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2021-12-31-accounts

TRUSTEES’ REPORT AND FINANCIAL STATEMENTS 2021

(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 2021

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 ................................................................. 28
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 ........................................................................................................ 35
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 Contingent Liabilities ................................................................................... 45
Note 27 Cash flow information .................................................................................. 45
Note 28 Related party transactions ........................................................................... 45
Note 29 Lease commitments .................................................................................... 45
Note 30 Lease receivable ......................................................................................... 46
Note 31 Subsidiary undertakings .............................................................................. 46
Note 32 Consolidated summary income and expenditure account .......................... 46
Note 33 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 United Reformed Church Trust (“the charitable company”) is the corporate charity trustee of the funds of the General Assembly of the United Reformed Church (“URC”) and is responsible for reporting its financial activities. The directors, who are also trustees of the charitable company, submit their report and the audited consolidated financial statements for the year ended 31 December, 2021, which incorporate the funds of the General Assembly of the United Reformed Church.

REFERENCE AND ADMINISTRATIVE INFORMATION

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

Directors

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

Name Ex officio Appointed / Resigned Mrs Jane Baird Deputy General Secretary, Administration & Resources The Revd Dr John Bradbury General Secretary The Revd James Breslin The Revd Clare Downing Moderator of The General Resigned 31 August 2022 Assembly Mr David Greatorex Mr Ian Hardie Honorary Treasurer Dr Ian Harrison Resigned 31 August 2021 The Revd Dr Michael Hopkins Clerk of the General Assembly Mr David Lathbury Revd John Macaulay Appointed 15 September 2021 Revd Julian Macro Appointed 7 December 2021 The Revd Nick Mark Mrs Valerie Morrison (Chair) Resigned 31 August 2022 Mr Clifford Patten Mr Peter Pay Moderator of The General Died 18 December 2021 Assembly Mrs Margaret Thompson Resigned 31 August 2022 Dr Stephen Thompson Appointed 13 September 2022 Mr Andrew Weston Resigned 7 December 2021 Ms Catriona Wheeler (Chair)

Secretary: Ms Sandi Hallam-Jones

Most of the directors are appointed as members of the charitable company by the General Assembly of the URC and then as directors by the company under the provisions of its Articles of Association, 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.

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

Westminster College, Cambridge

(Registered Charity number 311449) Convenor of Trustees: The Revd Nigel Uden

Principal and trustee: The Revd Samantha White (resigned 25 March 2022) Revd Dr Robert Pope (acting principal from 25 March 2022)

Trustees: The Revd Jan Adamson, Mr John Ellis, Mr William McVey, Mr Stuart Scott, Mrs Darnette Whitby-Reid, Mr Christopher Wright

Others with charity governance responsibilities

Immediate Past Moderators – The Revd Nigel Uden, Mr Derek Estill Business Committee Convenor – The Revd Mark Robinson Deputy General Secretary, Discipleship – The Revd Adrian Bulley Deputy General Secretary, Mission – The Revd Philip Brooks 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.

Assembly Executive

The ex officio members of the charitable company, the Chair of trustees, the Deputy Treasurer, Vaughan Griffiths, and the others listed immediately above are members of Assembly Executive 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 2021.Convenors: Mrs Sarah Lane Cawte, The Revd Anne Lewitt, Mrs Helen Lidgett, The Revd Mark Robinson, The Revd Paul Robinson, The Revd Dr Robert Pope, The Revd Dr Peter Stevenson; The Revd Paul Whittle, Mr Alan Yates. URC Youth representatives: Mr Rueben Watt (Moderator), Ms Jo Harris (Moderator elect), Miss Victoria Turner.

Synod Moderators and representatives:

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

United Reformed Church Finance Committee

Mrs Jane Baird, The Revd Simon Copley, Mr Vaughan Griffiths (Deputy Treasurer), Mrs Denise Harman, Mrs Jane Humphreys, Mr Frank Liddell, Ms Joana Marfoh, Mrs Valerie Morrison, The Revd Wilbert Sayimani, Mr Gordon Wanless

Legal Advisers

Sleeter Heelis Solicitors Anthony Collins Solicitors Lloyds Bank Buildings 134 Edmund Street 16 School Road, Sale Birmingham Chester M33 7XP B3 2ES

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 9 Appold Street 60 Queen Victoria Street London EC1M 7AD London EC4N 4TR

STRUCTURE, GOVERNANCE AND MANAGEMENT

The company

The General Assembly of the URC in 2006 appointed the United Reformed Church Trust, the charitable company, as the corporate trustee of its funds. Following consultation with the Charity Commission in December 2009 the charitable company adopted new memorandum and articles and was registered as a Charity.

Church Governance

The governing body of the URC 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 URC (as contained in sections A - C of the Manual of the URC) contain the foundation documents of the Church, known as the Scheme of Union. Each General Assembly appoints members to Assembly Executive, although those appointed to represent synods are nominated by the synods concerned. The names of members of Assembly Executive are listed above. The purpose of Assembly Executive 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.

Charitable Assets

The charitable assets of the URC, are held by the charitable company as charity trustee. It manages those assets and applies them as directed by General Assembly for the work of the URC, and ensures they are expended in a compliant fashion.

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Employees

There is a commitment by the URC 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.

Employees are provided with information on matters of concern to them, and the Church 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 Church. 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 charitable objects of the Charitable company 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.

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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 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 for the United Reformed Church, and thus to provide education and promote the Christian religion. The United Reformed Church Trust is the holding trustee of the shares held in Westminster College Trading Limited.

STRATEGIC REPORT

Achievements and Performance

The charitable funds of the United Reformed Church are used to fund the work 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 from 9 to 12 July, 2021. The Book of Reports to the July 2022 General Assembly will cover the second half of the year 2021. We report below on that work and on the specific activities of the URC, whose work is supported by the charitable assets of the United Reformed Church held and applied by the charity trustee.

The Covid-19 pandemic continued to challenge Church life in 2021, however many churches have settled into their ways of providing worship online with some managing in-person worship during the periods when lockdown restrictions were eased. The many committees of the denomination continued to conduct their business via Zoom and other online platforms. Most of the committees are looking to a hybrid of online in-person meetings going forward 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 much 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 and most paper based systems have now been adapted to electronic ones.

Due to Covid-19 restrictions, the General Assembly was unable to meet in person, but met online to contract the full agenda of business. The Assembly Executive (the successor body to the Mission Council) met in person for the first time in November.

Impact of Covid-19 control measures

Early 2021 saw the resumption of lockdown restrictions due to Covid-19. A good number of 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.

With the end of lockdown, the coming year will help us assess the longer term consequences of lockdown for the financial stability of the Ministry and Mission fund. 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 and hybrid services which have, in some cases, enabled people previously unable to attend church in person to feel part of the church community again.

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The administrative staff of the charity continued to work from home until April 2022 when they moved to a hybrid and office working.

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

The URC 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 2021. 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.

Legal matters

A long running (10 years) Employment Tribunal claim was concluded in 2021 after a 5 week hearing. This incurred significant costs to the church in legal fees over this period. The claimant’s claims were dismissed and no liabilities therefore arise in term of remedy.

Committee work

Children’s and Youth Work

Our theme for 2021 was Heroes and Villains, and worship resources for all ages were sent to all URC churches. Linked Holiday Club resources were produced and grants offered to churches running holiday clubs. Covid-9 continued to impact work with children and young people, and Youth Assembly and other events were not held in person, resulting in budget savings along with reduced travel expenses. Instead, online events and training were developed, including joint work with Education and Learning drawing on the Carmichael Montgomery fund. In addition, the post of URC Youth Intern to support social media communication was created. The strategic focus was on 5-11 year olds culminating in a virtual conference with ROOTS over 3 evenings. Sessions for FOFA groups were commissioned, and Families on Faith Adventures continued to be offered as a weekly online resource. Resources for the URC’s 50th anniversary in 2022 were created, including Celebrate Together with 50,000 copies printed for churches to give away. Working in partnership with other departments, Children’s and Youth Work coordinated the creation and production of the Lent Pack (5,000 copies) and Advent Box (5,000 kits) to support local churches in keeping connected to families. In partnership with Commitment for Life a new resource for 5-14 year olds about Nicaragua was created (Go with Greta). The URC’s relationship with Pilots was reviewed, resulting in reduced direct resourcing. In 2022 staffing will be restructured to reflect this, and to support the launch of URC Children as we mark a year of Jubilee.

Communications

The work of the URC Communications Team continues to be wide-ranging and busy. The team currently provides press releases and statements for media enquiries; Reform magazine; content for the new, redesigned, URC website; News Update and other emails; content for multiple social media channels; design and production for hundreds of leaflets, books and resources; the URC bookshop, which has also been redesigned to make it easier to use, delivering more than 10,000 items per year; graphical, editorial and technical support at national and regional events; the iChurch website service for local churches; editing and copywriting; helping to maintain the URC archive and brand advice and creative solutions to those who need them.

In addition to this business as usual work, the team has also been leading on multiple areas of the URC’s 50th anniversary, including a jubilee resource pack for all churches and merchandise for the bookshop; adding content to the new URC website; updating Coronavirus advice guides and guidance for churches from the Moderators; the Community Awards with Congregational; appointing the new editors for the annual Prayer Handbook; books and kits for Advent and Lent to engage with families connected to the church; extending the range of leaflets about paid and voluntary roles; digitising records from the General Assembly; children’s resources including a new Pilots resource, and much more.

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Education and Learning

2021 was a year where we expected so much and most of it didn’t happen in the way we expected! Challenged by successive lockdowns and restarts, we have got used to ‘hybrid’ as the word that describes much of what we do: in meetings, learning opportunities, working at Church House, training and gathering. However, within that challenge we have seen change and new initiatives. We have begun the work around the integration of Education and Learning and engaged in new conversations with the Resource Centres for Learning, where we currently train our Ministers and through which we offer learning opportunities to the wider URC. We have developed pathways for synod recognised lay preachers and also for those who wish to become Assembly accredited; Locally Recognised Worship leaders follow a Stepwise pathway with additional tasks and assessed services or a synod based training course and Assembly Accredited Lay Preachers now train through one of our RCLs on a two-year part-time course that will be recognised across the whole URC. We have sought to listen to the needs of those from BAME backgrounds who have not been able to access educational qualifications needed to go forward to assessment for ministry; we are now able to offer a Foundation course through the Durham Common Award and also support to complete English qualifications. We have developed a process to offer grants through the Discipleship Development Fund supporting churches, synods and groups to encourage whole of life discipleship and lifelong learning opportunities, experiences and events. The Programme Officer for Education and Learning, the Revd Elizabeth Gray-King, moved on into a new pastoral role for the URC and her work was absorbed by the other members of the Team. The Education and Learning Committee continues to seek ways to support all people in their discipleship development and have identified that good communication supporting increased accessibility and availability, a renewed emphasis on vocation and deeper sense of URC identity are key areas of focus for the coming year. As ever, all we do is to serve those who are in our local churches and communities.

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 2021 Ministries created a new ministry of Locally Recognised Worship Leaders alongside the Assembly Accredited Lay Preachers and this was adopted at General Assembly 2021. In 2022 Ministries will bring a new Pioneering Ministry to General Assembly which will replace the pilot projects established in 2019 but which were halted by the pandemic in 2020. Ministries continues to look at other forms of ministry that can be funded by the M&M fund including Assembly Accredited Elders in Local Leadership.

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Mission

In 2021, Walking the Way: Living the life of Jesus today , the URC’s long-term focus on wholeof-life discipleship and mission, enabled collaborative resource production across the Mission and Discipleship departments, supported the General Assembly in making decisions about the future of the focus, and continued to develop insights into discipleship accompaniment and online discipleship.

The United Reformed Church continued its association with the Greenbelt faith festival. Despite the hope that a festival could be held in 2021, concerns about Covid-19 once again caused a cancellation. The team have moved their energies to planning a major presence for 2022, the URC 50th anniversary year.

The United Reformed Church responds to issues of public policy and social justice as part of the ecumenical Joint Public Issues Team (JPIT). In 2021 the team focused on the social impacts of the Covid-19 pandemic, particularly around poverty and debt, advocacy for a fairer and more compassionate asylum system, and using the opportunity presented by the UK’s hosting of COP26 to encourage churches in their engagement with environmental issues. Mission staff continued to support the work of synod mission enablers and pioneer ministers, whose work was seriously affected by the impact of the pandemic. A new learning community of lay pioneers could no longer gather in person, but met regularly online for mutual learning and support.

The joint post of National Rural Officer, shared with the Methodist Church, was discontinued in 2021, following the retirement of the postholder and restructuring in the Methodist Church. Mission staff conducted a church-wide survey inviting participants to submit their views on how churches in rural contexts can be supported most effectively as they serve their communities. Global and Intercultural Ministries continued to focus on racial justice – within the URC, ecumenically, and in wider society. The Legacies of (Transatlantic) Slavery initiative included the launch of a URC-wide consultation regarding a proposed apology and confession, while work also began to address the underrepresentation of Black and ethnic minority colleagues in Assembly appointments. Global work mainly focused on the Partners in Mission Programme, supporting individuals from overseas serving in the URC, and being sent by the URC to serve in partner contexts.

Commitment for Life is the URC's global justice programme. We partner with Christian Aid and Global Justice Now. We enable local congregations to deepen their prayer, insight and advocacy for global justice. In 2021 the programme continued to focus on three partner regions: Zimbabwe, Bangladesh, and Israel and the occupied Palestinian territory.

The URC’s ecumenical and interfaith work continued to be largely online during 2021, although there were a small number of in-person ecumenical meetings. In the main though, online was the default option 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 and a Bethlehem Advent service live from the Christmas Lutheran Church.

Safeguarding

2021 saw a significant change to staff within the Church House Safeguarding team. The Safeguarding Advisor (SA) left in February 2021 shortly followed the same month, although unrelated, by the Training and Development Coordinator (TDC) who was one year into a 3 year funded role and in November the Administrative Assistant moved on from the URC.

The decision was to leave the TDC role vacant until a new SA was appointed. Following a review of the SA role there was a change of title to Designated Safeguarding Lead (DSL). In the interim period the very critical parts of the role were covered four hours a week by a Synod Safeguarding Officer (SSO). This included managing of the Disclosure and Barring scheme, particularly blemished disclosures, support on case management for SSO’s and reporting to the Safeguarding Advisory Group. Other SSO’s took on roles such as annual report writing for General Assembly, attending Local Ecumenical Partnership and networking meetings.

Following two unsuccessful rounds of recruitment for a full time DSL, an appointment was made to a role part time role which started in February 2022. The tasks that were taken out of the

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DSL role to make it part-time have formed a new role for a Policy Development Coordinator which, it is hoped, the post will be filled in the first half of 2022.

The TDC role started in January 2022 and has already started developing training in line with the Training Framework agreed at General Assembly 2021.

The Administrative Assistant role is currently being covered by a very competent temp and it is hoped to make a permanent appointment in the first half of 2002.

In 2022 the national safeguarding team aims to:

Resourcing the work of the United Reformed Church

All the above must be set in the context of the financial resources of the United Reformed Church, which continue to be carefully managed in an uncertain economic climate. Detail of the latest year is given in the financial review below, broader trends also need to be considered. Among these are:

Managing the Assets

Investments & Investment Policy

The charitable company acts as corporate charity 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 charitable company. The Investment Committee of the Church, which reports to the charitable company, keeps under review the investment policy and monitors the performance of the fund managers. All investments are held in pooled funds that aim to comply with the ethical policies agreed by the Church through its General Assembly.

The Investment Committee continued to monitor the investments throughout 2021.

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Properties

The charitable company is responsible for the management of the properties included in its balance sheet. The buildings of Westminster College are managed by the College Trustees.

Risk Management

The charitable company continues to monitor the risks with which the central administration of the Church is faced. During 2021 the risk register process was updated for 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 are currently being collated and will be presented to the charitable company in due course.

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

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 8.

The long term risks associated with the impact of Covid-19 are still currently difficult to assess and there are further risks from the ‘cost of living crisis’ and how this will impact M&M income as well as the cost base of the Church. However, the Church continues to monitor developments and has curtailed expenditure wherever possible.

Future Developments

A group has been set up by the General Assembly to conduct a thorough review of the life of the United Reformed Church. Part of its work concerns a forensic examination of the income, expenditure and assets of the 14 Trusts that hold the majority of the URC’s assets and expend the majority of its expenditure. These are the 13 synods, and the General Assembly. It is hoped that this examination will lead to clarity over where economies of scale might be made through more collaborative working, and allow us to determine where and how we are best able to invest in the development of the ministry and mission work of the United Reformed Church.

2021 saw the appointment of a new Deputy General Secretary for Discipleship, the Revd. Adrian Bulley. The Deputy General Secretary for Mission, Francis Brienen, resigned from her post in April 2022. The role will be covered temporarily by the Revd Philip Brooks. Major pieces of

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business were taken through the General Assembly to embed the safeguarding processes of the United Reformed Church into its governance structures.

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 2021 it was calculated that the central church’s carbon emissions amounted to approximately 61.18 tonnes (2020: 54.47 tonnes). Average emission rates have been used in calculating this figure. The total includes use of 173,936 kWH (2020: 148,917 kWH)of energy used which has been converted to CO2 emission using an average rate. This works out at approximately 0.70 tonnes (2020: 052 tonnes) per employee.

Section 172 of the Companies Act

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

Financial Review

The financial statements show the consolidated income, expenditure, assets and liabilities of those trusts and other funds that the charitable company administers and holds as charity trustee for the benefit of the United Reformed Church under the overall authority of the General Assembly. These represent the assets of the United Reformed Church that the charitable company manages on its behalf and applies towards its charitable purposes. They include Westminster College, and its subsidiary company Westminster College Trading Limited together with 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 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 Assembly Executive, General Assembly and the charitable company. 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 £136,629k as at 31 December, 2021 (2020: £101,040k). 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.

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The unrestricted fund net assets readily available are £28,351k (2020: £20,398k). 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 £24.75m and £25.5m.

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 and the impact of the ‘cost of living crisis’, the Committee were satisfied that this was appropriate. The Committee will review the policy annually.

Grant making

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

2021 Financial Results

The results for 2021 are set out in more detail in the Consolidated Statement of Financial Activities on page 21. This shows that there was, overall, an increase in funds in the year of £35,589k. The following table shows the breakdown of the results for 2021 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		 2021
2020
£000
£000
17,204
17,908
10,023
1,469
1,243
1,233
285
279
1,948
1,950
3,384
415
34,087
23,254
80
399
23,998
22,524
24,078
22,923
10,009
331
7,911
3,590
17,920
3,921
17,669
(10,174)
35,589
(6,253)

Ministry and Mission Fund contributions

The pie chart on page 13 gives a visual picture of total unrestricted income, showing that 87% of our unrestricted income comes from Ministry and Mission Fund contributions, which totalled just over £17 million. Despite the ongoing effects of 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 83% of our unrestricted expenditure, totalling £17,020k, is used to provide ministry and a further 9% (£1,835k) is used to provide financial resources to train and equip people for ministry.

12

TRUSTEES’ REPORT CONTINUED

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 donations totalling just over £9m from the synods towards helping pay the deficit contribution to the Ministers’ Pension Fund. Commitment for Life donations from churches and individuals were up slightly on the 2020 level, increasing from £253k to £266k. 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 £634k (2020: £716k). Grants paid from this fund totalled £11k in 2021 (2020: £19k) with a further £123k included in creditors having been committed for future payment.

13

TRUSTEES’ REPORT CONTINUED

Investment income

Total investment income includes rental income on the mixed motive property. The 2021 figure shows the overall figure very similar to the previous being £1,948k in 2021 compared to £1,950k in 2020. 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 continued to suffer from the effects of the Covid-19 pandemic, but income rose slightly from £279k in 2020 to £285k. There was a corresponding fall in expenditure in this area from £399k to £80k.

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 (£2,499k) 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 2021, 7 properties were bought and 20 were sold.

Expenditure – Charitable activities

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

Ministry: £18,665k. 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

14

TRUSTEES’ REPORT CONTINUED

ministers and CRCWs (who averaged 372 in number over the year) and includes all costs of the Synod Moderators. In 2021 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: £3,217k. 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: £337k. Due to the Covid-19 Pandemic, some of the usual activities of the Children’s and Youth Work area continued to be 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: £1,353k. The Mission Committee and team continue to progress longer-term strategies, including the Walking the Way missional discipleship emphasis and Commitment for Life programme. There was continued support for the Joint Public Issues Team and various interdenominational and interfaith organisations.

Publishing: £426k. 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 well during 2021 and the year ended with the investment up £7,577k on the value at the start of the year. However, in the period from 31 December 2021 to May 2022, the value of the investments had fallen by around 5% due to the uncertainty of the situation in Ukraine. A revaluation of investment property added £334k 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). There was little change to the pension liabilities in 2021 but there were good gains on the fund’s diversified investments. The overall net actuarial gain for the year was £17.7m. 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 £5.5m 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 THE TRUSTEES’ RESPONSIBILITIES

The directors of the charitable company are responsible for preparing the Trustees’ Report and the financial statements.

Company law requires the charitable company to prepare financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) for each financial year which give a true and fair view of the state of affairs of the charity 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 charitable company is required to:

The charitable company is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company, and the funds it is responsible for 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 charitable company is aware:

The charitable company is 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 company by its directors has approved this Report. Those wanting more information or explanations about any aspect of the Church’s finances are encouraged to address their enquiries to the Treasurer.

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, 2021 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 ~~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.

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

17

whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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 directors 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 directors 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 directors 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.

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

18

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.

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

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.

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 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:

19

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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

28 September 2022

Devonshire House 9 Appold Street London EC2A 2AP

20

CONSOLIDATED & TRUSTS' STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2021

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		 2021
Total
Unrestricted
Designated
Restricted
Capital Funds
funds
£'000
£'000
£'000
£'000
£'000
17,204
0
0
0
17,204		 2021
Total
Unrestricted
Designated
Restricted
Capital Funds
funds
£'000
£'000
£'000
£'000
£'000
17,204
0
0
0
17,204		 2021
Trust
Only
£'000
17,204		 2021
Trust
Only
£'000
17,204		 2020
Total
funds
£'000
17,908
162
0
236
0
398
1
0
79
0
80
0
0
266
0
266
5
1
9,268
5
9,279		 162
1
266
9,020		 690
339
253
187
168
1
9,849
5
10,023		 9,449 1,469
0
0
739
0
739
18
0
279
0
297
3
0
0
0
3
0
0
0
0
0
204
0
0
0
204
225
0
1,018
0
1,243
0
0
285
0
285
1,299
28
621
0
1,948		 0
18
3
0
204
225
0
1,894
719
252
13
0
249
1,233
279
1,950
824
0
2,499
0
3,323
61
0
0
0
61		 1,041
61		 396
19
885
0
2,499
0
3,384		 1,102 415
19,781
29
14,272
5
34,087
0
0
80
0
80		 29,874
0		 23,254
399
17,020
71
1,574
0
18,665
1,835
8
1,374
0
3,217
326
1
10
0
337
974
4
375
0
1,353
411
2
13
0
426
0
0
0
0
0		 17,666
1,903
337
1,353
426
0		 17,220
3,258
353
1,282
411
0
20,566
86
3,346
0
23,998		 21,685 22,524
20,566
86
3,426
0
24,078
(785)
(57)
10,846
5
10,009
1,975
115
1,775
4,046
7,911
1,190
58
12,621
4,051
17,920
93
0
(93)
0
0
17,669
0
0
0
17,669
18,952
58
12,528
4,051
35,589
9,824
1,664
58,312
31,240
101,040
28,776
1,722
70,840
35,291
136,629		 21,685
8,189
7,686
15,875
0
17,669
33,544
58,704
92,248		 22,923
331
3,590
3,921
0
(10,174)
(6,253)
107,293
101,040

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 2021 Coftsolldttted Consolidoted Trtsst Trnst Note 2021 2020 2021 2020 Efyjo £'ooo Fixeda55et5 IntatbgiblE a55ets Tansible 355ets HDV5e5 for rEtir￿ mini5tsrS li 83 96 78 88 li 39334 8th22 39,979 S,S17 8,297 S3,793 338 347 396 Houses for seNin( nmnistèrs OthEr prDPErtil Totsi properties r5 and uipmÈnt 8.622 5.517 8.193 56,149 310 2.646 11.615 116 2,671 8,584 84 56542 S4,227 11.809 8,7S6 Inve5trnent5 MIX￿ mDtive I￿v￿tmentproperlY MixÈd USÈ InvStr￿ntprQpttfy InvestmÈnts 12 2500 927 2.222 856 2.500 927 2.222 8S6 12 13 63,954 242 S6,283 242 62.036 242 54,593 242 Prts8raMmÈ-r1at￿ iAvèStmÉnts Loans. ecludln4 Intw-fund loans 14 Is 202 155 5.688 6.671 64.S84 672S S9,7S8 71.393 Currem a5fet5 Stock 27 27 Debtors 16 4019 16.263 3.311 8,245 11.S83 5.105 14.533 3.607 7,661 11.295 Bank balances and montyon call 21￿81 19.638 Current liabl1rft￿S 17 Net iurrent assets 19238 10.285 16.022 8.594 I43￿05 124,270 99.224 51.934 Defined b￿e11t wsion schemeliability Other pwsion obli8aiions 22-24 120,8721 12072 23 123581 Neta55et5 InrI￿dIn8pefi￿Qn 136h29 101.040 92.248 58.704 Unrestti(ted if*Lome funds GenEral re5ervE 24.949 5.911 2.534 1.722 24.229 4,S85 1.882 1,664 32.360 120.8721 58,312 31.240 24.949 5.911 2.534 L722 24.229 4.585 IA82 1.664 Revèluation iesÈrve- InvÉtsxa)ts Revaluation re5erve- property Designated funds Total unrestricted Incornefunds betorepension reserve 35.116 14ts181 70.840 35.291 3S.116 32.360 1201721 17.140 30￿76 Re5trkted kn<ome fu￿￿$ 27.736 34.014 alfvnds TOTAL FUNDS 19-20 136.629 101,040 92.248 58.704 Approved by the diTecrors se émbei ￿2¥rtd si8ned ihelTbehaif by.. Cairlonèwheelei Chair lan Hawdie TreasLKei United Reformed Church Trust Is a company Ilmlted byguarantee. number 135934. and Registered Charity number 1133373. The notes on pa8es 2410 47form an inte8ral part of these financial ststements. 22

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER, 2021

Cash flows from operating activities
Net income before other recognised gains and losses (see page 21)
Adjustments for:
Decrease in stocks
Increase in debtors
Decrease in creditors
Gain on investment assets
Profit on sale of tangible fixed assets
Depreciation and impairment
Other investment income
Cash endowment received
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
Net increase (decrease) in Cash (note 27)		 2021
£'000
2020
£'000
17,920
3,922
27
-
(1,508)
(68)
546
(252)
(7,911)
(3,591)
(3,323)
(396)
260
259
(1,948)
(1,950)
(5)
(4)
1,416
440		 2021
£'000
2020
£'000
17,920
3,922
27
-
(1,508)
(68)
546
(252)
(7,911)
(3,591)
(3,323)
(396)
260
259
(1,948)
(1,950)
(5)
(4)
1,416
440
5,474
(1,640)
(5,782)
-
6,530
(260)
150
(1)
29
(75)
1,948		 (2,648)
(44)
1,154
-
-
(34)
21
-
1,950
2,539
399
5
4
8,018
(1,237)

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) - (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) 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 Cash Flow Statement has 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 directors have considered possible events and conditions that might cast significant doubt on the ability of the Trust to continue as a going concern. The directors have made their assessment for a period of at least one year from the date of approval of these financial statements. In particular they have considered the Trust’s forecasts and projections and have considered the longer term 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 directors 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.

24

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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 raising funds, investment income, is recognised in the SOFA when there is legal entitlement to the income, any performance conditions attached to the income have been met, it is probable that the income will be received and the amount can be measured reliably.

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.

25

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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.

(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.

26

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

(xvi) Critical accounting judgements and estimation

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

NOTE 2 VOLUNTARY INCOME

(a)

Synods
Northern
North Western
Mersey
Yorkshire
East Midlands
West Midlands
Eastern
South Western
Wessex
Thames North
Southern
Wales
Scotland		 2021
£’000
2020
£’000
735
786
1,613
1,673
938
937
727
888
875
1,045
1,589
1,664
1,928
1,930
1,182
1,205
2,007
2,006
1,989
2,049
2,586
2,592
454
467
581
666
17,204
17,908

(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		 2021
£'000
2020
£'000
103
103
30
87
61
61
40
439
234
690

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 2021, all of the grant had been expensed. Further grants totalling £30k were received to cover the costs of a South Korean minister working for the URC.

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

onations
2021 2020
£'000 £'000
Other donations received 9,279 197

Included above are £36k (2020: £95k) received by Westminster College, and £9,001k (2020: £88k) received from synods as a contribution towards the pension fund deficit (see note 21).

27

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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		 2021
£'000
2020
£'000
740
719
245
250
93
123
110
126
21
15
1,209
1,233

NOTE 4 INVESTMENT INCOME

Unitised funds
Interest on short-term investment and bank deposits
Rental income		 2021
£'000
2020
£'000
1,811
1,764
1
16
136
170
1,948
1,950

NOTE 5 ANALYSIS OF EXPENDITURE

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

2021 Direct Grant Support 2021
programme funding costs Total
expenditure (note 6) (note 7)
£'000 £'000 £'000 £'000
Ministry 15,481 584 2,602 18,667
Education and Learning 2,062 434 314 2,810
Children’s and Youth work 251 1 84 336
Mission programmes 644 493 215 1,352
Publishing 336 - 90 426
18,774 1,512 3,305 23,591
2020 Direct Grant Support 2020
programme funding costs Total
expenditure (note 6) (note 7)
£'000 £'000 £'000 £'000
Ministry 14,287 706 2,227 17,220
Education and Learning 2,253 576 429 3,258
Children’s and Youth work 255 4 94 353
Mission programmes 657 373 252 1,282
Publishing 363 - 48 411
17,815 1,659 3,050 22,524
NOTE 6 ANALYSIS OF GRANTS
2021
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
2021
Total
£'000
207
-
207
262
-
262
374
3
377
15
134
149
-
59
59
3
7
10
1
320
321
2
125
127
864
648
1,512

28

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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
227
382
391
-
-
-
-
29		 Grants to
institutions
£’000
2020
Total
£'000
-
227
-
382
170
561
-
-
37
37
239
239
184
184
-
29
1,029 630
1,659

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		 2021
£’000
188
-
42		 2020
£’000
128
25
8

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
2021
Total
£'000
2020
Total
£'000
Area
Staff
Actual
costs
11
23
2,568
2,602
2,227
10
33
271
314
429
12
29
43
84
94
14
65
136
215
252
10
22
58
90
48
57
172
3,076
3,305
3,050

NOTE 8 GOVERNANCE COSTS

Governance costs are included in support costs and total £505k (2020: £191k). This figure includes the remuneration of the auditors, amounting to £65 (2020: £68k) of which £32k relates to the audit of the Trust which includes an under accrual of £3k and the balance of £33k relates to the audits of subsidiary charities. Other services provided by the auditors amounts to £6k. The main difference from the previous year’s cost was that the church was involved in a complex case which incurred substantial legal fees.

NOTE 9 NOTIFIED LEGACIES

The Trust had received notification of one legacy (2020: none) that has not been included in the financial statements because the conditions for recognition have not yet been met.

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: 372 (2020: 392)
Gross stipends
Social security costs
Other pension costs
All stipend costs above are included within the costs of Ministry
Lay staff: 87 (2020: 106)
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		 2021
£'000
2020
£'000
9,648
10,255
910
957
2,616
2,747
13,174
13,959
2,526
2,663
226
251
527
862
24
19
3,303
3,795
1,279
1,520
884
1,279
212
241
478
532
450
223
3,303
3,795

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 2021 (2020: one).

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 2021 was £157k (2020: £236k). The Deputy General Secretary post for Discipleship was vacant for 9 months of 2021.

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 as a director for the company received no remuneration in respect of their services as director, other than the reimbursement of travel expenses to 1 individual during the year ended 31 December, 2021 totalling £130 (2020: 13 individuals totalling £1,236).

30

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 11 TANGIBLE & INTANGIBLE FIXED ASSETS

NOTE 11 TANGIBLE & INTANGIBLE FIXED ASSETS FIXED ASSETS
(a)Consolidated:
Cost
At 1 January, 2021
Additions
Disposals
At 31 December, 2021
Accumulated
depreciation and
impairment
At 1 January, 2021
Charge for year
Disposals
Re-classification
At 31 December, 2021
Net book value
At 31 December, 2021
At 31 December, 2020		 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
40,391
5,573
9,253
1,725
3,852
126
(2,403)
(752)
(90)		 1,393
56,610
79
5,782
(18)
(3,263)		 133
-
-
39,713
8,673
9,289		 1,454
59,129
133
412
51
961
-
-
140
(33)
-
(5)
-
-
-		 1,055
2,479
107
247
(18)
(56)
-
-		 37
13
-
-
379
51
1,096
39,334
8,622
8,193		 1,144
2,670
50
310
56,459
83
39,979
5,522
8,292		 338
54,131
96

Of the land and buildings included above, £5,398k (2020: £5,433k) are leasehold. At 31 December, 2021 294 (2019: 300) houses were owned for housing retired ministers and 17 (2020: 16) 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 2021
Additions
Disposals
At 31 December 2021
Accumulated
depreciation and
impairment
At 1 January 2021
Charge for year
Disposals
At 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020		 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
5,573
2,835
507
9,336
-
3,857
-
61
3,918
(52)
(752)
-
(18)
(822)		 94
-
-
369
8,678
2,835
550
12,432
94
25
56
164
423
668
-
-
25
29
54
(3)
-
-
(18)
(21)		 6
10
-
22
56
189
434
701
16
347
8,622
2,646
116
11,731
78
396
5,517
2,671
84
8,668
88

(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
2021
£'000
2020
£'000
2021
£'000
2020
£'000
2,222
2,000
2,222
2,000
15
-
15
-
263
222
263
222
2,500
2,222
2,500
2,222

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, 2021 was calculated using rental yields.

32

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 12a MIXED USE 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
2021
£'000
2020
£'000
2021
£'000
2020
£'000
856
-
856
-
-
695
-
695
71
161
71
161
927
856
927
856

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, 2021 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
2021
£'000
2020
£'000
2021
£'000
2020
£'000
56,283
53,085
54,593
51,484
244
-
244
-
(150)
-
(150)
-
7,577
3,198
7,349
3,109
63,954
56,283
62,036
54,593
Consolidated
Trust
2021
£'000
2020
£'000
2021
£'000
2020
£'000
62,713
55,197
60,795
53,507
1,241
1,086
1,241
1,086
63,954
56,283
62,036
54,593
35,035
34,880
34,014
33,859

The directors 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 £4,624k held to meet the ‘other pension obligation’ as set out in note 23. Financial assets measured at fair value are £63,954k.

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
2021
£'000
2020
£'000
2021
£'000
2020
£'000
43
71
43
71
159
84
159
84
-
-
5,486
6,516
202
155
5,688
6,671

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
2021
£'000
2020
£'000
2021
£'000
2020
£'000
71
58
71
58
(29)
(21)
(29)
(21)
1
34
1
34
43
71
43
71

Loans to churches comprises a long term loan to the Synod of Wales in respect of the Glamorgan Chaplaincy and loans from the Church Building Fund to local churches. The loan to the Glamorgan Chaplaincy is interest free and is repayable if the chaplaincy is wound up. The loans from the Church Building Fund are repayable over 8 years and interest is charged using the CCLA Charities Deposit Fund deposit rate.

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.

34

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 16 DEBTORS

NOTE 16 DEBTORS
Consolidated Trust
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Debtors comprise:
Amounts owed by group undertakings - - 475 439
Tax recoverable 9 2 9 2
Other debtors 3,556 2,460 3,496 2,433
Prepayments and accrued income 1,254 849 1,125 733
4,819 3,311 5,105 3,607
Financial assets measured at amortised cost 3,383 2,460 3,328 2,872
NOTE 17 CREDITORS: amounts falling due within one year
Consolidated Trust
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Current liabilities comprise:
Amounts owed to group undertakings - - 2,178 1,673
Sums held for synods and congregations 65 90 - 38
Other creditors including taxation and social
security		 1,365 945 1,100 859
Accruals 363 148 295 92
Deferred income 51 115 43 39
1,844 1,298 3,616 2,701
Financial liabilities measured at amortised cost 2,663 1,093 3,237 2,624

Included within Other creditors are amounts totalling £117k 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
202
£'000
2020
£'000
2021
£'000
2020
£'000
115
238
39
97
76
102
43
39
(12)
(10)
-
-
(86)
(215)
(39)
(97)
93
115
43
39

NOTE 18 UNRESTRICTED FUNDS

The Ministry and Mission Fund is the general fund of the Church through which the bulk of income and expenditure, covered by the annual budget agreed by the Trustee and presented to Assembly Executive, 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. The capital is expendable by decision of the Trustee.

35

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 19 SUMMARY OF FUND MOVEMENTS

2021 Fund Movements

UNRESTRICTED
FUNDS
Ministry and Mission
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
Pension Deficit Fund
Other Funds
Total Trust Funds
Westminster College
Retired Ministers'
Housing Society
Total Consolidated
Funds
CAPITAL FUNDS
Ministry and Mission
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
Total Consolidated
Funds		 Funds
at 1 Jan
2021
Incoming
resources
Resources
expended
Transfers
between
funds
£’000s
£’000s
£’000s
£’000s
9,824
19,271
(20,566)
603
-
39
-
(39)
-
471
-
(471)		 Gains/
(Losses) on
investment
assets
Actuarial
(losses)/
gains
Funds at
31 Dec
2021
£’000s
£’000s
£’000s
1,975
17,669
28,776
-
-
-
-
-
-
9,824
19,781
(20,566)
93		 1,975
17,669
28,776
716
1
(84)
-
948
28
(2)
-		 -
-
633
115
-
1,089
1,664
29
86
-		 115
-
1,722
4,631
146
(61)
(12)
5,387
230
(15)
(100)
1
8
-
(1)
1,169
159
(207)
825
143
266
(279)
(127)
-
9,001
(287)
-
5,811
252
(184)
(678)		 606
-
5,309
-
-
5,502
-
-
8
577
-
2,523
-
-
4
-
-
8,714
477
-
5,678
17,142
10,062
(1,033)
(93)
6,428
1,387
(1,394)
-
34,742
2,823
(999)
-		 1,660
-
27,738
115
-
6,536
-
-
36,566
58,312
14,272
(3,426)
(93)		 1,774
-
70,840
8,476
-
-
(1,796)
1,126
-
-
753
14,239
-
-
1,046
184
-
-
-
391
-
-
-
969
-
-
-
675
-
-
(320)
4,016
5
-
317		 844
-
7,524
254
-
2,133
2,064
-
17,349
-
-
184
-
-
391
131
-
1,100
48
-
403
592
-
4,930
30,076
5
-
-
1,164
-
-
-		 3,933
-
34,014
113
-
1,276
31,240
5
-
-		 4,046
-
35,291

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. The allocation of individual fund balances for Capital Funds was incorrectly reflected in the 2020 accounts. In order to correct this, figures have been shown in the transfers column to get to the correct allocation as at 31 December 2021. The total closing balance figure of £30,076k was correct in the 2020 accounts.

36

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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
Actuaria
l
(losses)/
gains
Funds at
31 Dec
2020
£’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

37

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 20 ANALYSIS OF CONSOLIDATED NET ASSETS BETWEEN FUNDS

2021 Analysis

ANALYSIS OF ASSETS BETWEEN FUNDS – CONSOLIDATED BETWEEN FUNDS – CONSOLIDATED BETWEEN FUNDS – CONSOLIDATED
Unrestricted Designated Restricted Capital Total
Funds Funds Funds Funds 2021
£’000s £’000s £’000s £’000s £’000s
Intangible assets 79 - 4 - 83
Property 10,641 - 44,211 1,297 56,149
Cars and equipment 116 - 194 - 310
Investments 14,133 1,026 15,051 33,986 64,196
Investment properties 3,427 - - - 3,427
External loans 43 - 159 - 202
Inter fund loans 1,702 - (1,702) - -
Net current assets 14,122 (123) 5,239 - 19,239
Pension reserve (4,618) - (2,358) - (6,976)
Inter fund balances (10,869) 819 10,041 8 -
Net assets 28,776 1,722 70,840 35,291 136,629
ANALYSIS OF ASSETS BETWEEN FUNDS – TRUST
Unrestricted Designated Restricted Capital Total
Funds Funds Funds Funds 2021
£’000 £’000s £’000 £’000 £’000
Intangible assets 78 - - - 78
Property 10,641 - - 974 11,615
Cars and equipment 116 - - - 116
Investments 14,133 1,026 14,087 33,032 62,278
Investment properties 3,427 - - - 3,427
External loans 43 - 5,646 - 5,688
Net current assets 15,824 (123) 321 - 16,022
Pension reserve (4,618) - (2,538) - (6,976)
Inter fund balances (10,868) 819 10,041 8 -
Net assets 28,776 1,722 27,736 34,014 92,248

2020 Analysis

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

38

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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

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 2021 included £12k from donations and £79k 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) Pension Deficit Fund

During 2021 the synods pledged various amounts to help with the payment of deficit contributions to the Ministers’ Pension Fund. A restricted fund was set up to collect these contributions and to pay them over to the Pension Fund when required by the agreed schedule of contributions. Any excess monies in the fund once the deficit has been paid off will be returned to the synods in the proportion in which they contributed.

(h) 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
2021
2020
£’000
£’000
Recognised
actuarial
gains/(losses)
(17,629)
(10,966)
Net scheme
assets/(liabilities)
(4,603)
(20,801)		 FSS
2021
2020
£’000
£’000
(40)
-
(15)
(71)		 Total
2021
2020
£’000
£’000
(17,669)
(10,966)
(4,618)
(20,872)

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, 2021 was formally agreed on 23 March, 2022. For the purpose of these financial statements, the actuary has updated that valuation at 31 December, 2021 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 less than 0.1% while asset values have increased by 9.4%. This has resulted in a decrease of £16. 2 million 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 2021 totalled 21.95% of pensionable pay, together with a fixed annual amount of deficit funding, in 2021 £580k (2020: £580k), increasing in line with stipends. Members’ contributions are 7.5% of pensionable pay. Church contributions totalled £1,995k in 2021 (2020: £2,073k). 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:

2021 2020
Discount rate at year end 2.00% 1.40%
Expected return on plan assets at year end n/a n/a

40

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Future stipend increases 2.90% 2.20%
Future pension increases (RPI up to 5%) 3.30% 2.90%
Future deferred pension revaluation (CPI) 2.90% 2.20%
Life expectancy of male pensioners (age 65) 24.1 24.0
Life expectancy at female pensioners (age 65) 25.6 25.5
b) The amounts recognised in the Balance Sheet are as follows:
2021 2020
Value at 31 Dec Value at 31 Dec
£'000 £'000
Present value of obligations (194,278) (194,227)
Fair value of plan assets 189,675 173,426
Net (liability) (4,603) (20,801)
c) The charge to the Statement of Financial Activities for the year comprised:
2021 2020
Charitable activities £'000 £’000
Current service cost 3,293 2,633
Administrative expenses 441 327
Financing cost:
Interest on net defined liability 293 191
Total operating charge 4,027 3,151
Actuarial gains/(losses) on pension schemes)
Asset gains arising during the year (18,025) (17,522)
Liability losses/(gains) arising during the year 396 28,488
(17,629) 10,966
Total loss/(gain) recognised in the Statements of Financial
Activities (13,602) 14,117
d) Change in defined benefit obligation:
2021 2020
£'000 £’000
Opening defined benefit obligation 194,227 165,807
Service cost (incl. employee contributions) 4,247 3,575
Interest expense on DBO 2,695 3,283
Actuarial (gains)/losses on liabilities 396 28,488
Benefits paid (7,287) (6,926)
Closing defined benefit obligation 194,278 194,227
e) Change in fair value of plan assets:
2021 2020
£’000 £’000
Opening fair value of plan assets 173,426 156,426
Interest income on assets 2,402 3,092
Actuarial gains (losses) 18,025 17,522
Contributions by employer 2,596 2,697
Contributions by employees 954 942
Administrative expenses (441) (327)
Benefits paid (7,287) (6,926)
Closing fair value of plan assets 189,675 173,426

f) Future employer contributions:

The Church expects to contribute about £3,421,000 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:

2021 2020
Asset Asset
allocation allocation
% %
Equities 37 39
Property 11 7
Bonds 51 54
Cash/other 0 0

h) Five year comparison

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

Defined benefit obligation
Plan assets
Surplus/(deficit)		 2021
2020
2019
2018
2017
£’000
£’000
£’000
£’000
£’000
(194,278)
(194,227)
165,807
152,689
167,115
189,675
173,426
156,426
141,063
140,023
(4,603)
(20,801)
(9,381)
(11,626)
(27,092)

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% (100% from 1 January 2022) 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 1 January, 2021, 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 £5,491k 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, 2021 using assumptions that are consistent with the requirements of FRS102.

i) Contributions:

During 2021 the United Reformed Church contributed 22.8% (2020: 22.8%) of basic salary in respect of members of the scheme. The 2021 figure included 3.0% as deficit funding. Expenses and levies with are payable as a separate lump sum. 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:

2021
2020
2019
Discount rate at year end
1.80%
1.40%
2.00%
Inflation (RPI)
3.20%
2.95%
3.05%
Inflation (CPI)
2.85%
2.55%
2.05%
Future salary increases
2.62%
2.50% for 3
years and
2.75%
thereafter
2.50% for 3
years and
2.75%
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
21.2
21.3
Life expectancy in years of females retiring in 2020
(age 65)
23.4
23.4
23.0
Life expectancy in years of males retiring in 2040
(age 65)
22.6
22.6
22.7
Life expectancy in years of females retiring in 2040
(age 65)
24.5
24.5
24.3
ii)
The amounts recognised at 31 December in the Balance Sheet are as follows:
2021
2020
2019
£'000
£'000
£'000
Present value of obligations
(36,994)
(37,495)
(31,450)
Fair value of plan assets
46,764
41,820
34,301
Adjustment to reflect asset limit
(9,770)
(4,325)
(2,851)
Pension asset/(liability)
–
-
-
iii)
The charge to the Statement of Financial Activities for the year comprised:
2021
2020
Charitable activities
£'000
£’000
Current service cost
1,420
1,125
Administrative expenses
113
121
Net interest (credit)/cost:
(60)
59
Total operating charge
1,473
1,305
Actuarial gains/(losses) on pension schemes
Asset gains/(losses) arising during the year
3,864
7,519
Liability gains/(losses) arising during the year
1,684
(6,045)
Effect of asset limit
(3,360)
4,325
2,188
5,799
iv)
Change in defined benefit obligation:
2021
2020
£'000
£’000
Opening defined benefit obligation
37,495
31,450
Current service cost (inc. contributions by plan participants)
1,420
1,162
Interest expense on DBO
529
633
Actuarial losses/(gains) on liabilities
(1,648)
5,022
Benefits paid and death in service premiums
(802)
(772)
Closing defined benefit obligation
36,994
37,495		 2021
2020
2019
Discount rate at year end
1.80%
1.40%
2.00%
Inflation (RPI)
3.20%
2.95%
3.05%
Inflation (CPI)
2.85%
2.55%
2.05%
Future salary increases
2.62%
2.50% for 3
years and
2.75%
thereafter
2.50% for 3
years and
2.75%
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
21.2
21.3
Life expectancy in years of females retiring in 2020
(age 65)
23.4
23.4
23.0
Life expectancy in years of males retiring in 2040
(age 65)
22.6
22.6
22.7
Life expectancy in years of females retiring in 2040
(age 65)
24.5
24.5
24.3
ii)
The amounts recognised at 31 December in the Balance Sheet are as follows:
2021
2020
2019
£'000
£'000
£'000
Present value of obligations
(36,994)
(37,495)
(31,450)
Fair value of plan assets
46,764
41,820
34,301
Adjustment to reflect asset limit
(9,770)
(4,325)
(2,851)
Pension asset/(liability)
–
-
-
iii)
The charge to the Statement of Financial Activities for the year comprised:
2021
2020
Charitable activities
£'000
£’000
Current service cost
1,420
1,125
Administrative expenses
113
121
Net interest (credit)/cost:
(60)
59
Total operating charge
1,473
1,305
Actuarial gains/(losses) on pension schemes
Asset gains/(losses) arising during the year
3,864
7,519
Liability gains/(losses) arising during the year
1,684
(6,045)
Effect of asset limit
(3,360)
4,325
2,188
5,799
iv)
Change in defined benefit obligation:
2021
2020
£'000
£’000
Opening defined benefit obligation
37,495
31,450
Current service cost (inc. contributions by plan participants)
1,420
1,162
Interest expense on DBO
529
633
Actuarial losses/(gains) on liabilities
(1,648)
5,022
Benefits paid and death in service premiums
(802)
(772)
Closing defined benefit obligation
36,994
37,495		 2021
2020
2019
Discount rate at year end
1.80%
1.40%
2.00%
Inflation (RPI)
3.20%
2.95%
3.05%
Inflation (CPI)
2.85%
2.55%
2.05%
Future salary increases
2.62%
2.50% for 3
years and
2.75%
thereafter
2.50% for 3
years and
2.75%
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
21.2
21.3
Life expectancy in years of females retiring in 2020
(age 65)
23.4
23.4
23.0
Life expectancy in years of males retiring in 2040
(age 65)
22.6
22.6
22.7
Life expectancy in years of females retiring in 2040
(age 65)
24.5
24.5
24.3
ii)
The amounts recognised at 31 December in the Balance Sheet are as follows:
2021
2020
2019
£'000
£'000
£'000
Present value of obligations
(36,994)
(37,495)
(31,450)
Fair value of plan assets
46,764
41,820
34,301
Adjustment to reflect asset limit
(9,770)
(4,325)
(2,851)
Pension asset/(liability)
–
-
-
iii)
The charge to the Statement of Financial Activities for the year comprised:
2021
2020
Charitable activities
£'000
£’000
Current service cost
1,420
1,125
Administrative expenses
113
121
Net interest (credit)/cost:
(60)
59
Total operating charge
1,473
1,305
Actuarial gains/(losses) on pension schemes
Asset gains/(losses) arising during the year
3,864
7,519
Liability gains/(losses) arising during the year
1,684
(6,045)
Effect of asset limit
(3,360)
4,325
2,188
5,799
iv)
Change in defined benefit obligation:
2021
2020
£'000
£’000
Opening defined benefit obligation
37,495
31,450
Current service cost (inc. contributions by plan participants)
1,420
1,162
Interest expense on DBO
529
633
Actuarial losses/(gains) on liabilities
(1,648)
5,022
Benefits paid and death in service premiums
(802)
(772)
Closing defined benefit obligation
36,994
37,495
1,473
1,305
3,864
7,519
1,684
(6,045)
(3,360)
4,325
2,188
5,799
2021
2020
£'000
£’000
37,495
31,450
1,420
1,162
529
633
(1,648)
5,022
(802)
(772)
36,994
37,495

43

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

v) Change in fair value of plan assets:

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		 2021
2020
£’000
£’000
41,820
34,301
589
692
(113)
(121)
3,864
6,226
1,370
1,457
36
37
(802)
(772)
46,764
41,820

vi) Future employer contributions:

Employers expect to contribute about £1,490,000 to the plan during the next accounting year.

vii) Breakdown of plan assets:

The major categories of plan assets are as follows:

Equity-Type assets
Fixed Interest Bonds
Index-Linked bonds
Fixed Interest Gilts
Property
Other
Total assets		 2021
£’000
2020
£’000
2019
£’000
23,587
21,917
13,916
3,829
5,205
2,635
13,800
11,052
7,701
3,132
1,661
3,831
2,082
1,464
1,485
334
521
4,733
46,764
41,820
34,301

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 £15k at the balance sheet date (2020: £17k). The present value is calculated using a discount rate of 1.18% (2020: 0.27%), and the charge to the Statement of Financial Activities of £17k (2020: £2k) 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, 2021 there were no commitments in respect of the purchase of properties (2020: £nil), and contractual liabilities of £nil (2019: £nil). £123k (2020: £51k) 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 2021 £1,725k was spent on acquiring housing for retired ministers, £503k on repairing and maintaining existing properties and profits of £1,992k were earned from the sale of homes no longer required. Exercises have been undertaken periodically by the Society’s management committee to collect

44

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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 £24 million, using assets available for this purpose.

NOTE 26 CONTINGENT LIBILITIES

We have been notified by the trustee of the United Reformed Church Final Salary Pension Scheme that they performed a review of the changes made to the Scheme’s benefits over the years and the result is that there is uncertainty surrounding some of these changes. The trustee has determined that it is prudent to follow best practice and seek clarification from the Court on these items. This process is ongoing and the matter is unlikely to be resolved before 2024 at the earliest. It is recognised that this could potentially impact the value of Scheme liabilities, but as the Court direction is pending, it is not possible to calculate the impact of this issue with any accuracy at this time. Therefore, no adjustment has been made in these financial statements in respect of this issue.

NOTE 27 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		 2021
£'000
2020
£'000
8,018
(1,237)
8,245
9,482
16,263
8,245

Net cash funds are represented by bank balances and money on call, as shown on the Consolidated Balance Sheet. Of the total, £14,533k is shown on the Trust Balance Sheet.

NOTE 28 RELATED PARTY TRANSACTIONS

During the year the United Reformed Church Trust recharged salary and staff costs amounting to £253k (2020: 304k) to the United Reformed Church Retired Ministers’ Housing Society Limited and paid £367k (2020: £495k) to Westminster College as a contribution to the teaching costs and other support costs of the College.

NOTE 29 LEASE COMMITMENTS

At 31 December, 2021 the trust had future minimum Lease payments under non-cancellable operating leases as follows:

Due within 1 year
Due in more than 1 year but less than 5 years
Due in more than 5 years
Total		 2021
£’000
2020
£’000
2
3
2
4
-
-
4
7

45

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 30 LEASES RECEIVABLE

At 31 December, 2021 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		 2021
£’000
2020
£’000
75
100
-
75
-
-
75
175

NOTE 31 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 supertintended 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
2021
2020
£’000
£’000
2,824
1,427
998
728		 Westminster College
Cambridge
2021
2020
£’000
£’000
1,097
1,477
1,394
1,797
1,826
699		 (297)
(321)
36,570
34,738		 7,812
7,592

NOTE 32 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		 2021
£'000
2020
£'000
35,128
22,858
1,041
396
34,087
23,254
(24,078)
(22,923)
10,009
331

46

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

NOTE 33

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
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		 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
18
0
378
0
396
19
0
0
0
19
37
0
378
0
415
19,803
68
3,379
4
23,254
0
0
399
0
399
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
20,214
19
2,291
0
22,524
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

47

FIVE YEAR SUMMARY

FIVE YEAR SUMMARY (unaudited)

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		 2017
2018
2019
2020
2021
£'000
£'000
£'000
£'000
£'000
19,104
19,016
18,817
17,908
17,204
1,694
1,839
1,884
1,950
1,948
1,346
1,547
1,421
1,233
1,243
139
155
304
690
398
322
1,036
811
339
80
476
398
1,044
440
9,545
3,403
1,606
2,727
694
3,669
26,484
25,597
27,008
23,254
34,087
18,986
17,775
17,378
17,220
18,665
3,246
2,967
3,142
3,258
3,217
387
428
385
353
337
1,493
1,893
1,537
1,282
1,353
151
147
162
411
426
548
599
651
399
80
223
50 ‐
‐
‐
25,034
23,859
23,255
22,923
24,078
1,450
1,738
3,753
331
10,009
4,484
(1,142)
8,392
3,590
7,911
3,261
17,292
332
(10,174)
17,669
9,195
17,888
12,477
(6,253)
35,589
(1,686)
679
(1,417)
946
946
1,337
(714)
(1,473)
500
500
116
102
73
92
48
5
20
(18)
13
(28)
(228)
87
(2,835)
1,551
1,466
1,450
1,738
3,656
331
10,009
(2,198)
(1,351)
(4,461)
(21)
(2,578)
(748)
387
(805)
310
7,431
4
5
4
4
5
‐
85
(892)
0
(93)
516
(390)
(1,142)
1,237
(8,018)
(228)
87
(2,835)
1,551
(675)

48

FIVE YEAR SUMMARY Continued

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		 2017
2017
2018
2019
2020
£'000
£'000
£'000
£'000
£'000
38,070
39,115
38,654
39,979
39,334
5,364
5,364
5,021
5,517
8,622
8,258
8,581
8,415
8,297
8,193
621
533
463
434
393
52,313
53,593
52,553
54,227
56,542
1,755
1,905
2,695
3,078
3,427
46,001
44,623
53,317
56,525
64,196
139
160
142
155
202
100,208
100,281
108,707
113,985
124,367

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
731
‐
‐
‐
‐
1,540
2,097
3,270
3,338
4,819
7,950
8,340
9,482
8,245
16,263
10,221
10,437
12,752
11,583
21,082
1,435
1,464
1,550
1,298
1,844
8,786
8,973
11,202
10,285
19,238
108,994
109,254
119,909
124,270
143,605
(28,916)
(11,288)
(9,466)
(20,872)
(4,618)
(3,150)
(3,150)
(3,150)
(2,358)
(2,358)
76,928
94,816
107,293
101,040
136,629
(1,176)
15,519
20,111
9,824
28,776
‐
1,579
1,564
1,664
1,722
52,019
52,298
56,030
58,312
70,840
26,085
25,420
29,588
31,240
35,291
76,928
94,816
107,293
101,040
136,629
NON‐FINANCIAL STATISTICS
(from URC Year Book)
2017 2018 2019 2020 2021
Members 49,517 46,881 44,788 43,208 40,024
Stipendiary ministers 401 398 377 364 334
Non‐stipendiary ministers 57 58 58 62 56
Churches 1,406 1,383 1,354 1,331 1,284
Retired ministers 885 885 874 857 844
Ministry and Mission contribution per member £384 £401 £420 £414 £430

49