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2020-12-31-accounts

TRUSTEES’ REPORT AND FINANCIAL STATEMENTS 2020

(A company limited by guarantee, number 135934, Registered Charity No. 1133373)

UNITED REFORMED CHURCH TRUST

TRUSTEES’ REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

CONTENTS

Page
Trustees’ Report ................................................................................................................ 1
Reference and administrative information .................................................................. 1
Structure, governance and management .................................................................... 3
Objectives and activities.......................................................................................................4
Strategic Report ........................................................................................................... 5
Statement of Trustees' responsibilities .......................................................................... 16
Independent Auditors' Report ........................................................................................ 17
Consolidated Statement of Financial Activities ............................................................. 21
Consolidated and Trust Balance Sheets .......................................................................... 22
Consolidated Statement of Cash Flows .......................................................................... 23
Notes to the financial statements .................................................................................. 24
Note 1 Principal accounting policies ....................................................................... 24
Note 2
Voluntary income ........................................................................................ 27
Note 3
Income from charitable activities ................................................................ 27
Note 4
Investment income ...................................................................................... 28
Note 5
Analysis of expenditure ............................................................................... 28
Note 6
Analysis of grants ........................................................................................ 28
Note 7
Support costs ............................................................................................... 29
Note 8
Governance costs ........................................................................................ 29
Note 9
Notified legacies .......................................................................................... 29
Note 10 Stipend and salary costs ............................................................................. 30
Note 11 Tangible fixed assets ................................................................................... 31
Note 12 Mixed motive investment property ............................................................ 32
Note 12a Mixed use investment property .................................................................. 33
Note 13 Investments ................................................................................................. 33
Note 14 Programme‐related investments ................................................................ 34
Note 15 Concessionary loans .................................................................................... 34
Note 16 Debtors ........................................................................................................ 34
Note 17 Creditors: amounts falling due within one year .......................................... 35
Note 18 Unrestricted funds ....................................................................................... 35
Note 19 Summary of fund movements ..................................................................... 36
Note 20 Analysis of net assets between funds ......................................................... 38
Note 21 Restricted funds .......................................................................................... 39
Note 22 Pension obligations ..................................................................................... 40
Note 23 The United Reformed Church Ministers’ Pension Fund .............................. 40
Note 24 The United Reformed Church Final Salary Scheme ..................................... 42
Note 25 Commitments .............................................................................................. 44
Note 26 Cash flow information ................................................................................. 45
Note 27 Related party transactions .......................................................................... 45
Note 28 Lease commitments .................................................................................... 45
Note 29 Lease receivable .......................................................................................... 45
Note 30 Subsidiary undertakings .............................................................................. 46
Note 31 Consolidated summary income and expenditure account ......................... 46
Note 32 Consolidated Statement of Financial Activities 2019 .................................. 47
Five year summary .......................................................................................................... 48

UNITED REFORMED CHURCH TRUST

(A company limited by guarantee, number 135934, Registered Charity number 1133373)

TRUSTEES’ REPORT

(Incorporating the Report of the Directors)

The directors, who are also trustees of the charity, submit their report and the audited consolidated financial statements for the year ended 31 December 2020. The company is trustee for the General Assembly of the United Reformed Church and is responsible for reporting its financial affairs.

REFERENCE AND ADMINISTRATIVE INFORMATION

Corporate Trustee Registered Office: 86 Tavistock Place London WC1H 9RT

Directors and Trustees

The directors who served during the year and to the date of this report, unless otherwise indicated, were as follows:

Name
Mrs Jane Baird
Revd Dr John Bradbury
Revd James Breslin
Revd Clare Downing
Mr Derek Estill
Mr Alastair Forsyth
Mr David Greatorex
Mr Ian Hardie
Dr Ian Harrison
Revd Michael Hopkins
Mr David Lathbury
Revd Nick Mark
Mr Neil McKenzie
Revd Leslie Morrison
Mrs Valerie Morrison (Chair)
Mr Clifford Patten
Mr Peter Pay
Revd John Proctor
Mrs Margaret Thompson
Revd Nigel Uden
Mr Andrew Weston
Mrs Catriona Wheeler		 Ex officio
Deputy General Secretary,
Administration & Resources
General Secretary
Moderator of The General Assembly
Moderator of the General Assembly
Honorary Treasurer
Clerk of the General Assembly
Moderator of The General Assembly
General Secretary
Moderator of the General Assembly		 Appointed / Resigned
Appointed 1 August 2020
Appointed 15 September 2020
Appointed 15 September 2020
Resigned 15 September 2020
Appointed 15 September 2020
Appointed 15 September 2020
Resigned 31 August 2020
Resigned 31 August 2020
Resigned 31 August 2020
Resigned 31 August 2020

Secretary: Ms Sandi Hallam‐Jones

Most of the directors are appointed as trustees by the General Assembly of the United Reformed Church, to serve for up to four years (with a possibility of renewal for one further period of four years), having been nominated through the representative processes of the Church. There are six directors who serve ex officio, their appointment or election to their positions also having followed nomination. The directors receive no remuneration but may be reimbursed their expenses of attending meetings.

Most newly appointed directors are already familiar with many aspects of their role through serving on Assembly committees or Synod bodies, but they are provided with relevant documentation and encouraged to sign up to receiving regular information from sources such as the Charity Commission. Training is provided via general external courses and events where possible, and training is given in conjunction with quarterly meetings in specific areas of governance as needs arise, to assist in the performance of their duties as trustees.

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Trustees of subsidiary charities at the date of this report:

United Reformed Church Retired Ministers’ Housing Society Limited

(Exempt charity, registered under Co‐operative and Community Benefit Societies Act 2014, number 15986R)

Chair: Revd Anne Bedford

Secretary: Ms. Chuka Agbasiere

The Board (appointed for a renewable term of three years): Revd Nigel Appleton, Revd Dr John Bradbury, Revd Nicola Furley‐Smith, Mr Ian Hardie, Mr Malcolm Lindo, Mr Clifford Patten, Revd Kenneth Summers, Revd Simon Walkling, Revd Pamela Ward, Mr Peter West, Revd Paul Whittle.

Westminster College, Cambridge

(Registered Charity number 311449)

Convenor of Trustees: Revd Nigel Uden

Principal and trustee: Revd Neil Thorogood till June 2020, Revd Samantha White from 24 September 2020

Trustees: Revd Jan Adamson, Mr John Ellis, Mr Mark Hayes, Mr William McVey, Revd Dr Rickey Mearkle, Mr Stuart Scott, Mrs Darnette Whitby‐Reid, Mr Christopher Wright

Others with charity governance responsibilities

Immediate Past Moderators – Revd Nigel Uden, Mr Derek Estill

Business Committee Convenor – Revd Adrian Bulley Deputy General Secretary, Discipleship – Post vacant Deputy General Secretary, Mission – Ms Francis Brienen

Deputy General Secretary, Admin & Resources – Mrs Jane Baird

The key management personnel of the charity are the members of the General Secretariat: the General Secretary and three Deputy General Secretaries.

Mission Council

The ex officio trustees of the trust, the Chair of trustees, the deputy treasurer, John Piper, and the others listed immediately above are members of Mission Council by virtue of the offices that they hold. Other members are the other convenors of the General Assembly Standing committees, URC Youth representatives, Synod moderators and three representatives from each Synod. These are listed below, as at December 2020.

Convenors : Revd Ray Adams, Mrs Sarah Lane Cawte, Revd David Grosch‐Miller, Revd Anne Lewitt, Revd Paul Robinson, Revd Dr Robert Pope, Revd Dr Peter Stevenson; Revd Paul Whittle, Mr Alan Yates.

URC Youth representatives: Mr Rueben Watt (Moderator),Ms Jo Harris (Moderator elect).

Synod moderators and representatives:

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United Reformed Church Finance Committee

Convenor: Mr Ian Hardie Chief Finance Officer: Mr John Samson

Mr Bob Christie, Mr David Greatorex, Mrs Denise Harman, Mrs Jane Humphreys, Mr Frank Liddell, Ms Joana Marfoh, Mrs Valerie Morrison, Revd John Piper, Mr William Potter, Revd Wilbert Sayimani

Legal Advisers

Towns Needham & Co (legal adviser to General Assembly) Veale Wasbrough Vizards LLP Kingsgate 2nd Floor 3 Brindley Place 51‐53 South King Street Birmingham Manchester M2 6DE B1 2JB Actuaries Aon Hewitt Limited Carnegie House Peterborough Road Harrow Middlesex HA1 2AJ Independent Auditors Bankers Moore Kingston Smith LLP HSBC Bank plc Chartered Accountants and Statutory Auditors City of London Corporate Banking Centre Devonshire House, 60 Goswell Road 60 Queen Victoria Street London EC1M 7AD London EC4N 4TR

STRUCTURE, GOVERNANCE AND MANAGEMENT

Trustee

The General Assembly of the United Reformed Church in 2006 appointed United Reformed Church Trust as its corporate trustee. Following consultation with the Charity Commission, the company in December 2009 adopted new memorandum and articles and was registered as a Charity. It acts as steward of the charity assets on behalf of the General Assembly.

Church Governance

The governing body of the United Reformed Church is the General Assembly. The authority under which the General Assembly acts was given by the resolutions passed at the Uniting Assemblies of 1972, 1981 and 2000; and the United Reformed Church Acts 1972, 1981 and 2000 enabled those resolutions to be given legal effect in relation to the finance and property of the Church. These Acts of Parliament together with the Basis, Structure and Rules of Procedure for the time being of the United Reformed Church (as contained in sections A ‐ C of the Manual of the United Reformed Church) contain the foundation documents of the Church, known as the Scheme of Union. Each General Assembly appoints members to Mission Council, although those appointed to represent Synods are nominated by the Synods concerned. The names of members of Mission Council are listed above. The purpose of Mission Council is to enable the Church, in its General Assembly, to take a more comprehensive view of the activity and policy of the Church, to decide more carefully about priorities and to encourage the outreach of the Church to the community.

Charity Status

The United Reformed Church, having charitable status at General Assembly, Synod and local church levels, was formerly excepted from charity registration by legislation. With the implementation of the Charities Act 2006 this exception ended for charities with an annual gross income over £100,000, and as a result United Reformed Church Trust, Synod Trusts and some local churches in England and Wales are no longer excepted and are now registered charities. Under section 30(2)(c) of the Charities Act 2011 the exception continues to apply to other local churches with an annual gross income under £100,000. Churches in Scotland and the Synod of Scotland are registered under Scottish legislation.

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Employees

The charity is committed to employment policies which follow best practice, based on equal opportunities for all employees, irrespective of gender, gender reassignment, sexual orientation, religious beliefs, colour, ethnic or national origin, age, marital status or disability. In respect of disabled persons, therefore, it seeks to eradicate less favourable treatment by endeavouring to identify and remove barriers to participation in employment, training, promotion, leadership and representation on church committees.

The charity provides employees with information on matters of concern to them, and consults them regularly, so that their views can be taken into account when making decisions likely to affect their interests. Employee involvement is encouraged, for example by a staff association at the main office, as achieving a common awareness of the charity’s priorities and of the financial and economic factors affecting it plays a major role in maintaining its performance.

Remuneration

Remuneration of key management personnel is set in the same way as that of other equivalent staff. All ministers are paid the same basic stipend, the level of which is recommended annually by a sub‐ committee of Ministries committee having regard to external data on pay and cost inflation, reviewed by Finance committee and confirmed by the Trustees. The pay of lay staff is assessed when a post is created, by a Human Resources advisory group having regard to comparable posts in the charity sector and among Church bodies in particular; it is reviewed and confirmed by a remuneration committee, which decides annual cost of living increases. Any reassessment of a post’s remuneration is by the same process.

OBJECTIVES AND ACTIVITIES

The charity’s objects are to advance the Christian religion for the benefit of the public in accordance with the doctrines, principles and usages, and the Scheme of Union of the United Reformed Church.

During 2017 the United Reformed Church launched Walking the Way, Living the Life of Jesus Today , an emphasis on personal and corporate discipleship. It offers a framework within which much of the denomination’s planning will take place and includes Stepwise, a lay development programme, as well as the advocacy of resources such as Holy Habits which are all intended to assist growth in discipleship practices. Alongside this, preaching of the Gospel, pastoral care for, and building up of, communities by ministers, lay preachers and Church Related Community Workers (CRCWs) will continue to operate. The denomination’s Vision2020 framework for mission, as well as the Local Mission and Ministry Review process, through which the Synods challenge and support their churches, are key vehicles for increasing

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the effectiveness of local witness and service. The Commitment for Life programme continues to encourage churches to pray and campaign for the eradication of global poverty.

The United Reformed Church Retired Ministers’ Housing Society Limited's objects are for the benefit of the community to advance the Christian religion in accordance with the principles, usages and the Scheme of Union of the URC, in particular by providing for retired ministers and widow/ers or civil partners of ministers of the United Reformed Church who are in need for various reasons, housing and associated amenities, or assistance to enable them to provide this for themselves.

The object of Westminster College, Cambridge, is to be a theological college of the United Reformed Church, and thus to provide education and promote the Christian religion. The United Reformed Church Trust is the custodian trustee of the shares held in Westminster College Trading Limited.

STRATEGIC REPORT

Achievements and Performance

Most of the company’s activities are carried out through councils and committees of the United Reformed Church, and a detailed review of their work is incorporated in the Book of Reports to the Church’s General Assembly, which met online on 11 July 2020. The Book of Reports to the July 2021 General Assembly will cover the second half of the year 2020. We report below on that work and on the specific activities of the Trustee as steward of the charity’s assets.

The Covid 19 pandemic brought many challenges to Church life, however many churches were able to adapt to the situation, providing worship via online platforms such as Zoom. A weekly Sunday service was sent out via the ‘Daily Devotions’ email network for those wishing to join this act of worship. The many committees of the denomination also turned to Zoom and other online platforms to conduct their business and the success of this has resulted in many looking to continue this practice even after people are able to meet in person again as this not only saves time and money but is also a more climate friendly way of meeting.

Staff based at the Church’s central office in London spent most of the year working from home. The use of a remote server system, which was implemented in 2017, enabled them to have access to all their computer files and systems, although there were still some challenges to be faced to move some paper based systems to electronic systems.

Due to Covid restrictions, we were unable to meet in person for Mission Council and General Assembly. It was therefore decided to conduct the business of the church through online Mission Council meetings and the General Assembly was mainly an act of worship, but did include the business of induction Revd Clare Downing and Mr Peter Pay as the new moderators and Revd Dr John Bradbury as General Secretary. The Revd Bradbury replaced Revd John Proctor who retired after 7 years of service as General Secretary. The church is grateful for the contribution he made to the life of the URC and wish him well in his retirement.

Impact of COVID‐19 control measures

On 23 March 2020 the UK Government announced measure to put the country in ‘lockdown’ as a measure to prevent the spread of the COVID‐19 virus (also known as the Corona virus). The effect of the lockdown meant that URC churches across England, Scotland and Wales had to close their doors. A good number of these churches rely on lettings of church buildings for a substantial portion of their income. This loss of income means that the local churches’ ability to make regular payments into the Ministry and Mission (“M&M”) fund has been curtailed. Despite this the drop in income was not as severe as initially expected and the trustees are extremely grateful for the efforts of all involved to keep this giving at a level which allowed the church to still function effectively.

The restrictions have continued into 2021 and some churches are seeing their financial resources depleted. The future level of M&M giving is still very uncertain as the future restrictions and easing thereof are not known. The URC Trust does have sufficient cash resources and reserves to continue to cover ongoing expenditure. Committees and budget holders responded well to the request to keep

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expenditure to a minimum and the drop in income was offset to a large degree by reduced expenditure with some savings expected to continue even after lockdown as online committee meetings become more of the norm, thus reducing travel expenditure. The full impact of the lockdowns will not be known for a year or two. However it is expected that the URC Trust will be able to continue to operate and largely carry out its charitable aims.

Many churches have adapted to having virtual services which have, in some cases, enabled people previously unable to attend church in person to feel part of the church community again.

The administrative staff of the charity have continued to work from home with access to most of their work through logging onto to the main computer systems via a remote server system. The main financial functions (payroll and accounting) are continuing to be performed with minor disruptions and difficulties.

The councils of the Church have met virtually and have, to a large extent, been able to conduct their business as usual.

The URC Trust has obligations to two defined benefit pension schemes (see notes 22 to 24). While the assets of both funds saw an immediate drop in value when the first lockdown was announced, these have recovered well and the assets of these funds showed gains in 2020. While other factors continue to effect the value of the overall liability in the case of the Ministers’ Pension Fund, the investment side appears to be stable at the moment.

Committee work

Children’s and Youth Work

Our theme for 2020 was Common Ground and worship resources for all ages were sent to all URC churches. At Youth Assembly in January over one hundred 14‐25 year olds explored how to find and create common ground through discussions, workshops and worship. Reuben Watt was inducted as Youth Moderator, the Youth Executive were elected and spent 2020 following up resolutions persuading the URC to declare a climate emergency and encouraging local churches to support students. Covid‐19 restrictions meant that Youth Exec were unable to hold any residentials meetings and had to cancel Youth Assembly 2021. Instead they created an online service for World Youth Day on mental health, supported Black Lives Matter and free school meal campaigns and planned a virtual event URC Youth (dis)ASSEMBLED. The strategic focus for the year was 0‐5s, and a series of resources to support churches in engaging with this group was produced, with a virtual conference over three evenings on Faith with Under Fives. In response to the pandemic and closure of churches a weekly resource Families On Faith Adventures @ Home was produced from April, a live discussion programme for young people TRIalogue was launched and other support, training and resources developed. A number of residential meetings and events were cancelled, resulting in budget savings. Working in partnership with other departments, Children’s and Youth Work coordinated the creation and production of an Advent Box Hope & Joy and Lent Pack Walking towards Easter Together for churches to give to families and households. 2021 will see a strategic focus on 5‐11s, a review of the Pilots organisation, and support for churches as they emerge from Covid19 restrictions and refresh their engagement with children and young people, within our theme of Heroes and Villains.

Communications

The work of the communications team continues to be busy and wide‐ranging. The team currently provides: comments, press releases and statements for media enquiries; Reform magazine; content for the URC website; News Update and other emails; content for multiple social media channels; design and production for hundreds of leaflets, books and resources; the online bookshop, delivering more than 9,000 items per year; graphical, editorial and technical support at major URC events; the iChurch website service for local churches; editing and copywriting; helping to maintain the URC archive and offers brand advice and creative solutions to those who need them.

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In addition to this business as usual work, the team has also been heavily involved with the development and maintenance of a new website for the URC; designing and selling a new range of URC certificates; providing resources for churches for the reopening of buildings; Coronavirus advice guides; the Community Awards with Congregational; kits for Advent and Lent to engage with families connected to the church; enabling the councils of the church to meet online; extending the range of leaflets about paid and voluntary roles; digitising records from the General Assembly; a new website for RMHS; new Child Friendly certificates and plaques; children’s resources; Legacy of Slavery resources; a Pilots resource about Fiji and a framework document for Churches Together in England, to mention a few.

Education and Learning

2020 has seen us enter a world of change! The Covid‐19 pandemic lockdown had an immediate effect on all learning, meetings and gatherings and the Resource Centres for Learning (RCLs) took to teaching remotely and we are grateful to both staff and students for adapting so swiftly. Staff based at Church House also moved to working at home, online meetings took over from face‐to‐face ones and we all began to learn more about Zoom technology! Fortunately, the Committee had already discussed a ‘greener’ way of working and all but 1 meeting per year was planned to be virtual. The Committee’s focus has been on The Way Forward strategy that sets out a direction of travel for the coming years, including proposing a wide consultation on the integration of Education and Learning within the URC, which began after Mission Council’s endorsement in November. The Paper D relating to Lay Preachers was withdrawn from Mission Council and collaboration between E and L, Ministries and the RCLs began in October to address the need for the clarification of the Marks of Ministry and Expected Standards of Lay Preachers and the need for new training provision now TLS is no longer available as the training pathway. Stepwise, the discipleship development programme, came into its own as online study groups began and all 5 streams were finished and ready for use. It is exciting to see the interest in this programme growing. Finally, the Secretary for Education, the Revd Fiona Thomas retired from post at the end of August and, in October, the Revd Jenny Mills took up the role as her replacement. It has been an interesting time for the Committee, ably convened by Mr Alan Yates, as it continues to seek to support and enable training for the whole URC, at a time of pandemic, intermittent lockdowns and the increasing pressure on the budget.

Equalities

The remit of the Equalities committee is ‘to remind the United Reformed Church that equality is enshrined in its theology, life and work and to challenge the practice of the URC where appropriate.’ Much of the work of the committee is in the promotion and encouragement of equality and diversity. This is achieved through established links with the other Assembly committees as well as by being alert to the work undertaken on Assembly’s behalf by bodies such as the Joint Public Issues Team (JPIT) and members of staff but particularly the work around racial justice and intercultural ministry.

The committee is able to remind committees of their responsibilities with regard to equality and diversity and seeks to identify new methods and technologies that will enable participation by all.

Ministries

The committee is concerned with the specific recognised ministries which provide leadership for the Church, including church related community work, eldership, lay preaching and the ministry of word and sacraments, but also recognises that each of these has a duty to enable discipleship in others. Recognising the challenges of our demography, we continue to work with our synods developing strategies that use our ministers most effectively in providing leadership in local churches. During 2020 a working group looked at the issue of pastoral supervision for ministers of word and sacrament, looking in particular at who should engage in pastoral supervision, how frequent such supervision should be and the financial implications for the denomination. The recommendations of the group were accepted by General Assembly in July. The denomination also continues to fund two pilot projects looking at other forms of ministry that can be funded by the M&M fund.

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Mission

The URC’s long‐term focus on whole‐of‐life discipleship and mission, Walking the Way: Living the life of Jesus today, continued to develop in a variety of ways, including pilot accompaniment programmes with local churches in two synods, resourcing worship and spirituality and producing/promoting relevant materials. Developing online church progressed rapidly throughout the denomination during the lockdowns of 2020.

The United Reformed Church continued its association with the Greenbelt faith festival, but as with many other activities during 2020, this was entirely online.

The United Reformed Church is part of the ecumenical Joint Public Issues Team (JPIT). In 2020 the team focused on the social impacts of the Covid‐19 pandemic, particularly around poverty and debt, and encouraging the ongoing response and engagement of churches around issues of environmental and social responsibility.

As COVID has altered church life for everyone, many rural churches have adapted well and continue to serve their communities. The National Rural Officer worked with the Arthur Rank Centre on a project around Loneliness and Isolation, which included producing a tool kit. They also provided a voice for the farming community, as it faces many uncertainties over Brexit.

Global and intercultural ministries had a strong focus on racial justice during 2020, spurred by the inequalities exposed by the Covid pandemic and the killing of George Floyd, and the ensuing global cry for justice. The ‘Legacies of Slavery’ webpage was launched, whilst a series of Zoom gatherings asked, ‘Do Black Lives Matter in the URC?’ These initiatives fed into the Church’s November 2020 commitment to move from a position of ‘not racist’ to actively ‘anti‐racist’.

Mission staff supported the work of synod mission enablers and pioneer ministers. A learning community was formed of lay pioneers who meet regularly for sharing and support.

The Commitment for Life programme partners with Christian Aid and Global Justice Now to enable local URC congregations to fulfil their global justice mission objectives. With our partners, we focused on helping the poorest communities in Bangladesh, Zimbabwe, Central America and Israel and the occupied Palestinian territories.

The URC’s ecumenical and interfaith work transferred online during 2020 making extensive use of the Zoom conference platform. This was not only for committee work and training courses but also for large events which included two online services of worship with partner churches in Germany, a ‘virtual pilgrimage’ to Bethlehem and a series of mosque/church conversations bringing together local communities.

Safeguarding

The year saw a new safeguarding communication network established with a quarterly newsletter being issued and a Survivors of church based abuse group being set up to help support those who had been victims of abuse in a church environment. In July the first Annual safeguarding report was presented to General Assembly. This used data complied from the Annual Church Safeguarding Returns to inform General Assembly of what is happening in our churches. The Safeguarding team worked hard at bedding down the new monitoring and review systems. This looks to help refine the Safeguarding Strategic Plan (“The Plan”) which was agreed at the November 2019 Mission council. The Plan was officially launched at an online nationwide symposium held in October and which promoted the principle that “Safeguarding is everyone’s business”. This was attended by over 200 people. The first grants to synods from central funds were made during 2020. These grants are aimed at assisting the synods with their safeguarding work.

Resourcing Our Work

All the above must be set in the context of our financial resources, which continue to be carefully managed in an uncertain economic climate. Detail of the latest year is given in the financial review below, but we have also to consider broader trends. Among these are:

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Managing the Assets

Investments & Investment Policy

United Reformed Church Trust acts as corporate trustee of the central funds of the United Reformed Church. The powers of investment are given under the memorandum and articles of association of the trustee company. The Investment Committee of the Church, which reports to the Trustees, keeps under review our investment policy and monitors the performance of our fund managers. All investments are held in pooled funds that aim to comply with the ethical policies agreed by the Church.

The Investment Committee continued to monitor the investments throughout 2020.

Properties

United Reformed Church Trust is responsible for the management of the properties included in its balance sheet. The management of about 300 houses for retired ministers is delegated to the United Reformed Church Retired Ministers’ Housing Society Limited, which has six dedicated staff members and a Board. Its staff members also oversee the houses occupied as manses by Synod Moderators and others in General Assembly posts. Other properties include the buildings of Westminster College, which are managed by the College Trustees, the former Yardley Hastings centre and United Reformed Church House, London.

Risk Management

The trustees continue to monitor the risks with which the central administration of the Church is faced. During 2019 the new risk register process was rolled out across all the main committees of the church. This process concentrated on identifying risks as opposed to issues and also helped committees focus on what mitigation procedures were in place. The results of this procedure were presented to the Trustees during 2020.

The risks which are deemed as having the highest impact and likelihood are given particular attention. Those risks fall broadly into two areas:

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Reputational matters are taken very seriously and the Church has a process in place whereby anyone concerned that a matter may receive unfavourable publicity refers that matter to the communications department who will advise on its handling or, if the matter is particularly sensitive, will handle it directly. The General Secretary is made aware of all issues and will intervene personally if appropriate.

The safeguarding of children and adults at risk is seen as a key responsibility of the Church. Good Practice 5 , the denomination’s safeguarding policy was issued during 2019. This updated the policy for recent changes in legislation and safeguarding practice. Local churches are required to report annually on safeguarding matters to their synod’s safeguarding officer. A Safeguarding Advisor at Church House, together with the synods’ own safeguarding officers, is available to offer advice and guidance to churches. DBS/PVG checks are mandatory for all active ministers and key officers including all who work with children.

Further details about safeguarding are to be found in the ‘Safeguarding’ section on page 9.

The Covid 19 pandemic poses a significant risk to the Trust’s resources. The long term impact of Covid 19 is still currently difficult to assess but it is acknowledged that the longer this lasts the greater the impact will be. The Church continues to monitor developments and has curtailed expenditure wherever possible.

Future Developments

With the retirement of the Deputy General Secretary (Discipleship) in 2020, the post remained vacant while some strategic thought was given to the role. In early 2021 Revd Adrian Bulley was appointed to this post and will be taking up office in September 2021. In 2020 we appointed new Synod Moderators in the Southern, and Thames North synods as well as the Synod of Scotland. In 2021 a nomination was made for the Moderator role in Eastern Synod.

Steps are underway to set up a group to look at the future of the URC. This group will, in consultation with many different people and bodies within the URC family, look at the structures, resources and work of the denomination. Amongst other things the group will be looking at the impact of Covid 19 and the way the church has adapted to it, the deployment of ministers, the pension fund deficit and our identity as a Christians in the body of Christ. This body will report back to each Mission Council and General Assembly.

A separate group drawing on expert knowledge in the denomination has been looking specifically at the pension funds and will be bringing recommendations for the way forward to the 2021 General Assembly in July.

The implementation of the Safeguarding Strategic Plan will be ongoing across the denomination while we will be bedding down the pastoral supervision objectives to compliment the safeguarding of vulnerable adults and to ensure the wellbeing of our ministers.

CO2 Emissions

The church continually looks for ways of reducing its carbon footprint and actively recycles wherever possible. It also encourages individual churches to be as ‘green’ as possible and promotes the Eco‐ Church award scheme.

A carbon emissions figure has been calculated for the central functions of the church based on electricity usage at Church House along with car and air miles travelled by officers and staff. In 2020 it was calculated that the churches cardon emissions amounted to approximately 54.47 tonnes. Average emission rates have been used in calculating this figure. The total includes use of 148,917 kWH of energy used which has been converted to CO2 emission using an average rate. This works out at approximately 0.52 tonnes per employee.

Section 172 of the Companies Act

In summary, as required by Section 172 of the Companies Act, the Directors (Trustees) must act in a way they consider, in good, faith, would be most likely to promote the success of the company for the benefit of its members as a whole and, in doing so, have regard (amongst other matters) to:

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Financial Review

The financial statements show the consolidated income, expenditure, assets and liabilities of those trusts and other funds controlled by United Reformed Church Trust (the Trust) and administered for the benefit of the United Reformed Church under the overall authority of the General Assembly. These represent the charitable assets of the United Reformed Church that United Reformed Church Trust manages on its behalf and applies towards its charitable purposes. They include the operations of Westminster College (the College), its resource centre for learning in Cambridge, which is a registered charity in its own right, and its subsidiary company Westminster College Trading Limited. They also include the operations of the United Reformed Church Retired Ministers' Housing Society Limited (RMHS), which is an exempt charity providing housing and associated amenities for needy persons who are retired ministers or widow/ers or civil partners of ministers of the United Reformed Church. The Balance Sheet also reports separately the assets and liabilities of the Trust, excluding the College and RMHS, and details are given of the funds, incoming and outgoing resources and assets of the College and RMHS as subsidiary charities.

The Finance Committee of the Church is responsible for the general financial oversight of funds administered for the benefit of the United Reformed Church, its long‐term financial planning, and the preparation and control of its budget under the authority of Mission Council and the trustees. The Committee ensures that proper procedures are in place for the maintenance of accounting records, controlling and monitoring the budgetary process, and the preparation of financial statements in compliance with applicable United Kingdom law and accounting standards. To this end the Committee authorised the introduction of new accounting software and meets with the auditors at least once a year. The Committee may take such decisions with regard to the finances of the Church as are necessary within the policies set by the General Assembly.

Reserves Policy

The Consolidated Balance Sheet on page 22 shows the disposition of the various charity funds totalling £101,040k as at 31 December 2020 (2019: £107,293k). The term “reserves” describes that part of a charity’s income funds that is freely available. Much of the funds are invested in property or restricted in use.

The unrestricted fund net assets readily available are £20,398k (2019: £22,573k).

The Finance Committee reviews the policy annually and have taken a risk‐based approach to setting a reserves target. The main financial risks that the Committee felt needed to be covered were the call up of the guarantee to the pension funds (see notes 22 to 23), possible future lump sum contributions required to be made to either of the pension fund, a possible drop in excess of the usual rate in giving to Ministry and Mission Fund and possible legal action against the church requiring lump sum pay outs. Based on these risks, the Committee felt that the Trust should aim to maintain its reserves at a level between £17m and £19m.

The current level of reserves held is a little in excess of the target level, however with uncertainty around the long term impact on the income of the Church due to COVID‐19, the Committee were satisfied that this was appropriate. The Committee will review the policy annually.

11

TRUSTEES’ REPORT CONTINUED

Grant making

Grants are made on the recommendation of the relevant committee. Each application is assessed on its individual merits.

2020 Financial Results

The results for 2020 are set out in more detail in the Consolidated Statement of Financial Activities on page 21. This shows that there was, overall, a decrease in funds in the year of £6,250k. The following table shows the breakdown of the results for 2020 compared with those for the previous year.

Voluntary income:
Ministry and Mission Fund contributions
Donations, grants and legacies
Income from charitable activities
Trading income
Investment income
Other income
Total income
Expenditure:
Cost of raising funds
Charitable activities
Total expended
Net income from operating activities
Gains/(loss) on investment assets
Net (expense)/income
Actuarial (loss)/gain on pension schemes		 2020
2019
£000
£000
17,908
18,817
1,469
2,159
1,233
1,421
279
788
1,950
1,884
415
1,939
23,254
27,008
399
651
22,524
22,604
22,923
23,255
331
3,753
3,591
8,392
3,922
12,145
(10,174)
332
(6,257)
12,477

Ministry and Mission Fund contributions

The pie chart on page 13 gives a visual picture of total unrestricted income, showing that 90% of our unrestricted income comes from Ministry and Mission Fund contributions, which totalled just under £18 million. Despite the Covid‐19 pandemic, a great effort was made by churches and Synods to get as close to the amount pledged as possible. We are extremely grateful for the faithful and regular giving that this represents, enabling the Church to support ministry and mission across our three nations, and sustain the major way in which all members of the Church fund, in partnership, all our work for the kingdom of God. The pie chart of total unrestricted expenditure on page 14 shows that 81% of our unrestricted expenditure, totalling £16,345k, is used to provide ministry and a further 10% (£2,058k) is used to provide financial resources to train and equip people for ministry.

Donations, grants and legacies

We are very grateful for regular grants from a number of trusts, detailed in note 2(b) to the financial statements, as well as for many other donations. Apart from general donations the Trust received some donations from the synods which, following the encouragement by Mission Council, donating a portion of the sales proceeds of church buildings towards helping pay the deficit contribution to the Ministers’ Pension Fund. Commitment for Life donations from churches and individuals were down on the 2019 level, decreasing from £330k to £253k largely due to the effects of Covid‐19. Legacies bequeathed for general purposes are held in a separate designated Legacy Fund, available for projects not covered by regular budgets. The balance in this fund is now £716k (2019: £693k). Grants paid from this fund totalled £19k in 2020 (2019: £54k) with a further £69k included in creditors having been committed for future payment.

12

TRUSTEES’ REPORT CONTINUED

Unrestricted Income ‐ £19.8m Year ended 31 December 2020

----- Start of picture text -----
90%
0%
1%
7% 2%
----- End of picture text -----

Ministry and Mission Fund contributions Donations, grants and legacies Investment income Income from charitable activities Other income

13

TRUSTEES’ REPORT CONTINUED

Unrestricted Expenditure ‐ £20.2m Year ended 31 December 2020

----- Start of picture text -----
81%
0%
2%
5%
10%
2%
----- End of picture text -----

Ministry Education and Learning Children's and Youth work Mission programmes Publishing Other

Investment income

Total investment income includes rental income on the mixed motive property. The 2020 figure shows a slight increase in the overall figure of £66k from £1,884k to £1,950k. Interest rates on cash deposits remained at historically low levels.

Trading income/cost of raising funds

The bed and breakfast accommodation and conferences and events business through Westminster College Trading Limited was hard hit by the Covid‐19 pandemic. Income fell from £788k in 2019 to £279k. There was a corresponding fall in expenditure in this area from £651k to £399k.

Income from charitable activities

This income includes rental from the retired ministers’ housing properties, income from student accommodation, catering and course fee income of Westminster College and from sales of publications and subscriptions to Reform magazine.

Other income

Most of this income (£414k) represents net gains from selling retired ministers’ housing properties when they fall vacant, the proceeds of which are used to acquire properties for retiring ministers or sometimes for rehousing them in later years. In 2020, 6 properties were bought and 5 were sold.

Expenditure – Charitable activities

These costs are analysed in note 5 on page 28 and include a share of support costs.

14

TRUSTEES’ REPORT CONTINUED

Ministry: £17,220k. The maintenance of ministry is the most important charge on the Church’s resources. This sum pays for the stipends, social security and pension costs of our stipendiary ministers and CRCWs (who averaged 392 in number over the year) and includes all costs of the Synod Moderators. In 2020 the cost of ministry fell, as the number of retirements of stipendiary ministers exceeded the number of ordinations. The total also includes costs relating to retired ministers of supplementing pensions and maintaining housing.

Education and Learning: £3,258k. The considerable commitment of resources to training ministers has continued. This sum includes our support for our Resource Centres for Learning, which reflects their wider role in providing learning opportunities for the whole Church, as well as direct support of those training for ministry. Other costs relate to ongoing lay development, including the Stepwise programme. It also includes the relevant costs of Westminster College.

Children’s and Youth Work: £353k. Due to the Covid‐19 Pandemic, some of the usual activities of the Children’s and Youth Work area moved to online events which resulted in some savings in costs, however, it is hoped that these events will take place in person in the not too distant future.

Mission Programmes: £1,282k. The Mission Committee and team continue to progress longer‐term strategies, including the Walking the Way missional discipleship emphasis and Commitment for Life programme. Commitment for Life grants were down on last year in line with the decrease in donations received. There was continued support for the Joint Public Issues Team and various interdenominational and interfaith organisations.

Publishing: £411k. The costs of publishing Reform magazine have continued to be tightly controlled while maintaining its quality, with a levelling off in subscriptions and advertising income. There was a further drive to increase the merchandise available from the on‐line bookshop including the popular Advent Packs. The denomination continued to subsidise the iChurch website support.

Gains on investment assets

The change in investment values from the beginning to end of the year, broken down by fund, is shown in the Summary of Fund Movements in note 19. Despite the Covid‐19 pandemic, financial markets performed quite well during 2020 and the year ended with the investment up £3,581k on the value at the start of the year. A revaluation of investment property added £257k to the gain. Investment gains and losses over time are shown in the five year summary on page 48.

Actuarial gains on pension obligations

The Trust is required to take full account of actuarial gains and losses arising each year in the United Reformed Church Ministers’ Pension Fund (MPF). In 2020 the lower discount rate resulted in an increase in the pension liabilities. This was offset to some degree by good gains on the fund’s diversified investment. The overall net actuarial loss for the year was £10m. The Church continued to make the required deficit contributions to fund the deficit mainly from contributions from local churches to the Ministry and Mission Fund .

The United Reformed Church Final Salary Scheme (FSS), which is mainly for lay staff, reported an actuarial gain of £1.2m mainly due to an increase in the scheme assets. This has resulted in a net asset position in this scheme but because the Trust does not have an unconditional right to the surplus, this has not been recognised.

More details are given in notes 22 to 24 to the financial statements on pages 40 to 44.

15

TRUSTEES’ REPORT CONTINUED

STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The Trustees (who are also directors of United Reformed Church Trust for the purposes of company law), are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group for that period. In preparing these financial statements, the Trustees are required to:

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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the Trustees are aware:

The 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.

CONCLUSION

The Trustees have approved this Report, and as directors of the company have approved the Strategic Report included within it. Those wanting more information or explanations about any aspect of the Church’s finances are encouraged to address their enquiries to the Treasurer.

Signed on behalf of the Trustees

Valerie Morrison 29 October 2020

16

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF UNITED REFORMED CHURCH TRUST

Opinion

We have audited the financial statements of United Reformed Church Trust for the year ended 31 December 2020 which comprise the Group Statement of Financial Activities, the Group and Parent Charitable Company Balance Sheets, the Group Cash Flow Statement 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 charitable company 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 charitable company'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 other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information. 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.

17

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:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ annual report.

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

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, 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 and 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 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 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.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed

18

risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the charitable company.

Our approach was as follows:

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

19

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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 which 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 any party other than the charitable company and charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Andrew Stickland (Senior Statutory Auditor) for and on behalf of Moore Kingston Smith LLP, Statutory Auditor

Devonshire House 60 Goswell Road London EC1M 7AD

20

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2020

Note
Donations and legacies
Ministry and Mission Fund contributions
2(a)
Grants receivable
2(b)
Legacies
Commitment for Life donations
Other donations
2(c)
Charitable activities
3
Ministry
Education and Learning
Children's and Youth work
Mission programmes
Publishing
Other trading activities
Investment income
4		 2020
Total
Unrestricted
Designated
Restricted
Capital Funds
funds
£'000
£'000
£'000
£'000
£'000
17,908
0
0
0
17,908
184
22
484
0
690
0
20
319
0
339
0
0
253
0
253
101
0
82
4
187
285
42
1,138
4
1,469
0
0
719
0
719
2
0
250
0
252
13
0
0
0
13
0
0
0
0
0
249
0
0
0
249
264
0
969
0
1,233
0
0
279
0
279
1,309
26
615
0
1,950		 2020
Total
Unrestricted
Designated
Restricted
Capital Funds
funds
£'000
£'000
£'000
£'000
£'000
17,908
0
0
0
17,908
184
22
484
0
690
0
20
319
0
339
0
0
253
0
253
101
0
82
4
187
285
42
1,138
4
1,469
0
0
719
0
719
2
0
250
0
252
13
0
0
0
13
0
0
0
0
0
249
0
0
0
249
264
0
969
0
1,233
0
0
279
0
279
1,309
26
615
0
1,950		 2020
Trust
Only
£'000
17,908
369
20
253
120
762
0
2
13
0
249
264
0
1,899		 2020
Trust
Only
£'000
17,908
369
20
253
120
762
0
2
13
0
249
264
0
1,899		 2019
Total
funds
£'000
18,817
304
811
330
714
2,159
718
509
14
0
180
1,421
788
1,884
Other income
Gains on sale of properties
Other income
Total income and endowments
Expenditure on:
Raising funds:
Trading expenditure
Charitable activities
5
Ministry
Education and Learning
Children's and Youth work
Mission programmes
Publishing
Other expenditure
Total expended
Surplus from charitable and trading activities
Net gains/ (Loss)on investment assets
Net income
Transfers between funds
Actuarial gains/(losses) on pension schemes
22
Net movement in funds
Reconciliation of Funds
Total funds brought forward
Total funds carried forward
18
0
378
0
396
19
0
0
0
19		 18
19		 1,899
40
37
0
378
0
415		 37 1,939
19,803
68
3,379
4
23,254
0
0
399
0
399		 20,870
0		 27,008
651
16,345
10
865
0
17,220
2,058
2
1,198
0
3,258
346
3
4
0
353
1,056
4
222
0
1,282
409
0
2
0
411
0
0
0
0
0		 16,740
2,127
356
1,296
405
0		 17,378
3,142
385
1,537
162
0
20,214
19
2,291
0
22,524		 20,924 22,604
20,214
19
2,690
0
22,923
(411)
49
689
4
331
1,103
51
788
1,648
3,590
692
100
1,477
1,652
3,921
(13)
0
13
0
0
(10,966)
0
792
0
(10,174)
(10,287)
100
2,282
1,652
(6,253)
20,111
1,564
56,030
29,588
107,293
9,824
1,664
58,312
31,240
101,040		 20,924
(54)
3,491
3,437
0
(10,174)
(6,737)
65,441
58,704		 23,255
3,753
8,392
12,145
0
332
12,477
94,816
107,293

All amounts relate to continuing operations. There is no material difference between the net incoming resources stated above and their historical cost equivalents. All gains and losses recognised in the year are included in the Statement of Financial Activities. The Companies Act income and expenditure account has been included in note 32. The notes on pages 24 to 47 form an integral part of these financial statements.

21

CONSOLIDATED AND TRUST BALANCE SHEETS AS AT 31 DECEMBER 2020

Note
Fixed assets
Intangible assets
11
Tangible assets
11
Houses for retired ministers
Houses for serving ministers
Other properties
Total properties
Cars and equipment
Investments and loans
Mixed motive investment property
12		 Consolidated
2020
£'000
96
39,979
5,517
8,297
53,793
338
54,227
2,222		 Consolidated
2020
£'000
96
39,979
5,517
8,297
53,793
338
54,227
2,222		 Consolidated
2019
£'000
65
38,654
5,021
8,415
52,090
398
52,553
2,000		 Consolidated
2019
£'000
65
38,654
5,021
8,415
52,090
398
52,553
2,000		 Trust
2020
£'000
88
396
5,517
2,671
8,584
84
8,756
2,222		 Trust
2020
£'000
88
396
5,517
2,671
8,584
84
8,756
2,222		 Trust
2019
£'000
50
396
5,021
2,697
8,114
97
8,261
2,000
Mixed use investment property
12a		 856 695 856 695
Investments
13
Programme‐related investments
14
Loans, excluding inter‐fund loans
15
Current assets
Stock
Debtors
16
Bank balances and money on call
Current liabilities
17
Net current assets
Total assets less current liabilities
Defined benefit pension scheme liability
22‐24
Other pension obligations
23
Net assets including pension liability
Unrestricted income funds
General reserves
Revaluation reserve ‐ investments
Revaluation reserve ‐ property
Designated funds
Total unrestricted income funds before pension reserve
Pension reserve
Restricted income funds
Capital funds
TOTAL FUNDS
19‐20		 56,283
242
155
59,758		 53,075
242
142
56,154		 54,593
242
6,671
64,584		 51,484
242
7,912
62,333
27
3,311
8,245		 27
3,243
9,482		 27
3,607
7,661		 27
2,939
9,022
11,583
(1,298)		 12,752
(1,550)		 11,295
(2,701)		 11,988
(4,525)
10,285
124,270
(20,872)
(2,358)
101,040
24,229
4,585
1,882
1,664
32,360
(20,872)
58,312
31,240
101,040		 11,202
119,909
(9,466)
(3,150)
107,293
23,895
3,865
1,817
1,564
31,141
(9,466)
56,030
29,588
107,293		 8,594
81,934
(20,872)
(2,358)
58,704
24,229
4,585
1,882
1,664
32,360
(20,872)
17,140
30,076
58,704		 7,463
78,057
(9,466)
(3,150)
65,441
23,895
3,865
1,817
1,564
31,141
(9,466)
15,292
28,474
65,441

Approved by the Trustees on 18 May 2021 and signed on their behalf by:

Valerie Morrison Ian Hardie Chair Treasurer

United Reformed Church Trust is a company limited by guarantee, number 135934, and Registered Charity number 1133373.

The notes on pages 24 to 47 form an integral part of these financial statements.

22

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020

Cash flows from operating activities
Net income before other recognised gains and losses (see page 21)
Adjustments for:
Increase in stocks
Increase in debtors
Decrease in creditors
Increase/ (Decrease) in sums held for Synods and congregations
Gain on investment assets
Profit on sale of tangible fixed assets
Depreciation and impairment
Other investment income
Cash endowment received
Cash endowment paid
Difference between pension contributions and actuarial cost
Cash flows generated from operations
Cash flows from investing activities
Payments to acquire tangible fixed assets
Payments to acquire intangible fixed assets
Receipts from sales of tangible fixed assets
Payments to acquire fixed asset investments
Receipts from sales of fixed asset investments
Loans and advances made to ministers
Loans repaid by ministers
Loans and advances to churches
Investment income
Cash flows from financing
Addition to capital endowment
Payments capital endowments
Net increase (decrease) in Cash (note 26)		 2020
£'000
2019
£'000
3,922
12,145
‐
(21)
(68)
(1,152)
(129)
(100)
(123)
186
(3,591)
(8,392)
(396)
(1,898)
259
281
(1,950)
(1,884)
(4)
(4)
‐
‐
440
(1,490)		 2020
£'000
2019
£'000
3,922
12,145
‐
(21)
(68)
(1,152)
(129)
(100)
(123)
186
(3,591)
(8,392)
(396)
(1,898)
259
281
(1,950)
(1,884)
(4)
(4)
‐
‐
440
(1,490)
(1,640)
(2,329)
(2,648)
(44)
1,154
‐
‐
(34)
21
‐
1,950		 (1,332)
(41)
3,820
(1,017)
125
(7)
25
‐
1,884
399
3,467
4
‐		 4
‐
4
4
(1,237)
1,142

The notes on pages 24 to 47 form an integral part of these financial statements.

23

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 1 PRINCIPAL ACCOUNTING POLICIES

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 and Republic of Ireland (FRS 102) (effective 1 January 2015) ‐ (Charities SORP (FRS 102)) and the Companies Act 2006. The accounts (financial statements) have been prepared to give a 'true and fair' view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a 'true and fair view'. This departure has involved following Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn. United Reformed Church Trust meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s).

A separate Statement of Financial Activities and Cash Flow Statement have not been presented for United Reformed Church Trust itself because it has made use of the exemptions afforded by Section 408 of the Companies Act 2006.

The presentation currency is pounds sterling and unless otherwise stated, figures are rounded to the nearest thousand (£000).

Going concern

The Trustees have considered possible events and conditions that might cast significant doubt on the ability of the Trust to continue as a going concern. The Trustees have made their assessment for a period of at least one year from the date of approval of these financial statements. In particular the Trustees have considered the Trust’s forecasts and projections and have considered the potential impact of the Covid 19 pandemic on the viability of the Trust. Whilst there has been an impact on Ministry and Mission Fund contributions, steps have been taken to curtail expenditure and this combined with the significant reserves available has led the Trustees to conclude that there is a reasonable expectation that the Trust has adequate resources to continue in operational existence for the foreseeable future. The Trust therefore continues to adopt the going concern basis in preparing its financial statements.

The principal accounting policies, which have been applied consistently throughout the year, are set out below: (i) Scope

The consolidated financial statements show the combined income, expenditure, assets and liabilities of the charitable funds administered by the Trust for the purposes of the United Reformed Church under the overall authority of the General Assembly, and include the total financial operations of Westminster College (“the college”), Westminster College Trading Limited (company registration number 8855396) and of the United Reformed Church Retired Ministers’ Housing Society Limited (“the society”). The college is a registered charity (number 311449), while the society is a separate exempt charity registered under the Co‐operative and Community Benefit Societies Act 2014. Each is accounted for as a separate fund and branch of the Church in accordance with the SORP, and details are also given to reflect their legal status as subsidiary charities.

(ii) Classification of funds

Unrestricted income funds may be spent generally for furthering the religious and charitable work of the Church. Restricted income funds are funds whose use is restricted to specific purposes according to the terms on which the funds were received. However, if the purpose is one that forms part of the Church’s regular expenditure and the income of the funds are fully spent each year, the restriction has no practical effect and funds with such restrictions are treated as unrestricted.

Capital funds (i.e. endowments) include some permanent endowments that are required to be retained but the income from these funds can be spent for the benefit of the Church subject, in certain cases, to specific restrictions contained in the original endowment. Other capital funds (i.e. expendable endowments) may be converted to income at the discretion of the trustees.

The main funds included in these financial statements, and their classification, are shown in notes 18 to 21.

(iii) Income

All incoming resources including voluntary income, income from activities for generating funds, investment income, is recognised in the SOFA when there is legal entitlement to the income, any performance conditions

24

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

attached to the income have been met, it is probable that the income will be received and the amount can be quantified with reasonable accuracy.

a. Donations and legacies

Donations and legacies are accounted for on a receivable basis. In accordance with this policy, legacies are included when advice has been received from the personal representative of an estate that payment will be made or property transferred and the amount can be measured reliably. Gifts in kind are included within income at the value to the charity at the date of the gift. The value of services provided by volunteers has not been included.

b. Grants receivable

Incoming grants are accounted for on a receivable basis. Incoming resources from grants, where there are service or performance deliverables required as conditions of the terms of the grant, are accounted for as the charity earns the right to payment through its performance, when the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably and it is not deferred.

c. Ministry and Mission Fund contributions, investment income and other income

Ministry and Mission Fund contributions, investment income, income from charitable activities and other incoming resources are accounted for on a receivable basis. Contributions to the fund, based on local church pledges, are agreed annually in advance with each Synod; amounts received in excess of, or shortfalls from the agreed contributions, are accounted for in the year.

d. Gains and losses on investments

Realised and unrealised gains and losses on investments are included in the Statement of Financial Activities in the year in which they arise.

(iv) Expenditure

Expenditure is accounted for on an accruals basis and allocated to the appropriate heading in the financial statements. Any irrecoverable VAT is included with the costs to which it relates. Directly attributable costs are allocated to the main charitable activities; details are shown in notes 5 to 8. The support costs, including governance costs, included in note 7 relate to the whole of the charity’s activities and a proportion of these costs is allocated to expenditure headings on a basis that is consistent with the use of the resources. Outgoing grants are accounted for on a payable basis. Grants payable are included in the Statement of Financial Activities when approved and this has been communicated to the applicant. The value of such grants unpaid at the end of the year is accrued.

(v) Taxation

The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.

(vi) Pensions

The Church operates a funded defined benefit pension scheme for ministers and Church Related Community Workers (CRCWs) receiving a stipend, known as The United Reformed Church Ministers’ Pension Fund. The assets of the scheme are managed independently of the Church. Pension costs are assessed in accordance with the advice of an independent qualified actuary.

The Church, together with most synod trusts, also uses The United Reformed Church Final Salary Scheme, a multi‐employer defined benefit scheme operated by TPT Retirement Solutions Trust, an independent pension provider to the not‐for‐profit sector. It provides trustee and asset management services, and pension costs are assessed in accordance with the advice of an independent qualified actuary.

For both schemes, under FRS 102 paragraph 28 – ‘Retirement benefits’ – the amounts charged to expenditure are the current service costs, interest costs and expenses, which are included within charitable expenditure. Actuarial gains and losses are recognised immediately and disclosed in the Statement of Financial Activities.

The assets of the pension schemes are measured at fair value and liabilities are measured on an actuarial basis using the attained age method and discounted at a rate equivalent to the current rate of return on a high‐quality corporate bond of equivalent term to the scheme liabilities. The actuarial valuations are obtained triennially and are updated at each year end. The resulting defined benefit asset or liability is presented separately after other net assets on the Balance Sheet except where the scheme is in surplus and there is no unconditional right to that surplus. In this situation the scheme surplus is recognised at nil value in accordance with FRS102.

25

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

(vii) Intangible and tangible fixed assets

Intangible and tangible fixed assets having an initial cost of £1,000 or less are written off on acquisition. Assets having an initial cost greater than £1,000 are stated at cost when purchased and at valuation when received in specie. Property repairs are normally written off when incurred.

Many properties used as houses for retired ministers are owned jointly with tenants or Synods of the United Reformed Church. The value in the Balance Sheet of such properties is the cost (less any impairment charged) to the charity of the charity’s share in the property.

Properties are maintained in a state of sound repair. The Finance Committee considers whether any impairment is necessary considering the lives of the properties and their residual value. Any material deficit between the anticipated recoverable amount of freehold property and its carrying value shown in the financial statements is recognised in the Statement of Financial Activities. Depreciation is no longer charged on these properties on grounds of materiality. The value of land is not depreciated.

Depreciation is charged as a percentage of cost as follows: Improvements to property with limited life 5 % pa Cars, computers and photocopiers 25 % pa Intangible assets, other furniture and equipment 10 % pa

Other tangible assets in regular use, principally book collections acquired by or donated to Westminster College over the period since its foundation, are not included in the Balance Sheet, since to obtain a reliable valuation is not practicable. Further details are given in note 11.

(viii) Heritage assets

Westminster College owns certain manuscripts and artefacts that are not in regular use, but are held for their historical or artistic qualities. They were largely acquired by the founders and donated to the College at or soon after its foundation. No formal valuations have been obtained for these assets as the cost of obtaining such valuations would outweigh the benefit. As a result these assets are not included on the Balance Sheet.

(ix) Operating leases

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to the Statement of Financial Activities as incurred.

(x) Mixed motive investment properties

Mixed motive investment property comprises the portion of United Reformed Church House that is let on a commercial basis to other charities. It is recognised at fair value and is not depreciated.

(xi) Mixed use investment properties Mixed use investment property comprises the portion of United Reformed Church House that is let on a commercial basis for residential purposes. It is recognised at fair value and is not depreciated.

(xii) Investments

Listed securities are included at market value at the Balance Sheet date. Unlisted securities are stated at cost as there is no readily ascertainable market price.

(xiii) Programme‐related investments

Programme‐related investments comprise investments in entities whose aims are aligned to the charitable objectives of the trust and are shown at cost.

(xiv) Concessionary loans

Loans to advance the Church’s charitable purposes are held within fixed assets and are stated at original cost and subsequently adjusted for any repayments or impairment.

(xv) Financial instruments

The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

(xvi) Critical accounting judgements and estimation

Significant areas of judgement in applying accounting policies are as follows:

26

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 2 VOLUNTARY INCOME

(a)

Synods
Northern
North Western
Mersey
Yorkshire
East Midlands
West Midlands
Eastern
South Western
Wessex
Thames North
Southern
Wales
Scotland		 2020
£’000
2019
£’000
786
769
1,673
1,919
937
986
888
958
1,045
1,143
1,664
1,706
1,930
1,902
1,205
1,354
2,006
2,056
2,049
2,170
2,592
2,624
467
499
666
731
17,908
18,817

(b) Grants Receivable

The Church receives income from a number of trusts. The significant ones are described below.

Congregational Memorial Hall Trust
Council for World Mission
The Cheshunt Foundation
Other grants		 2020
£'000
103
87
61
439
690		 2019
£'000
98
40
60
106
304

Congregational Memorial Hall Trust The United Reformed Church has a 70% interest in distributions from this Trust. In 2010 the trust distributed a share of half of its assets by way of a donation totalling £3,658k of investments. Income from the investments has replaced most of the grant.

Council for World Mission The Council approved grants totalling £238k to be paid over 3 years to be used for the Walking the Way programme. By the end of 2020, £238k of the total had been received and £197k of that had been expensed.

The Cheshunt Foundation The foundation, which is an independent Trust not reporting to the United Reformed Church, supports Westminster College by funding the stipend and expenses of one of the teaching staff.

(c) Donations

Donations
2020 2019
£'000 £'000
Other donations received 197 714

Included above are £95k (2019: £23k) received by Westminster College, and £88k (2019: £538k) received from Synods as a contribution towards the pension fund deficit.

NOTE 3
INCOME FROM CHARITABLE ACTIVITIES
These comprise:
Retired Ministers’ Housing rents
Westminster College ‐ accommodation, conferences, catering and fees
Publication and resource sales
Reform magazine ‐ subscriptions and advertising
Other programmes ‐ fees, grants and sales		 2020
£'000
719
250
123
126
15
1,233		 2019
£'000
718
509
55
122
17
1,421

27

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 4 INVESTMENT INCOME

TE 4
INVESTMENT INCOME
Unitised funds
Interest on short‐term investment and bank deposits
Rental income		 2020
£'000
1,764
16
170
1,950		 2019
£'000
1,726
32
126
1,884

NOTE 5 ANALYSIS OF EXPENDITURE

The amount spent on charitable activities, including support costs, is summarised as follows:

2020
Ministry
Education and Learning
Children’s and Youth work
Mission programmes
Publishing
Other expenditure
2019
Ministry
Education and Learning
Children’s and Youth work
Mission programmes
Publishing
Other expenditure		 Direct
programme
expenditure
£'000
Grant
funding
(note 6)
£'000
Support
costs
(note 7)
£'000
2020
Total
£'000
14,287
706
2,227
17,220
2,253
576
429
3,258
255
4
94
353
657
373
252
1,282
363
‐
48
411
‐
‐
‐
‐
17,815
1,659
3,050
22,524
Direct
programme
expenditure
£'000
Grant
funding
(note 6)
£'000
Support
costs
(note 7)
£'000
2019
Total
£'000
14,842
605
1,931
17,378
2,329
446
367
3,142
237
80
68
385
752
572
213
1,537
123
‐
39
162
‐
‐
‐
‐
18,283
1,703
2,618
22,604

NOTE 6 ANALYSIS OF GRANTS

2020
Pension grants
Welfare and other ministry grants
Student maintenance and training
Local churches ‐ mission and facilities
Chaplaincies
Ecumenical church bodies
Commitment for Life programme
Other programmes		 Grants to
individuals
£’000
Grants to
institutions
£’000
2020
Total
£'000
227
‐
227
382
‐
382
391
170
561
‐
‐
‐
‐
37
37
‐
239
239
‐
184
184
29
‐
29
1,029
630
1,659

28

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2019
Pension grants
Welfare and other ministry grants
Student maintenance and training
Local churches ‐ mission and facilities
Chaplaincies
Ecumenical church bodies
Commitment for Life programme
Other programmes		 Grants to
individuals
£’000
Grants to
institutions
£’000
2019
Total
£'000
‐
305
305
7
254
261
‐
446
446
127
‐
127
40
‐
40
85
‐
85
298
‐
298
141
‐
141
698
1,005
1,703

Major grants to institutions in the year (included above) were:

Organisation
Christian Aid
Council for World Mission
Global Justice Now		 Type
Commitment for Life
Ecumenical
Commitment for Life		 2020
£’000
128
25
8		 2019
£’000
247
55
17

NOTE 7 SUPPORT COSTS

Support costs comprise the premises costs of United Reformed Church House, and the staff and office costs in respect of: Central Secretariat (including Human Resources), Finance, Communications and Information Technology, and governance costs. These costs have been apportioned across the areas of charitable activity on the basis and in the amounts shown below.

Basis of apportionment
Ministry
Education and Learning
Children’s and Youth work
Mission
Publishing		 Premises
costs
£'000
Computer
costs
£'000
Staff and
office costs
£'000
2020
Total
£'000
2019
Total
£'000
Area
Staff
Actual costs
16
23
2,188
2,227
1,931
14
22
393
429
367
17
32
45
94
68
20
44
188
252
213
14
17
17
48
39
81
138
2,831
3,050
2,618

NOTE 8 GOVERNANCE COSTS

Governance costs are included in support costs and total £191k (2019: £242k). This figure includes the remuneration of the auditors, amounting to £68k (2019: £38k) of which £36k relates to the audit of the Trust which includes an under accrual of £8k and the balance of £29k relates to the audits of subsidiary charities. Other services provided by the auditors amounts to £3k. The main difference from the previous year’s was that General Assembly was held online rather in person, making for substantial cost savings.

NOTE 9 NOTIFIED LEGACIES

The Trust had not been notified of any legacies (2019: one) that had been received but not included in the financial statements because the conditions for recognition have not yet been met. The value of the 2019 legacy was £20k.

29

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 10 STIPEND AND SALARY COSTS

During the year the following stipend and salary costs were incurred:

During the year the following stipend and salary costs were incurred:
Ministers and CRCWs : 392 (2019: 389)
Gross stipends
Social security costs
Other pension costs
All stipend costs above are included within the costs of Ministry
Lay staff : 106 (2019: 109)
Gross salaries
Social security costs
Other pension costs
Redundancy costs
Salary costs have been apportioned as follows:
Ministry
Education and Learning
Children's and Youth work
Mission programmes
Publishing		 2020
£'000
2019
£'000
10,255
10,085
957
950
2,747
2,710
13,959
13,745
2,663
2,712
251
254
862
877
19
12
3,795
3,855
1,520
1,156
1,279
1,515
241
270
532
513
223
401
3,795
3,855

The minister and staff numbers shown represent the average for the year. They include staff working at Church House in London and Westminster College in Cambridge.

One employee received emoluments, excluding employer pension contributions, of between £60k and £70k during 2020. There was one employee whose emoluments, excluding employer pension contributions, exceeded £60k during 2019.

Key management personnel are the General Secretary and three Deputy General Secretaries; of these four two are ministers and two are lay staff. The total of employee benefits paid to key management personnel in 2020 was £236k (2019: £244k).

In addition, a great amount of time, the value of which it is impossible to reflect in these financial statements, is donated by thousands of volunteers throughout the United Kingdom.

Individuals acting in a trustee capacity for the various United Reformed Church trusts received no remuneration in respect of their services as trustee, other than the reimbursement of travel expenses to 13 individuals during the year ended 31 December 2020 totalling £1,236 (2019: 14 individuals totalling £3,627).

30

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 11 TANGIBLE & INTAGIBLE FIXED ASSETS

(a)Consolidated:
Cost
At 1 January 2020
Additions
Disposals
At 31 December 2020
Accumulated depreciation
and impairment
At 1 January 2020
Charge for year
Disposals
Re‐classification
At 31 December 2020
Net book value
At 31 December 2020
At 31 December 2019		 Houses for
retired
ministers
£'000
Houses for
serving
ministers
£'000
Other
properties
£'000
Cars and
equipment
£'000
Total
Tangible Fixed
assets
£'000
Computer
Software
£’000		 Houses for
retired
ministers
£'000
Houses for
serving
ministers
£'000
Other
properties
£'000
Cars and
equipment
£'000
Total
Tangible Fixed
assets
£'000
Computer
Software
£’000
39,077
5,077
9,232
1,345
54,731
1,776
803
21
48
2,648
(462)
(307)
‐
‐
(769)		 90
43
‐
40,391
5,573
9,253
1,393
56,610
133
423
56
817
947
2,243
‐
‐
139
108
247
(11)
‐
‐
‐
(11)
‐
(5)
5
‐
‐		 25
12
‐
‐
412
51
961
1,055
2,479
37
39,979
5,522
8,292
338
54,131
96
38,654
5,021
8,415
398
52,488
65

Of the land and buildings included above, £5,433k (2019: £4,667k) are leasehold. At 31 December 2020 300 (2019: 312) houses were owned for housing retired ministers and 16 (2019: 17) houses for serving ministers. Although the total market value of all properties is not practicable to quantify, it is considerably in excess of the carrying value shown above.

Other properties include premises improvements at United Reformed Church House and the Yardley Hastings Centre, and building improvement costs capitalised at Westminster College. At the Yardley Hastings property, which has a carrying value of £628k, the local church continues to use part of the premises and the remainder is leased to a local charity under a long‐term lease.

With the exception of certain improvements and additions, including the costs of the major refurbishment in 2013‐14, the buildings of Westminster College are not included in the Balance Sheet since the use of the College was originally a gift to the Church, the value of which cannot readily be ascertained without excessive cost. In addition, there is a covenant in perpetuity restricting the Church’s ability to use the College for purposes wider than that of a theological college; hence an open market value cannot be applied.

The College also owns certain tangible assets, which have been acquired or donated to it over the years since its foundation, not included in the Balance Sheet. These include the Academic Library and other book collections with an insurance valuation in excess of £1million, historic furniture and works of art. All book collections are in regular use, either for theological study and reference or for historical research. Other items are in use or on display as appropriate.

31

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

(b) Trust:
Cost
At 1 January 2020
Additions
Disposals
At 31 December 2020
Accumulated depreciation and
impairment
At 1 January 2020
Charge for year
Disposals
At 31 December 2020
Net book value
At 31 December 2020
At 31 December 2019		 Houses for
retired
ministers
£'000
Houses for
serving
ministers
£'000
Other
properties
£'000
Cars and
equipment
£'000
Total
Tangible
fixed assets
£'000
Computer
software
£’000		 Houses for
retired
ministers
£'000
Houses for
serving
ministers
£'000
Other
properties
£'000
Cars and
equipment
£'000
Total
Tangible
fixed assets
£'000
Computer
software
£’000
421
5,077
2,835
489
8,822
‐
803
‐
18
821
‐
(307)
‐
‐
(307)		 50
44
‐
421
5,573
2,835
507
9,336
94
25
56
138
392
611
‐
‐
26
31
57
‐
‐
‐
‐
‐		 ‐
6
‐
25
56
164
423
668
6
396
5,517
2,671
84
8,668
88
396
5,021
2,697
97
8,211
50

(c) Heritage Assets

Westminster College owns certain manuscripts and artefacts that are not in regular use, but held for their historical qualities. Most derive from the collections of the founding sisters, Agnes Lewis and Margaret Gibson, and were donated by them to the College during their lifetime. Some are displayed and others stored. In recent years some items of significant value, but not relevant to the heritage of the church traditions represented in the United Reformed Church nor to the present objectives of the College, were sold in order to raise funds for College development. The College also holds the archives, manuscripts and historic books of the United Reformed Church History Society (which is a separate charity) on behalf of the United Reformed Church. Indicative valuations have been obtained for some items held, but are not considered sufficiently robust to be reported here.

NOTE 12 MIXED MOTIVE INVESTMENT PROPERTY

Fixed asset investments
Carrying value at beginning of year
Additions
Net gains/(losses) on revaluation
Carrying value at end of year		 Consolidated
Trust
2020
£'000
2019
£'000
2020
£'000
2019
£'000
2,000
1,905
2,000
1,905
‐
43
‐
43
222
52
222
52
2,222
2,000
2,222
2,000

32

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Mixed motive investment property consists of the second floor of URC Church House which is rented out on a commercial let to another charity. The property was formally valued by Allsop LLP on 6 November 2017. The value of the mixed motive investment property at 31 December 2020 was calculated using rental yields.

NOTE 12a MIXED USE INVESTMENT PROPERTY

Fixed asset investments
Carrying value at beginning of year
Additions
Transfer from fixed assets at NBV*
Net gains/(losses) on revaluation
Carrying value at end of year		 Consolidated
Trust
2020
£'000
2019
£'000
2020
£'000
2019
£'000
‐
‐
695
38
695
38
‐
200
‐
200
161
457
161
457
856
695
856
695

Mixed use investment property consists of the third floor of URC Church House which is rented out on a commercial let for residential purposes. The property was formally valued by Allsop LLP on 6 November 2017. The value of the mixed use investment property at 31 December 2020 was calculated using rental yields.

NOTE 13 INVESTMENTS

Fixed asset investments
Carrying value at beginning of year
Additions to investments at cost
Sales proceeds
Net gains/(losses) on revaluation
Carrying value at end of year
Investments comprise units in UK based Common
Investment Funds at market value, as follows:
COIF Charities Ethical Investment Fund
COIF Charities Property Fund
Investments at book cost		 Consolidated
Trust
2020
£'000
2019
£'000
2020
£'000
2019
£'000
53,085
44,381
51,484
43,037
‐
935
‐
935
‐
(125)
‐
(125)
3,198
7,884
3,108
7,637
56,283
53,075
54,593
51,484
Consolidated
Trust
2020
£'000
2019
£'000
2020
£'000
2019
£'000
55,197
51,931
53,507
50,340
1,086
1,144
10,86
1,144
56,283
53,075
54,593
51,484
34,880
34,880
33,859
33,859

The trustees believe that the carrying value of the investments is supported by their underlying net assets. Included within investments held in the COIF Charities Ethical Investment Fund is £4,971k held to meet the ‘other pension obligation’ as set out in note 23.

Financial assets measured at fair value are £56,283k.

33

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 14 PROGRAMME‐RELATED INVESTMENTS

Programme‐related investments are investments made in pursuit of the Trust’s charitable purposes, the primary motivation for which is not financial but to further our objectives and programme. The principal programme‐ related investment is £200k as a Founder Member of Luther King House Educational Trust, which owns the property that houses our resource centre for learning at Northern College. Smaller investments are held in Oikocredit, the Churches’ Mutual Credit Union and Traidcraft plc. These smaller investments held as social investments and are held at cost and not revalued.

NOTE 15 CONCESSIONARY LOANS

External loans comprise:
To ministers
To Churches
Inter‐fund concessionary loans		 Consolidated
Trust
2020
£'000
2019
£'000
2020
£'000
2019
£'000
71
58
71
58
84
84
84
84
‐
‐
6,516
7,770
155
142
6,671
7,912

Loans to ministers are generally interest free and repayable over 3 to 5 years. Movement on the loan balances was as follows:

Balance at 1 January
Repaid in the year
Advanced in the year
Balance at 31 December		 Consolidated
Trust
2020
£'000
2019
£'000
2020
£'000
2019
£'000
58
76
58
76
(21)
(25)
(21)
(25)
34
7
34
7
71
58
71
58

Loans to churches comprises a long term loan to the Synod of Wales in respect of the Glamorgan Chaplaincy. The loan is interest free and is repayable if the chaplaincy is wound up.

Inter‐fund concessionary loans represent the long‐term indebtedness of the United Reformed Church Retired Ministers’ Housing Society Limited to other funds of the Church. Loans have been made available for the purchase of properties, for as long as they are required, to enable the Society to fulfil its objectives.

NOTE 16 DEBTORS

Debtors comprise:
Amounts owed by group undertakings
Tax recoverable
Other debtors
Prepayments and accrued income
Financial assets measured at amortised cost		 Consolidated
Trust
2020
£'000
2019
£'000
2020
£'000
2019
£'000
‐
‐
439
215
2
1
2
1
2,460
2,056
2,433
2,029
849
1,186
733
694
3,311
3,243
3,607
2,939
2,460
2,072
2,872
2,244

34

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 17 CREDITORS: amounts falling due within one year

Current liabilities comprise:
Amounts owed to group undertakings
Sums held for Synods and congregations
Other creditors including taxation and social security
Accruals
Deferred income
Financial liabilities measured at amortised cost		 Consolidated
Trust
2020
£'000
2019
£'000
2020
£'000
2019
£'000
‐
‐
1,673
3,441
90
213
38
3
945
601
859
614
148
498
92
371
115
238
39
96
1,298
1,550
2,701
4,525
1,093
1,097
2,624
4,426

Included within Other creditors are amounts totalling £52k which are held in trust on behalf of other organisations.

Movements in deferred income
Balance at 1 January
Received in the year
Refunded during the year
Transferred to income
Balance at 31 December		 Consolidated
Trust
2020
£'000
2019
£'000
2020
£'000
2019
£'000
238
115
97
‐
102
427
39
97
(10)
‐
‐
‐
(215)
(304)
(97)
‐
115
238
39
97

NOTE 18 UNRESTRICTED FUNDS

The Ministry and Mission Fund is the general fund of the Church through which the bulk of our income and expenditure, covered by the annual budget agreed by the Trustees and presented to Mission Council, is passed. Associated with it are two capital funds, Maintenance of the Ministry and Ministerial Training, the whole of whose income each year is transferred to the Ministry and Mission Fund, which is responsible for meeting ministry and training costs.

These funds include £23.8million held as capital, most having been gifted by other trusts. These funds are invested and the income is used as intended; in the case of £17.6million the capital is expendable by decision of the Trustees.

35

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 19 SUMMARY OF FUND MOVEMENTS

2020 Fund Movements

UNRESTRICTED FUNDS
Ministry and Mission Fund
Maintenance of the Ministry
Fund
Ministerial Training Fund
Consolidated & Trust
DESIGNATED FUNDS
Legacy Fund
Discipleship Development
Fund
Consolidated & Trust
RESTRICTED FUNDS
Church Buildings Fund
Retired Ministers' Housing
Fund
Welfare Fund
Retired Ministers' Funds
Commitment For Life Fund
Other Funds
Total Trust Funds
Westminster College Funds
Retired Ministers' Housing
Society
Total Consolidated Funds
CAPITAL FUNDS
Ministry and Mission Fund
Maintenance of the Ministry
Fund
Ministerial Training Fund
Church Buildings Funds
Retired Ministers' Housing
Funds
Welfare Funds
Retired Ministers' Funds
Other Funds
Total Trust Funds
Westminster College Funds
Total Consolidated Funds		 Funds at 1
Jan 2020
Incoming
resources
Resources
expended
Transfers
between
funds
Gains/
(Losses) on
investment
assets
Actuarial
(losses)/
gains
Funds at
31 Dec 20
£’000s
£’000s
£’000s
£’000s
£’000s
£’000s
£’000s
20,111
19,245
(20,164)
495
1,103
(10,966)
9,824
‐
63
‐
(63)
‐
‐
‐
‐
495
(50)
(445)
‐
‐
‐
20,111
19,803
(20,214)
(13)
1,103
(10,966)
9,824
693
42
(19)
‐
‐
‐
716
871
26
‐
‐
51
‐
948
1,564
68
(19)
‐
51
‐
1,664
4,275
143
(53)
‐
266
‐
4,631
5,393
14
(20)
‐
‐
‐
5,387
7
49
(66)
11
‐
‐
1
1,019
123
(185)
‐
212
‐
1,169
47
302
(206)
‐
‐
‐
143
4,551
368
(162)
2
260
792
5,811
15,292
999
(692)
13
738
792
17,142
6,698
949
(1,269)
‐
50
‐
6,428
34,040
1,431
(729)
‐
‐
‐
34,742
56,030
3,379
(2,690)
13
788
792
58,312
8,104
‐
‐
‐
372
‐
8,476
1,045
‐
‐
‐
81
‐
1,126
13,427
‐
‐
‐
812
‐
14,239
184
‐
‐
‐
‐
‐
184
391
‐
‐
‐
‐
‐
391
912
‐
‐
‐
57
‐
969
654
‐
‐
‐
21
‐
675
3,757
4
‐
‐
255
‐
4,016
28,474
4
‐
‐
1,598
‐
30,076
1,114
‐
‐
‐
50
‐
1,164
29,588
4
‐
‐
1,648
‐
31,240

Transfers between funds generally represents use of restricted funds to cover items of expenditure in the general funds that fall within the objects of the specific restricted fund.

36

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2019 Fund Movements

UNRESTRICTED FUNDS
Ministry and Mission Fund
Maintenance of the Ministry
Fund
Ministerial Training Fund
Consolidated & Trust
DESIGNATED FUNDS
Legacy Fund
Discipleship Development
Fund
Consolidated & Trust
RESTRICTED FUNDS
Church Buildings Fund
Retired Ministers' Housing
Fund
Welfare Fund
Retired Ministers' Funds
Commitment For Life Fund
Other Funds
Total Trust Funds
Westminster College Funds
Retired Ministers' Housing
Society
Total Consolidated Funds
CAPITAL FUNDS
Ministry and Mission Fund
Maintenance of the Ministry
Fund
Ministerial Training Fund
Church Buildings Funds
Retired Ministers' Housing
Funds
Welfare Funds
Retired Ministers' Funds
Other Funds
Total Trust Funds
Westminster College Funds
Total Consolidated Funds		 Funds at 1
Jan 2019
Incoming
resources
Resources
expended
Transfers
between
funds
Gains/
(Losses) on
investment
assets
Actuarial
gains
Funds at
31 Dec 19
£’000s
£’000s
£’000s
£’000s
£’000s
£’000s
£’000s
15,519
20,984
(19,329)
323
2,282
332
20,111
‐
41
‐
(41)
‐
‐
‐
‐
458
‐
(458)
‐
‐
‐
15,519
21,483
(19,329)
(176)
2,282
332
20,111
729
‐
(57)
21
‐
‐
693
850
13
(1)
‐
9
‐
871
1,579
13
(58)
21
9
‐
1,564
3,572
139
(83)
‐
647
‐
4,275
4,894
647
(28)
(120)
‐
‐
5,393
6
48
(59)
12
‐
‐
7
376
256
(251)
‐
638
‐
1,019
34
330
(317)
‐
‐
‐
47
3,872
377
(90)
(135)
527
‐
4,551
12,754
1,797
(828)
(243)
1,812
‐
15,292
6,836
1,429
(2,089)
398
124
‐
6,698
32,708
2,283
(951)
‐
‐
‐
34,040
52,298
5,509
(3,868)
155
1,936
‐
56,030
6,965
‐
‐
‐
1,139
‐
8,104
883
‐
‐
‐
162
‐
1,045
11,507
‐
‐
‐
1,920
‐
13,427
184
‐
‐
‐
‐
‐
184
391
‐
‐
‐
‐
‐
391
771
‐
‐
‐
141
‐
912
552
‐
‐
‐
102
‐
654
3,175
4
‐
‐
578
‐
3,757
24,428
4
‐
‐
4,042
‐
28,474
992
‐
‐
‐
122
‐
1,114
25,420
4
‐
‐
4,164
‐
29,588

37

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 20 ANALYSIS OF CONSOLIDATED NET ASSETS BETWEEN FUNDS

2020 Analysis

ANALYSIS OF ASSETS BETWEEN FUNDS – CONSOLIDATED

Intangible assets
Property
Cars and equipment
Investments
Investment properties
External loans
Inter fund loans
Net current assets
Pension reserve
Inter fund balances
Net assets		 Unrestricted
Funds
Designated
Funds
Restricted
Funds
Capital
Funds
Total
2020
£’000s
£’000s
£’000s
£’000s
£’000s
87
‐
9
‐
96
6,891
‐
45,605
1,297
53,793
84
‐
254
‐
338
12,026
860
13,568
30,071
56,525
3,079
‐
‐
‐
3,079
71
‐
84
‐
155
1,090
‐
(1,090)
‐
‐
8,300
(69)
2,053
‐
10,284
(20,872)
‐
(2,358)
‐
(23,230)
(932)
873
187
(128)
‐
9,824
1,664
58,312
31,240
101,040

ANALYSIS OF ASSETS BETWEEN FUNDS – TRUST

Intangible assets
Property
Cars and equipment
Investments
Investment properties
External loans
Net current assets
Pension reserve
Inter fund balances
Net assets		 Unrestricted
Funds
Designated
Funds
Restricted
Funds
Capital
Funds
Total
2020
£’000
£’000s
£’000
£’000
£’000
88
‐
‐
‐
88
6,891
‐
396
1,297
8,584
84
‐
‐
‐
84
12,025
860
11,879
30,071
54,835
3,078
‐
‐
‐
3,078
1,161
‐
5,510
‐
6,671
8,739
(69)
(76)
‐
8,594
(20,872)
‐
(2,358)
‐
(23,230)
(1,370)
873
1,789
(1,292)
‐
9,824
1,664
17,140
30,076
58,704

2019 Analysis

ANALYSIS OF ASSETS BETWEEN FUNDS – CONSOLIDATED

Intangible assets
Property
Cars and equipment
Investments
Investment properties
External loans
Inter fund loans
Net current assets
Pension reserve
Inter fund balances
Net assets		 Unrestricted
Funds
Designated
Funds
Restricted
Funds
Capital
Funds
Total
2019
£’000s
£’000s
£’000s
£’000s
£’000s
50
‐
15
‐
65
6,652
‐
44,141
1,297
52,090
97
‐
301
‐
398
11,703
809
12,534
28,271
53,317
2,695
‐
‐
‐
2,695
58
‐
84
‐
142
2,340
‐
(2,340)
‐
‐
10,813
(124)
513
‐
11,202
(9,466)
‐
(3,150)
‐
(12,616)
(4,831)
879
3,933
19
‐
20,111
1,564
56,031
29,587
107,293

38

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

ANALYSIS OF ASSETS BETWEEN FUNDS – TRUST

Intangible assets
Property
Cars and equipment
Investments
Investment properties
External loans
Inter fund loans
Net current assets
Pension reserve
Inter fund balances
Net assets		 Unrestricted
Funds
Designated
Funds
Restricted
Funds
Capital
Funds
Total
2019
£’000
£’000s
£’000
£’000
£’000
50
‐
‐
‐
50
6,652
‐
488
974
8,114
97
‐
‐
‐
97
11,704
809
11,732
27,480
51,725
2,695
‐
‐
‐
2,695
58
‐
84
‐
142
2,340
‐
5,432
‐
7,772
10,811
(125)
‐
‐
10,686
(9,466)
‐
(3,150)
‐
(12,616)
(4,830)
880
706
20
(3,224)
20,111
1,564
15,292
28,474
65,441

NOTE 21 RESTRICTED FUNDS

(a) Westminster College funds

This group of funds are the charity funds of Westminster College. In addition to the College general fund that deals with income and expenditure from its main academic activities, there are library funds, scholarship funds, its Development Appeal fund and other funds available for use in connection with the development of the College. Regular support from the Church is shown by way of transfer from the Ministry and Mission Fund.

(b) Church Buildings Fund

This fund may be used in the upkeep and repair of the buildings of the local churches of the United Reformed Church and the maintenance of the services therein; in the improvement and extension of the buildings of such churches; and in the provision and erection of buildings for use for the purposes of such churches or as residences for ministers of the United Reformed Church. Both grants and loans are available for these purposes; notes 6 and 15 give some details.

(c) Retired Ministers’ Housing Funds and Retired Ministers’ Housing Society

The whole of these funds is utilised by the RMHS Board in providing accommodation for ministers and ministers’ widow/ers or civil partners in their retirement. Income in 2020 included £9k from donations and £321k from legacies. Most of the remaining income arises from the profit on the sale of houses, the proceeds of which were largely re‐invested in further house purchases. The indebtedness of the Society to the other funds of the Church is included in the Trust Balance Sheet and notes 15 to 17 as inter‐fund loans and balances; note 25 gives information on its future commitments.

(d) Welfare Fund

This fund can be used to relieve cases of need among ministers of the United Reformed Church, their spouses and other dependants. Regular uses have been to provide a grant on the death of a minister to the surviving spouse, to provide a grant at Christmas to widow/ers of United Reformed Church ministers, counselling costs and assistance with medical costs. Surplus income of certain other funds is transferred to this fund.

(e) Retired Ministers’ Fund and Retired Ministers’ Aid Fund

These funds are used to supplement the pensions paid to ministers and ministers' widow/ers, principally by upgrading the pensions of former ministers of the Congregational Church and the Churches of Christ and the widow/ers of such ministers to a level of 95% of the pension that would have been paid if the minister's service had been to the former Presbyterian Church, and also to pay certain ill‐health early retirement pensions. The balances shown for these funds are after deducting the actuarially assessed cost of the Church’s constructive obligation to continue making these payments, totalling £2,358k.

(f) Commitment for Life Fund

This programme involves substantial sums of money being collected through the Church and Society office, and disbursed for Christian Aid programmes and other purposes. The balance held at the year end represents sums received, which had not yet been allocated.

39

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

(g) Other funds

There are some fifty other funds in the care of United Reformed Church Trust, covering many different activities relating to the Church centrally, and some to the wider parts of the United Reformed Church. Most of their income is earned from investments, and expenditure is in accordance with their various specific purposes.

NOTE 22 PENSION OBLIGATIONS

The United Reformed Church has obligations for two pension funds: United Reformed Church Ministers’ Pension Fund (MPF), and the United Reformed Church Final Salary Scheme (FSS). The actuarial gains and/or losses and the liabilities for each scheme were:

MPF
2020
2019
£’000
£’000
Recognised actuarial
gains/(losses)
(10,966)
820
Net scheme
assets/(liabilities)
(20,801)
(9,381)		 FSS
2020
2019
£’000
£’000
‐
(488)
(71)
(85)		 Total
2020
2019
£’000
£’000
(10,966)
332
(20,872)
(6,615)

Net scheme assets are not recognised in the balance sheet. The details of each scheme are set out in notes 23 and 24 below.

NOTE 23 THE UNITED REFORMED CHURCH MINISTERS' PENSION FUND

Pensions for most ministers are provided by The United Reformed Church Ministers' Pension Fund. The Fund is a defined benefit pension scheme and the assets are invested and managed by an independent trustee.

Triennial actuarial valuations of the pension scheme are performed by a qualified actuary. The actuarial valuation at 1 January 2018 was formally agreed on 11 December 2018. For the purpose of these financial statements, the actuary has updated that valuation at 31 December 2020 using assumptions that are consistent with the requirements of FRS102. Compared with a year ago, this update has increased the present value of scheme liabilities by 17.1% while asset values have increased by 10.9%. This has resulted in an increase of £11.42million in the scheme’s deficit and hence in the level of the pension reserve.

a) Contributions:

The defined benefit scheme is funded and is not contracted‐out of the state scheme. Contributions in 2020 totalled 21.95% of pensionable pay, together with a fixed annual amount of deficit funding, in 2020 £580k (2019: £565k), increasing in line with stipends. A further additional lump sum of £1.5m was paid into the pension fund during 2019. Members’ contributions are 7.5% of pensionable pay. Church contributions totalled £2,073k in 2020 (2019: £4,252k). Following the latest valuation, contributions from January 2020 total 21.95% of pensionable pay, together with annual deficit funding of £580k, increasing in line with stipends.

The major assumptions used by the actuary in assessing scheme liabilities on a FRS102 basis were:

2020 2019
Discount rate at year end 1.40% 2.00%
Expected return on plan assets at year end n/a n/a
Future stipend increases 2.20% 2.15%
Future pension increases (RPI up to 5%) 2.90% 2.95%
Future deferred pension revaluation (CPI) 2.20% 2.15%
Life expectancy of male pensioners (age 65) 24.0 22.5
Life expectancy at female pensioners (age 65) 25.5 23.5

40

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

b) The amounts recognised in the Balance Sheet are as follows:

2020 2019
Value at 31 Dec Value at 31 Dec
£'000 £'000
Present value of obligations (194,227) (165,807)
Fair value of plan assets 173,426 156,426
Net (liability) (20,801) (9,381)
c) The charge to the Statement of Financial Activities for the year comprised:
2020 2019
Charitable activities £'000 £’000
Current service cost 2,633 2,182
Administrative expenses 327 340
Financing cost:
Interest on net defined liability 191 305
Total operating charge 3,151 2,827
Actuarial gains/(losses) on pension schemes)
Asset gains arising during the year (17,522) (13,361)
Liability losses/(gains) arising during the year 28,488 12,541
10,966 (820)
Total loss/(gain) recognised in the Statements of Financial Activities
14,117 2,007
d) Change in defined benefit obligation:
2020 2019
£'000 £’000
Opening defined benefit obligation 165,807 152,689
Service cost (incl. employee contributions) 3,575 3,131
Interest expense on DBO 3,283 4,371
Actuarial (gains)/losses on liabilities 28,488 12,541
Benefits paid (6,926) (6,925)
Closing defined benefit obligation 194,227 165,807
e) Change in fair value of plan assets:
2020 2019
£’000 £’000
Opening fair value of plan assets 156,426 141,063
Interest income on assets 3,092 4,066
Actuarial gains (losses) 17,522 13,361
Contributions by employer 2,697 4,252
Contributions by employees 942 949
Administrative expenses (327) (340)
Benefits paid (6,926) (6,925)
Closing fair value of plan assets 173,426 156,426

f) Future employer contributions:

The Church expects to contribute about £2,100,000 to the plan during the next accounting year.

41

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

g) Breakdown of plan assets:

The major categories of plan assets as a percentage of total plan assets are as follows:

2020 2019
Asset allocation Asset allocation
% %
Equities 39 37
Property 7 9
Bonds 54 53
Cash/other 0 1

h) Five year comparison

The amounts for the current and previous four years are as follows:

Defined benefit obligation
Plan assets
Surplus/(deficit)		 2020
2019
2018
2017
2016
£’000
£’000
£’000
£’000
£’000
(194,227)
165,807
152,689
167,115
161,763
173,426
156,426
141,063
140,023
133,477
(20,801)
(9,381)
(11,626)
(27,092)
(28,286)

Other pension obligations

SORP 2015 requires that constructive obligations, although not legally binding, be recognised on a charity’s balance sheet. United Reformed Church Trust considers that it has a long‐term constructive obligation in respect of:

a) the pension supplements it pays to former ministers of the Congregational Church and the Churches of Christ and the widow/ers of those ministers, in order to bring their pension to a level of 95% of the pension that would have been paid if the minister’s service had been to the former Presbyterian Church. An independent actuarial assessment of the net present value of these future payments was obtained at the time of the formal actuarial review as at 31 December 2017, using comparable assumptions as for FRS 17 calculations; this value (£2,358k) has been deducted from the total of restricted Fund included in the Balance Sheet. Included within restricted fund investments is £4,657k held to meet this obligation, and;

b) other pension grants, principally for ill‐health early retirement until 2004.

NOTE 24 THE UNITED REFORMED CHURCH FINAL SALARY SCHEME

a) The United Reformed Church contributes to a staff pension scheme known as the "Final Salary” scheme; this too is a defined benefit scheme, which is administered by TPT Retirement Solutions (formerly The Pensions Trust). The United Reformed Church is the principal employer in the scheme, and eleven synods and Northern College are participating employers. There is no agreement to charge the net defined benefit cost to participating employers, who are therefore unable to identify their share of the underlying assets and liabilities – each employer pays a common contribution rate. The information below is provided by the principal employer in respect of the whole scheme as required by FRS102.

Triennial actuarial valuations of the whole Final Salary scheme are performed by a qualified independent actuary. The most recent formal actuarial review of the scheme was at 30 September 2019, when the scheme had a surplus of £2,689k. For the purpose of these financial statements, the actuary has updated that valuation at 31 December 2020 using assumptions that are consistent with the requirements of FRS102.

i) Contributions:

During 2020 the United Reformed Church contributed 22.8% (2019: 28.2%) of basic salary in respect of members of the scheme. The 2019 figure included 3.0% as deficit funding and 3.2% to meet expenses and levies with will be payable as a separate lump sum in 2020. Members contributed at the rate of 7.5% (2019: 7.5%) of pensionable salary throughout the accounting period.

42

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

The major assumptions used by the actuary in assessing scheme liabilities on a FRS102 basis were:

2020 2019 2018
Discount rate at year end 1.40% 2.00% 2.75%
Inflation (RPI) 2.95% 3.05% 3.25%
Inflation (CPI) 2.55% 2.05% 2.25%
Future salary increases 2.50% for 3 years 2.50% for 3 years 2.50% for 3 years
and 2.75% and 2.75% and 2.75%
thereafter thereafter thereafter
Future deferred pension revaluation (CPI) 2.50% 2.50% 2.50%
Life expectancy in years of males retiring in 2020 (age 65) 21.2 21.3 21.5
Life expectancy in years of females retiring in 2020 (age 65) 23.4 23.0 23.2
Life expectancy in years of males retiring in 2040 (age 65) 22.6 22.7 22.9
Life expectancy in years of females retiring in 2040 (age 65) 24.5 24.3 24.5

ii) The amounts recognised at 31 December in the Balance Sheet are as follows:

Present value of obligations
Fair value of plan assets
Adjustment to reflect asset limit
Pension asset/(liability)		 2020
2019
2018
£'000
£'000
£'000
(37,495)
(31,450)
(27,808)
41,820
34,301
28,297
(4,325)
(2,851)
‐
‐
‐
489

iii) The charge to the Statement of Financial Activities for the year comprised:

Charitable activities
Current service cost
Administrative expenses
Net interest (credit)/cost:
Total operating charge
Actuarial gains/(losses) on pension schemes
Asset gains/(losses) arising during the year
Liability gains/(losses) arising during the year
Effect of asset limit
iv)
Change in defined benefit obligation:
Opening defined benefit obligation
Current service cost (inc. contributions by plan participants)
Interest expense on DBO
Actuarial losses/(gains) on liabilities
Benefits paid and death in service premiums
Closing defined benefit obligation		 2020
£'000
1,125
121
59
1,305
7,519
(6,045)
4,325
5,799
2020
£'000
31,450
1,162
633
5,022
(772)
37,495		 2019
£’000
1,266
129
(30)
1,365
5,061
(2698)
2,851
5,214
2019
£’000
27,808
1,295
750
2,698
(1,101)
31,450

43

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

v) Change in fair value of plan assets:

Opening fair value of plan assets
Interest income on assets
Expenses
Actuarial gains (losses)
Contributions by employers
Contributions by plan participants
Benefits paid
Closing fair value of plan assets		 2020
£’000
34,301
692
(121)
6,226
1,457
37
(772)
41,820		 2019
£’000
28,297
780
(129)
5,061
1,364
29
(1,101)
34,301

vi) Future employer contributions:

Employers expect to contribute about £1,259,000 to the plan during the next accounting year.

vii) Breakdown of plan assets:

The major categories of plan assets are as follows:

e major categories of plan assets are as follows:
Equity‐Type assets
Fixed Interest Bonds
Index‐Linked bonds
Fixed Interest Gilts
Property
Other
Total assets		 2020
£’000
2019
£’000
2018
£’000
21,917
13,916
14,383
5,205
2,635
3,460
11,052
7,701
8,680
1,661
3,831
8
1,464
1,485
1,543
521
4,733
223
41,820
34,301
28,297

b) Certain members of the Final Salary scheme have also made additional voluntary contributions to the ‘Growth Plan’, a multi‐employer funded pension plan operated by TPT Retirement Solutions. Certain past contributions to this plan entitle the members to either a defined pension or a guaranteed capital sum to be converted into an annuity at retirement. The Church does not normally make contributions to the Growth Plan, but from 1 April 2013 has been required to do so as a result of an actuarial deficit. The most recent formal actuarial valuation of the Growth Plan, as at 30 September 2017, revealed a deficit of £131.5m, equivalent to a funding level of 85.8%. Its latest recovery plan includes a requirement for contributions from the Church over a period of 5.5 years from 1 April 2019, including £17k in 2020. The Church now recognises a liability for the net present value of these future contributions, amounting to £71k at the balance sheet date (2019: £85k). The present value is calculated using a discount rate of 0.27% (2019: 1.13%), and the charge to the Statement of Financial Activities of £2k (2019: £48k) represents the finance cost of unwinding the discount rate and the effect of any changes in actuarial assumptions.

In addition, in the event of no members continuing to contribute to the Growth Plan, there is a contingent obligation of an employer debt on withdrawal in respect of certain liabilities incurred before March 2010. TPT Retirement Solutions estimated the Church’s contingent obligation at £271k as at 30 September 2014, but there is not currently any expectation that this situation will arise.

NOTE 25 COMMITMENTS

At 31 December 2020 there were no commitments in respect of the purchase of properties (2019: £nil), and contractual liabilities of £nil (2019: £nil). £51k (2019: £153k) was committed as grants payable from the Legacy Fund.

The Church is committed, through the United Reformed Church Retired Ministers’ Housing Society Limited and other earmarked funds, to providing housing for retired ministers. Owing to the many unknown variables which would be involved in calculating the value of this long‐term liability, no provision is included in the Balance Sheet.

These variables include the number of ministers requiring assistance from the Society and the level of contributions able to be made by individual ministers towards the cost of their homes. During 2020 £1,779k was spent on acquiring housing for retired ministers, £345k on repairing and maintaining existing properties and profits of £378k

44

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

were earned from the sale of homes no longer required. Exercises have been undertaken periodically by the Society’s management committee to collect information to assist more accurate long‐term planning; these have confirmed a continuing need for assistance in the short to medium term. Future cash flow is kept under continuous review, and recent years have seen the Society become cash flow positive. This trend is expected to continue for the medium to long term.

The Trust entered into a legal Guarantee on 21 July 2010, under which it guarantees future contributions by the Church to the United Reformed Church Ministers’ Pension Fund, as set out in the Schedule of Contributions in force from time to time up to an aggregate maximum amount of £16 million, using assets available for this purpose.

NOTE 26 CASH FLOW INFORMATION

Reconciliation of net cash flow to movement in net cash funds

Increase/(Decrease) in cash in the period
Net cash funds at 1 January
Net cash funds at 31 December		 2020
£'000
2019
£'000
(1,237)
1,142
9,482
8,340
8,245
9,482

Net cash funds are represented by bank balances and money on call, as shown on the Consolidated Balance Sheet. Of the total, £7,661k is shown on the Trust Balance Sheet.

NOTE 27 RELATED PARTY TRANSACTIONS

During the year the United Reformed Church Trust recharged salary and staff costs amounting to £304k (2019: 320k) to the United Reformed Church Retired Ministers’ Housing Society Limited and paid £495k (2019: £398k) to Westminster College as a contribution to the teaching costs and other support costs of the College (£395k) and gave a further grant (£100k) to assist the college with the impact of Covid.

NOTE 28 LEASE COMMITMENTS

At 31 December 2020 the trust had future minimum Lease payments under non‐cancellable operating leases as follows:

s follows:
Due within 1 year
Due in more than 1 year but less than 5 years
Due in more than 5 years
Total		 2020
£’000
2019
£’000
3
6
4
10
‐
‐
7
16

NOTE 29 LEASES RECEIVABLE

At 31 December 2020 the principle future minimum lease payments receivable under non‐cancellable leases are as follows:

Due within 1 year
Due in more than 1 year but less than 5 years
Due in more than 5 years
Total		 2020
£’000
2019
£’000
100
100
75
175
‐
‐
175
275

45

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 30 SUBSIDIARY UNDERTAKINGS

The United Reformed Church Retired Ministers’ Housing Society Limited (‘RMHS’) is an exempt charity registered under the Co‐operative and Community Benefit Societies Act 2014, number 15986R. Under the rules of the Society, which were revised by agreement of the RMHS Board in 2019, the United Reformed Church Trust has the power to appoint a majority of the directors. Accordingly, it is considered that the United Reformed Church Trust has control of the entity and its results are consolidated in full.

Westminster College Cambridge is governed by the General Assembly under clause 2.6 (A) (vi) of the Structure of the United Reformed Church through a body of Governors appointed by it, in accordance with the terms of the Trust Deed of 1899 as modified by the United Reformed Church Act 1972. Accordingly, it is considered that the United Reformed Church Trust has control of the entity and its results are consolidated in full.

Their financial results were as follows:

Income
Expenditure
Net income/(expenditure)
Total net assets		 United Reformed Church
Retired Ministers’ Housing
Society Limited
2020
2019
£’000
£’000
1,427
2,295
728
963		 Westminster College
Cambridge
2020
2019
£’000
£’000
1,477
1,828
1,797
2,090
699
1,332		 (321)
(262)
34,738
34,039		 7,592
7,812

NOTE 31 CONSOLIDATED SUMMARY INCOME AND EXPENDITURE ACCOUNT

Gross income from continuing operations
Net gains on disposal of fixed assets
Total income
Total expenditure
Net income for year		 2020
£'000
2019
£'000
22,858
25,109
396
1,899
23,254
27,008
(22,923)
(23,255)
331
3,753

46

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 32 CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2019

Note
Donations and legacies
Ministry and Mission Fund contributions
2(a)
Grants receivable
2(b)
Legacies
Commitment for Life donations
Other donations
2(c)
Charitable activities
3
Ministry
Education and Learning
Children's and Youth work
Mission programmes
Publishing
Other trading activities
Investment income
4
Other income
Gains on sale of properties
Other income
Total income and endowments
Expenditure on:
Raising funds:
Trading expenditure
Charitable activities
5
Ministry
Education and Learning
Children's and Youth work
Mission programmes
Publishing
Other expenditure
Total expended
Surplus from charitable and trading activities
Net gains/ (Loss)on investment assets
Net income
Transfers between funds
Actuarial gains/(losses) on pension schemes
22
Net movement in funds
Reconciliation of Funds
Total funds brought forward
Total funds carried forward		 2019
Total
‐‐‐‐ Capital funds ‐‐‐‐
funds
Unrestricted
Designated
Restricted
Unrestricted
Restricted
£'000
£'000
£'000
£'000
£'000
£'000
18,817
‐
‐
‐
‐
18,817
‐‐‐‐ Income funds ‐‐‐‐
98
‐
206
‐
‐
304
5
‐
806
‐
‐
811
‐
‐
330
‐
‐
330
548
‐
162
‐
4
714
651
‐
1,504
‐
4
2,159
‐
‐
718
‐
‐
718
‐
‐
509
‐
‐
509
14
‐
‐
‐
‐
14
‐
‐
‐
‐
‐
‐
180
‐
‐
‐
‐
180
194
‐
1,227
‐
‐
1,421
‐
‐
788
‐
‐
788
1,286
13
585
‐
‐
1,884
512
‐
1,387
‐
‐
1,899
23
‐
17
‐
‐
40
535
‐
1,404
‐
‐
1,939
21,483
13
5,508
‐
4
27,008
‐
‐
651
‐
‐
651
16,054
9
1,315
‐
‐
17,378
1,653
44
1,445
‐
‐
3,142
385
‐
‐
‐
‐
385
1,075
5
457
‐
‐
1,537
162
‐
‐
‐
‐
162
‐
‐
‐
‐
‐
‐
19,329
58
3,217
‐
‐
22,604
19,329
58
3,868
‐
‐
23,255
2,154
45
‐
1,640
‐
4
3,753
2,282
9
1,937
3,221
943
8,392
4,436
36
‐
3,577
3,221
947
12,145
176
‐
21
155
‐
‐
‐
332
‐
‐
‐
‐
332
4,592
15
‐
3,732
3,221
947
12,477
15,519
1,579
52,298
19,355
6,065
94,816
20,111
1,564
56,030
22,576
7,012
107,293

47

FIVE YEAR SUMMARY

INCOME AND EXPENDITURE ACCOUNTS
Income
Ministry and Mission Fund contributions
Investment income
Income from charitable activities
Grants receivable
Legacies
Donations
Other income
Expenditure
Ministry
Education & Learning
Children's and Youth work
Mission programmes
Support activities (incl. publishing)
Trading activities
Other costs
Net income
Investment gains
Actuarial gains/(losses)
Net increase/(decrease) in funds
CASH FLOW STATEMENTS
Cash required for investment in
Houses for retired ministers
Other properties
Cars and equipment
Loans to churches and ministers
Source of cash
Net incoming/(outgoing) resources
for the year (see above)
Adjustment for items not resulting
in a cash movement, for returns on
investments, and for capital receipts
Net increase in capital
Net decrease/(increase) in investments
Decrease/(increase) in bank balances		 2016
2017
2018
2019
2020
£'000
£'000
£'000
£'000
£'000
19,260
19,104
19,016
18,817
17,908
1,626
1,694
1,839
1,884
1,950
1,448
1,346
1,547
1,421
1,233
134
139
155
304
690
206
322
1,036
811
339
621
476
398
1,044
440
3,399
3,403
1,606
2,727
694
26,694
26,484
25,597
27,008
23,254
18,609
18,986
17,775
17,378
17,220
3,202
3,246
2,967
3,142
3,258
371
387
428
385
353
1,541
1,493
1,893
1,537
1,282
288
151
147
162
411
565
548
599
651
399
361
223
50
‐
‐
24,937
25,034
23,859
23,255
22,923
1,757
1,450
1,738
3,753
331
3,723
4,484
(1,142)
8,392
3,590
(6,933)
3,261
17,292
332
(10,174)
(1,453)
9,195
17,888
12,477
(6,253)
(2,193)
(1,686)
679
(1,417)
946
556
1,337
(714)
(1,473)
500
131
116
102
73
92
67
5
20
(18)
13
(1,439)
(228)
87
(2,835)
1,551
1,756
1,450
1,738
3,656
331
(1,932)
(2,198)
(1,351)
(4,461)
(21)
(176)
(748)
387
(805)
310
5
4
5
4
4
(448)
‐
85
(892)
0
(820)
516
(390)
(1,142)
1,237
(1,439)
(228)
87
(2,835)
1,551

48

FIVE YEAR SUMMARY Continued

BALANCE SHEETS (Consolidated)
Fixed assets
Tangible assets
Houses for retired ministers
Houses for serving ministers
Other properties
Cars, equipment and intangibles
Investment Properties
Long term investments (incl.programme‐related)
Loans to churches and ministers
Net current assets/(liabilities)
Current assets
Debtors and stock
Debtors and stock
Bank balances and money on call
less : current liabilities
Net assets excluding pension liability
Defined benefit pension scheme liability
Other pension obligations
Net assets including pension liability
Unrestricted income funds
Designated funds
Restricted income funds
Capital funds
Total funds		 2016
2017
2018
2019
2020
£'000
£'000
£'000
£'000
£'000
38,311
38,070
39,115
38,654
39,979
5,534
5,364
5,364
5,021
5,517
7,143
8,258
8,581
8,415
8,297
680
621
533
463
434
51,668
52,313
53,593
52,553
54,227
‐
1,755
1,905
2,695
3,078
42,675
46,001
44,623
53,317
56,525
134
139
160
142
155
94,477
100,208
100,281
108,707
113,985
‐
731
‐
‐
‐
2,298
1,540
2,097
3,270
3,338
8,466
7,950
8,340
9,482
8,245
10,764
10,221
10,437
12,752
11,583
1,544
1,435
1,464
1,550
1,298
9,220
8,786
8,973
11,202
10,285
103,697
108,994
109,254
119,909
124,270
(31,929)
(28,916)
(11,288)
(9,466)
(20,872)
(4,035)
(3,150)
(3,150)
(3,150)
(2,358)
67,733
76,928
94,816
107,293
101,040
(5,387)
(1,176)
15,519
20,111
9,824
‐
‐
1,579
1,564
1,664
48,821
52,019
52,298
56,030
58,312
24,299
26,085
25,420
29,588
31,240
67,733
76,928
94,816
107,293
101,040
NON‐FINANCIAL STATISTICS
(from URC Year Book)
2015 2016 2017 2018 2019
Members 52,060 49,517 46,881 44,788 43,208
Stipendiary ministers 438 401 398 377 364
Non‐stipendiary ministers 65 57 58 58 62
Churches 1,426 1,406 1,383 1,354 1,331
Retired ministers 891 885 885 874 857
Ministry and Mission contribution per member £367 £384 £401 £420 £414

49