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2022-02-28-accounts

Charity registered number 1160531

North Wales Recovery Communities

Trustees' report and accounts

for the year ended 28 February 2022

North Wales Recovery Communities

Contents

Page
Report of the trustees 3 - 8
Independent examiner's report 9
Statement of financial activities 10
Balance sheet 11
Notes 12 - 17

North Wales Recovery Communities

Report of the trustees

The trustees present their report along with the financial statements of the charity for the year ended 28 February 2022 and confirm they comply with the requirements of the Charities Act 2011, the Charitable Incorporated Organisations (General) Regulations 2012 and the charity's constitution.

The charity is registered with the Charity Commission under number 1160531.

Legal and administrative information

The trustees who served during the period are stated below:

Conor Mathieson Mohammed Olanrewagu Peter Salami Sarah Frances Flynn

Principal office

Penrhyn House Llandegai Road Bangor Gwynedd LL57 1PZ

Structure, governance and management

The charity was established as a foundation charitable incorporated organisation on 17 February 2015.

Objectives and activities

To provide relief and support to vulnerable people and in particular those who are in recovery from substance misuse and have been affected by offending, homelessness & mental health issues in the areas of Conwy, Flintshire, Gwynedd and the Isle of Anglesey.

The charity achieves its objectives by the provision of abstinence based housing, open access therapeutic programmes, the promotion of health and well-being, practical support and promoting personal development.

Achievements and performance

The course of the past year has been as always for NWRC been one of triumph and adversity.

We have continued to grow and develop a thriving recovery community at Penrhyn House and have once again been able to open our doors to the wider public after having to remain closed for so long due to the Covid-19 pandemic. NWRC’s approach remains one of Asset based community development and we continue to be recognised as a centre of excellence in terms of supporting abstinence-based community recovery and have regularly received positive press coverage with several documentaries having been made about the journey of Penrhyn House and its individual residents.

We have also recently completed our first year’s trading at Bwyd Da Bangor, our restaurant/Café that we opened to the public in partnership with BCUHB & Gwynedd council amongst others in November of 2021. Whilst this project has its own challenges in terms of sustainable funding etc, NWRC have nevertheless established Bwyd Da as a vibrant, organic, ethically sourced business that has been extremely well received by the local community and regularly attracts 5-star customer reviews due to the quality of the food produced.

Bwyd currently employs 19 full and part time staff over half of whom are in long term sustainable recovery. As well as the usual restaurant/ coffee shop offer, Bwyd Da also offer a 12-month training/employment opportunity for individuals who are affected by complex barriers to employment. There is also a surplus food club that offers its members (Currently 190, many of whom are experiencing food poverty) a wide variety of surplus food sourced from local supermarkets and organisations such as Fair Share.

Page 3

Most significantly this year, NWRC have also recently been able to complete the purchase of a new site which we will be transplanting our main base of operations too in the summer of 2023. Whilst Penrhyn House will always remain close to our hearts, there can be no doubt that we have outgrown the site there and the costs of annual repairs & general state of the building meant that a move was vital for us if we want to continue to grow as a community.

Our new home at Hillgrove sits on the site of a former private school and offers huge scope for development. Whilst the initial phase of development work will commence in January 2023, the project at Hillgrove will take us years to develop fully. This will be an incredibly exciting journey for us and one that will allow us to develop a bespoke ‘hub” offering a multitude of recovery pathway & resources, built and developed by its community members. Crucially the site remains within the confines of the City of Bangor and will benefit from far better transport links making the new site far more accessible.

At this time NWRC would like to place on record their thanks to Mark Watkin Jones, Susan Ashworth, Kevin Hogan and their dedicated teams. Without their unflinching generosity, vision and business acumen this simply would not have happened.

As a result, the future of NWRC is now secured and as such we will be able to continue offering out hope and inspiration for individuals struggling with active addiction for generations to come.

Therapeutic programme

NWRC has continued to deliver a therapeutic programme that comprises of a series of psychosocial group programmes, mutual aid groups and physical activities aimed at supporting individuals to achieve recovery from addiction.

The programme continues to equip its participants with the skills to cope with a life substance free, as well as addressing any long-term barriers to employment and increasing physical health and enhancing wellbeing.

Now into its seventh year of delivery, the programme has remained incredibly successful with participants attending from a wide catchment area. It has been recognised as being unique in its approach to supporting recovery and has continued to receive regular coverage in both the written press, television and radio, with participants being regularly invited to discuss their positive and often life changing experiences.

The project continues to comprise of multiple Mutual aid-based recovery programmes including “Moving on in my Recovery” (An A.C.T based programme) and access to onsite 12 step fellowship & SMART recovery meetings. Alongside therapeutic and skill-based courses, individuals have also been able to access a variety of diversionary activities, developing new skills and interests to “fill the void” left by their addictions.

These sessions focus upon enhancing health & wellbeing and include Mindfulness, Yoga, 5 a side football, Boxing, running, walking etc.

Over the course of the past 12 months NWRC have also continued to offer a more creative outlet for participants with a creative writing course, Art therapy and the continuing long-term partnership with Eternal Media.

NWRC’s long standing organic growing project “Growing for change” have enjoyed another strong year, supplying a number of restaurants/cafes with fresh organic produce.

The growth in abstinence-based recovery within Northwest Wales remains one of NWRC’s greatest successes. Having started seven years ago with only one 12 step fellowship meeting, NWRC are now proud to host upwards of six mutual aid meeting per week at Penrhyn house including AA, CA, NA etc. As well as the meeting hosted at Penrhyn House, NWRC now also host community-based AA & NA meetings at Bwyd Da and provide recovery support groups in both South Gwynedd and Ynys Mon and have also seen numerous meetings being established all the way across North Wales by ex-residents of Penrhyn House who have now returned to their home areas and are now using their strength, hope and experience to establish new meetings and act as “Recovery beacons”

The culture & recovery orientated system of care that we have imbedded at Penrhyn House continues to support its peers in reaching personal milestones in recovery and as a result our community has grown from strength to strength in terms of established sobriety and the ability to offer service to others. As such the vast majority of mutual aid on offer at Penrhyn House continues to be peer led.

Page 4

Penrhyn house continue to offer a wide variety of mutual aid programmes including

Abstinence based housing

N.W.R.C have continued to deliver abstinence based multi occupancy housing from the Penrhyn House site in Bangor.

Housing up to 16 individuals at a time the project at Penrhyn House has gone from strength to strength with the average residency now lasting just over 8 months and the average period of abstinence being 7 months (Accurate as of February 2022).

The continued success at Penrhyn House means that demand for a placement remains high. As a result of this demand Penrhyn House continue to operate at full occupancy, with a waiting list of up to 8 individuals at any one time. Due to the high demand for a placement, NWRC are able to offer places to individuals who appear most motivated and often ask perspective residents to engage on a day basis whilst awaiting a room in order to judge levels of commitment and suitability. As well as evidencing motivation it also allows the individual the opportunity to develop positive relationships with existing residents ahead of moving in which often increases the chances of success once a tenancy commences.

Residents continue to adopt a “working week” and have to satisfy a minimum of 20-30 hours of positive pro social activity a week in order to maintain their tenancies. These hours can consist of voluntary work, treatment or further education and can be sourced externally or satisfied within the in-house therapeutic programme currently on offer.

Page 5

Whilst the housing element of NWRC’s service remains financially self-sustaining, there have undoubtably been issues caused by the ongoing cost of living crisis. With energy bills in particular being hit by unprecedented price increases, NWRC are continuing to review the current level of eligible HB and increase the charge accordingly.

This coupled with the ever-increasing repair and maintenance costs at an aging Penrhyn site again underline why the move to more up to date energy efficient premises are vital if NWRC are to continue to grow and develop long-term in what are becoming ever increasingly difficult financial times.

Move on accommodation.

Over the course of the past twelve months NWRC have significantly reduced the number of move on properties that we manage. Historical issues of under occupancy, coupled with vastly increased running costs meant that these units where no longer financially viable

We have therefore continued to transition our remaining “move on” tenancies over to tenants once they have achieved full time employment and are able to manage the tenancy independently. However, we have opted instead not to source any further units as we normally would.

As such we will only be retaining one unit in Ynys Mon as a long-term placement for individuals over 65 years of age with the hope that this can remain a “forever home”

In future we plan instead to be able to develop alternative “move on” accommodation on the new site at Hillgrove. With huge scope for additional development, NWRC will look to develop a number of cost effective, standalone, energy efficient independent dwellings in the grounds at Hillgrove over the coming years once the initial developments have all been completed.

Potential future developments

As mentioned earlier in this report the biggest development currently facing NWRC is the development and transition to our new home at Hillgrove. The new site will offer us the opportunity to explore additional revenue streams through the development of new services.

Whilst the current focus is on developing residential accommodation, we hope in the future to also be able to develop an education & training hub focusing on employability and access to training and further education. We also plan to explore the development of on-site detoxification facilities which if achieved would significantly reduce the strain on existing detox provision within North Wales.

However, our immediate goal over the next 12 months must be to transplant the recovery orientated system of care we have developed at Penrhyn House and ensure that we foster the same culture of honesty, openness and integrity that has made Penrhyn House so successful.

We also recognise that we will have to build relationships with our new neighbours. Whilst our current “neighbours” recognise the positive impact & service that we offer to our community we will now have to prove this all over again to our new ones.

Prejudice and stigma will always surround recovery from addiction, and it will be our responsibility through our efforts to tackle these misconceptions and to reassure the small minority who may be concerned by our arrival that we will actually be of positive service to our new community.

Current challenges

At present the biggest challenge facing NWRC is the financial position that Bwyd Da is currently faced with. When the project was devised, all parties involved accepted that a project of this nature would always be heavily grant reliant. When NWRC where approached by BCUHB to be the delivery partner we were asked to model the revenue costs and informed them that a project of this kind employing upwards of 15 individuals, with a training element and a surplus food club as requested would cost approximately £375k per annum to fund which was accepted by all partners involved as being appropriate.

At this point it needs to be acknowledged that Bwyd Da should have been a roaring success for NWRC when judged against the initial plans for it. We have satisfied our element of the Bwyd Da project in an exemplary manner. We have delivered every element of the project on time and within budget, from the initial build right throughout our first year of trading.

Page 6

As well as establishing an award winning, 5 Star rating on Trip advisor for its food Bwyd Da is also the focal point in addressing food poverty in the Arfon area. Alongside its stigma free Surplus food club, Bwyd da also offer a free food box scheme in partnership with Gwynedd council.

We’ve worked hard on establishing a similar ethos and working environment to the one developed at Penrhyn House and have been rewarded by a positive culture and very high rate of staff retention. As such Bwyd Da like NWRC as a whole is now recognised as an ethical employer offering employment & training opportunities for individuals faced with historical complex barriers to employment.

Unfortunately, despite being the instigator and designer of the Bwyd Da project BCUHB have been unable to fulfil their financial commitment to fund Bwyd Da. Therefore, instead of being in position where we should be sat on a comfortable cash surplus, we are instead faced with a constant uphill struggle to fund the project on a month-by-month basis.

Whilst urgent discussions with BCUHB are still currently ongoing the reality is that the £375k promised annually to Bwyd Da now been appears to be lost. NWRC have approached multiple different funding sources, including statutory, third sector and Welsh government in an effort to replace the “lost’ funding in order to be able to carry on delivering the current model in place at Bwyd Da which is rich in social value. As no new funding has yet been sourced, NWRC continue to maintain frank and open dialogue with BCUHB around the current financial plight facing BDB and the knock-on financial exposure to NWRC caused by BCUHB’s financial shortcomings. NWRC have in effect asked BCUHB to fund BDB in its current form until the end of the financial year during which time we will attempt to transition BDB across to a “Break even” model. This request has been taken to the Executive board of BCUHB and at the time of writing this report are currently awaiting a written response.

Whilst nobody could have envisaged the financial difficulties that we would face with BDB given the nature of the delivery partnership involved BCUHB, Gwynedd council, ADRA etc it has nevertheless highlighted the risk that a social enterprise type business poses to NWRC as a whole if the social enterprise itself should get into financial difficulty.

We have therefore taken the decision with the support of CWMPAS (formerly the Welsh cooperative) to transfer Bwyd Da from a trading subsidiary of the larger NWRC charity and transform it into a separate company limited by guarantee. Whilst this new entity would still be able to attract the same level of grant funding as Bwyd Da’s current constitution, it would shield the wider charity from any financial exposure whilst at the same time allow us to establish an “asset lock” which would ensure that NWRC would be able to retain any and all tangible assets should Bwyd Da ever have to close its doors.

Given the recent lessons learnt through Bwyd Da, NWRC are keen to avoid making similar mistakes with “Growing for change” our longstanding organic growing operation. Long term the plan had always been to establish GFC as a trading subsidiary however our recent experiences with BDB mean that we will now look instead to either establish it as a company limited by guarantee or alternatively as its own stand-alone entity under the form of a CIO (Charitable incorporated organisation).

At present GFC is in a strong position, we have a dedicated team of growers invested in the project and already supply several cafes/restaurants including Bwyd Da from two growing sites based at Penrhyn House and Moelychi. It is hoped that next year will see us finally secure the capital costs to develop the piece of land that we have been donated by Gwynedd council. If successful in securing this funding, it will allow us to significantly upscale the growing operation and eventually develop a number of the current voluntary posts into paid ones.

Page 7

Therapeutic grant funding

NWRC continue to receive £89k per annum from the North West Area Planning Board at Penrhyn House.

Evidence base

NWRC have continued to take part in a joint research project this with the CSARS group (Chester Studies of Addiction, Recovery and Spirituality) from Chester University. The initial paper entitled “The Impact of Group Engagement on Recovery Outcomes” looked at the recovery outcomes for a group of 75 participants who engaged within the recovery programme at Penrhyn House over a three year period and suggested that there was an exceptionally strong link between ongoing attendance at mutual aid meetings and the sustainment of long term recovery, with roughly two thirds of all attendees at Penrhyn House having a sustainable recovery journey.The project is now being broadened out to become a more longer term study similar in type to “Project Match” in the United States or the “Life in Recovery” study being undertaken by Sheffield University.

This project which is the first of kind in the UK supports the work carried out by leading lights in the the Recovery Field such as Dr’s David Best and Ed Day and offers the opportunity to study long term the impact that mutual aid can have on overcoming addiction.

It’s hoped that this study can be continued and indeed broadened over the coming years to look at the long term affects of recovery in terms of reducing offending, increasing employability etc. Hopefully this will continue to show the efficacy of the recovery model developed at Penrhyn House and support the case for increased funding of recovery orientated systems of care.

Financial review

The charity’s income was £950,472 and net income for the year was £5,320. The charity aims to maintain cash reserves of £15,000.

This report was approved by the trustees on 18 December 2022 and signed on their behalf by

Sarah Frances Flynn Trustee

Page 8

North Wales Recovery Communities

Independent Examiner's Report to the Trustees of North Wales Recovery Communities

I report on the accounts of the charity for the year ended 28 February 2022.

Respective responsibilities of trustees and examiner

The charity's trustees are responsible for the preparation of the accounts. The charity's trustees consider that an audit is not required for this period under section 144(2) of the Charities Act 2011 and that an independent examination is needed.

It is my responsibility to:

Basis of the independent examiner's report

My examination was carried out in accordance with the General Directions given by the Charity Commission. An examination includes a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also includes consideration of any unusual items or disclosures in the accounts and seeking explanations from the trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit and consequently I do not express an audit opinion on the accounts.

Independent examiner's report

In the course of my examination no matter has come to my attention:

Mr N A Christian FCPA

Christian Sykes & Co Ltd 333/335 High Street Bangor Gwynedd LL57 1YA

Dated: 18 December 2022

Page 9

North Wales Recovery Communities

Statement of financial activities for the year ended 28 February 2022

note
Incoming resources
3
Resources expended
4
Expenditure on the provision of care
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Total funds carried forward
Total
Expenditure on:
Charitable activities
Total
Net income
Other trading activities
Transfers between funds
Donations and other grants
Other trading activities
Central and local government grants for the
provision of care.
Charitable activities
Income and endowments from:		 £
250,123
602,215
98,134
950,472
699,709
245,443
945,152
5,320
-
5,320
259,485
264,805
Unrestricted
funds		 Restated
£
248,959
490,890
-
739,849
542,699
-
542,699
197,150
-
197,150
62,335
259,485
Prior year
funds

Page 10

North Wales Recovery Communities

Balance sheet as at 28 February 2022

Fixed assets
Tangible assets
9
Total fixed assets
Current assets
Debtors
10
Cash at bank and in hand
12
Total current assets
11
Net current assets
Total net assets
Funds of the charity
Unrestricted funds
Total funds
Creditors: amounts falling due within one
year
note		 £
204,840
204,840
22,192
103,233
125,425
65,460
59,965
264,805
264,805
264,805
Unrestricted
funds		 Restated
£
25,825
25,825
226,715
20,748
247,463
13,803
233,660
259,485
259,485
259,485
Prior year
funds

Page 11

North Wales Recovery Communities

Notes to the accounts for the year ended 28 February 2022

1 Basis of preparation

1.1 Basis of accounting

These accounts have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant notes to these accounts.

The accounts have been prepared in accordance with:

The charity constitutes a public benefit entity as defined by FRS 102.

There are no material uncertainties related to events or conditions that cast significant doubt on the charity's ability to continue as a going concern.

2.1 Income

Recognition of income

Income is included in the Statement of Financial Activities (SoFA) when:

Offsetting

There has been no offsetting of assets and liabilities or income and expenses unless required or permitted by by the FRS 102 SORP or FRS 102.

Grants and donations

Grants and donations are only included in the SoFA when the general income recognition criteria are met (5.10 to 5.12 FRS 102 SORP).

In the case of performance related grants, income is only recognised to the extent that the charity has provided the specified goods or services as entitlement to the grant only occurs when the performance related conditions are met (5.16 FRS 102 SORP).

Contractual income and performance related grants

This is only included in the SoFA once the charity has provided the related goods or services or met the performance related conditions.

Page 12

North Wales Recovery Communities

Notes to the accounts (cont) for the year ended 28 February 2022

2.1 Income (cont)

Support costs

The charity has incurred expenditure on support costs.

2.2 Expenditure and liabilities

Liability recognition

Liabilities are recognised where it is more likely than not that there is a legal or constructive obligation committing the charity to pay out resources and the amount of the obligation can be measured with reasonable certainty.

Governance and support costs

Support costs have been allocated between governance cost and other support. Governance costs comprise all costs involving public accountability of the charity and its compliance with regulation and good practice.

Creditors

The charity has creditors which are measured at settlement amounts less any trade discounts.

Provisions for liabilities

A liability is measured on recognition at its historical cost and then subsequently measured at the best estimate of the amount required to settle the obligation at the reporting date.

2.3 Assets

Tangible fixed assets for use by the charity

These are capitalised if they can be used for more than one year and cost at least £100.

They are valued at cost and the depreciation rates and methods are disclosed in note 7.

Debtors

Debtors, including trade debtors and loans receivable, are measured on initial recognition at settlement amount after any trade discounts or amount advanced by the charity. Subsequently, they are measured at the cash or other consideration expected to be received.

3 Analysis of income

Charitable activities

Income from charitable activities
Abstinence based housing
Physical diversity activity
Complimentary therapies
Other trading activities		 £
472,664
64,775
64,775
98,134
700,349
Unrestricted
funds		 Restated
Last
year
£
348,336
71,277
71,277
-
490,890

Page 13

North Wales Recovery Communities

Notes to the accounts (cont) for the year ended 28 February 2022

4 Analysis of expenditure

Expenditure on charitable activities

Activity
Abstinence based housing
Physical diversity activity
Complimentary therapies
Other trading activities
Support costs
Office
Professional fees
Finance
Governance		 Restated
Total
Last
year
£
£
£
£
449,849
22,334
472,183
431,544
194,336
22,334
216,669
107,801
1,983
22,334
24,317
3,355
218,523
13,460
231,983
-
864,691
80,461
945,152
542,700
Restated
This year
Last year
£
£
20,349
4,924
55,452
40
3,660
206
1,000
624
80,461
5,794
Activities
undertaken
Support
costs

5 Support costs

6 Details for certain items of expenditure

6.1 Fees for examination of the accounts

Independent examiner's fees £1,000 (2022: £624).

7 No fees were paid for assurance services, tax advisory fees or other fees
last year.
Paid employees		 either for this year or
7.1 Staff costs
Salaries and wages
Social security costs
Pension costs (defined contribution scheme)		 Restated
This year
Last year
£
£
218,267
31,312
15,902
-
5,011
473
Total staff costs 239,180
31,785
7.2 Physical diversity activity
Café staff
Average head count in the year
The parts of the charity in which the
employees work		 This year
Last year
Number
Number
4
2
10
-
14
2

Page 14

North Wales Recovery Communities

Notes to the accounts (cont) for the year ended 28 February 2022

Restated
8 Defined contribution pension scheme This year Last year
£ £
Amount of contributions recognised in the SOFA as an expense 5,011 473
9 Tangible fixed assets
Total
Freehold Motor
 Fixtures,fittings
Property Vehicles and equipment
£ £ £ £
Cost or valuation
At the beginning of the year - - 45,757 45,757
Disposals - - - -
Additions 78,773
19,000
92,123		 170,896
At the end of the year 78,773
19,000
137,880		 235,652
Depreciation
At the beginning of the year -
-		 19,932 19,932
Disposals -
-		 - -
Depreciation 1,097
4,750
5,034		 6,131
At the end of the year 1,097
4,750
24,966		 30,813
Net book value
At the beginning of the year - -
25,825		 25,825
At the end of the year 77,675
14,250.00
112,914		 204,840

Tangible fixed assets are depreciated as follows:

Freehold property - 2% on cost Fixtures, fittings and equipment - 15% on the reducing balance basis Motor vehicles - 25% on the reducing balance basis

10 Debtors and prepayments
10.1 Analysis of debtors
Trade debtors
Other debtors
Taxation and social security		 Restated
This year
Last year
£
£
-
39,517
20,794
-
1,399
187,198
22,192
226,715

Page 15

North Wales Recovery Communities

Notes to the accounts (cont) for the year ended 28 February 2022

11 Creditors and accruals

11.1 Analysis of creditors and accruals
Trade creditors
Taxation and social security
Accruals and deferred income
Other creditors		 Restated
This year
Last year
£
£
56,303
7,459
6,812
853
1,000
5,400
1,345
91
65,460
13,803

11.2 Deferred income

Income received in advance of the provision of the contracted service has been deferred this year and last year.

year and last year.
Movement in deferred income account Restated
This year
Last year
Balance at the start of the reporting period £
£
4,167
4,167
Amounts added in current period -
4,167
Amounts released to income from previous periods (4,167)
(4,167)
Balance at the end of the reporting period -
4,167
12 Cash at bank and in hand Restated
This year
Last year
Cash at bank and on hand £
£
103,233
20,748

13 Trustee remuneration and benefits

None of the trustees have been paid any remuneration or received any other benefits from an employment with their charity or a related entity.

14 Trustee's expenses

Type of expenses reimbursed
Travel and subsistence
Office costs		 Restated
This year
Last year
£
£
-
966
-
1,125
-
2,091

The number of trustees paid expenses was NIL (2021: 1).

Page 16

North Wales Recovery Communities

Notes to the accounts (cont) for the year ended 28 February 2022

15 Transactions with related parties

During the year the charity was invoiced £260,982 (2021: £203,136) by North Wales Recovery Communities Cyf, a company controlled by an employee, for providing supervisory care of the charity's beneficiaries.

At the 28/02/22 the charity owed North Wales Recovery Communities Cyf £17,205 (2021: £7,459).

16 Prior year adjustment

The charity received grants within the year ended 28th February 2022 which were specifically relating to the year ending 28th February 2021 per the grant documentation.

The amount totals £185,799 and is material to the finacial statements, the previous year has therefore been restated and the amount recognised within accrued income.

Unrestricted funds
Accrued income
Total		 28th February 2021
Previously reported
£
73,686
-
73,686		 28th February 2021
Restated
£
259,485
185,799
-
73,686

Page 17