pension scheme liability is calculated by the scheme’s actuary and based on the assumptions set out in note 19. Dilapidation liabilities are estimated for leasehold properties and based on the expected cost of fulfilling L&W’s obligation under the leases. The actual amounts payable may vary from the amounts calculated with landlords.

e) Income and expenditure account

The Statement of Financial Activities on page 24 discloses the information required within the Income and Expenditure account and as such no separate Income and Expenditure account has been prepared.

f) Income

The recognition of income as receivable varies according to the nature of the income. Income from contracts and performance related grants is recognised only to the extent that related services have been delivered and contract or performance conditions met. Income received in excess of that recognised as earned is carried forward as deferred income. Donations and general grants are credited to the Statement of Financial Activities as they become due. For grants which are not specifically

27

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

performance-related income is recognised once NLWI is entitled to the funds, receipt is considered probable, and the amount can be reliably measure. Unspent amounts related to such grants are carried forward as funds. Attention is drawn to the Charities Aid Foundation grant of £2.145m received in February 2021, recognised in full in the year to 31 March 2021, but where nearly all of the work will be done in the years to 31 March 2022 and 2023. Accordingly, the SOFA included a large surplus related to the Charities Aid Foundation work in the year to 31 March 2021 but deficits for years to 31 March 2022 and 2023.

g) Expenditure

Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under the following activity headings:

h) Allocation of support costs

Support costs are those functions that assist the work of the organisation but do not directly undertake charitable activities. Support costs include back office costs, finance, human resources, payroll and governance costs which all support the charitable objectives. The bases on which support costs have been allocated are set out in note 6.

i) Operating leases

The organisation classifies the lease of printing equipment as operating leases. The title to the equipment remains with the lessor and the equipment is replaced every 3-5 years. The organisation also has leases for the office buildings from which it operates. Rentals payable under operating leases are charged as an expense on a straight line basis over the term of the lease.

j) Investments

Investments are valued at the market rate prevailing at the balance sheet date.

Net gains and losses on revaluation and disposals during the year are included in the statement of financial activities.

k) Tangible fixed assets

Individual fixed assets costing more than £1,000 are capitalised at cost and are depreciated over the estimated useful economic life on a straight line basis as follows;

Tangible fixed assets are stated at cost net of depreciation.

Computer equipment
 - 33% straight line
Office equipment - 20% straight line
Buildings maintenance - 6-20% straight line
Leasehold improvements - straight line over balance of leases

28

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

l) Creditors

Creditors are recognised where the organisation has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amounts due to settle the obligation can be measured or estimated reliably. Creditors are normally recognised at their settlement amount after allowing for any trade discounts due.

m) Provisions

An assessment of dilapidations liabilities is made for leasehold properties. The provision is based on an assessment of the nature of each lease, risk of materialisation and size of each property.

n) Financial instruments

Financial liabilities are classified according to the substance of their governing contractual arrangements entered into.

Where the contractual obligations of financial instruments are classed as financial liabilities, financial liabilities are presented as such in the balance sheet. Finance costs & gains or losses relating to financial liabilities are included in the Statement of Financial Activities. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

o) Pension costs

Employees are automatically enrolled into the Local Government Pension Scheme (LGPS) administered by the Local Pensions Partnership (LPP) scheme formerly known as the London Pension Funds Authority (LPFA). This is funded by contributions from employee and employer.

For the year ended 31 March 2023 all employees were in the LGPS scheme.

The LGPS scheme administered by the LPP is a multi-employer defined benefit scheme administered for the benefit of local authorities and other bodies and is managed in accordance with the Local Government Pension Scheme Regulations 1997 (as amended).

The scheme assets are measured at fair values. Scheme liabilities are measured on an actuarial basis using the projected unit method on the basis of triennial valuations and are discounted at appropriate high quality corporate bond rates. The net surplus or deficit is presented separately from other net assets on the balance sheet. A net surplus is recognised only to the extent it is recoverable by the organisation. The assumptions made by the actuary have a material effect on the net liability, these are disclosed in note 19.

29

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

2. Investment income

The income derived from dividends and interest received from the charity’s investments held and managed in the UK, and interest arising from money held in interest bearing accounts.

----- Start of picture text -----
2023 2022
Total Total
£'000 £'000
Dividends 91 72
Interest on investments 2 -
Interest on Bank accounts 1 -
Total Investment Income 94 72
----- End of picture text -----

3.

Income from charitable activities – core projects

Income from charitable activities – core projects
L&W Wales
Research and development
Campaigns, promotions and advocacy
Total charitable activities income
L&W Wales
Research and development
Campaigns, promotions and advocacy
Total charitable activities income		 Contract
& sales
2023
£'000
254
2,040
15
2,309
Contract
& sales
2022
£'000
-
1,265
-
1,265		 Recurrent
grant
Total
2023
2023
£'000
£'000
580
834
-
2,040
241
256
821
3,130
Recurrent
grant
Total
2022
2022
£'000
£'000
509
509
583
1,848
287
287
1,379
2,644
Income analysed by funding source
Departments for Education
Welsh Government
Department of Work and Pensions
Ministry of Defence
Other Government
European Funding
Public sector
Charitable trusts
Other project funding		 Total
Total
2023
2022
£'000
£'000
274
870
709
509
592
13
177
90
-
-
(30)
127
281
201
707
793
420
41
3,130
2,644

30

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

4. Income from other charitable activities

----- Start of picture text -----
2023 2022
Total Total
£'000 £'000
Conference and events income 76 62
Other income 35 -
Total income from other charitable activities 111 62
----- End of picture text -----

5. Analysis of total expenditure

Direct project costs
Direct salary costs associated with projects
Allocation of support costs
Allocation of governance costs
Total costs of core charitable activities
Other charitable activity direct costs
Other charitable activity direct salary costs
Allocation of support costs
Allocation of governance costs
Total costs of other charitable activities
Investment management fees		 Unrestricted
2023
£'000
741
1,345
417
111
2,614		 Restricted
2023
£'000
692
706
87
23
1,508		 Total
2023
£'000
1,433
2,051
504
134
4,122
64
87
10
3
164
38
Direct project costs
Direct salary costs associated with projects
Allocation of support costs
Allocation of governance costs
Total costs of core charitable activities
Other charitable activity direct costs
Other charitable activity direct salary costs
Allocation of support costs
Allocation of governance costs
Total costs of other charitable activities
Investment management fees		 L&W
Wales
2022
£'000
120
345
100
13
578		 Research &
Development
Campaigns
2022
2022
£'000
£'000
501
37
1,984
108
647
58
87
9
3,219
212		 Total
2022
£'000
658
2,437
805
109
4,009
6
41
25
3
75
38

31

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

6.

Analysis of support and governance costs

----- Start of picture text -----
2023 2022
Total Total
£'000 £'000
Support costs
FRS 102 Cost of Defined Benefit Pension Scheme 130 145
Support Staff Salaries 371 397
Additional Defined Benefit Pension contribution 13 13
Accommodation 199 -
Computer 94 76
Depreciation 12 16
HR Costs 55 113
Travel 26 1
Policy and publicity 3 13
Telephone 14 18
Printing and stationery 16 2
Total support costs 933 794
Governance costs
Salaries and FRS102 Cost of Defined Benefit Pension Scheme 137 75
Audit services 25 9
Legal and insurances 25 28
Total governance costs 187 112
----- End of picture text -----

Notes on basis of allocation

Support and governance cost are identified and then allocated on income earned. Cost of the defined benefit pension scheme shown above is an allocation of the total charge shown in note 19, based upon the cost of support staff as a proportion of all staff.

7.

Net expenditure for the year

This is stated after charging: 2023 2022
£'000 £'000
Operating leases
Land and buildings 121 118
Others 3 3
Depreciation 12 18
Auditors remuneration
External audit fees 25 24
Other accountancy services - -
Trustee’s indemnity insurance 6 10

32

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

8. Analysis of staff costs, trustee expenses and the cost of key management personnel

Salaries and wages
Social security costs
Pension costs
Employer contributions paid
Addition Defined Benefit Pension Scheme Charges
Teachers’ Pension scheme		 2023
2022
£’000
£’000
1,700
1,603
184
162
316
345
76
787
-
-
2,276
2,897

Not included in the above are termination costs of £17,078 (2022: £47,422).

The number of employees where emoluments (including salary and taxable benefits) exceeded £60,000 was:

£60,000 was:
£ 60,001 - £ 70,000
£ 80,001 - £ 90,000
£100,001 and above		 2023
Number
1
1
1
3		 2022
Number
2
-
1
3

The key management personnel of the organisation comprise the Trustees, the Chief Executive Officer and the Senior Management Team. Trustees were not paid any remuneration for their services in the year, nor in the prior year. The total employment benefits for the Senior Management Team, including the CEO, was £668,152 (2022: £574,612).

9. Staff numbers

The average annual headcount of employees, employed by L&W during the year:

Employees 2023
45		 2022
46

L&W has a number of part-time employees. The average number of full-time equivalents employed during the year was as follows:

Employees – full time equivalents 2023
42		 2022
42

33

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

10. Tangible fixed assets

----- Start of picture text -----
Computer Office
Total
equipment equipment
£'000 £'000 £'000
Cost
228 81 309
At 1 April 2022
Disposals (92) (73) (165)
At 31 March 2023 136 8 144
Depreciation
At 1 April 2022 216 74 290
Elimination on Disposal (92) (73) (165)
Charge for the year 9 3 12
At 31 March 2023
133 4 137
Net book value
At 31 March 2023
3 4 7
----- End of picture text -----

11. Investments (all held and managed in the UK)

----- Start of picture text -----
£'000
At 1 April 2022 - L&W 7,031
Additions at cost 1,469
Disposal at proceeds (1,861)
Realised and unrealised gains (474)
Movement in cash (151)
At 31 March 2023 6,014
The fixed asset investments were held as follows
2023 2022
£’000 £’000
Listed stocks and shares 5,747 6,613
Cash 267 418
Market value at 31 March 6,014 7,031
----- End of picture text -----

The L&W book cost of listed stock and shares was £5,993,513 (2022 £6,340,457).

On the Balance sheet, the consolidated investments include the Haldane Trust portfolio valued at £113,000 as of 31 March 2023 and £122,000 as of 31 March 2022.

34

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

12. Debtors

----- Start of picture text -----
2023 2022
£’000 £’000
Trade debtors 626 496
Prepayments and accrued income 252 626
Other debtors - -
878 1,122
----- End of picture text -----

13. Creditors: amounts falling due within one year

----- Start of picture text -----
2023 2022
£’000 £’000
Trade creditors 303 230
Other creditors 46 11
Tax and social security 185 145
Accruals 55 9
Deferred income (see note 14) 245 821
Provision for costs of relocation on new premises 153 166
987 1,382
----- End of picture text -----

14. Deferred income

----- Start of picture text -----
Balance at Movement Balance at
31-Mar-22 In year 31-Mar-23
£’000 £’000 £’000
Restricted funds charitable activities 64 56 120
Unrestricted funds charitable activities 816 (691) 125
Unrestricted funds other trading activities 10 (10) 0
890 (645) 245
----- End of picture text -----

15. Creditors: amounts falling due after more than one year

Provision for costs of relocation on leased premises 2023
£’000
26		 2022
£’000
26

35

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

16. Analysis of charitable funds

Analysis of movement in restricted fund

----- Start of picture text -----
2023 2022
£'000 £'000
Opening balance 2,052 2,205
Income 413 1,379
Expenditure (1,389) (1,532)
Closing balance 1,076 2,052
----- End of picture text -----

L&W gratefully acknowledge the following grant income recovered and receivable.

----- Start of picture text -----
Transfer
Surplus/ from/(to)
Funder and project details Income Expenditure
(deficit) unrestricted
funds
2023 2023 2023 2023
£'000 £'000 £'000 £'000
DFE
- - - -
core funding for agreed projects
DFE
Festival of Learning England 241 (241) - -
DFE – incremental to core fundingspecific projects agreed, - - - -
European Programmes
Various (30) (17) (47) -
Charitable Trusts 32 (32) - -
Charities Aid Foundation 0 (841) (841) -
Ministry of Defence 170 (157) 13 -
Other consultancy/research
Various - (101) (101) -
413 (1,389) (976) -
----- End of picture text -----

36

National Learning and Work Institute Company No:02603322

Trustees’ report and financial statements for the year ended 31 March 2023

Funder and project details
DFE
core funding for agreed projects
DFE
Festival of Learning England
DFE –specific projects agreed,
incremental to core funding
European Programmes
Various
Charitable Trusts
Charities Aid Foundation
Ministry of Defence
Other consultancy/research
Various		 Income
2022
£'000
518
241
110
420
0
90
-
1,379		 Expenditure
2022
£'000
(589)
(241)
(110)
(420)
(82)
(90)
-
(1,532)		 Surplus/
(deficit)
2022
£'000
(71)
-
-
-
(82)
-
-
(153)		 Transfer
from/(to)
unrestricted
funds
2022
£'000
-
-
-
-
-
-

17. Analysis of net assets between funds

Restricted funds
Unrestricted funds
Endowment funds		 Balance at
01-Apr-22
£’000
2,052
(5,366)
122
(3,192)		 Movement
In year
£’000
(976)
11,377
(9)
10,392		 Balance at
31-Mar-23
£’000
1,076
6,011
113
7,200
Fund balances at 31 March 2023 are
represented
Tangible fixed assets
Investments
Cash at bank
Current assets
Current liabilities
Creditors of more than one year
Defined benefit pension scheme liability
Total net assets		 Restricted
funds
2023
£'000
-
-
1,079
143
(146)
-
-
1,076		 Unrestricted
funds
2023
£'000
7
6,014
122
735
(841)
(26)
-
6,011		 Endowment
funds
2023
£’000
-
113
-
-
-
-
-
113		 Total
funds
2023
£'000
7
6,127
1,201
878
(987)
(26)
-
7,200

37

National Learning and Work Institute Company No:02603322

Trustees’ report and financial statements for the year ended 31 March 2023

----- Start of picture text -----
Restricted Unrestricted Endowment Total
funds funds funds funds
2022 2022 2022 2022
£'000 £'000 £’000 £'000
Fund balances at 31 March 2022 are
represented
- -
Tangible fixed assets (5) (5)
Investments - 7,031 122 7,153
Cash at bank 1,726 83 - 1,809
Current assets 326 898 - 1,224
Current liabilities - (1,484) - (1,484)
- -
Creditors of more than one year (26) (26)
Defined benefit pension scheme liability - (11,863) - (11,863)
Total net assets 2,052 (5,366) 122 (3,192)
----- End of picture text -----

18. Reconciliation of net movements in funds to net cash flow from operating activities

----- Start of picture text -----
2023 2022
£’000 £’000
Net movement in funds 10,380 4,722
FRS 102 Non cash adjustment (11,863) (5,227)
Add back depreciation charge 12 36
Deduct interest income shown in investing activities (94) (72)
Decrease (increase) in debtors 244 (292)
Increase (decrease) in creditors (395) (165)
Increase (decrease) in creditor long term - 5
Investments (gains) / losses 485 (29)
Movement in investment cash 145 (202)
Net cash used in operating activities (1,086) (1,224)
----- End of picture text -----

38

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

19. Pension costs

The organisation contributes to a defined benefit pension schemes being the Local Government Pension Scheme (LGPS) administered by the Local Pensions. The assets of this scheme is held in independently administered funds. Contributions are paid based on the recommendations of the qualified actuaries.

(a) The LGPS scheme

Although this is a multi-employer scheme the actuaries have advised the Trustees that they are able to identify L&W's share of the scheme's underlying assets and liabilities. The valuation of the fund has been calculated in accordance with FRS102 by the actuary appointed by the scheme’s administrator using their standard assumptions as follows:

----- Start of picture text -----
31-Mar 31-Mar
2023 2022
Actuarial assumptions:
Rate of increase in pensions and CPI rate of inflation 2.90% 3.25%
Rate of increase in salaries 3.90% 4.25%
Rate used to discount scheme liabilities 4.80% 2.60%
----- End of picture text -----

To assess the value of the Employer's liabilities at 31 March 2023, the actuaries have rolled forward the value of the liabilities calculated for the funding valuation as at 31 March 2022, using financial assumptions that comply with FRS102.

To calculate the asset share the actuaries have rolled forward the assets allocated to the Employer at 31 March 2022 allowing for investment returns (estimated where necessary), contributions paid into, and estimated benefits paid from, the Fund by and in respect of the Employer and its employees.

The actuaries adopted a set of demographic assumptions that are consistent with those used for the most recent Fund valuation, which was carried out as at 31 March 2022. The assumed life expectancies, based on assumptions, are set out in the table below:

----- Start of picture text -----
Life expectancy from age 65 (years) 2023 2022
Retiring today Males 21.7 22.5
Females 24.3 24.3
Retiring in 20 years Males 21.9 22.6
Females 25.3 25.8
----- End of picture text -----

39

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

The amounts recognised in the balance sheet are determined as follows:

----- Start of picture text -----
31-Mar 31-Mar
2023 2022
£'000 £'000
The Estimated asset allocation for the Employer:
Equities 20,007 18,998
Target return Portfolio 6,326 7,518
Infrastructure 4,305 3,498
Property 3,341 3,064
Cash 781 1,139
Total 34,760 34,217
Present value of funded liabilities (30,093) (46,080)
Net pension asset / (liability) 4,667 (11,863)
Pension Liability per Balance Sheet [1] 0 (11,863)
----- End of picture text -----

The movement in the defined benefit obligation over the year was as follows:

----- Start of picture text -----
2023 2022
£'000 £'000
Reconcilation of opening and closing balances of the present
value of the defined obligation:
Opening defined benefit obligation 46,080 47,506
Current service cost 775 747
Interest cost 1,185 941
Contributions paid by members 118 113
Changes in financial assumptions (19,028) (2,258)
-
Changes in demographic assumption (1,107)
Estimated benefits paid net of transfers in (1,296) (1,096)
Experience loss / (gain) on defined benefit obligation 3,300 111
Past service costs including curtailments 66 16
Closing defined benefit obligation 30,093 46,080
----- End of picture text -----

The movement in the fair value of employer assets over the year was as follows:


2023
£'000		 2022
£'000
Reconcilation of opening and closing balances of the
fair values of the Fund assets:
Opening fair value of employer assets
Interest on assets
Return on assets less interest
Other actuarial gains/(losses)
Administration expenses
Contributions paid by members
Contributions paid by the employer
Estimated benefits paid
Closing fair value of employer assets		 34,217
880
468
(24)
(10)
118
407
(1,296)
34,760		 30,416
602
3,890
-
(40)
113
332
(1,096)
34,217

40

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

The amounts recognised in the statement of financial activities are as follows:

----- Start of picture text -----
2023 2022
£'000 £'000
The amounts recognised in the profit and loss statement:
Administration expenses 10 40
Current service cost 841 763
Net interest on the defined liability (asset) 305 339
1,156 1,142
----- End of picture text -----

Amounts for the current and previous accounting periods ended 31 March:

----- Start of picture text -----
2023 2022
£'000 £'000
Fair value of employer assets 34,760 34,217
Present value of defined benefit obligation (30,093) (46,080)
Surplus/(deficit) 4,667 (11,863)
Return on fund assets in excess of interest 468 3,890
Change in financial assumptions (19,028) 2,258
Remeasurement of the net assets/(defined liability) 17,279 6,037
----- End of picture text -----

20. Commitments

Operating lease payments amounted to £121,385 during 2022/23. The leases to which these amounts relate expire as follows:

Operating leases which expire in:
Less than one year
One to five years
Total		 Land and
Other
buildings
£'000
£'000
10
-
135
-
145
-
2023		 Land and
Other
buildings
£'000
£'000
-
3
380
3
380
6
2022

41

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

21. Connected charities and related parties

Two trustees of L&W are also the sole trustees of the Haldane Trust, created in 1934 to commemorate the work of Viscount Haldane of Cloan in connection with Adult Education. The Haldane Trust holds investments with a market value of £113,000 as of 31 March 2023 (£122,000 as of 31 March 2022). Due to the common control and materiality, the investments of the Haldane Trust have been consolidated into the L&W accounts. The Haldane Trust was not consolidated prior to the year ended 31 March 2021 as it was immaterial.

22. Trustees and other bodies

Certain trustees of L&W can be trustees of other bodies who may in turn provide funding to L&W. Trustees declare their interests in line with the policies of L&W and the funding bodies and do not participate in decisions affecting L&W. One trustee provided consultancy services to a project during the year ended 31 March 2023 for the value of £3,600. There were no other connected charities and related parties during the year to 31 March 2023 or the year to 31 March 2022.

23. Financial derivatives

There were no financial derivatives as of 31 March 2023 or 31 March 2022.

24. Related Parties

As per note 22 one trustee provided consultancy services to a project during the year ended 31 March 2023 for the value of £3,600. There were no related party transactions in the year to 31 March 2023 or 31 March 2022.

42

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Legal and administrative details

Company registration number : 02603322

Charity registration number: 1002775

Registered office: 3rd Floor Arnhem House 31 Waterloo Way Leicester LE1 6LP Patron: HRH The Princess Royal Chief Executive and Stephen Evans Company Secretary: Trustees: Margaret Galliers (President) Jeremy Moore (Chair) Timothy Render (Treasurer) Charlotte Bosworth Jeffrey Greenidge Lauren Harris Tony Lawlor Haf Merrifield Ruth Spellman Chris Banks

Committees

Learning and Work has established two Committees and a Strategy Group. The members during the relevant period are as follows:

Audit Committee

Tony Lawlor (Chair) Jeff Greenidge Ruth Spellman Paul Greening Jamie Hutchinson

43

National Learning and Work Institute Company No:02603322 Trustees’ report and financial statements for the year ended 31 March 2023

Learning and Work Institute Wales Strategy Group

Jeff Greenidge (Chair) Sian Cartwright Michelle Matheron Alan Felstead Sarah Quibell Katy Stevenson Rachel Cable Amanda Wilkinson Michelle Kerswell Jamie Insole Catherine Jenkins Llyr ap Gareth Richard Spear

Remuneration Committee

Margaret Galliers Timothy Render Jeremy Moore Senior Management: Stephen Evans Chief Executive Naomi Phillips Deputy Chief Executive Paul Cleminson Director of Finance & Operations Solicitors: Shakespeare Martineau Two Colton Square Leicester, LE1 1QH External auditor and Haysmacintyre LLP accountants 10 Queen Street Place London, EC4R 1AG Bankers: Bank of Scotland 8 Humberstone Gate Leicester, LE1 3PH Investment advisors: Canaccord Genuity Wealth Limited 88 Wood Street London EC2V 7QR Haldane Trust Trustees: Margaret Galliers (Chair) Haf Merrifield

44