**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

Company Registration Number: 08540597 

Charity Registration Number: 1153859 

## **THE EDUCATION AND TRAINING FOUNDATION** 

(Company Limited by Guarantee) 

## **Trustees’ Report** 

## **and** 

## **Financial Statements** 

**For the year ended** 

**31 March 2021** 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **CONTENTS** 

||Page|
|---|---|
|1. Trustees and Advisors|3|
|2. Trustees’ Report|4|
|3. Statement of responsibilities of the Trustees|20|
|4. Independent auditor’s report to the ETF|21|
|5. Consolidated statement of financial activities|25|
|6. Consolidated and Parent Charity Balance Sheets|26|
|7. Consolidated statement of cash flows|27|
|8. Notes to the accounts|28|
|9. ANNEX|42|



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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **1. Trustees and Advisors** 

## **1.1. Trustees** 

The Education and Training Foundation (ETF) is governed by a Board of Trustees. Those Trustees who served during the year and up to the date on which this report was approved are as follows: 

|<br>are as follows:||||
|---|---|---|---|
||**Appointed**|**Re-appointed**|**Resigned**|
|Mr Z Azam|21 July 2017||11 December 2020|
|Ms S Dicketts CBE|8 December 2016|13 December 2019||
|Mr J Graham|27 March 2019|||
|Prof P Latchford OBE (Chair)|23 October 2019|||
|Ms L Leith|11 December 2020|||
|Mr A McConnell OBE (Finance<br>Chair wef 1 January 2022)|22 July 2019|||
|Mr G McDonald|11 November 2021|||
|Ms R Musson (Audit Chair)|13 December 2019|||
|Ms F Orban|8 June 2016|1 March 2019||
|Mr M Ord|18 November 2016|1 March 2019||
|Dr S Parrett CBE|11 November 2021|||
|Mr P Singh|11 December 2020|||
|Ms R Spellman OBE|27 March 2019|||
|Mr D Williams|18 November 2016|1 March 2019|21 May 2020|



## **1.2. Officers** 

CEO: Mr D Russell (appointed 27 January 2014) Company Secretary: Dr G Hobson (appointed 19 June 2014) 

## **1.3. Registered Office** 

Education and Training Foundation, 157-197 Buckingham Palace Road, London SW1W 9SP 

## **1.4. Auditor** 

BDO LLP, 55 Baker Street, London W1U 7EU 

## **1.5. Solicitor** 

Stone King LLP, Boundary House, 91 Charterhouse Street, London EC1M 6HR 

## **1.6. Bankers** 

Royal Bank of Scotland, 62-63 Threadneedle Street, London EC2R 8LA Barclays Bank, 1 Churchill Place, London E14 5HP 

Should you have any comment regarding our programmes or the content of this report, please do get in touch with our CEO (david.russell@etfoundation.co.uk). You can find more - information about the ETF’s Public Benefit and Impact on the website: https://www.et foundation.co.uk/governance/documents/. 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **2. Trustees’ Report** 

The ETF is a registered charity and a company limited by guarantee. It is regulated by the Charity Commission. 

The Trustees (who are also the Directors for the purposes of the Companies Act 2006) present their report and consolidated financial statements of the results of the charity and its wholly-owned subsidiary (ETF Services Ltd, company number 09511877) for the year ended 31 March 2021 (“the year”). 

This Report incorporates the Strategic Report and the Directors’ Report required under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013. 

The Trustees confirm that they have referred to the Charity Commission’s guidance on public benefit and adopted the Charity Governance Code (first published in July 2017, updated 2020). 

The accounts have been prepared in accordance with the policies set out in note 1 to the financial statements and comply with the ETF’s Articles of Association (‘the Articles’), applicable law and the requirements of the Statement of Recommended Practice and Financial Reporting Standard (FRS 102). 

## **2.1. Purposes and activities** 

2.1.1. The ETF supports teachers and leaders across the Further Education (FE) sector to help them achieve their professional development goals for the benefit of learners and employers across England. In doing so, we help to transform the lives of individuals and communities across the country, unleashing potential and benefitting the economy. 

2.1.2. Our work has three key principles at its heart: 

- The first is that we exist for the benefit of learners, something we achieve by improving the professional practice of teachers and leaders in the sector; 

- The second is that we exist as a means to an end, not an end in itself. We have no shareholders and are not motivated to make a profit. Everything we do is about helping our fantastic sector unlock the talents and potential of our learners and improving productivity, employability, skills and educational attainment; 

- And the third is that we exist to support professionals to be even better than they already are, identifying excellence and seeking to understand and disseminate it through collaborative practice. Although our work focuses on FE, we bring in expert challenge and support from outside the sector. 

2.1.3. Our support ranges from leadership development through to maths and English enhancement, to Prevent training and digital teaching skills. As well as professional development, we support recruitment into the sector and provide key data and research. We are also the guardian of the sector’s Professional Standards and home to the professional membership body for the sector, the Society for Education and Training (SET), whose 20,000 plus members we support. SET is responsible for the awarding of both Qualified Teacher Learning and Skills (QTLS) status and Advanced Teacher Status (ATS). 

2.1.4. Over 2019-20 and 2020-21 the ETF has provided additional and bespoke support to the sector while providers have operated through a global pandemic. This will continue to be a priority as the long-term implications of the pandemic are fully realised. 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

2.1.5. Since 2013, the ETF has secured significant public investment in the FE workforce. It has worked in partnership with its Founding Members (the Association of Colleges (AoC) and the Association of Adult Education and Training Organisations (AAETO-HOLEX)) and Member organisations (Natspec; National Union of Students (NUS); the Trades Union Congress (TUC)), and a wide range of bodies and experts to deliver support and development programmes. 

## 2.1.6. An overview of our activity is shown below: 


## **2.2. Overview of our achievements** 

2.2.1. The ETF believes that the key to improving education and training is to support teachers and their leaders to excel. 

- 2.2.2. Everything the ETF does is in pursuit of our vision of: 

   - Highly effective, professionally confident teachers and trainers; 

   - First class leadership of the sector; 

   - FE as the career of choice for ambitious professionals who wish to make a difference. 

- 2.2.3. To achieve our vision, we pursue five strategic objectives: 

   1. GROW: the capacity of the sector; 

   2. LEAD: the sector’s own development activities; 

   3. INFLUENCE:  the system’s priorities, thinking and behaviour; 

   4. DEVELOP: the capability of the sector; 

   5. EVOLVE: the ETF to continually adapt and thrive; 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

2.2.4. 2020-21 has been a successful year for ETF. The tables below set out an overview of achievements against the objectives and strategic priorities. In addition, throughout this report (and in section 2.8 in particular), detail is provided regarding how the ETF has responded and continues to respond to the Covid-19 pandemic. 

## **2.3. Achievements against our strategic objectives (GLIDE)** 

|**Objective**|**Priorities 2020-21**|**Achievements in 2020-21**|
|---|---|---|
|**GROW**the capacity<br>of the sector|1. Set out a career framework model<br>that then gets sector buy-in<br>2. Encourage high quality entrants<br>into the sector<br>3. Reflect the views of the workforce<br>in order to take actions that benefit<br>the whole sector|1.  Career framework model outline<br>developed and discussed with<br>Department for Education (DfE) in<br>support of its ambitions set out in<br>the White Paper.<br>2. Programmes including Taking<br>Teaching Further (TTF), mentoring<br>provision, and Initial Teacher<br>Education support assisted in<br>building workforce capacity.<br>3. Research initiatives including<br>membership, practitioner, and<br>advanced practitioner generating<br>significant insights which inform our<br>work with the sector and DfE.|
|**LEAD**the sector’s<br>own development<br>activities|1. Enabling the ETF and the sector<br>to rise to the challenge of corporate<br>and social responsibility<br>2. Establish the ETF leadership<br>institute|1. Strong delivery in Governance<br>programmes and chairs events<br>providing essential support to the<br>sector at this time.<br>2. Consultation with the sector<br>through a steering group to<br>establish foundations for an<br>institute.|
|**INFLUENCE**the<br>system’s priorities,<br>thinking and<br>behaviour|1. Lead the continuous improvement<br>of Professional Workforce<br>Development in support of a self-<br>improving system<br>2. Work with the sector to identify<br>effective practice and encourage<br>engagement|1. Advanced practitioners<br>programme reach target exceeded<br>with positive feedback received,<br>whilst the Centres for Excellence in<br>Maths (CfEM) programme has<br>successfully delivered against<br>targets this year and has been<br>extended for the full contract<br>lifespan. Our new Quality team is<br>having a positive impact across all<br>our work with its interventions and<br>quality dashboards.<br>2. Practitioner led research target<br>met, with high quality of delivery<br>recorded by participants.|



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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

|**Objective**|**Priorities 2020-21**|**Achievements in 2020-21**|
|---|---|---|
|**DEVELOP**the<br>capability of the<br>sector|1. Sector sees SET membership as<br>essential and Professional Status is<br>undertaken by majority of teachers<br>2. Striving for Excellence in Sector<br>Teaching and Learning through CPD<br>delivery|1. SET membership ended the year<br>at over 21k members with a very<br>positive renewal rate and growth of<br>around 3%.<br>2. Strong performance across<br>range of ETF development<br>programmes achieving over 100%<br>of delivery targets including<br>Outstanding Teaching Learning<br>and Assessment (OTLA), maths &<br>English, learning technologies, and<br>inclusion and wellbeing.|
|**EVOLVE**ETF to<br>continually adapt and<br>thrive|1. Realise the benefits of our<br>organisational change<br> <br>2. Enhancing our reputation as an<br>Employer of Choice, through culture,<br>climate and values<br>3. Demonstrate our impact|1. Business Development and<br>Procurement teams have<br>significantly upgraded their<br>processes and procedures. Our<br>change programme delivered<br>strong outputs in support of<br>collaborative working and<br>improvement in the year. Majority<br>of the work to deliver our IT<br>transformation project completed.<br> <br>2. A new HR Learning and<br>Development system was rolled<br>out. Forums and focus groups<br>reviewed ETF as an Employer of<br>Choice and identified areas to<br>address in the coming year.<br>3. A new Research and Evaluation<br>Manager and a Knowledge<br>Management Officer embedded in<br>the business. Evaluation<br>undertaken across grant<br>programmes. New Evaluation<br>strategy and framework signed off<br>by SMT with Public Benefit and<br>Impact reportspublished.|



2.3.1. In the following sections we outline our operational priorities over 2020-21 and provide some of the highlights. 

## Workforce Development: Teacher and Trainer Development 

- Advanced Practitioners: A package of training and support delivered through a range of collaborative projects, national conferences and Continuing Professional Development (CPD) sessions. Overall, demand for the programme has been strong and target numbers have been met despite the challenging circumstances the sector has faced. Participant feedback remains high for this programme. 

- CfEM: The CfEM programme has been focused on four key themes of: mastery; contextualisation; data and technology; and motivation and engagement. KPIs continue to be met and participant satisfaction remains high. The CfEM programme has been granted a two-year contract extension from the DfE. 

- Excellence Gateway and Foundation Online Learning (FOL): The FOL repository and Excellence Gateway have been widely accessed by the sector. Work has taken place 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

in a range of individual subject areas to review and update some of the resources that are available, for example on Prevent, and maths and English. 

- Maths and English: The maths and English offer is delivered through Shaping Success, a CPD pathway with specific targeted courses, and the Regional Specialist Leads, who provide free in-depth advice and guidance and facilitate networking opportunities. Our ‘New to ESOL’ CPD provided targeted events to address the needs of practitioners. 

- Mentoring: A wide range of support provided through activities such as the development of a mentoring guide, the delivery of CPD courses which focused on the provision of high-quality mentoring and career support for teachers, and providing grants for teachers to undertake development opportunities in their own organisations. 

- Online Teaching Resources: A series of effective online teaching resources produced for Mentoring, T Levels Professional Development (TLPD), plus certification for the new Apprenticeship Workforce Development offer introduced which promoted a high level of take up. Development started on upcoming course areas including safeguarding, maths, and equality, diversity and inclusion. Further opportunities to use the FutureLearn platform explored. 

- Outstanding Teaching Learning and Assessment (OTLA): The OTLA programme focused on the improvement of teaching, learning and assessment through the delivery of small-scale action research projects. Themes included learner progress, maths, English, English for Speakers of Other Languages (ESOL) and digital skills 

- Practice Development Groups: These locally organised groups engaged regularly, identified practitioner focused issues, and worked together to reflect on their practice. Evaluation reports positive regarding delivery, value and impact of the programme. 

- Supporting learners with Special Educational Needs and Disabilities (SEND): A range of support delivered through our three SEND Centres of Excellence including specialist one to one support for leaders and communities of practice for managers and practitioners. We also offered programmes for middle managers with responsibility for SEND, and support for teachers to help support learners with specific needs. 

- TLPD: The TLPD programme is designed to promote understanding of the T Levels qualifications (generally and by subject), teaching and learning in technical education, and leadership. The programme is informed by external experts, employers and the sector via a rigorous series of validation panels and a regular update requirement. Over 50 courses released (28 online and 26 face to face). Feedback from participants across all courses is uniformly positive, including for courses amended to take into account of delivery challenges created by the pandemic. 

- Technical Teaching Fellowships: Four Fellows funded this year and supported to promote a model of professional excellence in delivery of technical education, and to disseminate effective practice around improving the quality of technical teaching and training. 

- Safeguarding and Prevent (inc. ETF Learners): Our offer in this area included online training available for teachers on how to meet and make effective use of the requirements of the Prevent agenda (also for use by / with learners) as well as an extremely well attended series of forums. 

Workforce Development: Leaders, Managers, Chairs and Governors’ Support 

- Chief Finance Officers (CFO) Programme: Supported CFOs to become more effective strategic business partners within their organisations and to work better with their CEO / Principal to drive strategy forward. The participants attended a residential CPD programme and follow up sessions. 

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- CEO Mentoring: Support provided to develop the capacity of senior leaders, through alumni events and mentoring. This focused on colleges with financial and other specific challenges and is a popular part of the leadership offer. 

- Diversity in Leadership: Programme designed to improve management team decision making through encouraging diversity. It included a Women-in-Leadership programme to support a pipeline of women to senior leadership. 

- First line leadership programme (Stepping into Leadership): Programme supported participants recently appointed to management roles. Activities included action learning to support participants overcome specific leadership challenges. 

- Leading from the middle: Programme supported middle managers through a range of activity including face-to-face immersive days, bespoke online content, 1:1 mentoring, webinars and focused learning activities to meet the needs of a specific organisational challenge. It included a series of masterclass alumni events for middle managers aspiring to senior leadership. 

- New to senior leadership: A new pilot programme enabled newly appointed senior leaders to take up their roles more effectively and forge a cross-sector cadre of leaders. Facilitated through a blend of theory ‘bursts’, leadership skills development, exploring knowledge and evidence, debate and facilitated group discussions, and learning from leaders, from the FE sector and the wider system. 

- Prep for CEO: Programme supported experienced FE leaders who seek to move into the CEO / Principal role to be able to better articulate purpose and set vision and think strategically in the short, medium and long term. Targeted module delivery to encourage network events to a cohort of participants and through alumni events. 

- Strategic Leader Programme (SLP): The SLP was partly oriented to help CEOs deal with the issues presented by Covid-19 and took place online. Some modules deferred until face to face is an option, at the request of participants. Activities included mentoring, network learning groups and cutting-edge classes delivered by world class leaders offering a deeper understanding of important trends in the sector and the political complexities of top tier leadership. 

- Chairs’ Leadership Programme: A cohort of chairs supported to reflect on their role as governance leaders and to identify ways in which they can further enhance the value they add to the board and their wider organisation. Facilitated through targeted module delivery and alumni events. 

- Continuing support of governors: A range of activities supported and facilitated the successful recruitment of governors to the sector, from regional events to governor and student governor inductions. Themes included: ‘ensuring board members are equipped with the necessary skills and knowledge to fulfil their responsibilities’, and ‘providing a comprehensive and structured approach to board member induction and their ongoing development. 

- Governor Development Programme: A range of CPD modules has been developed and delivered to governors focusing on search and succession planning, sustainable education, board evaluations. 

- Governance Professionals Development Programme: Programme provided support for governance professionals. In particular, this focused on role expansion from administrator of the board to technical adviser and strategic enabler, a critical role in meeting the administrative and procedural requirements of boards, and enabling efficient, effective discussion and decision making. 

## Sector Recruitment 

- FE Advice: A team of experts has provided specialist advice and guidance to potential new recruits into FE teaching. FE advisors also supported existing teachers considering a move in the sector and want to explore training which might help them. Enquiries have focused on SEND, maths, English, schools to FE, and apprenticeships. 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

- SET for Teaching Success: Programme successfully provided a wide range of support for high quality STEM staff. It focused on recruiting and training graduates and industry professionals to become SET (Science, Engineering and Technology) teachers by providing a 2-year Post-Graduate Certificate of Education (PGCE) plus wider technical knowledge, skills enhancement and work placements for recent graduates. 

- Taking Teaching Further: TTF successful in recruiting a high number of industry experts into FE teaching. Funding now provided for the qualification, shadowing / mentoring and a reduced timetable, plus a focus on 15 technical subject areas. 

- Talent to Teach: Programme successfully recruited high numbers of talented people to support the increase in the FE teacher talent pipeline. Funding provided to support recruits for the AET (Award in Education and Training), and FE placements. 

## Professional Membership and Status 

- To grow SET: Membership grew by around 3% to around 21.5k. The third annual conference held in November 2020 achieved its highest ever online attendance. A large-scale research survey undertaken to inform future growth plans and aligned the positioning of the new website launch and CRM data migration project. 

- To maintain registration of QTLS and ATS: Registrations for QTLS lower than last year due to the pandemic, but better than expected. ATS had its highest ever enrolment of over 100 and supported again by a bursary scheme. A second ‘Chartered Teacher’ graduation ceremony with the Chartered College of Teaching held in March 2021. 

- Continue to improve relationships with existing Corporate Partners: 93% of corporate partners committed to continuing the scheme in March 2021. Number of corporate partners reached 27. 

2.3.2. The above provides a summary view of the various activities and achievements of the ETF during 2020-2021. For further detail regarding our impact and public benefit, please - refer to the corresponding reports available on the ETF website (https://www.et foundation.co.uk/governance/documents/). 

## **2.4. ETF Impact and Public Benefit** 

2.4.1. In 2020-21, the ETF’s evaluation practice was constrained by the DfE research moratorium (from March to September 2020) after which more than a dozen external evaluations were rapidly commissioned for delivery by 2020-21 year end.  As in previous years, these projects relied on the Kirkpatrick framework for assessing the impact of training interventions on individual participants. Project timescales prevented consideration of wider and longer-term impact. Nevertheless, the ETF has committed to publishing the reports and its plans for implementing its recommendations to strengthen programme quality and impact. The ETF is also evolving its evaluation practice to focus more strongly on reporting impact in the future. 

2.4.2. In 2020-21, the ETF produced its annual Public Benefit and Impact Reports for 201920. The Public Benefit Report showcases ETF Continuing Professional Development programmes and SET.  It highlighted the benefits and sustained positive impact both have brought to supporting leaders, teachers and trainers across the FE sector.  The Impact Report goes further, discussing the challenges of capturing impact, presenting independent systematic analysis of two dozen programme evaluation reports, and recommending actions for strengthening impact reporting. It found the ETF’s strategic objectives are delivered through a dual approach to workforce development: the development of skills, knowledge 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

and understanding by participating professionals; and community development through engagement with professional networks and collaborative projects. This dynamic dualism has the potential to contribute profound and sustained impact across the sector. 

2.4.3. The ETF Impact report for 2019-20 made recommendations for demonstrating impact following the adoption of a new evaluation strategy in 2020-21. Implementation of the strategy began in 2021-22, when commissioned external evaluations included process and impact evaluations of programmes within broad programme areas and adopted theory of change logic models to provide a sharper focus on how programme participation improves professional practice, organisational performance and learner outcomes.  Implementation of the strategy in full depends on creating more uniform programme management information, stronger governance for programme participant surveys, the appointment of a single evaluation partner and the introduction of longitudinal evaluation designs spanning more than a single year. 

## **2.5. Education for Sustainable Development (ESD)** 

2.5.1. The ETF recognises the vital role the FE sector has to play in combating climate change and achieving sustainability and social justice both nationally and globally. To meet our national and global sustainability goals, both the education and employment landscape will need to respond and there are significant implications and opportunities for the sector workforce. 

2.5.2. In October 2020 the ETF recruited its first National Head of Education for Sustainable Development (ESD) who has led the development of the ESD strategy, in consultation with various sector stakeholders, to identify how the ETF can add value and enable greater ESD uptake to enhance teaching, learning, assessment and leadership. 

- 2.5.3. The strategy is fourfold: 

   - Weave ESD content throughout the existing CPD offer; 

   - Develop specialist ESD CPD; 

   - Work with others in the sector to create a more enabling environment for ESD in FE; 

   - Ensure that the ETF as an organisation is walking the walk with its own sustainability performance. 

2.5.4. This work will contribute to the strategic objectives and form part of considerations within the SHAPE groups. Progress has been made across all four areas: 

1. Solid progress at embedding ESD within the ETF’s leadership, governance, initial teacher education and SET offers; 

2. Submitting funding bids to finance the development of specialist ESD CPD; 

3. The ETF being recognised as an FE thought leader in the ESD space, invited to submit evidence as an expert to the Environmental Audit Committee’s parliamentary scrutiny panel on Green Jobs and sit on numerous relevant sector fora; 

4. Internal sustainability performance will initially be led by the sustainability SHAPE staff forum who submitted a recommended action plan to SMT in June 2021. The first stage of which is to develop monitoring systems to capture and evaluate robust and comprehensive data. 

2.5.5. To give the ETF a baseline for monitoring processes, and to inform work with a robust evidence base the ETF is undertaking two pieces of research for publication in July 2021: Experiences of ESD across the FE workforce and an audit of ESD within the current FE curriculum alongside a number of case studies showcasing existing leadership in the field. In 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

development is an articulated theory of change for the ETF’s work in this field and longerterm ambitions are to equip the sector to deliver impactful and quality ESD. 

## **2.6. Equity, Diversity and Inclusion** 

2.6.1. The ETF runs a number of programmes aimed at increasing the diversity of the FE sector by challenging bias and reducing barriers to attaining leadership roles for black, Asian, female and other underrepresented groups. The impact of Black Lives Matter, the Me-Too movement (along with the intersectionality of all underrepresented characteristics, as well as neurodiversity) combined with socio-economic inequalities brought about by Covid-19 highlighted the impact these inequalities have on the experience of staff and students in the post-16 sector. These inequalities risk leading to major differences in the educational success of individuals and may ultimately suppress their social and economic mobility. As a result, the ETF has sought to mitigate this risk by working in partnership with sector organisations to implement short- and long-term strategies geared at encouraging and supporting systemic change in the post 16 sector. Change that places equity and inclusion at the fore in balancing these inequalities. 

2.6.2. In 2020-21 the ETF has been working with the AoC and other organisations to identify and share progress that practitioners in FE colleges are making in developing and implementing inclusion and diversity strategies within the curriculum and organisational development. 

2.6.3. Acting as a thought leader, the ETF is challenging and supporting leaders in FE and training to develop and implement equity and inclusion strategies that impact at governance and CEO level. Equity recognises that each person has different circumstances and allocates the resources and opportunities needed to reach an equal outcome. ETF is also working with partner organisations such as WorldSkills and awarding organisations to amplify the voices of students, practitioners, and leaders. 

2.6.4. As an organisation committed to living the values it espouses externally, the ETF is seeking to embed equity, diversity, and inclusion into its DNA through its strategy, SHAPE, its policies, lived practice and in its externally facing programmes. The ETF has engaged Inclusive Employers to support the organisation in developing its internal strategy and action plan. The ETF aims to be an organisation in which diversity is valued for the addition it brings, inclusion is expected, and staff have a strong sense of belonging. Identified steps: 

- Ensure staff have a good understanding and awareness of the organisation's vision for diversity and inclusion; 

- Equip all staff, managers and leaders through training, policies, and guidance to build equity, diversity, and inclusion into the work they do and the way they work; 

- Empower by involving staff through networks, team discussions; 

- Embed inclusion and diversity into the organisation's corporate strategy; 

- Evaluate diversity and inclusion progress; 

- Evolve by continuously learning and drawing on best practice. 

## **2.7. Organisational development: SHAPE** 

2.7.1. The Board and Senior Management Team (SMT) consider continuing organisational and professional development to be vital to the ETF’s success. Under SHAPE, the ETF’s organisational development change programme consisting of strategic and cross cutting projects, this development is taking place. It is recognised that with a growing and more regionally based organisation, all employees must continue to share the same values and 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

ways of working, sitting alongside the creation and use of common operating systems, policies and procedures. 

2.7.2. SHAPE’s purpose is to ensure the organisation operates internally as “One ETF” and is recognised and perceived externally as “One ETF” to achieve its strategic priorities. This is achieved through operating in the most efficient and effective way possible to maximise the impact the ETF has, and ensure the sector recognises the full range of support the ETF offers. 

- 2.7.3. Key achievements of SHAPE in 2020-21 included: 

   - A digital estate review and quick wins exercise to prioritise the medium to long term actions when reviewing and consolidating the ETF’s digital estate; 

   - Considering, developing and testing four career framework prototypes; 

   - Carrying out external benchmarking in sustainability and equality, diversity and inclusion to drive forward ETF’s commitment; 

   - The implementation of a comprehensive wellbeing support package in response to Covid-19; 

   - Progressing recommended areas from work with MIND to ensure effective practice linked to staff wellbeing and mental health; 

   - Continuing to develop new ways of recognising staff achievements (e.g. the launch of an online “recognise a colleague” channel); 

   - Utilising informal feedback mechanisms to ensure staff are listened to through staff forums, suggestions boxes and short surveys; 

   - Leading a successful virtual staff away day, with discussion points centred on cross team collaboration and values. 

- 2.7.4. The following table shows the changes in SHAPE’s set-up from 2020-21 to 2021-22: 


- 2.7.5. Groups will focus on: 

   - Organisation and People; 

   - Digital Transformation; 

   - Products and Propositions; 

   - Continuous Improvement (CI) and Learning Organisation; 

   - One ETF. 

2.7.6. Staff forums will continue to be run across 1) wellbeing and resilience, 2) environmental sustainability and 3) equality, diversity, and inclusion. Expert organisations are engaged to assess strengths and areas for improvement in all three areas and help develop thinking and plans for 2022. 

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## **2.8 The ETF’s response to Covid-19** 

2.8.1. As a result of the Covid-19 pandemic and UK Government advice, the ETF’s physical office closed on 19 March 2020. In the run up to the office closure, the ETF’s Business Continuity Plan was enacted and escalated to Incident Response through March and April 2020. From 19 March 2020, all staff worked from home; no ETF staff were furloughed. The CEO and Governance Director held weekly calls with the Chair and Audit Chair throughout the Incident Response period to ensure the Board kept oversight of the charity’s response to the pandemic. In addition, close contact was maintained with the ETF’s funders, DfE, throughout the period and the relationship remains positive. 

2.8.2. One of the ETF’s first responses to the UK lockdown was to review and, where possible, move support for the FE and training workforce online. In most cases it was possible to do so (with the main exception being the OSBS delivered leadership programmes). Delivery across 2020-21 considered the priorities and challenges faced by the sector, the impact on the workforce, and how our support could be tailored to meet these new needs. A campaign called #ETFSupportsFE showcasing the support that the ETF provided during this period was launched along with a range of commissioned bespoke webinars. 

2.8.3 Following preparations to establish a ‘Covid-secure’ workplace, over the summer of 2020, the ETF office partially reopened based on the following criteria: 

- the ETF continued to apply Government guidance and advice; 

- the activities to be done met the ETF definition of being essential to be undertaken in the office (determined by SMT); and 

- the staff member was happy to come into the office. 

2.8.4. Further office closures were necessitated as a result of follow up lockdowns. A Covid19 office risk assessment is published on the ETF website. 

2.8.5. Through the period of home working, a package of support was put in place for ETF staff which provided tips, resources and ideas to support wellbeing and mental health, including: 

- A video pal scheme to help to keep staff in touch across the business; 

- Practical tips for working from home and an acts of kindness initiative; 

- Internal social media pages to boost staff morale and engagement; 

- Mindfulness and online yoga sessions; 

- Wellbeing days (in addition to staff’s annual leave entitlement). 

2.8.6. The ETF has built into its strategic priorities actions to support the sector with postCovid recovery activities, including new materials to support delivery which reflect the challenges being faced by the sector and wider society (e.g. Levelling Up). 

## **2.9. Financial review** 

2.9.1 The ETF’s total income from its charitable activities in the year was £37.6m (2019-20: £29.8m) and £0.3m from trading activities (2019-20: £0.2m), total £37.9m (2019-20: £29.9m). Income included: 

- £20.5m from Government grant (2019-20: £22.8m); 

- £14.7m from Government contract (2019-20: £4.4m); 

- £1.7m from Membership and Accreditation income (2019-20: £1.6m); and 

- £0.7m from providers, practitioners and non-government grants (2019-20: £1.0m). 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

- 2.9.2 The ETF’s total expenditure for the year was £32.6m (2019-20: £28.0m) and included: 

   - £31.3m for Programme & Sector Development (2019-20: £25.7m); 

   - £0.1m for Research & Data (2019-20: £0.5m); 

   - £1.2m for Membership and Accreditation (2019-20: £1.8m). 

2.9.3 This resulted in an unrestricted surplus for the year of £5.6m. This is stated after provision for payback to DfE of the excess surplus made under the TLPD contract.   The majority of this surplus will be reinvested in delivery activities for this contract and more generally for furtherance of ETF’s charitable objectives to support the improvement of teaching and learning in the FE sector. 

## **2.10. Reserves policy and going concern** 

2.10.1 Restricted reserves at the end of the year were £0.2m (2019-20: £0.4m). This represents grant funding that the ETF has received in advance of delivery costs being incurred. 

2.10.2 Unrestricted reserves carried forward at the end of the year were £12.7m (2019-20: £7.1m).   Unrestricted reserves are available for use in support of the ETF’s charitable purposes. 

2.10.3 With some Government income moving from grant to contract and payment in arrears, the unrestricted reserves required to cover fluctuations in working capital is estimated at £1.2m (2019-20: £0.6m). A further £2.5m is earmarked for an orderly wind down of the ETF, should that be necessary at any stage. The remainder will be used in future financial years in connection with the expanding delivery of the TLPD contract and more generally to further ETF’s charitable purposes of improving the quality of teaching and learning in the FE sector. This includes investment in ETF’s own digital and IT resources. 

2.10.4 The level of reserves carried forward and existing contract and grant agreements mean the ETF can continue as a going concern and meet its liabilities as they fall due. 

## **2.11 Investment policy** 

2.11.1 The ETF holds its funds with AAA-rated banks. Most are held in immediate access accounts. In July 2020, the Board approved and introduced a new Treasury and Investment Policy, which outlines the level of reserves to be held by the ETF and the investment allowed, both in terms of liquidity and business development. The Board will continue to keep its investment policy under review to maximise the investment return consistent with the concern to ensure the security of its resources and minimise risk. 

## **2.12 Grant making** 

2.12.1 Under the DfE’s TTF scheme, the ETF makes grants to providers to help fund innovative projects to attract individuals into the sector and foster collaboration and secondment with industry. All grant awards are approved by the DfE and are subject to rigorous checks to ensure money is being used in accordance with the UK Charity Commission’s rule on public benefit. 

## **2.13 Other reporting requirements** 

2.13.1 Under Section 172 of the Companies Act 2006, the ETF’s Trustees, as Directors of the company, have a duty to promote the long term success of the charity. They have done that during 2020-21 by considering the impact of the decisions they make on the future of 

Page **15** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

the ETF. They have taken into account the views of different stakeholders when making these decisions. The Board considers that it has acted in the best interests of the charity and its beneficiaries. 

- 2.13.2 The Board considers the key stakeholder groups for the ETF to be: 

   - External stakeholders: who affect the external and corporate reputation of the ETF, including Government departments, other funders, membership bodies, media/political, and key influencers; 

   - Operational stakeholders: who form part of the ETF’s operational delivery space, including delivery partners, suppliers, and competitors; 

   - Customers: who use or could use ETF’s products and services at individual and provider level, including practitioners and FE providers. 

2.13.3 The Board engages with and builds its understanding of the respective needs of these stakeholder groups through a number of different means, including: 

- Ensuring a diverse range of perspectives on the Board, from sector practitioners and leaders, through to employers; 

- Engagement with key stakeholder groups through its Member organisations; 

- Formal reporting mechanism for the Society of Education and Training and its Management Board (SMB) to the ETF Board, along with Trustee membership on the SMB; 

- Board away days and other opportunities to bring the ‘outside in’ and better understand the challenges of the sector and wider system. 

2.13.4 During 2020-21 the Board has made a number of significant decisions which have impacted on the charity’s stakeholders, including: 

- Creation and review of ETF’s strategic objectives and priorities, resulting the in the GLIDE framework; 

- Consideration of a number of operational plans which support the achievement of the strategic objectives and priorities, including consideration of the stakeholder operational plan; 

- Recruitment of additional trustees to widen the perspectives and strengthen the diversity of the Board. 

2.13.5 Additional information regarding Section 172 reporting requirements can be found in the following sections: 

- Interests of the charity’s employees, see section 2.7; 

- Impact of the charity’s operations on the community and environment, see sections 2.5 and 2.6; 

- Maintaining high standards, see sections 2.3 and 2.4. 

2.13.6 The Streamlined Energy and Carbon Reporting (SECR) legislation was implemented on 1 April 2019. The new regulations apply to large unquoted companies, including charitable companies. The regulations require companies to disclose their energy and carbon emissions in their annual reports.  For the first time in the year to 31 March 2021, ETF is defined as a “large” organisation, with turnover exceeding £36m and Balance Sheet total (Total Fixed Assets and total Current Assets) exceeding £18m. 

2.13.7 However, in the first financial year that an unquoted company meets the qualifying size conditions it is exempt from the SECR disclosures and ETF has taken advantage of this exemption.  Initial data indicates that our energy usage for the year to 31 March 2021 was around 46,000 kWh.  Further information on ETF’s approach to sustainability can be found in section 2.5. 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

2.13.8 Section 162A of the Charities Act 2011 requires charities to make certain statements in their annual report in relation to their fundraising activities. The charity did not undertake any fundraising activities for the purposes of that section in the financial year and, accordingly, the Trustees confirm that: 

- there were no activities carried out by a commercial participator or professional fundraiser in the period; 

- neither the charity nor any person acting on behalf of the Charity were subject to any undertaking to be bound by any voluntary scheme for regulating fundraising in the financial year; 

- the Charity did not monitor any fundraising activities carried out by any person on behalf of the Charity; and 

- there were no complaints received by the Charity or person acting on behalf of the Charity for the purpose of fundraising. 

## **2.14 Plans for 2021-22** 

2.14.1. In 2021-22, the ETF will further consolidate changes introduced over the last few years to organisational design and the operating model. In 2020-21, several new teams were created to support a split in organisational functions and operating a role culture with the separation of (i) planning and doing and (ii) designing and managing. 

2.14.2. Aligned to this change and due to the implementation of a large new contract (TLPD), a significant change to headcount occurred in 2020-21.  In 2021-22 and beyond further work will be completed to embed business change and enhance ways of working of a larger and more complex structure. 

2.14.3. The advantage of this target operating model enables agility and response on curriculum design and development, meeting DfE and sector needs though the team of National Heads and managing and driving performance improvement through the delivery team.  In addition, it allows the Board and the Executive to continue to prioritise and be responsive to sector need in the post-Covid environment. 

2.14.4. Through 2020-21 and into 2021-22 the Board and Executive focus on strategic planning and its 3-year strategy (giving due consideration to the long term impact of Covid19 for the ETF, the sector and wider society) applied across four lenses: 

1. Considering ETF‘s overall mission and vision to ‘help support the sector to become a self-improving system’; 

2. Applying GLIDE organisational objectives to help deliver the strategy; 

3. Underpinning the GLIDE objectives with 12 strategic priorities; and 

4. Using the SHAPE programme to enable cross-organisational change programmes. 

## **2.15 Governance** 

2.15.1. At the ETF AGM (1 March 2019) new Articles and a supporting ‘Members – roles and responsibilities’ schedule were adopted. Following the Articles changes, the following actions were completed: 

- expanded the ETF Member Group (appointing NUS, Natspec and TUC); 

- implemented the trustee recruitment protocol; 

- recruited new trustees, including a new Chair and Audit Chair; 

- reviewed and updated the management of trustee conflicts of interest; and 

- introduced a trustee appraisal process, and implemented a new Board committee structure. 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

2.15.2. Through 2020-21 these governance changes were embedded across the business. We also moved to online meeting arrangements as a result of Covid-19. The Board focused on becoming a ‘high performing board’ and to improve its diversity, which continues to be a priority. 

## **2.16 Trustee induction and training** 

2.16.1 New trustees meet with the Chair, CEO, Deputy CEO, Company Secretary, SLT and other members of the SMT as part of the induction. Trustees are briefed on trustee responsibilities, the Articles, the ETF’s strategy and business plans, its financial performance, and key risks. On appointment and each year trustees are asked to adopt a Code of Conduct, and trustees’ interests are reviewed at every Board and Committee meeting. 

2.16.2. All trustees are offered the opportunity to observe and/or attend ETF events, as well as attend external training on various topics linked to trustee responsibilities. Board members attend an annual away day to consider the ETF’s operating environment, strategic priorities and opportunities.  The most recent away day was held online on 11 December 2020, with the next session planned on 9 December 2021. 

## **2.17 Risk management** 

2.17.1. The Board has reviewed and agreed an updated risk management policy and procedure that comprises: 

- A regular review of the principal strategic and operational risks faced by the charity by the ETF Board; 

- At least bi-annual consideration by the Audit and Risk Committee of the operation of the risk management policy, along with scrutiny of the key strategic risks and the mitigating actions, making recommendations and reports to the Board where necessary; 

- Monthly consideration and update of the ETF’s corporate risk register by the SMT as risk owners through the Performance Board. All risks and planned actions are recorded in the risk register, assigned owners and overseen by SMT. 

2.17.2. At the end of 2020-21, the Board considered the most significant risks to delivery of the ETF’s charitable aims. These are outlined below, with the key mitigations and actions: 

|**Risk**|**Mitigations and Actions**|
|---|---|
|||
|Macro environment and funding|•<br>Ongoing Grant and contract discussions<br>•<br>Responding to the White Paper and feeding into the<br>Spending Review to ensure ETF stays relevant|
|Digital systems are not fit for purpose|•<br>Implementation of the digital transformation programme,<br>Transform<br>•<br>Re-structure of IT and Digital team|
|DfE Commercial approach|•<br>Ongoing DfE relationship strategy management, including<br>open dialogue between DfE Commercial and ETF<br>•<br>Development of commercial strategy|
|Demonstrating and communicating<br>impact|•<br>Development of Evaluation Strategy, with task and finish<br>group established to embed the strategy<br>•<br>Development of comms plan|



2.17.3. The Board kept a close review of ETF’s responses to the above risks, along with risks linked to Covid-19. 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **2.18 Pay policy** 

2.18.1. The Board considers the key management personnel of the charity to be the members of the Senior Leadership Team (SLT), comprising; CEO, DCEO, Director of Finance, Director of Operations, Director of Business Strategy and the Director of Professionalism and Customer Experience (appointed June 2021). The SLT is in charge of directing and controlling, running and operating the charity on a day-to-day basis. 

2.18.2. The Board has agreed a pay policy. The pay of staff is reviewed annually by the Board’s Remuneration and Search Committee taking into account variables including: performance of the organisation; climate in the education and training, public and voluntary sectors; affordability for the ETF; attracting and retaining excellent staff; cost of living indices; and sector benchmarks. The Board’s Remuneration and Search Committee makes recommendations to the Board which is responsible for final decisions. In 2021-22 a review of the ETF’s pay, benefits, reward and recognition policies will be completed. 

## **2.19. Disclosure of Information to the Auditors** 

2.19.1. The Trustees who held office at the date of approval of this Trustees’ Report confirm that, so far as they are each aware, there is no relevant audit information of which the ETF’s auditors are unaware; and each Trustee has taken all the steps that he/she ought to have taken as a trustee to make himself/herself aware of any relevant audit information and to establish that the ETF’s auditors are aware of that information. 

The Report of the Trustees, which incorporates the requirements of the Strategic Report and the Directors’ Report as set out in the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, was approved by the Board, in their capacity as Trustees and company directors, and signed on its behalf on 16 December 2021 by: 

Prof Peter Latchford OBE Chair 16 December 2021 

David Russell 

Chief Executive Officer 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **3. Statement of Responsibilities of the Trustees** 

The trustees are responsible for preparing the Strategic Report, Trustees’ Report and the financial statements in accordance with applicable law and regulations. 

Charity law requires the Trustees to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and charity and of the incoming resources and application of resources, including the income and expenditure, of the group and charity for that period. 

In preparing these financial statements, the Trustees are required to: 

- select suitable accounting policies and then apply them consistently; 

- make judgements and accounting estimates that are reasonable and prudent; 

- state whether applicable UK 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 charity will continue in operation. 

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity’s transactions and disclose with reasonable accuracy at any time the financial position of the charity 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 charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 

Financial statements are published on the charity’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the charity’s website is the responsibility of the trustees. The trustees’ responsibility also extends to the ongoing integrity of the financial statements contained therein. 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **4. Independent auditor’s report to the Members of The Education and Training Foundation** 

## **Opinion on the financial statements** 

In our opinion, the financial statements: 

- give a true and fair view of the state of the Group’s and of the Parent Charity’s affairs as at 31 March 2021 and of the Group’s incoming resources and application of resources 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. 

We have audited the financial statements of the Education and Training Foundation (“the Parent Charitable Company”) and its subsidiary (“the Group”) for the year ended 31 March 2021 which comprise the Consolidated statement of financial activities, the Consolidated and Charity balance sheets, the Consolidated cash flow statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). 

## **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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 

## **Independence** 

We remain independent of the Group and the Parent Charitable Company in accordance with the ethical requirements 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. 

## **Conclusions related to going concern** 

In auditing the financial statements, we have concluded that the Trustees’ (Who are the Directors) use of the going concern basis of accounting in the preparation of the financial statements is appropriate. 

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

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

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **Other information** 

The Trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. The other information comprises the Trustees’ report which incorporates the Strategic report, and the Trustees’ responsibility 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. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 

We have nothing to report in this regard. 

## **Other Companies Act 2006 reporting** 

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

- the information given in the Trustees’ Report and the Strategic report prepared 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 Strategic report and the Trustees’ Report, which are included have been prepared in accordance with applicable legal requirements. 

In the light of the knowledge and understanding of the Group and the Parent Charitable Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' report or 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 by the Parent Charitable Company, or 

- returns adequate for our audit have not been received from branches not visited by us; or 

- the Parent Charitable Company 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. 

- • the Trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemptions in preparing the Trustees’ report and from the requirement to prepare a Strategic report. 

## **Responsibilities of Trustees** 

As explained more fully in the Trustees’ Responsibilities statement, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

give a true and fair view, and for such internal control as the Trustees determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 

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

## **Auditor’s responsibilities for the audit of the financial statements** 

We have been appointed as auditor under the Companies Act 2006 and report in accordance with the Act and relevant regulations made or having effect thereunder. 

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. 

## **Extent to which the audit was capable of detecting irregularities, including fraud** 

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

- Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud 

- Reviewing minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with HMRC and the DfE to identify any actual or potential frauds or any potential weaknesses in internal control which could result in fraud susceptibility 

- Reviewing items included in the fraud register as well as the results of internal audit’s investigation into these matters 

- Challenging assumptions made by management in their significant accounting estimates 

- In addressing the risk of fraud, including the management override of controls and improper income recognition, we tested the appropriateness of certain manual journals, reviewed the application of judgements associated with accounting estimates for the indication of potential bias and tested the application of cut-off and revenue recognition. 

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. 

A further description of our responsibilities for the audit of the financial statements is located at the Financial Reporting Council’s (“FRC’s”) website at: 

https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. 

## **Use of our report** 

This report is made solely to the Charitable Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Charitable Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charitable Company and the Charitable Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. 

James Aston (Senior Statutory Auditor) For and on behalf of BDO LLP, statutory auditor 

55 Baker Street London, UK 

Date: 17 December 2021 

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **5. Consolidated statement of financial activities** 

||||**2020-21**|||**2019-20**||
|---|---|---|---|---|---|---|---|
||**Note **|**Unrestricted**|**Restricted**|**Total**|**Unrestricted**|**Restricted**|**Total**|
|**Income:**||**£000**|**£000**|**£000**|**£000**|**£000**|**£000**|
|Income from charitable activities:||||||||
|Grant Income|4|-|20,637|20,637|-|22,865|22,865|
|Professional Development||15,253|-|15,253|5,346|-|5,346|
|Accreditation||787|-|787|760|-|760|
|Membership||936|-|936|803|-|803|
|||16,976|20,637|37,613|6,909|22,865|29,774|
|Income from trading activities:||||||||
|Property Rental||295|-|295|106|-|106|
|Other||48|-|48|33|-|33|
|Investment Income|5|4|-|4|33|-|33|
|**Total Income**||**17,323**|**20,637**|**37,960**|**7,081**|**22,865**|**29,946**|
|**Expenditure:**||||||||
|Expenditure on charitable<br>activities:|6|(11,720)|(20,876)|(32,596)|(4,420)|(23,534)|(27,954)|
|**Total Expenditure**||**(11,720)**|**(20,876)**|**(32,596)**|**(4,420)**|**(23,534)**|**(27,954)**|
|**Net income and movement in**||||||||
|**funds for the year**||**5,603**|**(239)**|**5,364**|**2,661**|**(669)**|**1,992**|
|**Reconciliation of funds**||||||||
|Total funds brought forward||7,130|424|7,554|4,469|1,093|5,562|
|**Total funds carried forward**||**12,733**|**185**|**12,918**|**7,130**|**424**|**7,554**|



The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities. 

The notes on pages 28 to 41 form part of these financial statements. 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **6. Consolidated and Parent Charity Balance Sheets** 

|**Group**<br>**2021**<br>**Note**<br>**£000**<br>**Fixed assets**<br>Intangible assets<br>12<br>542<br>Tangible assets<br>12<br>93<br>635<br>Investment in subsidiary<br>13<br>-<br>635<br>**Current assets**<br>Debtors<br>14<br>1,285<br>Cash at bank and in hand<br>24,162<br>25,447<br>**Liabilities**<br>Creditors: amounts falling due within one year<br>15<br>(13,164)<br>**Total assets less current liabilities**<br>**12,918**<br>**Net assets**<br>**12,918**<br>Unrestricted income funds<br>18<br>12,733<br>Restricted income funds<br>19<br>185<br>**Total funds**<br>**12,918**|**Charity**<br>**2021**<br>**£000**<br>542<br>93<br>635<br>1<br>636<br>1,481<br>24,103<br>25,584<br>(13,302)<br>**12,918**<br>**12,918**<br>12,733<br>185<br>**12,918**|**Group**<br>**2020**<br>**£000**<br>-<br>-<br> <br>-<br>-<br> <br>-<br> <br>997<br>12,788<br>13,785<br>(6,231)<br>**7,554**<br>**7,554**<br>7,130<br>424<br>**7,554**|**Charity**<br>**2020**<br>**£000**<br>-<br>-|
|---|---|---|---|
||||-<br>1|
||||1<br>1,083<br>12,643|
||||13,726<br>(6,173)|
||||**7,554**|
||||**7,554**|
||||7,130<br>424|
||||**7,554**|



The Statement of Financial Activity for the charity alone has not been presented, as permitted by s408 of the Companies Act 2006. During the year ended 31 March 2021, the charity results showed a surplus of £5,364k (2019-20 surplus of £1,992k). The financial results of the charity are summarised in note 3. 

The notes on pages 28 to 41 form part of these financial statements. 

These financial statements were approved by the trustees on 16 December 2021 and were signed on their behalf by: 

## **Prof Peter Latchford OBE Chair** 

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**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **7. Consolidated statement of cash flows** 

|**Note**<br>**Cash provided by operating activities**<br>22<br>**Cash flows from investing activities**<br>Interest income<br>**Increase in cash and cash equivalents in the year**<br>Cash and cash equivalents at the beginning of the year<br>**Total cash and cash equivalents at the end of the year**|**Group**<br>**Group**<br>**2020-21**<br>**2019-20**<br>**£000**<br>**£000**<br>**11,370**<br>**1,912**<br>4<br>33<br>11,374<br>1,945<br>12,788<br>10,843<br>**24,162**<br>**12,788**|
|---|---|



The notes on pages 28 to 41 form part of these financial statements. 

Page **27** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** 

## **1. Accounting policies** 

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are as follows: 

## a) Basis of preparation 

The financial statements have been prepared on the basis of historical cost in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102), Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with FRS102 (Charities SORP (FRS102)), the Charities Act 2011 and the Companies Act 2006. 

## b) Going concern 

The accounts have been prepared on a going concern basis. The ETF will be able to meet its obligations in full for at least 12 months following the signing of these accounts. The Board has reviewed and approved the budget for 2021-22 including the reserves that will be available to support trading after that period. The Board has also recently reviewed the out-turn forecast position for 2022. 

The Board has considered the longer-term position of the ETF and its financial strength. The trustees were satisfied that the ETF is in a strong position and were satisfied with the preparation of the accounts on a going concern basis. 

In conjunction with this, considering Covid-19 and the continual potential operational and financial impact on the ETF the Board also considered a reverse stress test, aimed at defining the strength of the ETF from a liquidity perspective. As such, the Board was satisfied of the ETF’s strong financial position and that the accounts are prepared on a going concern basis. 

## c) Group financial statements 

The financial statements consolidate the results of the charity and its wholly-owned subsidiary, ETF Services Ltd (ETFS), on a line-by-line basis. A separate Statement of Financial Activities and income and expenditure Account for the charity has not been prepared because the ETF has taken advantage of the exemption afforded by section 408 of the Companies Act 2006. The ETF is also fully supportive of ETFS and will not seek to request any payment of debt from the subsidiary in the eventuality of it making a loss. 

## d) Income 

Income is recognised when the ETF has entitlement to the funds, any performance conditions have been met and it is probable that the income will be received. 

Income from Government and other grants is recognised when the ETF has unconditional entitlement to the funds. Income is deferred and recognised as a liability when grants are received in advance of the period in which the donor has specified that the expenditure is to take place. Where specific instructions are received from the grant maker relating to the use of the funds for specific purpose, the amounts are accounted for within restricted income. 

Page **28** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **1. Accounting policies** (continued) 

## d) Income (continued) 

Income from membership subscriptions is recognised evenly over the period of membership. Income from registration onto accreditation schemes is recognised on receipt; income from submission of accreditation workbooks is recognised after evaluation has been completed. 

Income from professional development is recognised on an accruals basis. Income from rental and investment activities is recognised on an accruals basis. 

## e) Expenditure and liabilities 

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

Direct costs include all costs relating directly to delivering charitable activities. Staff costs include staff delivering charitable services (allocated directly) and those providing backoffice services (apportioned based on the costs directly allocated to each activity). Support costs include accommodation, depreciation, IT, stationery, general office expenses and governance. These are also apportioned in line with direct cost allocation. 

Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred. 

## f) Fund accounting 

Grants or donations received for specific projects are treated as restricted funds. 

Designated funds are available for specific identified purposes by the ETF. 

Unrestricted funds are available for general use by the ETF or to meet possible shortfalls in revenue or unforeseen increases in expenditure, investment in business development initiatives and generally for the furtherance of the charitable objective to support the improvement of teaching and learning in the FE sector. 

## g) Taxation 

The charity meets the requirements as set out in Paragraph 1 Schedule 6 of the Finance Act 2012 as a charitable company for UK corporation tax purposes. As such it is potentially exempt from income tax in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the corporation tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively for charitable purposes. 

The wholly-owned subsidiary, ETF Services Ltd, pays all of its profits to the charity under the gift aid scheme. 

No tax charge has arisen in the year. 

Page **29** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **1. Accounting policies** (continued) 

## h) Fixed assets and depreciation 

Individual fixed assets or groups of assets costing in excess of £5,000 are capitalised at cost and depreciated over their estimated useful life on a straight-line basis as follows: 

- Computer hardware 3 years; 

- Computer software 3 years; 

- Office equipment and furniture 5 years; 

- Intangible fixed assets 3 years. 

A full year’s depreciation is charged in the year an asset is commissioned, irrespective of the precise date during the year. 

## i) Operating leases 

Rental income and costs arising under operating leases are charged to the income and expenditure account on a straight-line basis over the period of the lease. 

## j) Financial instruments 

The ETF only has financial assets and liabilities which qualify as basic financial instruments, initially recognised at transaction value and subsequently measured at their settlement value. 

## k) Pensions 

The ETF operates three pension schemes: staff transferred under TUPE regulations from LSIS are entitled to belong to an Aviva defined-contribution scheme; staff who joined before October 2017 were offered ETF’s defined-contribution scheme operated by Standard Life; and new employees join ETF’s auto-enrolment defined-contribution scheme operated by Aviva. 

ETF contributes 6% of the employee’s pensionable salary into the Aviva/LSIS scheme. For 2020-21, employer’s contributions of £13,899 (2019-20: £13,772) were paid to Aviva. ETF contributes 6% of the employee’s pensionable salary into the Standard Life scheme. For 2020-21, employer’s contributions of £45,318 (2019-20: £74,746) were paid to Standard Life. 

ETF contributes 6% of the employee’s pensionable salary into the Aviva auto-enrolment scheme. For 2020-21, employer’s contributions of £302,923 (2019-20: £125,340) were paid to Aviva. 

Arrangements exist which, under certain circumstances, allow staff to sacrifice some of their remuneration in exchange for an equivalent increase in employer’s pension contribution. 

## l) Staff termination costs 

Statutory redundancy and ex-gratia payments being made to staff are recognised in the accounts when the decision about staff leaving has been made, it is likely that such payments will be required and the amount to be paid can be reliably assessed. 

Page **30** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **2. Legal status of the ETF** 

The ETF is a company limited by guarantee and a registered charity. It has no share capital. In the event of being wound up, the liability in respect of the guarantee is limited to £1,000 per member of the charity. 

## **3. Financial performance of the charity** 

The consolidated statement of financial activities includes the results of the charity’s whollyowned subsidiary, ETF Services Ltd (company number 09511877), which operates SET. The results for the charity alone are shown below: 

|**Income:**<br>_Income from charitable activities:_<br>Government grant<br>Non-Government grant<br>Government contract<br>Professional Development<br>Accreditation<br>Administration services to subsidiary<br>Donation from subsidiary<br>Other income<br>Property rental income<br>Seconded staff<br>Investment income<br>**Total Income**<br>**Expenditure:**<br>Expenditure on charitable activities<br>**Total expenditure**<br>**Net income and movement in**<br>**funds for the year**<br>**Reconciliation of funds:**<br>Total funds brought forward<br>**Total funds carried forward**|**2020-21**<br>**Unrestricted**<br>**Restricted**<br>**Total**<br>**£000**<br>**£000**<br>**£000**<br>-<br>20,537<br>20,537<br>-<br>100<br>100<br>14,685<br>-<br>14,685<br>568<br>-<br>568<br>787<br>-<br>787<br>24<br>-<br>24<br>196<br>-<br>196<br>48<br>-<br>48<br>16,308<br>20,637<br>36,945<br>295<br>-<br>295<br>-<br>-<br>-<br>4<br>-<br>4<br>**16,607**<br>**20,637**<br>**37,244**<br>11,004<br>20,876<br>31,880<br>**11,004**<br>**20,876**<br>**31,880**<br>5,603<br>(239)<br>5,364<br>7,130<br>424<br>7,554<br>**12,733**<br>**185**<br>**12,918**|**2019-20**<br>**Unrestricted**<br>**Restricted**<br>**Total**<br>**£000**<br>**£000**<br>**£000**<br>-<br>22,794<br>22,794<br>-<br>71<br>71<br>4,439<br>-<br>4,439<br>907<br>-<br>907<br>760<br>-<br>760<br>24<br>-<br>24<br>7<br>-<br>7<br>14<br>-<br>14|
|---|---|---|
|||6,151<br>22,865<br>29,016<br>106<br>-<br>106<br>-<br>-<br>-<br>33<br>-<br>33|
|||**6,290**<br>**22,865**<br>**29,155**|
|||3,628<br>23,534<br>27,162|
|||**3,628**<br>**23,534**<br>**27,162**|
|||2,661<br>(669)<br>1,992<br>4,469<br>1,093<br>5,562|
|||**7,130**<br>**424**<br>**7,554**|



Page **31** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **4. Government Grants and Contracts** 

The ETF received a Government grant of £20.5m in 2020-21 (2019-20: £22.8m) from the Department for Education. Included within Creditors is a sum of £465k of unspent grants to be repaid to DfE. The ETF also received grants of £50k from the Royal Commission for Technical Teaching Fellowships and £50k from the Gatsby Foundation for Further Forces. 

All conditions and contingencies attaching to grants receivable have been met. Analysis of movements in grants and other restricted funds received is given in note 19. 

In the year to 31 March 2021 ETF received income from three Government contracts, the most significant of which was for TLPD.  The total of £14.7m shown includes £13.0m from the TLPD contract, stated after making a provision of £1.5m for payback of surplus generated from this contract to the DfE. See also Note 23 regarding contingent liability. 

## **5. Investment income** 

All the group’s investment income of £4,130 (2019-20 £33,329) arises from money held in interest bearing deposit accounts. 

## **6. Analysis of expenditure on charitable activities** 

|Professional development<br>Sector development<br>Research and data<br>Membership and accreditation|**Direct cost**<br>**& grants**<br>**Direct staff**<br>**cost**<br>**Indirect staff**<br>**cost**<br>**Overhead**<br>**cost**<br>**2020-21**<br>**Total cost**<br>**£000**<br>**£000**<br>**£000**<br>**£000**<br>**£000**<br>11,946<br>3,060<br>1,417<br>986<br>**17,409**<br>10,598<br>1,493<br>1,141<br>613<br>**13,845**<br>67<br>9<br>7<br>47<br>**130**<br>508<br>604<br>-<br>100<br>**1,212**<br>**23,119**<br>**5,166**<br>**2,565**<br>**1,746**<br>**32,596**|**2019-20**<br>**Total cost**<br>**£000**<br>**10,269**<br>**15,419**<br>**500**<br>**1,766**|
|---|---|---|
|||**27,954**|



## **7. Grants Awarded** 

Grants of £4.6m have been awarded to various providers as part of the Government’s TTF Scheme (2019-20: £2.8m) and grants of £1.4m have been awarded under the Mentoring scheme (2019-20: nil). 

Page **32** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **8. Net income for the year** 

This is stated after charging: 

|Operating leases - property<br>Governance costs:<br>External Auditor's remuneration<br>- Audit fees<br>- Other advice<br>Internal Auditor's remuneration<br>Legal and Professional<br>Trustees remuneration & expenses<br>Depreciation|**2020-21**<br>**2019-20**<br>**£000**<br>**£000**<br>547<br>289<br>54<br>36<br>6<br>5<br>10<br>10<br>15<br>28<br>29<br>41<br>114<br>120<br>28<br>-|
|---|---|



## **9. Staff** 

The average number of staff, including senior post holders, employed across the ETF Group during the year ended 31 March, expressed as full-time equivalents (FTEs): 

|Total number of FTEs<br>Total number of heads|**2020-21**<br>**2019-20**<br>**132**<br>**69**<br>**141**<br>**75**|
|---|---|



Staff costs included within expenditure on charitable activities are: 

|Salaries and wages<br>Social Security costs<br>Pension costs<br>Termination payments|**2020-21**<br>**2019-20**<br>**£000**<br>**£000**<br>6,455<br>3,542<br>682<br>405<br>362<br>214<br>78<br>12<br>**7,577**<br>**4,173**|
|---|---|



Page **33** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **9.  Staff (continued)** 

The number of employees whose emoluments fell within the following bands was: 

||**2020-21**|**2019-20**|
|---|---|---|
|£60,000 - £69,999|13|6|
|£70,000 - £79,999|1|1|
|£80,000 - £89,999|1|1|
|£90,000 - £99,999|2|-|
|£120,000 - £129,999|-|1|
|£130,000 - £139,999|1|-|
|£140,000 - £149,999|-|1|
|£170,000 - £179,999|1|-|



The ETF organisation structure includes a Senior Leadership Team (SLT) and an Operational Senior Management Team (SMT). The Board considers the CEO, DCEO, Director of Finance, Director of Operations, Director of Business Strategy and the Director of Professionalism and Customer Experience (appointed to SLT June 2021) to comprise the key management personnel.  For 2020-21 this is for 5 FTE and in the prior year 2019-20 this comprised 4.4 FTE. 

The total cost of employing the key management personnel and the highest paid employee was as follows: 

|Salaries and wages<br>Social Security costs<br>Pension costs|**2020-21**<br>**2019-20**<br>**£**<br>**£**<br>580,268<br>487,600<br>74,006<br>61,930<br>32,336<br>43,281<br>**686,610**<br>**592,811**<br>**Key management personnel**|**2020-21**<br>**2019-20**<br>**£**<br>**£**<br>177,970<br>148,756<br>23,346<br>19,338<br>8,202<br>24,608<br>**209,518**<br>**192,702**<br>**Highest paid individual**|
|---|---|---|



It should be noted that the salary shown above for 2020-21 for the highest paid individual includes residual bonus payments, relating to earlier years.  No bonuses have been awarded in respect of the financial year 2020-21 and there is no longer a bonus element to the remuneration package. 

Page **34** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **10. Trustees’ remuneration and expenses** 

|S R Freer<br>P Mullins<br>R Musson<br>P Latchford<br>Reimbursement of trustees' expenses|**2020-21**<br>**2019-20**<br>**£**<br>**£**<br>-<br> <br>6,720<br> <br>-<br>13,446<br> <br>8,000<br>6,052<br>20,400<br>16,872<br> <br>181<br>9,265<br>**28,581**<br>**52,355**|
|---|---|



The Articles of Association, as agreed with the Charity Commission, permit remuneration of up to three independent trustees who manage significant and complex activities on behalf of ETF, requiring significant amounts of time. The Chair (P Latchford) and the Chair of the A&R Committee (R Musson) are contracted and remunerated. No pension contributions are made on their behalf. 

No other trustee received any remuneration or received any other benefit from the ETF. Travel, accommodation, and subsistence expenses were reimbursed to 1 trustee during the year (2019-20: 10 trustees). 

Page **35** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **11. Related party transactions** 

AoC, AAETO-HOLEX, NUS, Natspec and TUC were the Members of the ETF throughout 2020-21 and are considered to be related parties by virtue of their rights, under the Articles of Association, to be consulted about the appointment of Board members. 

In addition, a number of trustees and executive directors were employed by or held unremunerated positions in a variety of organisations, which are also considered to be related parties. The Board considers this to be appropriate and requires that trustees comply with its conflicts of interest policy. 

The ETF has entered into arms-length contractual arrangements with the following organisations which fall within the definition of related parties under FRS102. 

Other than direct services to the Board (e.g. Audit), the Board has no involvement in any of the ETF’s processes for assessing tenders. Similarly, no potentially conflicted trustees take part in supplier performance reviews when the supplier is a related party. 

|Activate Learning<br>Association of Employment and Learning Providers<br>Association of Adult Education and Training Organisations<br>Association of Colleges (AoC)<br>Association of Colleges (AoC)<br>AoC Regional Office - East Midlands (EMFEC)<br>AoC Create Limited<br>Candour Collaborations Ltd<br>Pearson's<br>Learning & Work Institute<br>NatSpec<br>University of Derby<br>Wakefield College Corporation<br>Women's Leadership Network|**2020-21**<br>**spend**<br>**£000**<br>51<br>42<br>35<br>1,055<br>-<br>285<br>442<br>NA<br>293<br>47<br>30<br>NA<br>73<br>50<br>**2,403**|**2019-20**<br>**spend**<br>**£000**<br>77<br>226<br>11<br>2,633<br>-<br>1,596<br>315<br>97<br>907<br>190<br>18<br>2<br>85<br>28<br>**6,185**|**2020-21**<br>**balance**<br>**due (to)/from**<br>**£000**<br>-<br>(21)<br>-<br>(290)<br>10<br>-<br>(289)<br>-<br>(194)<br>(24)<br>-<br>-<br>(61)<br>(10)<br>**(879)**|**2019-20**<br>**balance**<br>**due (to)/from**<br>**£000**<br>-<br>-<br>-<br>(305)<br>-<br>-<br>(169)<br>-<br>-<br>(108)<br>(8)<br>-<br>-<br>-|
|---|---|---|---|---|
|||||**(590)**|



Page **36** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **12. Fixed assets – group and charity** 

|**Cost**<br>Opening Balance 1 April 2020<br>Additions<br>Disposals<br>Closing Balance 31 March 2021<br>**Depreciation**<br>Opening Balance 1 April 2020<br>Charge in year<br>Closing Balance 31 March 2021<br>**Net Book Value 31 March 2021**<br>**Net book Value 31 March 2020**|**Computer**<br>**Software**<br>**Intangible**<br>**£000**<br>87<br>542<br>-<br>629<br>87<br>-<br>87<br>**542**<br>**-**|**Computer**<br>**Hardware**<br>**Tangible**<br>**£000**<br>83<br>121<br>-<br>204<br>83<br>28<br>111<br>**93**<br>**-**|**Total**<br>**£000**<br>**170**<br>**663**<br>-|
|---|---|---|---|
||||833|
||||**170**<br>**28**|
||||198|
|||||
||||**635**|
|||||
||||**-**|



## **13. Investments – charity** 

The charity holds the entire allotted share capital of £1,000 in its wholly-owned subsidiary, ETF Services Ltd, which is incorporated in the United Kingdom. The shares are called-up and fully-paid. The activities and results of this company are summarised in note 21. A copy of the directors’ report and financial statements of ETF Services Ltd can be obtained from the Company Secretary at 157-197 Buckingham Palace Road, London, SW1W 9SP. 

## **14. Debtors** 

|Trade debtors<br>Prepayments<br>Accrued income<br>Amounts owing from subsidiary company<br>Accrued donation by subsidiary company<br>Other debtors|**Group**<br>**2021**<br>**£000**<br>721<br>65<br>498<br>-<br>-<br>1<br>**1,285**|**Charity**<br>**2021**<br>**£000**<br>721<br>65<br>498<br>-<br>196<br>1<br>**1,481**|**Group**<br>**2020**<br>**£000**<br>466<br>64<br>430<br>-<br>-<br>37<br>**997**|**Charity**<br>**2020**<br>**£000**<br>466<br>64<br>430<br>79<br>7<br>37|
|---|---|---|---|---|
|||||**1,083**|



Page **37** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **15. Creditors: amounts falling due within one year** 

|Trade creditors<br>Grants payable<br>Accruals<br>Deferred income<br>Taxation and social security<br>Amounts owing to subsidiary company<br>Provision for TLPD contract payback to DfE<br>Other creditors|**Group**<br>**2021**<br>**£000**<br>7,600<br>-<br>1,770<br>1,650<br>321<br>-<br>1,500<br>323<br>**13,164**|**Charity**<br>**2021**<br>**£000**<br>7,600<br>-<br>1,768<br>1,561<br>321<br>229<br>1,500<br>323<br>**13,302**|**Group**<br>**2020**<br>**£000**<br>3,831<br>507<br>1,001<br>601<br>206<br>-<br>-<br>85<br>**6,231**|**Charity**<br>**2020**<br>**£000**<br>3,831<br>507<br>992<br>552<br>206<br>-<br>-<br>85|
|---|---|---|---|---|
|||||**6,173**|



## **16. Deferred Income** 

Deferred income comprises the SET membership fees in respect of 2021-22 invoiced before 31 March 2021, workbook submission fees received for QTLS accreditation applications which had not been assessed by year-end and course attendance fees invoiced which relate to courses which were due to take place on or after 1 April 2021.  Deferred income also includes grant income received within the year to 31 March 2021, the conditions for which are not satisfied through delivery until 2021-22 

|Balance at 1 April<br>Amount deferred in  year<br>Balance at 31 March<br>Amount released to income earned from charitable activities|**Group**<br>**2021**<br>**£000**<br>601<br>(601)<br>1,650<br>**1,650**|**Charity**<br>**2021**<br>**£000**<br>552<br>(552)<br>1,561|
|---|---|---|
|||**1,561**|



Total Deferred income in the Charity comprises of Government grants £769k (includes £465k payback re Management fee overclaimed), non-Government grants £40k, Professional Development £452k and maths & English (TLPD) £300k.  The Group figure includes SET membership fees in advance of £89k. 

## **17. Analysis of Group net assets in funds** 

|Cash in bank and in hand<br>Other net assets (liabilities)|**Unrestricted**<br>**£000**<br>23,977<br>(11,244)<br>**12,733**|**Restricted**<br>**Total**<br>**£000**<br>**£000**<br>185<br>**24,162**<br>-<br>**(11,244)**<br>**185**<br>**12,918**|
|---|---|---|



Page **38** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **18. Analysis of movements in unrestricted funds** 

|**2020-21**<br>Society for Education and Training<br>Designated funds, of which:<br>- Wind-down of ETF<br>- Strategic investment reserve<br>General fund<br>**2019-20**<br>Society for Education and Training<br>Designated funds, of which:<br>- Wind-down of ETF<br>- Strategic investment reserve<br>General fund|**Funds at**<br>**start of year**<br>**£000**<br>20<br>-<br>2,550<br>1,200<br>3,360<br>**7,130**<br>19<br>2,550<br>1,300<br>600<br>**4,469**|**Incoming**<br>**resources**<br>**£000**<br>936<br>-<br>-<br>16,387<br>**17,323**<br>822<br>-<br>-<br>6,259<br>**7,081**|**Resources**<br>**expended**<br>**£000**<br>(731)<br>-<br>-<br>(10,989)<br>**(11,720)**<br>(839)<br>-<br>(100)<br>(3,481)<br>**(4,420)**|**Transfers**<br>**£000**<br>7<br>-<br>-<br>(7)<br>**-**<br>18<br>-<br>-<br>(18)<br>**-**|**Funds at**<br>**end of year**<br>**£000**<br>**232**<br>**2,550**<br>**1,200**<br>**8,751**|
|---|---|---|---|---|---|
||||||**12,733**|
||||||**20**<br>**-**<br>**2,550**<br>**1,200**<br>**3,360**|
||||||**7,130**|



## **19. Analysis of movements in restricted funds** 

|**2020-21**<br>DfE grant<br>SET for Success<br>Further Forces<br>TVET<br>**2019-20**<br>DfE grant<br>Home Office grant<br>SET for Success (previously shown as BIS)<br>Gatsby Foundation<br>Royal Fellowship|**Funds at**<br>**Incoming**<br>**Resources**<br>**Funds at**<br>**start of year**<br>**resources**<br>**expended**<br>**end of year**<br>**£000**<br>**£000**<br>**£000**<br>**£000**<br>207<br>20,537<br>(20,675)<br>**69**<br>217<br>-<br>(101)<br>**116**<br>-<br>50<br>(50)<br>**-**<br>-<br>50<br>(50)<br>**-**<br>**424**<br>**20,637**<br>**(20,876)**<br>**185**<br>876<br>22,700<br>(23,369)<br>**207**<br>-<br>94<br>(94)<br>**-**<br>217<br>-<br>-<br>**217**<br>-<br>45<br>(45)<br>**-**<br>-<br>26<br>(26)<br>**-**<br>**1,093**<br>**22,865**<br>**(23,534)**<br>**424**|
|---|---|



Of the total 2020-21 DfE grant received it has been agreed that a sum of £465k will be refunded to the DfE.  The total of £20,537k shown above is net of this sum.  Unspent grant of £69k, due to timing of delivery, will be spent in 2021-22. 

The balance of £116k of the Grant for SET for Success has been carried forward. 

Page **39** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **20. Lease commitments** 

ETF and the charity had the following lease commitments as at 31 March 2021: 

|**Operating lease - property rental**<br>Payments due within one year<br>Payments in 2-5 years<br>**Operating lease - sub-rental income**<br>Payments due within one year<br>Payments in 2-5 years|**2020-21**<br>**£000**<br>509<br>1,105<br>**1,614**<br>(88)<br>-<br>**(88)**|**2019-20**<br>**£000**<br>547<br>1,279<br>**1,826**<br>(199)<br>(66)<br>**(265)**|
|---|---|---|



## **21. Subsidiary company** 

ETFS is a wholly-owned subsidiary of the charity, which operates SET.  The retained profit of the subsidiary alone is: 

|Turnover<br>Membership subscriptions<br>Other Income<br>Cost of sales and administration cost<br>Excess of income over expenditure<br>Gift aid donation to parent charity<br>Retained Profit/(Loss)<br>The assets and liabilities of the subsidiary are:<br>Current assets<br>Current liabilities<br>Aggregate share capital and reserves|**2020-21**<br>**£000**<br>936<br>-<br>936<br>(740)<br>196<br>(196)<br>-<br>59<br>(58)<br>**1**<br>**1**|**2019-20**<br>**£000**<br>803<br>19|
|---|---|---|
|||822<br>(815)|
|||7<br>(7)|
|||-|
|||145<br>(144)|
|||**1**|
|||**1**|



Page **40** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **8. Notes to the accounts** (continued) 

## **22. Reconciliation of net movement in funds to net cash flow from operating activities** 

|**Net movement in funds**<br>Add back depreciation charge<br>Deduct interest received<br>(Increase)/Decrease in debtors<br>Increase/(Decrease) in creditors<br>Payments made to acquire Fixed Assets<br>**Net cash provided by operating activities**|**Group**<br>**2020-21**<br>**£000**<br>5,364<br>28<br>(4)<br>(288)<br>6,933<br>(663)<br>**11,370**|**Group**<br>**2019-20**<br>**£000**<br>1,992<br>-<br>(33)<br>826<br>(873)<br>-|
|---|---|---|
|||**1,912**|



## **23. Contingent Liability** 

The ETF is in on-going discussions with the DfE regarding the extent of the surplus generated under the TLPD contract during the year to 31 March 2021. The ETF’s position on this is that there is a fair sum which could and should reasonably be repaid to the DfE.  This figure of £1,500k is included within current liabilities.  It is a complicated contract and the DfE position is that there is a potential maximum sum payable of up to £4,800k for the year to 31 March 2021.  As such there is currently a degree of uncertainty regarding the level of any further payments which may be settled relating to the year to 31 March 2021, up to a maximum liability of £3,300k. 

Furthermore, the DfE position regarding the pricing of the TLPD contract potentially has implications for the prior year to 31 March 2020, with a maximum further liability of £2.7m, should a similar methodology be applied by DfE to the early months of the contract. 

## **24. Post balance-sheet events** 

In July 2021, ETF signed a Transfer Agreement with ETFS transferring ETFS trade and assets to ETF. 

Page **41** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

## **9. ANNEX 1:** 

|**Acronyms**||
|---|---|
|AAETO-HOLEX|Association of Adult Education and|
||Training Organisations|
|ARPCE|Association for Research in Post|
||Compulsory Education|
|ATS|Advanced Teacher Status|
|AoC|Association of Colleges|
|AELP|Association of Employment and|
||Learning Providers|
|BERA|British Education Research|
||Association|
|BAME|Black, Asian and Minority Ethnic|
|CCT|Chartered College of Teaching|
|CEO|Chief Executive Officer|
|CFO|Chief Finance Officer|
|CPD|Continued Professional Development|
|CMS|Content Management System|
|CRM|Customer Relationship Management|
|DCEO|Deputy Chief Executive|
|DET|Diploma in Education and Training|
|DfE|Department for Education|
|DTPF|Digital Teaching Professional|
||Framework|
|EEF|Education Endowment Foundation|
|ESFA|Education and Skills Funding Agency|
|ETF|The Education and Training|
||Foundation|
|ETFS|ETF Services Ltd|
|ESOL|English to Speakers of Other|
||Languages|
|FD|Finance Director|
|FTE|Full Time Equivalent|
|FE|Further Education and Training|
|GAAP|Generally Accepted Accounting|
||Principles|
|HR|Human Resources|
|ITE|Initial Teacher Education|
|ITT|Initial Teacher Training|
|KIT|Keep In Touch|
|KPI|Key Performance Indicator|
|LSIS|Learning and Skills Improvement|
||Service|
|LSRN|Learning and Skills Research Network|
|OSBS|Oxford Said Business School|
|OTLA|Outstanding Teaching Learning and|
||Assessment|
|PCSPS|Principle Civil Service Pension|
||Scheme|
|QTLS|Qualified Teacher Learning and Skills|
|SLT|Senior Leadership Team|



Page **42** of **43** 



**Education and Training Foundation (company number 08540597) Trustees' Report and Financial Statements for the year ended 31 March 2021** 

|SMT|Senior Management Team|
|---|---|
|SET|Society for Education and Training|
|SEND|Special Educational Needs and|
||Disabilities|



Page **43** of **43**