## **Orchard Hill College**
**Annual Report and Financial Statements**
31 July 2023
Charity Registration Number 1144922 Company Registration Number 07586715 (England and Wales)
## **Contents**
## **Reports**
|**Reports**||
|---|---|
|Reference and administrative information|1|
|Trustees’ report|4|
|Independent auditor’s report|21|
|**Accounts**||
|Statement of financial activities|25|
|Balance sheet|26|
|Statement of cash flows|27|
|Principal accounting policies|29|
|Notes to the accounts|34|
**Reference and administrative information** 31 July 2023
**Members** John Brown Darren Coghlan Peter Holmes Roger Mills **Trustees/Directors** Peter Lauener (Chair) Rama Venchard (Vice Chair) John Prior (CEO) Akansha Arya (resigned 28.04.23) Julie Avis (resigned 25.03.23) Simon Fryer Angela O’Hara (appointed 01.09.23) Christian Jennings (appointed 01.09.23) David Dangana (appointed 01.09.23) Tim Borrie (appointed 01.09.23)
Orchard Hill College **1**
## **Reference and administrative information** 31 July 2023
**Principal office** 8th Floor Quadrant House The Quadrant Sutton Surrey SM2 5AS **Telephone** 0345 402 0453 **Website** www.orchardhill.ac.uk **Charity Registration Number** 1144922 **Company Registration Number** 07586715 (England and Wales)
**Executive Senior Leadership Team**
CEO John Prior Chief Finance Officer Corrina Jenkins Chief Operating Officer Stuart Dixon (resigned 31.08.23) Deputy CEO Laurie Cornwell Principal Kelly Phillips Lynn Barratt Julia James (appointed 01.09.23)
Executive Director of Development Executive Director of Quality & Standards
## **External Auditor**
Buzzacott LLP 130 Wood Street London EC2V 6DL
**Internal Auditor**
TIAA Ltd Artillery House, Fort Fareham Newgate Lane Fareham PO14 1AH
Orchard Hill College **2**
**Reference and administrative information** 31 July 2023
**Bankers** Lloyds Bank Plc 49/53 High Street Sutton Surrey SM1 1DT Barclays Corporate Banking 1 Churchhill Place Canary Wharf London E14 5HP **Solicitors** Veale Wasborough Vizards Orchard Court Orchard Lane Bristol BS1 5WS
Orchard Hill College **3**
## **Trustees’ report (including Strategic Report)** 31 July 2023
The Trustees present their statutory report together with the financial statements of Orchard Hill College (‘OHC’ or ‘the College’) for the year ended 31 July 2023.
The report has been prepared in accordance with Part 8 of the Charities Act 2011 and it is also the report of the directors for the purposes of the Companies Act 2006.
The financial statements have been prepared in accordance with the accounting policies set out on pages 299 to 33 and comply 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 United Kingdom and Republic of Ireland (FRS 102).
It should be noted that the directors of Orchard Hill College are the Trustees and as such both terms are used interchangeably throughout this report.
## **OBJECTIVES AND ACTIVITIES**
Orchard Hill College is a specialist college committed to offering social and vocational opportunities for students in the heart of their communities. Our vision statement is “Building Futures, Changing Lives” and this commitment informs everything we do.
Our provision is open to students over the age of 16 with a wide range of additional needs. All students are individual, and each programme is as unique as they are. Operating out of eight main centres and additional satellite provision across London and Surrey, our programmes are designed to support and empower each student to achieve their aspirations and goals, whilst developing skills to prepare them for adulthood. Alongside this, we work closely with families, local authorities, community stakeholders and other external partners in order to broker strong community partnerships that will support our students to build meaningful and fulfilling lives.
As a charity, our objects are to advance education, training, vocational and occupational opportunities for the benefit of the public in the following ways:
- promoting and widening participation in education, training, vocational and occupational opportunities, particularly for students with complex/profound/severe learning difficulties and/or disabilities and those who have been previously excluded from such opportunities and supporting practitioners who work with such students;
- improving the quality of education, training, work placements and employment prospects, particularly for students with complex/profound/severe learning difficulties and/or disabilities and those who have not previously been equitably represented in such opportunities and supporting practitioners who work with such students;
- recognising progress in all forms: promoting and improving access to education, training, work and employment opportunities, through the development and promotion of resources, provision, organisations and systems; and
- any other activity in its own work or work with others not covered by the above which, in the view of the Trustees directly enhances the charity’s activities and objectives.
## **Public benefit**
In formulating the College’s aims and in planning its activities, the Trustees confirm that they have had due regard to the general guidance published by the Charity Commission on public benefit.
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**Trustees’ report (including Strategic Report)** 31 July 2023
## **ACHIEVEMENTS AND PERFORMANCE**
Orchard Hill College (OHC) is an outstanding college and continues to be so. The College provides exceptional opportunities for learning and meeting the needs and aspirations of its students. Orchard Hill College works closely with its many communities and commissioners, including 26 local authorities, to ensure that it is always responsive to increased student demand which is growing year on year. Specialist centres are sited in Camberwell, Kingston, Wandsworth, Carshalton, Sutton and Hillingdon.
Orchard Hill College is an Independent Specialist College listed in Section 41 of the Children and Families Act 2014 and also delivers work-related training through a GLA (AEB) funding grant as well as apprenticeship delivery. The College delivers the highly regarded Diploma in Education & Training (SEND pathway), validated by Canterbury Christchurch College University. The College is listed on the Register of Apprenticeship Training Providers.
Overall student numbers decreased slightly from 411 in 2021-22 to 408 in 2022-23. Overall retention was slightly higher at 98.5% (up from 97.0% in 2021-22). Across all courses and centres the quality of education students receive continues to be outstanding. Typically 88% of teaching is at least Good or better. The overall effectiveness of teaching is quality assured using the Teacher Evaluation Schedule (TES).
OHC students help to design their programmes to achieve their aspirations and goals, whilst developing their skills and talents to become more independent in their lives in the future. The College is a busy, diverse and vibrant place to work and study, with a high focus on vocational programmes together with being part of the local communities it serves.
The College continues to hold Matrix Standard accreditation which affirms the many areas of outstanding practice, particularly in relation to careers education, information, advice and guidance (CEIAG).
The majority of students attend a full-time course. There are two course offers:
- Foundation Skills for Life which is a specialist Post-19 programme for students with complex, profound, and severe learning difficulties and/or disabilities, and;
- Skills for Work and Living, for students with an aspiration or an identified outcome in employment.
Both courses have four study programmes which are related to preparation for adulthood outcomes (employment, independent living, good health and friends and relationships in the community) and lead to individualised destinations in work, living and community. The College offers a range of work-related learning courses. The WorkStart programme suite comprises Supported Internships, Traineeships, inclusive Apprenticeships, Project Search, Pathway to Employment and Preparation for Employment. These programmes provide opportunities for students to gain relevant employability qualifications and work experience and to define their working ambitions for the future. They also give students, where appropriate, the opportunity to work towards achieving Functional Skills qualifications in English and maths. The courses are open to students who have experienced barriers to learning, including young people who are NEET (not in education, employment or training) as well as students with a learning difficulty or disability. A significant cohort of the students also have complex behaviours of concerns aligned to their disabilities. OHC is the education provider for Project Search initiative in both Hillingdon (working with the Local Authority and Hillingdon Autistic Care and Support ) and Sutton (working with the Local Authority and Sutton and St Helier Hospital). Project Search is a partnership project delivering one-year supported internships with the aim of securing paid employment for participants. Further partnerships have been identified with hospital trusts and local employers and commenced in September 2023.
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## **ACHIEVEMENTS AND PERFORMANCE** (continued)
In 2022/23 408 students were enrolled with an overall retention rate of 98.5%. 279 students were enrolled on the Foundation Skills for Life and Skills for Work and Living courses, a slight decrease on the previous year’s figure of 284. All achieved an outcome relevant to their individual EHCP ranging from employment, independent living, good health and friends and relationships in the community. The content and structure of these study programmes were reviewed at the end of 2022-2023. This involved curriculum and Integrated Services teams working collaboratively to better identify the skills, knowledge and behaviours required to master key activities across the Preparing for Adulthood areas. An assistive technology trial, which incorporates the use of widely accessible smart home assistive technology to support students to have greater independence through environmental control, was successful in Kingston and is planned to be rolled out across the College from September 2023.
129 students were enrolled on Workstart programmes, either on a full- or part-time basis. Of the 34 full time students, 62% are progressing to employment and 24% progressing to further education; the other 14% have had targeted intervention and support programmes to support their ongoing mental health needs, with a view to gaining employment.
The College has effective links with over 80 employers and community-based programmes; these provide outstanding progression into local supported living schemes, supported employment, internships and volunteering and Further Education and Adult Community programmes, as well as enhancing students’ educational and pastoral experience during their time with us.
The College offers apprenticeship programmes in Customer Service and Supporting Teaching and Learning and specialises in inclusive apprenticeships. The apprenticeship programme was inspected by Ofsted for the first time in November 2019 and was judged as Good. Our robust internal assessment, that includes the judicious use of Ofsted-trained external verifiers, evidences that the programme continues to be Good. Apprentices are making good progress and taking on more responsibilities in the workplace. Apprentices continue to make good progress and take on more responsibilities in the workplace. Of the 8 apprentices due to complete in the 2022/23 funding year, 5 completed, 1 withdrew after gaining full time employment and 2 are continuing, giving an achievement rate of 83%. 80% achieved a distinction grade.
The College continues to run the Duke of Edinburgh Award Scheme. There was growth in numbers this year, with 24 students accessing the scheme, up from 13 in 2021-22.3. This year the College also launched the Prince’s Trust scheme to further augment our extended curriculum offer. Safeguarding across the College continues to be outstanding, underpinned by a robust set of policies, procedures and training for all staff, which are informed by the SEND-specialist knowledge of OHC leaders and practitioners. All staff receive training as part of their annual safeguarding update as well as bespoke training and refreshers throughout the year. The College Designated Safeguarding Lead (DSL) oversees a team of Safeguarding and Mental Health Leads across the College who provide appropriate interventions and support as well as supporting the development of OHC’s student safeguarding ambassadors. The DSL works closely with the Director of Safeguarding & Wellbeing and participates in the cross-organisational DSLs’ network with OHCAT DSLs. This has continued to be a rich source of knowledge exchange and resource sharing throughout 2022-23, enabling a consistent and evidenceled response to current safeguarding issues, as well as greater triangulation of compliance requirements. Through delivery of a bespoke curriculum including relationships, sex and health education, e-safety and British values, students learn how to safeguard themselves and how to apply this knowledge in a variety of settings, particularly focusing on contextual safeguarding in their local communities.
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## **ACHIEVEMENTS AND PERFORMANCE** (continued)
The College continues its journey to become Trauma and Mental Health informed. The process of securing Trauma Informed status has involved training at all levels, enabling staff to feel more confident when supporting students who may require additional support with their mental health. OHC has 50 trained Mental Health First Aiders within the staff team, who augment this team approach working with staff and students. During 2022-23 five members of staff also completed ASIST suicide intervention training, in order to further augment the College’s comprehensive safeguarding and wellbeing strategy.
Other notable achievements this year: during 2022-23, the College offered workshops to parents and carers on trauma, mental health and positive behaviour support which was delivered by senior leaders. These workshops were supported by a full range of professionals from supported housing and employment, specialist disability organisations and local community schemes providing opportunities for extending life and learning skills.
OHC has a comprehensive and highly effectively CPD (Continuing Professional Development) programme in place to ensure that staff receive high quality training and development pertinent to their job role and to support succession planning. All staff access regular training on key compliance areas such as safeguarding, Positive Behaviour Support (PBS) and Team Teach, manual handling and therapeutic approaches to underpin curriculum delivery, as well as a range of specialist CPD focused on best practice within SEND. As a result, the quality of education students receive at Orchard Hill College is typically outstanding. Across the College and on all courses, during 2022-23 88% of teaching was never less than good and outstanding over time. Where teaching is less than good, lecturers benefit from a bespoke coaching and mentoring support package which includes peer, leadership and multidisciplinary interventions. This strategy ensures staff have every opportunity to improve their practice further in order to ensure the best outcomes for students.
Alongside regular INSET days, OHC runs a full Training Week in October half term and an annual Development Planning Day for all staff. OHC Training Week took place on the 17[th] -21[st ] of October, with staff accessing individualised training programmes spanning compliance matters and specialismfocused content. Development Planning Day was held at Twickenham Stadium on 28[th] April 2022, with a keynote from an external speaker on Positive Behaviour Support alongside OHC and wider Trust updates, strategic discussions and team building exercises.
The College delivers the Diploma in Education & Training (DET) SEND specialist pathway, validated by Canterbury Christ Church University (CCCU), which offers staff a route into qualified teaching and a clear career progression pathway within the organisation. During 2022-23, 14 OHC and Trust staff joined in Year 1 and the full cohort of staff progressed to Year 2 of the course. In addition, 17 external DET students took up the specialist pathway, enabling OHC to further disseminate SEND best practice to organisations including Ambitious About Autism, Great Oaks College, South Thames College and Beyond Autism. OHC continues to work closely with CCCU in a wider partnership capacity, including supporting with Ofsted’s inspection of CCCU’s teacher training provision in May 2023; inspectors met with teaching staff and trainees as well as visiting some OHC&AT trainees on placement. CCCU’s provision was graded as Good, with the final report noting that "Trainees on the specialist pathway programme for teaching learners with SEND gain a sound grasp of learning theories. For example, trainees learn about how to sequence subject content so that learners develop knowledge successfully. They understand the importance of designing a curriculum which builds in time for learners to revisit knowledge and then link new content to what they already know in lessons."
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## **Trustees’ report (including Strategic Report)** 31 July 2023
## **ACHIEVEMENTS AND PERFORMANCE** (continued)
OHC offers Level 1 and 2 Functional Skills in maths and English for all staff members who do not yet hold such qualifications. During 2022-23, the College delivered Level 1 and 2 Functional Skills English and maths courses to staff from OHC and OHCAT. Leaders and managers have an individualised CPD programme, including one Deputy Principal undertaking an NPQH and two members of the Senior Leadership team (SLT) undertaking a Level 7 leadership and management apprenticeship.
The Principal and SLT continue to make a regional and national contribution to government and advisory groups, influencing policy for the benefit of all students and the wider community. The College Principal is the Director for the South West Region of Natspec. The College Senior Leadership Team are regularly asked to speak regularly at regional and national conferences and employer events.
During 2022-23 members of the College SLT were represented on national, regional and local bodies including:
- London Councils’ Young People Education and Skills Board
- The London Implementation Group
- PBS Alliance National Steering Group and Schools and Colleges Community of Practice,
- Contributing to National Guidelines in Learning Disabilities for The Royal College of Speech & Language Therapy
- AoC’s Prevent Pilot Board
- AoC’s Sports Inclusion Hub
- Sutton Local Safeguarding Board South, West and London careers Hubs
- Prevent Forum for London
- Learning Disability network, Schools and College Network for therapy disciplines
- SEND employment forums
- Supported internship forums
- Governors of SEND schools
Through the Association of Colleges, OHC is working with Crawley College (a mainstream further education provider) providing support to young people with medical needs so they can access the FE pathway of their choice. The wider OHC&AT team also includes current and former badged Ofsted inspectors for both schools and further education. During 2022-23, the College featured as a case study in _A guide to best practice in special education, health and social care_ , published by Routledge.
Orchard Hill College sponsors Orchard Hill College Academy Trust, which supports the development and delivery of high-quality educational provision for school-age children and young people with SEND. The symbiotic relationship between College and Trust promotes collaborative working and enables a two-way flow of best practice and specialist knowledge which enriches and strengthens the student experience on both sides, as well as smoothing transitions for students moving from school to College. Working as a group enables the College to share good practice, to gain from the knowledge and expertise of colleagues in the academies, and to support smoother transitions for the students who are moving from school to college.
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**Trustees’ report (including Strategic Report)** 31 July 2023
## **FINANCIAL REVIEW**
## **Results for the year**
A summary of the results for the year can be found on page 25 of the financial statements.
Income for the year totalled £17,374,000 (2022: £17,705,000). The major part of this income is in relation to core grants from the Education and Skills Funding Agency (ESFA) of £5,651,000 (2022: £5,074,000), and funding from Local Authorities for educational contracts of £11,259,000 (2022: £11,944,000).
Expenditure for the year, which principally related to the provision of education, totalled £18,493,000 (2022: £19,682,000).
The net loss for the year ended 31 July 2023 as shown on the statement of financial activities was £1,119,000 (2022: net loss of £1,977,000). Excluding the pension current service cost and interest cost adjustments in relation to the Local Government Scheme required by FRS 102 of £672,000 (2022: £2,132,000), the net position would be a deficit of £447,000 (2022: surplus of £155,000).
## **Financial position and reserves policy**
As at 31 July 2023, the balance sheet included net assets totalling £6,478,000 (2022: net assets of £1,209,000). This is comprised of:
- The Tangible Fixed Assets fund of £3,981,000 (2022: £3,612,000). This fund represents the net book value of the College’s tangible fixed assets net of any associated lease obligations and has been separated on the balance sheet in recognition of the fact that these assets are essential to the day-to-day operation of the College, and the value of the assets can therefore not be considered as realisable.
- The Pension Reserve fund of £2,433,000 deficit (2022: £8,149,000 deficit). This fund reflects the College’s share of the net liability in respect of the Local Government Pension Scheme. This fund has been separated on the College’s balance sheet in order to distinguish the liability from the operational liabilities which form part of the College’s working capital.
- The Unrestricted General fund of £4,909,000 (2022: £5,746,000) are funds which are not represented by the tangible fixed assets fund, the pension reserve fund, restricted, or otherwise designated, and are in effect the College’s free reserves which are immediately available for general charitable use.
- Restricted funds of £21,000 (2022: £nil) representing ESFA funding carried forward.
Maintaining an appropriate level of financial reserves is considered essential in protecting the charity from financial risk generated by, for example:
- Income reduction due to Government funding changes;
- Unexpected falls in student numbers;
- Cash flow issues due to delays in receipt of funding; and
- Emergencies.
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## **Trustees’ report (including Strategic Report)** 31 July 2023
## **FINANCIAL REVIEW** (continued)
## **Financial position and reserves policy** (continued)
In general, it is considered prudent to maintain a level of usable reserves sufficient to cover unexpected and unplanned events so that the individual College’s primary objective is preserved. At the same time, the College wishes to ensure that it uses its funding to benefit the students in its care which implies an imperative to consider actively the use of reserves to enhance educational provision.
The Board of Trustees monitors levels of reserves in financial reports provided by the Chief Finance Officer. Trustees look to ensure that a prudent level of reserves is maintained, bearing in mind the recurrent spending needs to ensure high quality provision. In deciding the level of reserves, Trustees take into account the following:
- One month’s salary bill;
- The College’s annual budget;
The need for any large project spend such as facilities development or building condition needs; Any uncertainty, turbulence or expected reduction in funding arrangements, including the level of transitional protection within the College funding and its expiry date; and
Anticipated funding over the next three years. As a prudent measure, the College will aim for between 45 and 60 consecutive days of free reserves based on annual expenditure before depreciation and pension adjustments.
During the year the College achieved free reserves of 101 days based on the free reserves balance at 31 July 2023 of £4,909,000 (2022: 120 days totalling £5,746,000). General reserves will support the next phase of investment in the College premises, including investment in new College centres in Sutton and more suitable ICT infrastructures and migration to the Cloud. Furthermore, £250,000 has been ringfenced for LGPS deficit repayments due between August 2023 and July 2024.
## **Fundraising**
The College accesses funds for specific projects that will benefit existing and future students where funds for these projects cannot be accessed via existing channels i.e. government education funding. The College will access funds for projects that will provide opportunities and enhance the learning experience and environment for students.
The code of fundraising practice is followed (https://www.fundraisingregulator.org.uk/code).
The College does not use commercial organisations to support its fundraising activities. There were no complaints concerning the College’s fundraising activities during the year.
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Constitution**
The College is an independent charitable company. The Company Registration Number is 07586715 and the Charity Registration number is 1144922. The College’s primary governance document is the Articles of Association.
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## **Trustees’ report (including Strategic Report)** 31 July 2023
## **STRUCTURE, GOVERNANCE AND MANAGEMENT** (continued)
## **Constitution** (continued)
As a charity and company limited by guarantee, Orchard Hill College is governed by a Board of Directors (also referred to as Trustees) who are responsible for, and oversee, the management and administration of the College. The Trustees have overall responsibility and ultimate decision-making authority for all the work of the College. This is largely exercised through strategic planning and the setting of policy. It is managed through business planning, monitoring of budgets, performance management, the setting of standards and the implementation of quality management processes.
The Trustees (who are ultimately responsible for the delivery of the College’s objectives) are supported by an Executive Senior Leadership Team (ESLT) which includes the CEO, College Principal, Executive Principal/Deputy CEO, the Chief Finance Officer, the Chief Operating Officer and the Executive Director of Development. The services of ESLT (excluding the College Principal) are provided to the College by OHCAT as part of the core service charge service level agreement.
Local governance of the College falls to the College Committee, which is a committee formed by the Trustees and which derives its power from them. The College Committee is responsible for fulfilling a largely strategic role in the conduct of the College and is supported by the College Senior Leadership Team (SLT) in conjunction with the Principal who is responsible for the internal organisation, management and control of the College. The Trustees may also delegate responsibility to the Principal.
The College’s Senior Leadership Team comprises the Principal, two Deputy Principals, five Heads of College/Regional Leads and the Director of Operations. The College employs a Head of Governance, an experienced Governance professional. The Head of Governance reports directly to the Executive Director of Development who is qualified and experienced in corporate and school governance.
An acting Head of Governance maintained her professional development through engaging in regular training and further education briefings, was a member of the FE Governance Professional ’ network, a forum that shares good practice and information from the FE Governance sector, whilst a substantive post holder was recruited.
Orchard Hill College has four Members, to whom the Board of Trustees report (see page 1 for details). The College operates a portfolio governance system, assigning strategic areas to Trustees and governors of the College Committee via skills matching. The portfolio governance arrangements for Trustees and College Committee members which existed during the financial year is set out below:
## **Organisational structure**
The Board normally meets formally three times a year during the second half of each term. To maintain financial oversight, whilst recruiting a suitably skilled finance portfolio holder Trustee the Board has delegated powers to a finance and resource committee, which also meets once a term to ensure continuity of financial probity and scrutiny. The Chief Financial Officer meets with the committee Trustees termly; and these Trustees feedback on these meetings to other Board members . In addition, TIAA Ltd performed an annual Internal Audit programme to provide Trustees with additional assurances on key risks focussing on Key Finance Systems, Procurement, Whistleblowing, HR management and ILR funding. Financial management is monitored by the Executive Senior Leadership Team at monthly meetings and through regular departmental budget meetings.
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**Trustees’ report (including Strategic Report)** 31 July 2023
## **STRUCTURE, GOVERNANCE AND MANAGEMENT** (continued)
## **Organisational structure** (continued)
|**Portfolio**|**OHC Director**|**OHC Committee member**|
|---|---|---|
|Ethos,Vision and Strategy|Peter Lauener|Dave Hobday|
|Teaching and Learning|David Dangana (appointed
01.09.23)|Michele Humphreys
(resigned 10.02.23)
David Thomas (appointed
13.07.23)|
|Finance and Resources|Akansha Arya (resigned
28.04.23)
Christian Jennings (appointed
01.09.23)|N/A|
|Health and Safety, Safeguarding
and Child Protection|Julie Avis (term ended
25.03.23)|Neil Mears|
|Business Development and
Marketing|Rama Venchard|Vacancy|
|HR and Organisational
Development|Simon Fryer|N/A|
Orchard Hill College Academy Trust was established in 2013 by Orchard Hill College, in response to a request from the London Borough of Sutton and the DfE to sponsor Carew Manor School (now Carew Academy). The College and the Trust are independent legal entities that form a family of providers, collectively known as Orchard Hill College and Academy Trust (OHC&AT), working for the benefit of students and pupils in local communities.
The College and the Academy Trust operate a collaborated ‘family’ Board of Trustees, as shown below. This model of governance has proven to be a great success, allowing greater coherence in decisionmaking and greater clarity of communication while retaining the individuality of each organisation. Risk continues to be managed separately and collaboratively, allowing either organisation to retract from the collaboration if required while at the same time promoting transparency. In addition to the Remuneration Committee, the collaborated Board of Trustees also operates an Audit and Risk Committee, Finance and Resources committee, Safeguarding Oversight Committee, Quality and Standards committee and a Chairs’ Committee.
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## **STRUCTURE, GOVERNANCE AND MANAGEMENT** (continued)
## **Connected organisations**
The College and Academy Trust work closely together and are responsive to the requirements of each other and of academies within the Trust. The aligned Executive Senior Leadership Team (ESLT) maintains a close working relationship with the College Senior Leadership Team as well as those of each academy, The Academy Trust provides operational support to the College in a number of areas including HR, IT, Finance and Facilities.
The College is represented as one of the members of the Academy Trust and may appoint Directors to the Board of the Academy Trust in agreement with all other Trust members.
## **Trustees**
The Trustees (Directors) who served during the period and up to the date of approval of the report are included on page 1.
All new Trustees receive an induction on appointment and receive regular briefings from the ESLT and other senior leaders. All Members, Trustees and Governors have access to GovernorHub, a comprehensive online governance portal which includes online training and resources. All Members, Trustees and Governors have access to a comprehensive package of online training modules through The Key, the National Governance Association and Educare, all of which offer key compliance modules around safeguarding, health and safety and equality and diversity, as well as wider areas of interest. The College also offers bespoke training sessions on request. Additionally, the College and OHCAT jointly hold an annual governors’ conference, offering Trustees and LGB governors across both organisations the chance to take part in training and development opportunities as well as networking. The annual governor conference was held on 6[th] October 2022, with an agenda that included strategic discussions, safeguarding updates and SEND-specific training around neurodiversity, social emotional and mental health (SEMH) needs, and pathological demand avoidance (PDA).
All new Governors receive an induction and an introductory training session and are actively encouraged to participate in the relevant training offered, enabling them to understand their role within the College and the wider family formed with OHC&AT. As part of the portfolio governance arrangements, portfolio holders are also paired with members of College staff and expected to meet two to three times each year, or more as required, to discuss progress and any issues that may have arisen.
## **Key management personnel**
The Trustees consider the key management personnel for the College to include:
- The Trustees: and
- The Executive Senior Leadership Team:
- The CEO
- The Executive Principal/Deputy CEO
- The College Principal
- The Chief Finance Officer
- The Chief Operating Officer
- The Executive Director of Development
- The Executive Director for Quality & Standards
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## **STRUCTURE, GOVERNANCE AND MANAGEMENT** (continued)
## **Key management personnel** (continued)
The Executive Senior Leadership Team (except for the College Principal) all offer their services on a Service Level Agreement arrangement with OHCAT and are not direct employees of the College.
The OHC&AT Board has appointed an OHC&AT Remuneration Committee to consider salaries for senior post holders including the key management personnel of the College.
The OHC&AT Remuneration Committee is comprised of five members which consist of two OHC Trustees and three OHCAT Trustees, which is quorum.
The Remuneration Committee makes recommendations to the OHC&AT Board for approval. The Trustees, except for the CEO, who is also a Trustee of the charitable company, did not receive any remuneration for their services to the College in the period of report; as noted above, the CEO is remunerated by Orchard Hill College Academy Trust and the College is recharged by the Academy Trust for his time under a service level agreement.
The following factors are taken into account when considering the level of remuneration from the executive senior leadership team:
- Skills, experience and responsibilities;
- Performance appraisals;
- Annual turnover;
- Range of salaries for senior post holders in similar organisations;
- Retention;
- Average cost of living and incremental pay for all staff; and
- Role changes.
## **FUTURE PLANS**
## **Orchard Hill College and the OHC&AT family of providers**
Orchard Hill College, together with Orchard Hill College Academy Trust, operates as a collaborative family of specialist providers. Our mission is to support, enable and champion the talents, skills and rights of the most complex and vulnerable people in our society, in order that we can release their potential, promote their wellbeing and transform their lives. As a community of learners, families and colleagues we believe that by working collaboratively, with energy and ambition, we can always effect positive change. At the core of our ethos is the conviction that there should be no limit placed on what is possible and that everyone has the ability to be the very best they can be.
Our learners require and receive a high-quality blended offer within their local context in order to meet their different needs and ambitions. By working together as a family, we can maximise the benefits to our pupils and students from having staff, leaders, governance and associates with extensive expertise and experience in both the special and mainstream sectors, from pre-school through to Further Education (FE).
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## **Trustees’ report (including Strategic Report)** 31 July 2023
## **FUTURE PLANS** (continued)
## **Orchard Hill College and the OHC&AT family of providers** (continued)
Currently, the College offers specialist educational programmes for pupils and students aged 16 and over in eight main centres and additional satellite provision in London and Surrey. The Trust operates 14 academies. Provision is organised on a hub model, with College centres and schools clustered around four hubs:
- Sutton and Croydon – OHC Vocational Progression Centre, OHC Garratt House, OHC Robin Hood Lane, plus Carew Academy, The Link School and Addington Valley Academy;
- Northwest London and Slough – OHC Park View, plus The PRIDE Academy, The Skills Hub and Arbour Vale School;
- Southwest London – OHC Beaconsfield, OHC Lomond House, OHC Camberwell Road, OHC Vocational Centre, plus Dysart School, St Philip’s School, Bedelsford School and Nightingale Community Academy;
- Surrey and Sussex –St Dominic’s School, Grafham Grange School, Brantridge School, Unified Academy.
The hub model supports effective cross-organisational working and best use of resources to benefit every OHC&AT student. The College operates in a combination of co-located and community-based centres, offering a curriculum closely aligned to the needs of pupils in each hub who are leaving OHCAT schools to attend the College. Each hub develops or forms partnerships with providers to ensure that resourced facilities may be accessed by multiple OHC&AT provisions as required; this may include vocational facilities, digital hubs, generic/specialist sports facilities, independent living practice suites.
Orchard Hill College **15**
## **Trustees’ report (including Strategic Report)** 31 July 2023
## **FUTURE PLANS** (continued)
## **Orchard Hill College and the OHC&AT family of providers** (continued)
The development of the hub model has supported both College and Trust to offset potential limitations associated with geographical dispersion. By growing local excellence alongside OHCAT academies, the College has been able to smooth transitions for students, provide additional learning opportunities through shared facilities and resources, and enable staff to build networks and share expertise. Each member of the College Senior Leadership Team acts as Regional Lead for a specific area or areas, liaising closely with both College centre staff and OHCAT academies in the hub to ensure that quality assurance, compliance processes and responsive localised support are robust.
The period under discussion has seen the continuation of a planned shift in focus and a further evolution of strategic priorities. Building on the rapid growth and expansion of OHC&AT’s (which implicitly includes the College) first seven years, phase two of the organisational strategy is structured around the following key priorities:
- Quality, standards and reputation: ensuring life-changing outcomes, meaningful destinations and quality of life for every young person within the organisation, through the delivery of consistently excellent teaching and learning across a rich and relevant curriculum offer;
- Innovation and specialism: growing and developing the existing wealth of specialist knowledge within the organisation through the establishment of internal and external professional networks, robust impact measurement processes that feed into year-on-year strategic plans, and active engagement in research;
- Development and growth: taking an ambitious, judicious approach to securing the future of the organisation, through capacity building, maximising financial probity and efficiency, and the
- Strategic improvement of estates;
- System leadership: building influence and advocacy, and ensuring compliance and accountability, through a strong organisational culture that promotes responsive governance and leadership at all levels;
- Nurturing talent: future-proofing the organisation through a strategic approach to recruitment and retention, including training and development opportunities and career pathways that enable every staff member to maximise their potential within the College and the Trust.
In alignment with these strategic priorities, the College’s immediate future plans include further development of premises to meet local need, and enable an innovative curriculum including vocational opportunities, ongoing staff and whole organisational development around the specialisms associated with the cohort, and the further development of the ICT offer to support students in and out of College. In response to local demand, from September 2023 the College will operate from a ninth centre, Old Town Hall in Wallington, which can accommodate up to 32 students across all pathways. OHC and OHCAT continue to work with Achieving for Children (AfC), which provides children’s services in Kingston, and Kingston Council to progress a proposal for a post-16 SEND campus for OHC. The proposed campus is intended to offer local pathways to local young people who might benefit from having additional post-16 choice. As well as classroom spaces for young people with different needs and abilities, the campus would aim to ensure the provision of a flat for independent-living practice and a wide range of vocational workshops giving young people sustainable employability skills.
Orchard Hill College **16**
**Trustees’ report (including Strategic Report)** 31 July 2023
## **PRINCIPAL RISKS AND UNCERTAINTIES**
The Trustees have assessed the major risks to which the College is exposed and have implemented strategies in order to manage those risks. The following key principles outline the College’s approach to risk management and internal control as set out in the Risk Management Policy:
- The Board of Trustees has responsibility for overseeing risk management within the College as a whole.
- An open and receptive approach to solving risk problems is adopted by the Board of Trustees.
- The Executive Senior Leadership Team and the Principal support, advise on and implement policies approved by the Board of Trustees.
- The College makes conservative and prudent recognition and disclosure of the financial and nonfinancial implications of risks.
- Senior and middle managers are responsible for ensuring good risk management practice within their designated managed area.
- Key risk indicators are identified and closely monitored on a regular basis.
Principal risks are detailed in the risk register, which is reviewed by the Board of Trustees each term. Key risks include:
## **Quality**
The College currently operates eight related but separate centres, with additional satellite provision where necessary to meet demand. Ensuring the delivery of a transformative, high quality of education and pastoral care is the central mission of OHC and crucial to its continued success and growth. The College’s robust quality and progression monitoring framework is fully embedded, enabling a deep understanding at executive level of each centre and work stream’s strengths and areas for development to inform targeted improvement initiatives, underpinned by robust quantitative and qualitative data.
## **Compliance**
The College is geographically dispersed across four regional hubs. In addition, the College works to an underlying principle of localism supported by a central function. Such a local and regional focus means that individual centres can be more responsive to the bespoke nature of their context. It also reduces the risk of micro-management from a central function that may be less well informed about the local landscape and impose less efficacious solutions. Overarching this approach is the core role that OHC&AT plays in the monitoring and assurance of each College centre and work stream and in relation to statutory policies and procedures, key stakeholder engagement and the promotion of OHC’s broader mission and vision more widely. The reciprocal risk of this approach is that on matters of compliance, local variations could result in inconsistencies across the organisation. Our well-developed and established risk assessment processes – particularly, but not exclusively, in relation to safeguarding, financial systems, processes and reporting, recruitment and statutory policies – ensure that the College has comprehensive executive oversight of risk and any behaviours that may be sub-optimal in relation to compliance, and is able to intervene appropriately, decisively and in a timely manner.
## **Recruitment**
Recruitment continues to be a risk for the college. Whilst some provisions have more challenges due to local and/or circumstantial reasons, such as Hillingdon and Southwark, all centres are experiencing challenges, which is consistent with the national picture.
Orchard Hill College **17**
## **Trustees’ report (including Strategic Report)** 31 July 2023
## **PRINCIPAL RISKS AND UNCERTAINTIES** (continued)
## **Recruitment** (continued)
The cost-of-living challenges, alongside Covid and (no doubt at least to an extent) Brexit, coupled with higher rates of pay being offered in some other industries (for example retail), have made it more challenging to recruit to roles at the lower end of the pay scales. It is particularly difficult to attract Teaching Assistants and other support staff. This also applies to Integrated Services for the College (therapy and nursing), as availability of skilled personnel in this sector is diminishing. However, HR have diligently supported overseas recruitment for several members of Integrated Services staff and worked with key stakeholders to implement a reviewed set of terms and conditions for Integrated Services personnel that benchmark to the NHS Agenda for Change.
Over the past five years, the College has seen significant growth not only in numbers on roll but also the wide range of need and especially over the last few years we have seen an increasing pattern of students presenting with more profound and complex need which cannot be met within some of our centres. This is particularly pertinent for students within our VPC and Lomond centres. By way of example, since 2018, Lomond college centre has provided 136 places to Southwark young people but we have not been able to provide places for a further 79 young people in that time.
The critical challenge currently facing the College is working within the constraints that some of the current buildings have. It has now come to a point where we have a mismatch between some of the accommodation and the demand for more complex student places. In order to meet the increased demand, we do need to work in partnership with local authorities to purchase or secure long term leases with enough building capacity to offer an innovative curriculum, to enable more young people to study in their local areas.
## **Infrastructure and capacity**
In order to most effectively meet its strategic aims and objectives, the College requires an infrastructure for its business support services that enables it to operate in an efficient, coordinated and reliable way. Systems and processes are well established, appropriately supported and remain under active review by ESLT and Trustees in order to ensure that they are effective and fit for purpose. Central support, as well as delivery to students, requires sufficient capacity, in terms of quality, number of personnel and coherent organisational management in order to promote exceptional outcomes.
As both an outstanding provider and the sponsor of an Academy Trust, the College faces a range of potential challenges to its ability to continuously deliver high quality education and related services. The College and the Trust have taken steps to more closely align themselves in recent years, which increases the risk of issues impacting on both organisations rather than individually. The College has developed robust succession planning arrangements, developing leadership within the organisation and recruiting high quality staff in order to increase capacity, while strengthening cross-organisational support systems that encourage knowledge sharing and staff support targeted at areas of high demand. Internal reporting mechanisms have been synchronised across both organisations, allowing senior leaders to anticipate support needs and act rapidly in order to mitigate risk.
## **Over-expansion**
Any organisation that expands too rapidly risks downturns in the quality of provision and financial overstretch, to the detriment of its reputation and quality. OHC has agreed a three-year strategy that allows for growth while retaining the focus on quality, standards and wellbeing. The current strategic focus is on growth in numbers of provisions through building on existing commissioning, as well as deepening and maturing the College’s work so that best practice is consolidated.
Orchard Hill College **18**
**Trustees’ report (including Strategic Report)** 31 July 2023
## **PRINCIPAL RISKS AND UNCERTAINTIES** (continued)
## **Business continuity**
Interruptions to typical activity can have a negative impact on the offer provided to OHC students. In a dynamically shifting national, regional and local landscape, threats to normal business continuity are real and to the fore. OHC has a secure ethos, a clearly defined headline mission and vision, and a wellarticulated and understood set of values, in addition to an effective and responsive business support service. These combine to support the College to continue to deliver to a high standard even if working practices need to be adapted. Our suite of risk assessment and monitoring supports a detailed understanding of the overall operational picture across OHC at any given time.
## **Funding**
The College is reliant on Government funding to support students whose additional support needs carry costs that exceed most other forms of ongoing funding. Variations in the funding methodology and levels of resource, as well as changes in eligibility criteria and uncertainty associated with major political events, create potential risk. OHC engages proactively with funding bodies to raise awareness of the potential impact of planned actions and maintains strong working relationships with external agencies in order to ensure that productive dialogue takes place at local, regional and national level. This risk is particularly acute in the forthcoming academic year and beyond, as inflation has significantly increased this is directly impacting on the cost of attracting and retaining staff, the procurement of goods and services, in particular energy and the cost of borrowing which would be needed to support our estates strategy. This, alongside a downward pressure from financially challenged Local Authorities via Commissioning Alliances to reduce pricing will have a double effect.
## **Risk Management**
OHC regularly reviews the key risks to which its operations are exposed, together with the operating, financial and compliance controls that have been implemented to mitigate those risks. The Trustees are of the view that there is a formal ongoing process for identifying, evaluating and managing the College’s significant risks. In addition, factors are in place that provide the Trustees with the capacity to deal with issues or problems that occur, for example, calling on an experienced, capable Executive Senior Leadership Team, which can act quickly in response to unexpected events through forward planning, policies and insurance and through holding appropriate reserves. Additionally, the Board of Trustees has established an Audit & Risk Committee and a Finance & Resources Committee; membership of these committees is drawn from both OHC and OHCAT Trustees, and they report to the Trustees as a whole.
The overall responsibilities for the Audit Committee, on behalf of the OHC Trustees, are:
- Internal scrutiny – to have in place a process for checking financial systems, controls, transactions and risks and quality of provision.
- To achieve internal scrutiny which delivers objective and independent assurance.
- To provide assurance to Trustees that risks are being adequately identified and managed by:
- reviewing the risks; and
- agreeing a programme of work to address and provide assurance on those risks.
A risk report is submitted to the Trustees at each meeting and operational risks are reviewed at regular meetings of the Executive Senior Leadership Team and the CEO.
Orchard Hill College **19**
## **Trustees’ report (including Strategic Report)** 31 July 2023
## **Statement of Trustees’ responsibilities**
The Trustees (who are also Directors of Orchard Hill College for the purposes of company law) are responsible for preparing the Trustees’ report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).Company law requires the Trustees to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the charitable company and of the income and expenditure of the charitable company for that period.
In preparing these financial statements, the Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable to the United Kingdom and Republic of Ireland (FRS 102);
- make judgements and estimates that are reasonable and prudent;
- state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.
The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Each of the Trustees confirms that:
- so far as the Trustee is aware, there is no relevant audit information of which the charitable company’s auditor is unaware; and
- the Trustee has taken all the steps that he/she ought to have taken as a Trustee in order to make himself/herself aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Trustees’ report, including Strategic Report, approved by the Board of Trustees and signed on its behalf by:
Date: 8[th] December 2023
Mr P Lauener Trustee
Orchard Hill College **20**
## **Independent auditor’s report** 31 July 2023
## **Independent auditor’s report to the members of Orchard Hill College**
## **Opinion**
We have audited the financial statements of Orchard Hill College (the ‘College’) for the year ended 31 July 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows, the principal accounting policies, and the notes to the financial statements. 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:
- give a true and fair view of the state of the College’s affairs as at 31 July 2023 and of its income and expenditure for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **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 College 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 College’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 and financial statements other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report and financial statements. 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.
Orchard Hill College **21**
## **Independent auditor’s report** 31 July 2023
## **Other information** (continued)
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 course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. 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:
- the information given in the trustees’ report, which is also the directors’ report for the purposes of company law, for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the trustees’ report, which is also the directors’ report for the purposes of company law, has been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
In the light of the knowledge and understanding of the College and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report including the strategic report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees’ remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the trustees were not entitled to prepare the financial statements in accordance with the small companies regime.
## **Responsibilities of Trustees**
In the light of the knowledge and understanding of the College and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report including the strategic report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees’ remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.
Orchard Hill College **22**
**Independent auditor’s report** 31 July 2023
## **Auditor’s responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
- the engagement director ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
- we identified the laws and regulations applicable to the College through discussions with management, and from our knowledge and experience of the sector;
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the College, including the Charities Act 2011, Companies Act 2006, funding agreements with the ESFA and associated funding rules, ESFA regulations, data protection legislation, anti-bribery, safeguarding, employment, health and safety legislation;
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the College’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
- performed analytical procedures to identify any unusual or unexpected relationships;
- reviewed journal entries to identify unusual transactions; and
Orchard Hill College **23**
## **Independent auditor’s report** 31 July 2023
## **Auditor’s responsibilities for the audit of the financial statements** (continued)
- assessed whether judgements and assumptions made in determining the accounting estimates set out in the accounting policies were indicative of potential bias;
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
- agreeing financial statement disclosures to underlying supporting documentation;
- reading the minutes of trustee meetings; and
- enquiring of management as to actual and potential litigation and claims.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of noncompliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
## **Use of our report**
This report is made solely to the College’s members, as a body, in accordance with the College’s Articles of Government / Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the College’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the College and the College’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Gumayel Miah (Senior Statutory Auditor) For and on behalf of Buzzacott LLP Statutory Auditor 130 Wood Street London EC2V 6DL
Date: 21 December 2023
Orchard Hill College **24**
**Statement of financial activities** Year to 31 July 2023
|**Income and expenditure account**
Notes|
Unrestricted
funds
£’000|
Restricted
funds
£’000|
**2023**
**Total**
**funds**
**£’000**|2022
Total
funds
£’000|
|---|---|---|---|---|
|**Income from:**
Donations and legacies
1
Charitable activities
. Provision of education
2
Other trading activities
3
Investments
4
**Total income**
**Expenditure on:**
Charitable activities
. Provision of education
5
**Total expenditure**
**Net expenditure**
**Other recognised gains and losses**
Actuarial gains on defined
benefit pension scheme
19
**Net movement in funds**
**Reconciliation of funds**
Fund balances brought forward
at 1 August 2022
Fund balances carried forward
at 31 July2023|
15
17,052
66
80|
—
161
—
—|
**15**
**17,213**
**66**
**80**|
16
17,411
274
4|
||17,213|
161|
**17,374**|17,705|
||
18,353|
140|
**18,493**|19,682|
||18,353|
140|
**18,493**|19,682|
||(1,140)
6,388|
21
—|
**(1,119)**
**6,388**|(1,977)
8,298|
||5,248
1,209|
21
—|
**5,269**
**1,209**|6,321
(5,112)|
||6,457|
21|
**6,478**|1,209|
All recognised gains and losses are included in the above statement of financial activities.
All of the College’s activities derived from continuing operations during the period of report.
Orchard Hill College **25**
**Balance Sheet** 31 July 2023
|Notes
**Fixed assets**
Tangible assets
11
**Current assets**
Debtors
12
Cash at bank and in hand
**Creditors**: amounts falling due
within one year
13
**Net current assets**
**Total assets less current liabilities**
**Creditors:**amounts falling due after
more than one year
14
**Net assets excluding pension**
**liability**
Defined benefit pension scheme
liability
19
**Total net assets**
**The funds of the College:**
Restricted funds
Unrestricted funds
. Tangible fixed assets fund
15
. Pensions reserve fund
16
. General fund
18|**2023**
**£’000**|
**2023**
**£’000**|
2022
£’000|
2022
£’000|
|---|---|---|---|---|
||
**1,663**
**6,780**|
**5,265**
**4,910**
|
1,216
7,185|4,897
5,726|
||**8,443**
**(3,533)**||
8,401
(2,675)||
||**3,981**
**(2,433)**
**4,909**||
3,612
(8,149)
5,746||
|||**10,175**
**(1,264)**
||10,623
(1,265)|
|||**8,911**
**(2,433)**
||9,358
(8,149)|
|||**6,478**||1,209|
|||
**21**
**6,457**||—
1,209|
||||
||
|||**6,478**||1,209|
Approved by the Board of Trustees and signed on its behalf by:
Mr P Lauener Trustee
Date: 8[th] December 2023
Orchard Hill College **26**
## **Statement of cash flows** 31 July 2023
|Notes|
**2023**
**£’000**|2022
£’000|
|---|---|---|
|**Cash flows from operating activities:**
Net cash provided by operating activities
A
**Cash flows from investing activities:**
Bank interest receivable
Purchase of tangible fixed assets
**Net cash used in investing activities**
**Cash flows from financing activities:**
Interest on finance lease obligation
Repayment of finance lease obligation
**Net cash used in financing activities**
**Change in cash and cash equivalents in the year**
**Cash and cash equivalents at 1 August 2022**
B
**Cash and cash equivalents at 31 July 2023**
B|
**398**|982|
||
**80**
**(825) **|4
(494)|
||**(745) **|(490)|
||
**(58)**
—|(18)
(18)|
||**(58) **|(36)|
||
**(405)**
**7,185**
|456
6,729|
||
**6,780**|7,185|
## **Notes to the statement of cash flows for the year ended 31 July 2023**
## **A Reconciliation of net income to net cash provided by operating activities**
||**2023**
**£’000**|2022
£’000|
|---|---|---|
|**Net expenditure (as per the statement of financial activities)**
**Adjustments for:**
Depreciation charge
Loss on disposal of tangible fixed assets
Defined benefit pension scheme service cost adjustment
Defined benefit pension scheme finance cost adjustment
Interest receivable
Interest payable on finance lease obligation
(Increase)/decrease in debtors
Increase/(decrease) in creditors
**Net cashprovided by operating activities**|**(1,119)**
**456**
**1**
**380**
**292**
**(80)**
**58**
**(447)**
**857**|(1,977)
529
518
1,888
244
(4)
18
56
(290)|
||**398**|982|
## **B Analysis of cash and cash equivalents**
|**Analysis of cash and cash equivalents**|||
|---|---|---|
||**2023**
**£’000**|2022
£’000
6,729
456
7,185|
|Cash at bank and in hand
Change in cash and cash equivalents in the year
**Total cash and cash equivalents**|**7,185**
**(405)**
**6,780**||
Orchard Hill College **27**
**Statement of cash flows** 31 July 2023
## **C Analysis of change in net debt**
|**Analysis of change in net debt**||||
|---|---|---|---|
||1 August
2022
£’000|
Cashflows
£’000|**31 July**
**2023**
**£’000**|
|Cash at bank
Loans falling due within one year
Loans falling due after more than one year
**Total**|7,185
(20)
(1,265)|
(405)
—
1|**6,780**
**(20)**
**(1,264)**|
||5,900|
(404)|**5,496**|
Orchard Hill College **28**
**Principal accounting policies** 31 July 2023
The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are laid out below.
## **Basis of preparation**
These financial statements have been prepared for the year ended 31 July 2023. The comparative results are for the year ended 31 July 2022.
The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant accounting policies below or the notes to these accounts.
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 United Kingdom and Republic of Ireland (FRS 102) (Charities SORP FRS102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011.
The College constitutes a public benefit entity as defined by FRS 102.
The financial statements are presented in sterling and are rounded to the nearest thousand pounds.
## **Critical accounting estimates and areas of judgement**
Preparation of the financial statements requires the Trustees and management to make significant judgements and estimates.
The items in the accounts where these judgements and estimates have been made include:
- the useful economic lives attributed to tangible fixed assets used to determine the annual depreciation charge;
- the assumptions adopted by the Trustees and management in determining the value of any designations required from the College’s general unrestricted funds;
- the present value of the Local Government Pension Scheme defined benefit liability depends on several factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost for pensions include the discount rate and salary increase rate. Any changes in these assumptions, which are disclosed in note 19, will impact the carrying amount of the pension liability; and
- the discount rate applied in relation to the carrying value of building finance lease obligations.
## **Assessment of going concern**
The Trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The Trustees have made this assessment in respect to a period of at least one year from the date of approval of these financial statements.
The Trustees of the College have concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the College to continue as a going concern. The Trustees are of the opinion that the College will have sufficient resources to meet its liabilities as they fall due.
Orchard Hill College **29**
**Principal accounting policies** 31 July 2023
## **Assessment of going concern** (continued)
In forming this assessment, the Trustees have considered the impact of the current coronavirus pandemic on the College’s activities with a particular focus on its effect on the College’s financial position including income, expenditure and reserves; the College’s beneficiaries; and its employees. Whilst we acknowledge the disruption caused by the pandemic to the College’s day-to-day operations, we confirm that we do not consider this to be cause for material uncertainty in respect to the College’s ability to continue as a going concern. The College has sufficient liquid resources to continue for the foreseeable future, despite the current crisis.
## _**Income**_
Income is recognised in the year in which the College has entitlement to the income, the amount of income can be measured reliably, and it is probable that the income will be received.
## _**Grants**_
Grants are included in the statement of financial activities on a receivable basis. The balance of income received for specific purposes but not expended during the year is shown in the relevant funds on the balance sheet. Where income is received in advance of meeting any performance-related conditions there is not unconditional entitlement to the income and its recognition is deferred and included in creditors as deferred income until the performance-related conditions are met. Where entitlement occurs before income is received, the income is accrued.
## _**Tuition fees and educational contracts**_
Fee and educational contract income is recognised in the year in which the education was delivered.
## _**Donations**_
Donations are recognised on a receivable basis (where there are no performance-related conditions) where the receipt is probable and the amount can be reliably measured.
Assets donated to the College by Orchard Hill College Academy Trust have been accounted for based on the net book value of the asset in the Academy Trust balance sheet immediately before the date of transfer.
Net assets donated to the College by the London Borough of Sutton have been accounted for using the acquisition method. The assets and liabilities transferred were valued at their fair value and recognised in the balance sheet under the appropriate headings with a corresponding net amount recognised as net income in the statement of financial activities as donations income.
## _**Interest receivable**_
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the College; this is normally upon notification of the interest paid or payable by the bank.
## **Expenditure**
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity.
Orchard Hill College **30**
## **Principal accounting policies** 31 July 2023
## **Expenditure** (continued)
Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources.
Expenditure headings are as follows:
- a. Expenditure on raising funds - This includes all expenditure incurred by the College to raise funds for its charitable purposes and includes costs of all fundraising activities events and non-charitable trading.
- b. Expenditure on charitable activities - These are costs incurred on the College’s educational operations, including support costs and costs relating to the governance of the College. Governance costs comprise the costs involving the public accountability of the College (including audit costs) and costs in respect to its compliance with regulation and good practice.
All expenditure is inclusive of irrecoverable VAT.
## **Tangible fixed assets**
All assets costing more than £2,000 and with an expected useful life exceeding one year are capitalised.
All assets are stated at cost less depreciation.
Depreciation has been calculated at the following rates in order to write off each asset over its estimated useful life:
- Leasehold Buildings – to match the length of the lease subject to impairment review.
- Motor Vehicles - 25% (4 years) straight line.
- Furniture & Equipment - 25% (4 years) straight line.
- Computer Equipment & Software - 33.33% (3 years) straight line.
- Major Works (£50,000 - £100,000) - 10%-20% (5-10 years) straight line.
Depreciation on assets in the course of construction is not charged until they are brought into use.
## **Debtors**
Debtors are recognised at their settlement amount, less any provision for non-recoverability. Prepayments are valued at the amount prepaid. They have been discounted to the present value of the future cash receipt where such discounting is material.
## **Cash at bank and in hand**
Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition. Deposits for more than three months but less than one year have been disclosed as short-term deposits. Cash placed on deposit for more than one year is disclosed as a fixed asset investment.
Orchard Hill College **31**
**Principal accounting policies** 31 July 2023
## **Creditors and provisions**
Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Creditors and provisions are recognised at the amount the College anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material.
## **Pension costs**
Retirement benefits to employees of the College are provided by the Teachers’ Pension Scheme (‘TPS’) and the Local Government Pension Scheme (‘LGPS’). These are defined benefit schemes.
The TPS is an unfunded scheme and contributions are calculated to spread the cost of pensions over employees’ working lives with the College in such a way that the pension cost is a substantially level percentage of current and future pensionable payroll. The contributions are determined by the Government Actuary based on quadrennial valuations using a prospective unit credit method. The TPS is a multi-employer scheme and there is insufficient information available to use defined benefit accounting. The TPS is therefore treated as a defined contribution scheme for accounting purposes and the contributions recognised in the year to which they relate.
The LGPS is a funded scheme, and the assets are held separately from those of the College in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit credit method and discounted at a rate equivalent to the current rate of return on a high-quality corporate bond of equivalent term and currency to the liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The amounts charged to operating surplus are the current service costs and the costs of scheme introductions, benefit changes, settlements and curtailments. They are included as part of staff costs as incurred.
Net interest on the net defined benefit liability is also recognised in the statement of financial activities and comprises the interest cost on the defined benefit obligation and interest income on the scheme assets, calculated by multiplying the fair value of the scheme assets at the beginning of the period by the rate used to discount the benefit obligations. The difference between the interest income on the scheme assets and the actual return on the scheme assets is recognised in other recognised gains and losses.
Actuarial gains and losses are recognised immediately in other recognised gains and losses.
## **Leased assets**
Rentals applicable to operating leases where substantially all the benefits and risks of ownership remain with the lessor are charged on a straight-line basis over the lease term.
Assets held under finance leases and hire purchase contracts are capitalised and depreciated over their useful economic lives (or the term of lease if shorter). The corresponding lease or hire purchase obligation is treated in the balance sheet as a liability. The interest element of rental obligations is charged to the statement of financial activities over the year of the lease at a constant proportion of the outstanding balance of capital repayments.
Orchard Hill College **32**
**Principal accounting policies** 31 July 2023
## **Fund accounting**
Restricted funds are monies raised for, and their use restricted to, a specific purpose, or donations subject to donor-imposed conditions.
Designated funds comprise monies set aside out of unrestricted funds for specific future purposes or projects, including:
- The tangible fixed assets fund represents the net book value of the College’s tangible fixed assets.
- The pension reserve fund represents the net defined benefit pension scheme liability is respect to the LGPS.
Unrestricted general funds comprise those monies which may be used towards meeting the objectives of the College at the discretion of the Trustees.
Orchard Hill College **33**
**Notes to the financial statements** 31 July 2023
## **1 Income from donations and legacies**
|**Income from donations and legacies**|||
|---|---|---|
||Unrestrictedfunds||
||**2023**
**Total funds**
**£’000**|2022
Total funds
£’000|
|Donations|**15**|16|
## **2 Income from charitable activities: Provision of education**
|**Educational Skills Funding Agency:**
-
16-19 funding
-
19+ funding
**Local Authority educational contracts**
**Other educational operations**
**Covid-19 additional funding (DfE/ESFA)**
- Catch-up premium (Tuition Fund)
**Total 2023**
Total 2022|Unrestricted
funds
£’000
4,476
1,085
5,561
11,259
232
—
17,052
17,252|Restricted
funds
£’000
90
—
90
—
—
71
161
159|**2023**
**Total funds**
**£’000**
**4,566**
**1,085**
**5,651**
**11,259**
**232**
**71**
**17,213**
17,411|2022
Total funds
£’000
4,105
969
5,074
11,944
279
114
17,411|
|---|---|---|---|---|
## **3 Income from other trading activities**
|**4**|**Income from investments**
Bank interest receivable
Miscellaneous income|Unrestricted funds
**2023**
**£’000**
2022
£’000
**80**
4
Unrestrictedfunds
**2023**
**£’000**
2022
£’000
**66**
274|
|---|---|---|
|||**2023**
**£’000**
**80**|
Orchard Hill College **34**
**Notes to the financial statements** 31 July 2023
## **5 Expenditure on charitable activities: Provision of education**
|Staff costs (note 8)
Educational supplies
Allocated support costs (note 6)
**Total 2023**
Total 2022|Unrestricted
funds
£’000|
Restricted
funds
£’000
—
140
—
140
159|**2022**
**Total funds**
**£’000**
**12,883**
**779**
**4,831**
**18,493**
19,682|2021
Total funds
£’000|
|---|---|---|---|---|
||12,883
639
4,831|||
13,476
892
5,314|
||18,353|||
19,682|
||19,523||||
## **6 Support costs**
|**Support costs**|||
|---|---|---|
|Premises costs
Administration costs
Legal and professional fees
Governance costs (note 7)|Unrestricted funds||
||**2023**
**Total funds**
**£’000**
**1,802**
**2,981**
**15**
**33**
**4,831**|2022
Total funds
£’000|
|||2,582
2,678
17
37|
|||5,314|
Administration costs above include £2,495,000 for the core service charge and business support services provided by Orchard Hill College Academy Trust (2022: £2,268,000). See also note 20 to these financial statements. Included in premises costs in 2022 is a loss on disposal of tangible fixed assets of £519,000.
## **7 Governance costs**
|**Governance costs**|||
|---|---|---|
|External auditor’s remuneration
-
Audit services
-
Other services
Internal auditor’s remuneration|Unrestricted funds||
||**2023**
**£’000**
**25**
**1**
**7**
**33**|2022
£’000|
|||24
5
8|
|||37|
Orchard Hill College **35**
## **Notes to the financial statements** 31 July 2023
## **8 Staff costs**
|**Staff costs**|||
|---|---|---|
|Wages and salaries
Social security costs
Pension costs:
. TPS contributions payable
. LGPS contributions payable
. LGPS service cost adjustment
Severance payments|**2023**
**£’000**
**10,069**
**681**
**485**
**967**
**672**
**9**
**12,883**|2022
£’000|
|||9,528
653
438
973
1,888
(4)|
|||13,476|
## _**Staff numbers**_
The average number of persons employed by the College during the year was as follows:
|Lecturers & management
Teaching support staff
Admin staff|**2023**
**Number**
**62**
**189**
**14**
**265**|2022
Number
59
199
11
269|
|---|---|---|
The number of employees whose annualised emoluments (including taxable benefits in kind but excluding employer pension costs) exceeded £60,000 were as follows:
|£60,001 - £70,000
£70,001 - £80,000
£100,001 - £110,000|
**2023**
**Number**
—
**7**
**1**|2022
Number|
|---|---|---|
|||2
4
1|
## _**Remuneration of key management personnel**_
The Trustees consider that they, together with the Executive Senior Leadership Team, comprise the key management personnel of the charity in charge of directing and controlling, running and operating the College on a day-to-day basis.
Trustees were not remunerated for their services to the College apart from the CEO, who is an employee of Orchard Hill College Academy Trust, and is remunerated by the College under a service level agreement with the Academy Trust (see note 20 Related Party Transactions).
The total remuneration of the Principal for the year ended 31 July 2023 (including employer pension contributions and employer national insurance contributions) was £138,000 (2022: £139,000 for services to Orchard Hill College and Orchard Hill College Academy Trust).
Other members of the Executive Senior Leadership Team are employed by Orchard Hill College Academy Trust and the split of the remuneration attributable to the College and the Academy Trust individually cannot be determined with sufficient reliability. The total remuneration (including employer pension contributions and employer national insurance contributions) of the Executive Senior Leadership Team (payable by Orchard Hill College Academy Trust) for the year ended 31 July 2023 was £854,000 (2022: £795,000).
Orchard Hill College **36**
**Notes to the financial statements** 31 July 2023
## **9 Staff costs** (continued)
## _**Staff numbers** (continued)_
As noted in the Trustees’ report, Orchard Hill College continues to be the academy sponsor of Orchard Hill College Academy Trust. Further information regarding transactions between the College and the Academy Trust is given in note 20.
## _**Trustees’ expenses**_
Trustees may claim reimbursement for any out-of-pocket expenditure incurred in connection with their duties as Trustees of the College. During the year ended 31 July 2023, no trustee received reimbursement for travel and subsistence expenses (2022: £NIL).
## **10 Net expenditure for the year**
This is stated after charging:
|Staff costs (note 8)
Depreciation (note 11)
Operating lease rentals
External auditor’s remuneration|**2023**
**£’000**
**12,883**
**456**
**369**
**26**|2022
£’000
13,476
529
214
29|
|---|---|---|
## **11 Tangible assets**
|**Cost or valuation**
At 1 August 2022
Additions
Disposals
At 31 July 2023
**Depreciation**
At 1 August 2022
Charge for the year
Released on disposal
At 31 July 2023
**Net book values**
At 31 July 2023
At 1 August 2022|Long
leasehold
buildings
£’000
5,539
487
—
6,026
1,041
241
—
1,282
4,744
4,498|Furniture
and
equipment
£’000
2,481
219
(1)
2,699
2,082
210
—
2,292
407
399|Motor
vehicles
£’000
123
119
—
242
123
5
—
128
114
—|**Total**
**£’000**
**8,143**
**825**
**(1)**
**8,967**
**3,246**
**456**
—
**3,702**
**5,265**
**4,897**|
|---|---|---|---|---|
At 31 July 2023, the College had capital commitments of £435,000 in respect of orders placed for the year, these related to building works on Old Town Hall, not yet started at year end. These are included within prepayments and have not been capitalised during the year.
Orchard Hill College **37**
## **Notes to the financial statements** 31 July 2023
## **12 Debtors**
|Educational fees receivable
Due from Orchard Hill College Academy Trust (note 20)
Prepayments and accrued income
Other debtors|**2023**
**£’000**
**409**
**219**
**1,022**
**13**
**1,663**|2022
£’000
179
297
460
280
1,216|
|---|---|---|
## **13 Creditors: amounts falling due within one year**
|Expense creditors
Accruals
Due to Orchard Hill College Academy Trust (note 20)
Deferred income
Finance lease obligation (note 14)
Other taxation and social security
Other creditors
**Movements on deferred income (included above)**
Balance brought forward at 1 August 2022
Income deferred in current reporting year end
Amounts released to income from prior reporting year end
Balance carried forward at 31 July2023|**2023**
**£’000**
**69**
**1,377**
**1,239**
**437**
**20**
**306**
**85**
**3,533**
**518**
**260**
**(341)**
**437**|2022
£’000
54
670
626
518
20
285
502
2,675
196
518
(196)
518|
|---|---|---|
Deferred income in the main relates to funding received in advance from the ESFA and local authorities.
## **14 Creditors: amounts falling due after one year**
|Finance lease obligation|**2023**
**£’000**
**1,264**
**1,264**|2022
£’000
1,265
1,265|
|---|---|---|
At 31 July 2023, the present value of future minimum lease payments in respect to finance lease obligations for the College was as follows:
|**Amounts falling due within one year (note 13)**
**Amounts falling due after one year:**
. Amounts falling due between one to two years
. Amounts falling due between two to five years
. Amounts falling due after more than five years
Total finance lease obligations|**2023**
**£’000**
**20**
**22**
**81**
**1,161**
**1,264**
**1,284**|2022
£’000
20
22
81
1,162
1,265
1,285|
|---|---|---|
Orchard Hill College **38**
**Notes to the financial statements** 31 July 2023
## **14 Creditors: amounts falling due after one year** (continued)
The above obligations are in respect to long-leasehold properties transferred from the London Borough of Sutton and have been discounted at a rate of 4.00% and 5.25%.
## **15 Tangible fixed assets fund**
|At 1 August 2022
Net movement in year
At 31 July2023|**£’000**
**3,612**
**369**
**3,981**|
|---|---|
The tangible fixed assets fund represents the net book value of the College’s tangible fixed assets net of associated finance lease obligations. A decision was made to separate this fund from the general funds and other funds of the College in recognition of the fact that the tangible fixed assets are essential to the day-to-day work of the College and as such their value should not be regarded as funds that would be realisable with ease, in order to meet future contingencies.
## **16 Pension reserve fund**
|At 1 August 2022
Net movement in year
At 31 July2023|**£’000**
**(8,149)**
**5,716**
**(2,433)**|
|---|---|
The pension reserve fund represents the College’s share of the net liability in respect of the Local Government Pension Scheme. This fund has been separated on the College’s balance sheet in order to distinguish the liability from the operational liabilities which form part of the College’s working capital.
## **17 Restricted funds**
The income funds of the College include restricted funds comprising the following balances of donations and grants held on trust to be applied for specific purposes.
|Covid-19 funding
Other restricted DfE/ESFA funding|At 1 August
2022
£’000
—
—
—|Income
£’000
71
90
161|Expenditure
£’000
(71)
(69)
(140)|**At 31 July**
**2023**
**£’000**|
|---|---|---|---|---|
|||||—
**21**|
|||||**21**|
The specific purposes for which the monies are held are as follows:
- Covid-19 funding - this comprises monies received from government to provide additional financial support to the College with managing the disruption caused by Covid-19
- Other restricted DfE/ESFA funding - this comprises monies received from government, the use of which is limited to very specific purposes in line with the grant conditions.
Orchard Hill College **39**
**Notes to the financial statements** 31 July 2023
## **18 Analysis of net assets between funds**
|Tangible fixed assets
Debtors
Cash at bank and in hand
Creditors due within one year
Creditors due after more than one year
Defined benefit pension liability|Unrestricted funds
General
funds
£’000
Tangible
fixed assets
fund
£’000
Pensions
reserve
fund
£’000
—
5,265
—
1,663
—
—
6,780
—
—
(3,534)
(20)
—
—
(1,264)
—
—
—
(2,433)
4,909
3,981
(2,433)|Unrestricted funds
General
funds
£’000
Tangible
fixed assets
fund
£’000
Pensions
reserve
fund
£’000
—
5,265
—
1,663
—
—
6,780
—
—
(3,534)
(20)
—
—
(1,264)
—
—
—
(2,433)
4,909
3,981
(2,433)|Restricted
funds
£’000
—
—
—
21
—
—
21|**2023**
**Total**
**funds**
**£’000**|
|---|---|---|---|---|
||General
funds
£’000|Tangible
fixed assets
fund
£’000|||
||—
1,663
6,780
(3,534)
—
—
4,909|5,265
—
—
(20)
(1,264)
—
3,981||**5,265**
**1,663**
**6,780**
**(3,533)**
**(1,264)**
**(2,433)**|
|||||**6,478**|
## **19 Pension and similar obligations**
The College’s employees belong to two principal pension schemes: the Teachers’ Pension Scheme England and Wales (TPS) for academic and related staff: and the Local Government Pension Scheme (LGPS) for non-teaching staff, which is managed by London Borough of Sutton Pension Fund. Both are multi-employer defined benefit schemes.
Prior to 31 August 2023, the latest actuarial valuation of the TPS related to the period ended 31 March 2016 and of the LGPS 31 March 2022. A further valuation of the TPS scheme, relating to the period ended 31 March 2020 was published in October 2023.
Contributions amounting to £156,000 were payable to the schemes at 31 July 2023 (2022: £135,000) and are included within creditors.
## _**Teachers’ Pension Scheme**_
The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers’ Pension Scheme Regulations 2014. These regulations apply to teachers in schools, colleges and other educational establishments. Membership is automatic for teachers and lecturers at eligible institutions. Teachers and lecturers have the option to opt out of the TPS following enrolment. The TPS is an unfunded scheme and members contribute on a ’pay as you go‘ basis – these contributions, along with those made by employers, are credited to the Exchequer under arrangements governed by the above Act. Retirement and other pension benefits are paid by public funds provided by Parliament.
## _**Valuation of the Teachers’ Pension Scheme**_
The Government Actuary, using normal actuarial principles, conducts a formal actuarial review of the TPS in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014 published by HM Treasury every 4 years. The aim of the review is to specify the level of future contributions. Actuarial scheme valuations are dependent on assumptions about the value of future costs, design of benefits and many other factors. The actuarial valuation of the TPS which applied during the year ended 31 August 2023 was carried out as at 31 March 2016. The valuation report was published by the Department for Education on 5 March 2019. The key elements of the valuation and subsequent consultation are:
Orchard Hill College **40**
## **Notes to the financial statements** 31 July 2023
## **19 Pension and similar obligations** (continued)
_**Valuation of the Teachers’ Pension Scheme** (continued)_
- employer contribution rates set at 23.68% of pensionable pay (including a 0.08% administration levy);
- total scheme liabilities (pensions currently in payment and the estimated cost of future benefits) for service to the effective date of £218,100 million and notional assets (estimated future contributions together with the notional investments held at the valuation date) of £196,100 million, giving a notional past service deficit of £22,000 million;
- the SCAPE rate, set by HMT, is used to determine the notional investment return. The current SCAPE rate is 2.4% above the rate of CPI. Assumed real rate of return is 2.4% in excess of prices and 2% in excess of earnings. The rate of real earnings growth is assumed to be 2.2%. The assumed nominal rate of return including earnings growth is 4.45%.
The latest actuarial TPS valuation results, as at 31 March 2020, were released in October 2023. The valuation result is due to be implemented from 1 April 2024, from this date employer contribution rates will increase to 28.6% (including a 0.08% administration levy).
A full copy of the valuation report and supporting documentation can be found on the Teachers’ Pension Scheme website.
Under the definitions set out in FRS 102, the TPS is a multi-employer pension scheme. The College has accounted for its contributions to the scheme as if it were a defined contribution scheme. The College has set out above the information available on the scheme.
The employer’s pension costs paid to TPS during the year amounted £463,000 (2022: £438,000).
## _**Local Government Pension Scheme (LGPS)**_
The LGPS is a funded defined-benefit scheme, with the assets held in separate trustee-administered funds. The total contribution made for the year ended 31 July 2023 was £1,259,000 (2022: £1,216,000), of which employer’s contributions totalled £981,000 (2022: £947,000) and employees’ contributions totalled £278,000 (2022: £269,000)
|**Principal actuarial assumptions**
**At 31 July**
**2023**
**%**
Rate of increase in salaries
**2.95**
Rate of increase for pensions in payment
**2.95**
Discount rate for scheme liabilities
**5.00**
Inflation assumption(CPI)
**2.95**|At 31 July
2022
%|
|---|---|
||3.70
2.70
3.50
2.70|
Orchard Hill College **41**
**Notes to the financial statements** 31 July 2023
## **19 Pension and similar obligations** (continued)
## _**Local Government Pension Scheme (LGPS)** (continued)_
The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations from retirement age 65 are:
|_Retiring today_
Males
Females
_Retiring in 20 years_
Males
Females
The College’s share of the assets in the scheme were:
Equities
Bonds
Property
Cash
**Total market value of assets**|**2023**
**Years**
**20.2**
**24.3**
**21.6**
**25.4**
**Fair value**
**2023**
**£’000**
**5,127**
**1,912**
**1,130**
**520**
**8,689**|2022
Years
21.4
24.1
22.9
25.8
Fair value
2022
£’000
**3,838**
**1,599**
**704**
**256**
**6,397**|
|---|---|---|
The actual return on scheme assets was £188,000 (2022: £495,000).
|**Amounts recognised in statement of financial activities**
Current service costs
Net interest cost|**2023**
**£’000**
**1,361**
**292**
**1,653**|2022
£’000
2,835
244
3,079|
|---|---|---|
|**Changes in thepresent value of defined benefit obligations were as follows:**
Opening balance
Current service cost
Interest cost
Employee contributions
Actuarial gain
Benefits paid
**At 31 July 2023**|**2023**
**£’000**
**14,546**
**1,361**
**536**
**278**
**(5,524)**
**(75)**
**11,122**|2022
£’000
19,971
2,835
343
269
(8,793)
(79)
14,546|
|---|---|---|
Orchard Hill College **42**
**Notes to the financial statements** 31 July 2023
## **19 Pension and similar obligations** (continued)
_**Local Government Pension Scheme (LGPS)** (continued)_
|**Changes in the fair value of the College’s share of scheme assets:**
Opening balance
Interest income
Actuarial gain / (loss)
Employer contributions
Employee contributions
Benefits paid
**At 31 July 2023**|**2023**
**£’000**
**6,397**
**244**
**864**
**981**
**278**
**(75)**
**8,689**|2022
£’000
5,656
99
(495)
947
269
(79)
6,397|
|---|---|---|
## **20 Related party transactions**
Owing to the nature of the College’s operations and the composition of the Governing Body being drawn from local public and private sector organisations. It is inevitable that transactions will take place with organisations in which a Governor may have an interest. All transactions involving such organisations are conducted at arm’s length and in accordance with the College’s financial regulations and normal procurement procedures.
## _**Related party income**_
The College collaborates with OHCAT and its academies, which provide learning support services to the College. For the year ended 31 July 2023, theses amounted to £2,000 (2022: £78,000).
## _**Related party expenditure**_
During the year, the College received services from Orchard Hill College Academy Trust under service level agreements, at cost of £2,557,000 (2022: £2,268,000). This included recharges of leadership and support staffing costs, IT support, MIS services, marketing services, governance, training, safeguarding, legal, procurement and occupational health services. All services were provided at cost.
In addition to the above, the following transactions took place between the College and individual academies within the Academy Trust:
- A College centre is based at one of the academies of Orchard Hill College Academy Trust; the College pays rent of £44,000 (2022: £40,000);
- During 2022-23, College students accessed a vocational provision delivered by one of the academies; the cost of these courses amounted to £42,000 (2022: £58,000).
- The College has a service level agreement to reimburse the Academy Trust for costs incurred in relation to Garratt House, a College site transferred from the Academy Trust on a 50-year lease. In the year to 31 July 2023, the College paid £11,185 (2022: £11,388);
- All of these transactions were provided by Orchard Hill College Academy Trust at cost.
Orchard Hill College **43**
**Notes to the financial statements** 31 July 2023
## **20 Related party transactions** (continued)
The amount due from the Academy Trust to the College at 31 July 2023 was £219,000 as disclosed in note 12 (2022: £297,000).
The amount due to the Academy Trust from the College at 31 July 2023 was £1,239,000 as disclosed in note 13 (2022: £626,000).
## **21 Operating lease commitments**
At 31 July 2023, the total of the College’s future minimum lease payments under non-cancellable operating leases was as follows:
|Amounts due within one year
Amounts due within one to two years
Amounts due after more than five years|**At 31 July**
**2023**
**£’000**
**453**
**1,705**
**6,379**
**8,537**|At 31 July
2022
£’000
341
1,648
6,808
8,795|
|---|---|---|
Orchard Hill College **44**
**Notes to the financial statements** 31 July 2023
## **22 Comparative information**
Analysis of income and expenditure account for the year ended 31 July 2022 between restricted and unrestricted funds:
|**Income and expenditure account**|Unrestricted
funds
£’000|
Restricted
funds
£’000|**2022**
**Total**
**funds**
**£’000**
**16**
**17,411**
**274**
**4**
—
**17,705**
**19,682**
**19,682**
**(1,977)**
**8,298**
**6,321**
**(5,112) **
**1,209**|
|---|---|---|---|
|**Income from:**
Donations and legacies
Charitable activities
. Provision of education
Other trading activities
Investments
Other items: pension liability transferred
**Total income**
**Expenditure on:**
Charitable activities
. Provision of education
**Total expenditure**
**Net expenditure**
**Other recognised gains and losses**
Actuarial losses on defined
benefit pension scheme
**Net movement in funds**
**Reconciliation of funds**
Fund balances brought forward
at 1 August 2021
Fund balances carried forward
at 31 July2022|16
17,252
274
4
—|
—
**159**
—
—
—||
||17,546|
159||
||19,523|
159||
||19,523|
159||
||(1,977)
8,298|
—
—||
||6,321
(5,112)|
—
—||
||1,209|
—||
Orchard Hill College **45**