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2021-12-31-accounts

~~ANNUAL REPORT 2021~~

~~TRUSTEES’ REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021~~

~~PRINCIPALS, TRUSTEES AND SENIOR MANAGEMENT TEAM~~

David Cheyne MA (Cantab)

~~PATRON~~

Wing Commander Marie-Noelle Orzel OBE QVRM MSc PGDE RGN RSCN

Her Majesty The Queen

~~PRESIDENT~~

Wing Commander Sarah Davis MBA MSc FCIPD (from 24 January 2022)

HRH The Duke of Kent KG GCMG GCVO ADC(P)

Lady Hillier (from 24 January 2022)

Air Marshal Sir Richard Knighton KCB FREng (from 31 May 2022)

~~LIFE VICE-PRESIDENTS~~

Marshal of the Royal Air Force The Lord Craig of Radley GCB OBE MA DSc FRAeS Air Chief Marshal Sir Michael Graydon GCB CBE ADC FRAeS

~~BOARD OF TRUSTEES~~

Chair

Lawrie Haynes DEng BA (Hons) FCILTR FRSA (until 28 January 2022)

Air Chief Marshal Sir Stephen Hillier GCB CBE DFC ADC MA

Richard Daniel BSc (Hons) FRAeS (from 1 February 2022)

Air Chief Marshal Sir Richard Johns GCB KCVO CBE FRAeS

Honorary Treasurer

Air Chief Marshal Sir Roger Palin KCB OBE MA FRAeS FIPD Lady Hillier

Alastair Irvine BA (Hons) MCSI

Trustees

Allyson Arnold MSc BScN (Hons) (from 1 June 2021)

~~VICE-PRESIDENT~~

Patrick Aylmer FCA (from 1 June 2021) Alison Benjamin BA (Hons) (from 1 June 2021) Frances Brindle MSc BSc (Hons)

John Isabel

~~COUNCIL~~

Chair

David Cheyne MA (Cantab) (Senior Independent Trustee)

Lawrie Haynes DEng BA (Hons) FCILTR FRSA (until 28 January 2022)

Graeme Craig MA Richard Cryer MA (Cantab) FCA (from 1 June 2021)

Richard Daniel BSc (Hons) FRAeS (from 1 February 2022)

Deputy Chair

Wing Commander Sarah Davis MBA MSc FCIPD

The Viscount Trenchard of Wolfeton DL

Honorary Treasurer

Richard Ingham (until 25 March 2021) Sarah Meek MBA (from 1 June 2021 to 25 February 2022)

Alastair Irvine BA (Hons) MCSI

Members

Air Chief Marshal Sir Michael Wigston KCB CBE ADC RAF

Wing Commander Marie-Noelle Orzel OBE QVRM MSc PGDE RGN RSCN (Safeguarding Lead Trustee)

Air Marshal Andrew Turner CB CBE MA MSc BA FRAeS CCMI RAF (until 11 March 2022) Air Vice-Marshal John Cliffe CB OBE Frances Brindle MSc BSc (Hons)

Graeme Shankland (until 6 July 2021) Air Vice-Marshal Elaine West CBE (until 23 April 2022)

~~EXECUTIVE LEADERSHIP TEAM~~

Controller

Air Vice-Marshal Chris Elliot CB CBE MA BSc DL

Chief of Staff/Director of Governance

Air Commodore Paul Higgins MA BA (Hons) FCILT FCMI (until 3 September 2021)

Director of Finance (Director of Resources from 1 January 2022) Victoria Fakehinde BSc (Hons) ACMA CGMA

Director of Fundraising and Communications

Mike Straney (until 30 April 2021) Jason Shauness BEc (Hons) Grad Dip REM (from 24 May 2021)

Director of Welfare

Air Commodore Paul Hughesdon MA

Associate Director of Strategy and Impact Alison Wyman MSc BSc (Hons) CG (Affiliated) (from 1 January 2022)

Royal Air Force Benevolent Fund Principal and Registered Office 67 Portland Place, London W1B 1AR

~~CONTENTS~~

~~TRUSTEES’ REPORT~~

~~TRUSTEES’ REPORT~~
Foreword 4
Aims, objectives and values 6
Progress against our
strategic aims 8
2021: Our key statistics 12
Our fve key aims 14
Fundraising 20
Grant making 24
Financial highlights 25
Financial review 26
Governance and risk 32
Structure, governance and
management 34
Principal professional advisers 37
~~INDEPENDENT AUDITOR’S~~
~~REPORT TO THE TRUSTEES~~ ~~38~~
~~FINANCIAL STATEMENTS~~ ~~42~~

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to enhance our support for the RAF Air Cadets in 2021. We supported 88% more children and young people through our specialist counselling service compared to 2020 too.

~~ALWAYS HERE FOR THE RAF FAMILY~~

2021 was another year of challenges – but of many successes too, with exciting plans unfolding as we emerged from the pandemic.

For many in the RAF Family, 2021 started at a low point. Another lockdown once again left people facing everything from isolation to financial problems, anxiety to bereavement. We were proud to be there for over 44,600 veterans, serving personnel and their families during those challenging times – and the brighter times that followed as the pandemic eased. Not only did we keep delivering our crucial services despite difficult conditions, we grew and improved many of them, reacting quickly and flexibly to meet everyone’s needs.

During such a rollercoaster of a year, it was no surprise that our emotional wellbeing services were in high demand. We were delighted to help over 11,600 RAF Family members through services including counselling and free membership of the Headspace mindfulness app – a 42% rise on 2020. Our Telephone Friendship Groups, which help veterans and their partners meet new people and feel less isolated, also saw a remarkable 23% growth.

We focused strongly on supporting the youngest members of the RAF Family this year. In February we launched our Growing Up in the RAF report, the first research to look exclusively at the wellbeing of children and young people in the UK with RAF parents. We’ll use the findings to make the services we offer even better. Our Airplay and Ben Clubs again helped more than 2,000 children and young people on RAF stations enjoy fun and exciting activities. We were also pleased

We continued to be there for RAF Family members experiencing financial difficulties, giving out almost 3,000 grants totalling £3M to help with everything from paying unexpected bills to providing regular support for pensioners. We also continued our important work giving grants to support RAF Family members to live independently and with dignity.

We are very proud of our achievements in such a difficult climate. But they were only possible due to the huge generosity of our supporters. Thanks to you, we managed to raise £16.3M to support the RAF Family in 2021 – £2.2M more than last year. We are so grateful to every one of our donors and fundraisers for helping get the RAF Family through their toughest times.

Now we look to the future with optimism. At the beginning of 2022 we were delighted to launch our new strategy, Shaping The Future. Guiding our work through to 2026, it sets out how we’re going to improve access to personalised support for the RAF Family, as well as enhancing their quality of living, wellbeing and independence. We are delighted to welcome our new chair Richard Daniel to lead this work, and thank our outgoing chair Lawrie Haynes for his eight successful years of leadership.

For over 100 years, we have been the RAF’s most devoted friend, supporting the whole of the RAF Family – from the oldest veteran to the youngest child. Together, we will continue to be here for the RAF Family in 2022 and beyond.

Richard Daniel BSc (Hons) FRAeS

Air Vice-Marshal Chris Elliot CB CBE MA BSc DL Controller RAF Benevolent Fund

Chair RAF Benevolent Fund

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TRUSTEES’ REPORT

~~AIMS, OBJECTIVES AND VALUES~~

~~OUR VISION~~

~~OUR PURPOSE~~

Our vision is that everyone in our RAF Family – veterans, serving personnel and their families – gets support in their hour of need.

Our purpose is to be here for every member of the RAF Family in need – listening, understanding and providing life-changing practical, emotional and financial support.

In 2018 my wife Kim died of cancer. The Fund has stepped up for me and our children ever since. People often say the Fund is the heart of the RAF Family. I can absolutely say that’s true.”

Sqn Ldr Steve Debling

~~WHAT WE DO~~

People who have served in the RAF are trained to be self-reliant. They don’t want to make a fuss and they don’t want to be a burden. So all too often, when life gets tough, they suffer in silence.

We don’t believe anyone who has served their country should have to struggle through life. We’re the RAF Benevolent Fund, and we’re here to support veterans, serving personnel and their families when they need it most.

From counselling and financial support to adapting homes or replacing boilers, from the big challenges to the small changes, we can help people live with the dignity and independence they deserve.

~~OUR VALUES~~

Empathetic – we listen and seek to understand, standing side-by-side with the RAF Family.

People-focused – we put people at the heart of everything we do.

Responsive – we do what we say we will, and use evidence and insight to adapt to changing needs.

Inclusive – we work hard to ensure everyone feels valued and supported, and make ourselves accessible.

~~PUBLIC BENEFIT~~

When reviewing the Fund’s aims and objectives, and in planning future activities and policies, the Trustees have given careful consideration to the Charity Commission’s general guidance on public benefit and to its supplementary guidance on public benefit and fee charging.

All of our services are either free or heavily subsidised. Where we ask for contributions, for example towards the costs of living in one of our Housing Trust properties or respite breaks, we always take beneficiaries’ means into account. No member of the RAF Family should be prevented from accessing our services because they can’t afford the full cost.

By giving grants to other charities, we also enable them to maximise their public benefit in support of the RAF Family.

~~OUR STRUCTURE~~

We carry out some of our activities through the following subsidiaries:

y RAF Benevolent Fund Housing Trust Limited

y RAF Dependants Fund

y RAF Dependants Income Trust Limited

y RAF Trading Limited

y RAF Disabled Holiday Trust

Innovative – we are forward leaning and encourage new ideas and approaches to remain relevant.

y Royal Observer Corps Benevolent Fund.

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~~PROGRESS AGAINST OUR STRATEGIC AIMS~~

The total number of people we supported was down from 63,700 in 2020. This was due to a number of factors. Firstly, in 2020 we stepped up to provide Covid-19-related grants and services for RAF Family members and RAF stations in their time of greatest need. These grants were able to reach a large number of people, but naturally scaled back as the effects of the pandemic lessened in 2021. Furthermore, 2020 saw us help more people because of our successful centenary campaign encouraging RAF Family members to come to us for support. The size of the RAF Family has also continued to decline. The result of all these factors is that the number of people we helped has scaled back to close to its pre-pandemic baseline.

Back in 2017, we set out an exciting five-year strategy. It was a great success, helping us be there for significantly more members of the RAF Family in their toughest times.

However, in 2020, the Covid-19 pandemic – alongside other factors – changed the world. The fundraising environment, the charity sector and our ability to deliver our services all underwent significant shifts, and the RAF Family’s composition continued to change.

We reacted quickly, retiring our 2017–2022 strategy in November 2020 and resetting our strategic direction so we could better meet the needs of the RAF Family in this new reality.

We recruited three new Welfare Navigators in 2021. Their work is focused on making the journey from contacting the Fund to receiving support smoother for anyone who gets in touch. Thanks to our Welfare Navigators, 77% of people who contacted us said they were satisfied with the enquiry process – 7% more than our goal of 70%. Introducing three new Welfare Support Executives to help with more complex cases in September also allowed us to help RAF Family members more effectively, as did upgrading the digital system for managing our cases.

For 2021, we continued with our shortterm strategy to stabilise our operations and adjust to immediate challenges and opportunities. Below are the four aims we set for 2021, and the progress we made against them. We are delighted to say that we achieved the vast majority of our objectives.

We also worked on and launched our new Shaping The Future strategy for 2022–2026, which you can read more about on page 10.

~~STRATEGIC AIM 1~~

To maximise our impact, in 2021 we focused on building evidence and analysis to help us identify the needs of the RAF Family – and respond to them. We did a full review of how we gather data and insight and made several improvements as a result. We also produced two key pieces of research – one into the wellbeing of children and young people in the RAF Family, and the other with Swansea University into gambling and wellbeing in the RAF. Both gave us interesting insights to help shape our services.

To effectively support members of the RAF Family in need

We were pleased to support more than 44,600 members of the RAF Family in five key areas in 2021: emotional wellbeing, friendships and connections, family and relationships, independent living and financial assistance. 94% of the people we helped said we made a positive difference to their quality of life. This beat our target of 90%.

We continued to make RAF Family members aware of our services so they come to us for support. We launched a new website in December, plus several campaigns to promote our welfare services throughout the year. We also introduced a bi-annual newsletter to let RAF Family members know what we can offer and an e-newsletter for serving personnel leaving the RAF. Our branding and information about the Fund continued to feature at RAF stations nationwide too.

You can read about how we supported the RAF Family in more detail from pages 14–19.

~~STRATEGIC AIM 2~~

To develop and adopt a more financially sustainable model to support the RAF Family

In 2021 our total income was £25.5M, 33% more than in 2020. This included income from fundraising, investments, charitable activities and asset disposal.

We raised £16.3M from donations and legacies to improve the lives of the RAF Family. This was up 16% on our fundraising total in 2020.

To help us raise more money, we successfully

focused on raising awareness of the Fund in the media. The Fund was mentioned more than 2,000 times in newspapers, magazines and in digital and broadcast media in 2021. We also produced podcasts and films to showcase our work.

Another key objective in 2021 was to use evidence, analysis and insight to develop a more affordable programme of services for RAF Family members in need. We agreed this in November 2021 and will put it into practice in 2022.

We also started our drive to reduce deficit budgeting while ensuring that our resources are allocated to impact as many beneficiaries as we can by rationalising support costs across the charity. This led to decisions to outsource some non-core activities and reduce the size of our executive leadership team.

~~STRATEGIC AIM 3~~

To protect and enhance our reputation by demonstrating that we are a trusted, inclusive organisation that has our beneficiaries at its heart

In 2021 we continued to deliver successful communications across all audiences that demonstrate how we live our brand values.

Making sure we have strong governance in place is also central to being a trusted, inclusive organisation. During 2021, our executive leadership team and Trustees considered and proactively managed the strategic risks we faced every quarter. We also continued to implement improvements following our 2020 Board effectiveness review.

~~STRATEGIC AIM 4~~

To enhance our ways of working, to ensure we are a modern, efficient and effective organisation

In 2021 we started work on embedding data analysis and insight throughout everything we do, so all our decisions are based on evidence. We also improved our HR function and began to implement changes as a result of our diversity audit. We continued work on our new digital strategy, and reviewed our structures, including reducing the number of directors the Fund employs.

Throughout 2021 the country continued to face varying restrictions and guidance related to Covid-19. We worked throughout the year to make sure we adhered to government guidance, and to ensure our systems were robust enough to allow remote working in a secure way.

Another goal this year was to harness opportunities for greater partnership and collaboration with other organisations, where this benefits the people we help. For example, we can now refer enquiries electronically to the Royal Air Forces Association (RAFA) and SSAFA, the Armed Forces Charity, rather than ask the person looking for help to call them and re-tell their story.

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TRUSTEES’ REPORT

We marked the 80th anniversary of the Air Training Corps by collecting stories from those who are serving and who have previously served. We were proud to begin offering an enhanced package of welfare support for the RAF Air Cadets too, including members of the Combined Cadet Force. We now offer cadets support including emotional wellbeing, counselling and bereavement support, as well as financial support if a member is killed, on or off duty. This extends to staff cadets and uniformed volunteers too.

In 2021 we also celebrated the 80th anniversary of the founding of The Guinea Pig Club – a social club formed by a group of young men, mostly RAF aircrew who survived fiery crashes – during the Second World War. We are proud to have supported The Guinea Pig Club since its inception and have helped many of its members over the years. Almost 8,000 people visited our website and almost 2,000 people listened to our podcast to find out more about the Club.

~~SHAPING THE FUTURE: OUR 2022–2026 STRATEGY~~

y Covid-19. The pandemic has had a huge impact on mental wellbeing and social isolation. It’s likely these will be two of the most significant areas of need for the RAF Family over the next few years, for people of all ages.

In January 2022, we moved to our Shaping The Future strategy, which will guide us through to 2026.

Our new strategy resets our direction, taking into account the many changes and challenges we have faced since we launched our previous strategy in 2017. It is based on a review of data, research and analysis, and the views of our staff, the people we help and other stakeholders.

y Digital. Over the past decade there has been a trend towards greater digital delivery of services, which Covid-19 has accelerated. This presents opportunities for us to increase our use of data to inform the services we offer, and also to adapt our services so they are digitally accessible.

~~CHANGES AND CHALLENGES~~

The context for our new strategy includes:

money we hold in reserves, to reach and support the older veteran community before they pass on. However, a model that means we consistently spend more funds than we are able to raise is unsustainable. Ensuring our future financial sustainability has become a top priority.

y The need to improve the RAF Family’s journey to getting support. Our research showed us that more could be done

to provide greater practical assistance to help people navigate through their journey to getting support. We began work responding to this in 2021 with our new team of Welfare Navigators taking up their posts.

~~OUR PURPOSE, VISION AND GOALS~~

With the above in mind:

Our updated vision is that everyone in our RAF Family – veterans, serving personnel and their families – gets support in their hour of need.

Our updated purpose is to be here for every member of the RAF Family in need – listening, understanding and providing lifechanging practical, emotional and financial support.

Our key welfare goals are that RAF Family members in need have:

~~FIVE CHANGES FROM 2022–2026~~

To realise our vision and achieve our purpose and goals, our key aims over the next five years are:

1. Providing more hands-on, tailored support to the RAF Family to help them through the journey to support. We will build on our new Welfare Navigator function to provide support from the initial enquiry and guide the RAF Family through the process, as well as developing supporting technology.

2. Strengthening our community

engagement to be present in more communities and engage locally more effectively, including developing a volunteering framework and building a regional caseworking capability.

3. Increasing fundraising income by

investing in building our donor database through direct marketing, as well as building long-term, committed relationships with a relatively small portfolio of higher value corporate partnerships and philanthropists.

4. Placing a greater focus on insight,

impact and innovation so we can make effective evidence-based decisions at the right time and be proactive about adapting our strategy.

5. Developing greater collaboration

and partnership working so we reduce duplication and achieve our aim of being sustainable for the future. Examples of this include working with other organisations to tackle social isolation and scoping the possibility of sharing IT platforms with other service suppliers.

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TRUSTEES’ REPORT

~~2021: OUR KEY STATISTICS~~

£12.5M SPENT REACHING 21,900+ VETERANS AND THEIR FAMILIES

£17.7M SPENT REACHING 44,600+ MEMBERS OF THE RAF FAMILY

£5.2M SPENT REACHING 22,700+ SERVING PERSONNEL AND THEIR FAMILIES

94% SAID WE MADE A POSITIVE DIFFERENCE TO THEIR QUALITY OF LIFE

82% SAID WE MET ALL OR MOST OF THEIR NEEDS

WE SUPPORTED 5,500+ PEOPLE BY GIVING THEM INFORMATION OR ANSWERING THEIR ENQUIRY

OUR EMOTIONAL WELLBEING SERVICES SUPPORTED 11,600+ PEOPLE

7,300+ PEOPLE WERE SUPPORTED THROUGH FINANCIAL GRANTS WE GAVE TO HELP THEM THROUGH TOUGH TIMES

WE GAVE 2,500+ PEOPLE ADVICE AND ADVOCATED FOR THEM ON ISSUES INCLUDING BENEFITS AND CARE

WE HELPED 9,400+ PEOPLE THROUGH GRANTS WE GAVE TO OTHER ORGANISATIONS

WE HELPED 9,700+ PEOPLE THROUGH GRANTS WE GAVE TO RAF STATIONS

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TRUSTEES’ REPORT

~~KEY AIM 1: EMOTIONAL WELLBEING~~

~~WE IMPROVE THE RAF FAMILY’S MENTAL WELLBEING~~

For serving personnel and their partners, we offer free membership of Headspace, the meditation and mindfulness app. It provides practical tips and exercises to relieve stress – helping to stop more serious mental health problems developing. Almost 6,000 members of the RAF Family used Headspace in 2021 – a 26% rise on 2020. 94% felt it had a positive impact on their stress levels.

2021 was another turbulent year for many. With the Covid-19 pandemic ongoing, RAF Family members of all ages faced challenges ranging from loneliness, bereavement and ill health through to financial difficulties. Serving personnel also continued to deal with stresses around deployment, family separation and moves between postings.

£1M

SPENT ON IMPROVING THE RAF FAMILY’S EMOTIONAL WELLBEING

We were there every step of the way, supporting the RAF Family to navigate through these tough times. In 2021, we expanded many of our emotional wellbeing services, supporting more than 11,600 people to stay well and stay strong – 42% more than in 2020.

42%

MORE RAF FAMILY MEMBERS SUPPORTED WITH THEIR EMOTIONAL WELLBEING VS 2020

~~HOW WE ACHIEVED THIS~~

Our Wellbeing Services offer counselling to support people struggling with bereavement, low mood, anxiety and depression. 1,471 sought support from the service in 2021 (up 54% on 2020), and 91% said it had a positive impact on their life. 80% of people helped by one of our delivery partners showed a reliable improvement in their mental wellbeing.

91%

SUPPORTED BY COUNSELLING THROUGH OUR WELLBEING SERVICES SAID IT HAD A POSITIVE IMPACT

94%

FELT HEADSPACE HAD A POSITIVE IMPACT ON STRESS

Our specialist counselling service for children and young people aged 5-18 also saw an 88% increase in people supported (from 71 last year to 134 in 2021). 71% of children and young people helped felt the service had positively changed things for them.

71%

SUPPORTED BY OUR SPECIALIST

COUNSELLING SERVICE FOR CHILDREN AND YOUNG PEOPLE FELT THE SERVICE HAD A POSITIVE EFFECT

~~KEY AIM 2: FRIENDSHIPS AND CONNECTIONS~~

~~WE MAKE SURE EVERYONE IN THE RAF FAMILY HAS SOMEONE TO TURN TO~~

Despite Covid-19 restrictions, our Community Engagement Workers helped 164 members of the RAF Family, introducing them to regular meaningful social activities in 2021. We started the year with four Community Engagement Workers in Cambridgeshire, Norfolk, Suffolk and Lincolnshire. In July, two new Workers joined the team in West Sussex and Hampshire.

Over 85,000 veterans and their partners

were estimated to feel lonely, according to our research. Life in the RAF can be isolating for serving members and their families too, with continual moves and deployments. Covid-19 only served to exacerbate these problems for many.

No member of the RAF Family should ever feel alone. An important area of our work is easing isolation and loneliness. Because it’s such a vital part of wellbeing, we support everyone in the RAF Family to form friendships and make connections.

£562K

SPENT ON HELPING THE RAF FAMILY FIND FRIENDSHIPS AND CONNECTIONS

~~HOW WE ACHIEVED THIS~~

Our Telephone Friendship Groups give RAF veterans and their partners the chance to meet new people and feel less isolated. The groups – which involve up to six RAF Family members meeting weekly on the phone, facilitated by a trained volunteer – grew from 22 to 32 in 2021. And the number of people taking part grew 23% from 246 to 302. 83% of the people surveyed who took part said it had improved their overall sense of happiness. The groups were a lifeline for many during the winter 2021 lockdown.

23%

INCREASE IN PEOPLE TAKING PART IN OUR TELEPHONE FRIENDSHIP GROUPS

83%

SAID OUR TELEPHONE FRIENDSHIP GROUPS HAD IMPROVED THEIR HAPPINESS

6,000+

CHECK AND CHAT CALLS MADE TO 214 ISOLATED RAF FAMILY MEMBERS

Also important during the lockdown was our Check and Chat call service, with staff from the Fund regularly calling sociallyisolated RAF Family members to see how they were coping. We made over 6,000 calls to 214 people in the first half of the year, before winding down the service as restrictions eased.

164

PEOPLE SUPPORTED BY OUR COMMUNITY ENGAGEMENT WORKERS

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TRUSTEES’ REPORT

~~KEY AIM 3: FAMILY AND RELATIONSHIPS~~

~~WE SUPPORT RAF FAMILIES TO THRIVE~~

Life in the RAF can be difficult. Frequently moving between postings, deployments overseas and lots of training away from home can heap pressure on relationships. Unfortunately, relationships sometimes break down. RAF veterans can, of course, experience family-related problems too. And life for children of people in the RAF can also be tough.

the signs and symptoms of gambling harms following our workshop.

We also continued our Thrive workshops for partners of serving RAF personnel to improve their wellbeing, resilience, employability and, ultimately, quality of life. 68% of partners who took part showed an improvement in their wellbeing, according to an emotional needs audit we did before and after the course.

When life gets difficult, a break can help a family enormously. We were pleased to restart our wellbeing breaks in 2021, funding 112 people to enjoy UK trips away. 94% of those surveyed said it significantly or somewhat improved the quality of their family or personal relationships.

We offer a range of support to help serving personnel, veterans and their families with the challenges they face, keeping them together and improving their happiness.

~~HOW WE ACHIEVED THIS~~

Working with the charity Relate, we offer free relationship counselling and subsidised mediation for members of the RAF Family. In 2021, over 1,000 RAF Family members received relationship support. Of those who completed relationship counselling, 78% of those surveyed said communication with their partner had improved as a result. 71% also reported improvement in managing conflict with their partner.

£1.6M

SPENT ON IMPROVING LIFE FOR FAMILIES

1,000+

RAF FAMILY MEMBERS RECEIVED RELATIONSHIP SUPPORT

Thanks to our Airplay and Ben Clubs, more than 2,000 children and young people on RAF stations enjoyed fun and exciting activities in 2021 – 6% more than in 2020. We spent £1.3M on the programmes during the year.

71%

REPORTED AN IMPROVEMENT IN MANAGING CONFLICT WITH THEIR PARTNER

94%

Gambling addiction can blight families’ lives. This year, through our relationship with GamCare, we trained welfare staff on RAF stations to improve their understanding of gambling harms to be able to better support those who may be struggling. 95% of attendees said they felt they understood

OF RAF FAMILY MEMBERS WHO WENT ON A WELLBEING BREAK SAID IT IMPROVED THEIR FAMILY OR PERSONAL RELATIONSHIPS

2,000+

CHILDREN AND YOUNG PEOPLE ENJOYED EXCITING ACTIVITIES AT OUR AIRPLAY AND BEN CLUBS

~~KEY AIM 4: INDEPENDENT LIVING~~

~~WE HELP RAF FAMILY MEMBERS TO LIVE INDEPENDENTLY AND WITH DIGNITY~~

quickly, arranging face-to-face assessments and people being averse to entering care homes because of the pandemic.

Losing independence due to disability, injury or advancing years can be extremely tough. Finding ways to ease this is incredibly important for emotional and mental wellbeing.

We specialise in providing advocacy in a number of areas, including care services issues. We can act on behalf and argue in favour of RAF Family members facing problems including getting a care assessment, funding for care and more. We supported 587 people in 2021, with 84% of those surveyed saying it had benefited them or a member of their family.

We’re here to enable people to live full, independent and happy lives in their homes for as long as possible. We can also help with care home fees, so RAF Family members can live in a better standard of home, closer to family and have dignity in retirement.

~~HOW WE ACHIEVED THIS~~

£4.7M

In 2021 we gave out £1.8M in 1,865 grants to RAF Family members to pay for mobility, care and disability equipment. 96% surveyed said it contributed to their comfort, and 89% said they used their equipment every day or most days.

SPENT ON HELPING THE RAF FAMILY LIVE INDEPENDENTLY

£1.8M

We also gave out £815K to repair and adapt housing for RAF Family members. 98% said it contributed to improving their day-to-day life. We spent £220K to help pay for care at home too.

SPENT ON GRANTS FOR MOBILITY, CARE AND DISABILITY EQUIPMENT

98%

OF PEOPLE WHO RECEIVED GRANTS TO PAY FOR PROPERTY REPAIRS OR ADAPTATIONS SAID IT CONTRIBUTED TO IMPROVING THEIR DAY-TO-DAY LIFE

If a care home is needed, we want RAF Family members to be able to stay in a caring, supportive environment, where their dignity is respected. In 2021 we gave £332K in grants to help top up care home fees to make this possible.

587

PEOPLE WERE SUPPORTED BY OUR ADVOCACY SERVICE

We helped 18% fewer people with independent living grants in 2021 compared to 2020, and spent 33% less on grants. We believe this was largely due to ongoing difficulties in getting equipment delivered

84%

SAID IT HAD BENEFITED THEM OR A FAMILY MEMBER

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TRUSTEES’ REPORT

£

~~STATION GRANTS~~

~~KEY AIM 5: FINANCIAL ASSISTANCE~~

~~WE’RE THERE FOR THE RAF FAMILY WITH FINANCIAL HELP~~

92% of RAF personnel pay into our Dependants Fund, which provides a tax-free lump sum to their nominated beneficiary in the event of their death. In 2021, we paid out £280K, supporting these families at really challenging times.

From struggling to make pensions stretch far enough to paying for urgent home repairs, money problems can be a source of great stress and worry for some in the RAF Family, especially at the current time.

We’re a much-needed financial safety net for veterans, serving members of the RAF, and their families. Our grants and advice on applying for welfare benefits relieve stress, offer peace of mind and allow people to get back on their feet.

£4.7M

SPENT ON SUPPORTING THE RAF FAMILY FINANCIALLY

95%

~~HOW WE ACHIEVED THIS~~

SAID THEIR GRANT CONTRIBUTED TO IMPROVING THEIR QUALITY OF LIFE

We gave 2,969 individual awards totalling £3M to veterans, serving members of the RAF and their families in 2021. 95% of the people who received a grant said it contributed to improving their overall quality of life. 84% said their need had been fully met or the grant had helped them a lot.

£1M

SPENT TO HELP WITH HOUSE REPAIRS

£203K

The welfare benefits system can be difficult to get to grips with. Our Benefits Advice Service helps RAF Family members work out what benefits they’re entitled to. It can also help with disability benefit appeals. In 2021, we identified £2M in unclaimed benefits. 81% of people who used the service managed to make a successful benefits claim thanks to the advice they received.

SPENT ON FUNERAL COSTS

£508K

SPENT ON REGULAR FINANCIAL HELP FOR PENSIONERS

In addition, our Legal Advice Helpline, launched last year, helped 163 people in 2021. 74% of those who received support said the advice was of benefit to them.

IN 2021 WE HELPED...

A huge part of our work helping the RAF Family is giving grants to RAF stations to pay for facilities and activities to benefit serving personnel and their families.

9,700+

PEOPLE THROUGH £3.2M IN GRANTS WE GAVE TO RAF STATIONS

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CYPRUS
RAF EPISKOPI: £3K
RAF AKROTIRI: £36K
RAF LOSSIEMOUTH: £116K
RAF BOULMER: £59K
RAF SPADEADAM: £197K
RAF FYLINGDALES: £1K
RAF LEEMING: £120K
RAF SCAMPTON: £53K
RAF DIGBY: £59K
RAF LINTON-ON-OUSE: £51K
RAF WADDINGTON: £96K
RAF CONINGSBY: £104K
RAF COLLEGE CRANWELL: £57K
MOD STAFFORD: £1K
RAF WITTERING: £77K
RAF VALLEY: £63K
RAF MARHAM: £84K
RAF SHAWBURY: £106K
RAF HONINGTON: £175K
RAF COSFORD: £80K
RAF WYTON: £52K
RAF BRIZE NORTON: £121K
RAF HENLOW: £51K
MOD ST ATHAN: £7K
RAF HALTON: £68K
MOD ABBEY WOOD: £12K
NORTHWOOD HQ: £2K
MOD BOSCOMBE DOWN: £56K
RAF NORTHOLT: £67K
RAF HIGH WYCOMBE: £149K
RAF BENSON: £85K
RAF ODIHAM: £74K
RAF ST MAWGAN: £79K
----- End of picture text -----

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TRUSTEES’ REPORT

~~FUNDRAISING~~

In 2021 we were able to support 44,600+ members of the RAF Family in need thanks to the generosity and efforts of our wonderful supporters. Their hard work and commitment helped us raise an amazing £16.3M in a difficult climate, 7% more than our target and £2.2M more than in 2020.

~~THE IMPACT OF COVID-19~~

As for many charities, we had hoped that Covid-19 would have passed and would not impact any of our plans for 2021. The uncertainty meant we had to delay or cancel some events while we regained our confidence to meet with others. We continued to be adaptable to respond to restrictions as they were applied.

Despite challenges, we had strong performance from our gifts in Wills income at £11.5M, a £3.8M increase on 2020. This was partly due to easing of 2020’s probate delays. Our new cycling event, the Dambusters Bike Ride, also raised a very respectable £146K.

~~PARTNERSHIPS~~

Covid-19 continued to impact our ability to engage and work with our commercial, strategic and philanthropic partners. However, we had a number of fundraising successes in this area in 2021, raising £900K to continue our vital work.

We created significant new relationships in 2021 with The National Lottery Community Fund Young Start programme, which is helping to provide Airplay at RAF Lossiemouth, and with the Scottish Veterans Fund, which is helping us tackle social isolation and loneliness across Scotland.

In addition, we focused on reinforcing longstanding and valued relationships, including with BAE Systems, Adrian Swire Charitable Trust and Mr Duncan Barber. We are very grateful for the continued support and commitment of all our corporate partners, trusts and major donors at a time when they themselves faced difficult decisions and challenges as a result of the pandemic.

A highlight of the year was the return of inperson events. We were delighted that The Beaujolais Run was able to return to the wine and Champagne regions of France. We are hugely grateful to all participants who went above and beyond to fundraise for us.

The Fund was also thrilled to welcome RAF Family members, supporters and partners to our awards ceremony in October and carol concert in December. These events were only possible thanks to the generosity of our sponsors including Lockheed Martin, MBDA UK and The Mercury Foundation.

~~SUPPORT FROM THE SERVING RAF~~

Serving personnel continue the tradition of looking after their own, recognising the support the Fund can offer to them in their time of need. 70% made a monthly gift to the Fund through the Service Day’s Pay Giving scheme, contributing an amazing £1.6M in 2021.

~~INDIVIDUALS~~

Individuals make a significant contribution to our funds each year (£1.7M in 2021, up from £1.6M in 2020). We also enjoyed generous support from individuals who made gifts in response to our fundraising appeals and in memory of a loved one.

Social distancing and lockdowns meant some of our plans for challenge events had to be cancelled. We are grateful to supporters for their creativity in organising their own Covidsafe fundraising events throughout 2021.

~~GIFTS IN WILLS~~

In 2021, we were extremely grateful to receive £11.5M in legacies, up 49% on 2020. Gifts in Wills represent the largest form of income for the Fund and we are deeply indebted to the people who choose to support the RAF Family in this way.

£16.3M

TOTAL RAISED

£11.5M RECEIVED FROM GIFTS IN WILLS

£1.7M

RECEIVED FROM INDIVIDUALS

£900K

RECEIVED FROM PARTNERS, TRUSTS AND MAJOR DONORS

£1.6M

RECEIVED FROM THE SERVICE DAY’S PAY GIVING SCHEME

£600K

RECEIVED FROM FUNDRAISING EVENTS AND TRADING ACTIVITIES

~~COMPLIANCE AND SUPPORTER PROMISE~~

We comply with all relevant laws and regulations including the Charities Act 2011, the Charities (Protection and Social Investment) Act 2016, the UK General Data Protection Regulation (UK GDPR), the Data Protection Act 2018 and the Privacy and Electronic Communications Regulation 2003.

We also comply with the regulatory standards for fundraising, including guidance published by the Charity Commission. We are registered with the Fundraising Regulator and are committed to the Fundraising Promise, compliance with the Fundraising Preference Service and adherence to the Code of Fundraising Practice. In 2021 we were careful to

ensure that we complied with guidance released by the Fundraising Regulator and Chartered Institute of Fundraising on how to respond to the Covid-19 pandemic.

We are fully committed to the principles we laid out in our fundraising promise:

We believe in being transparent in how we raise money and spend donations, and the impact this makes on the RAF Family. We take this responsibility very seriously. We are registered with the Fundraising Regulator and are committed to its Code of Fundraising Practice.

In all that we do, we aim to meet the highest standards, so that supporters and volunteers are able to give to and fundraise for us with confidence and trust that their hard work will make a difference. In line with the Charities (Protection and Social Investment) Act 2016, our Board of Trustees closely monitors our fundraising activity and performance alongside the fundraising management team.

We are open, honest and transparent

We promise to be open, honest and transparent in relation to our fundraising and, as importantly, in how accurately we represent members of the RAF Family in the materials we produce. We engage them in planning and ensure we have signoff before the materials are made available to supporters or the public.

We are respectful

In our fundraising materials, or in conversation, we show respect and we promise never to pressure anyone to make a donation. We are particularly sensitive when engaging with vulnerable people, including those who are elderly.

Importantly, we do not and never have shared our supporters’ details with any other charity or business. Following the introduction of the General Data Protection Regulation in 2018, we only communicate with supporters who have given us express permission to maintain

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TRUSTEES’ REPORT

contact with them. We keep supporters up to date with our work in a way and at times that suit them. If any supporter prefers a reduced level of contact, they only have to let us know and we will respond to their wishes.

We are accessible

We want to make it easy for anyone to get in touch with our fundraising team. Whether they want to update their contact preferences or ask a question about our work or how we spend their donation, we welcome their phone call, email or letter.

We have a complaints procedure should a supporter be unhappy or have concerns about any of our fundraising activities. This is available on our website or by contacting the fundraising team at hello@rafbf.org.uk .

We will help supporters to take their complaint to the Fundraising Regulator should they feel we haven’t responded suitably. We record all complaints we receive in response to our fundraising. In 2021 we received 11 complaints (2020: 15). We were able to resolve these with the supporters concerned without referral to the Fundraising Regulator.

Relationships with fundraising suppliers

We employ external agencies to add additional expertise or capacity when and where needed. This is more cost-effective than trying to do everything ourselves. We appoint these agencies through a competitive tendering process. We also put in place a contract and an agreed Service Level Agreement for the work they will carry out for us, carefully ensuring they provide the same high standards as our in-house team.

~~THANK YOU TO OUR DONORS~~

The Fund would like to thank all of our supporters, who make our work possible. We are extremely grateful to the following trusts, companies and committed individuals who have given significant levels of support over the year:

2Excel Aviation (The Blades)

Ada Hillard Charitable Trust Adrian Swire Charitable Trust Anson Charitable Trust Armed Forces Covenant Fund Trust Babcock International Group BAE Systems Duncan Barber and Jane Burrows Barkshire Charitable Trust Basil Death Trust

Bill Brown’s 1989 Charitable Trust

Mr and Mrs Colin Blowers

BNA Charitable Incorporated Organisation CCM Motorcycles

Charles Littlewood Hill Charitable Trust Charles S French Charitable Trust Charles Burrell 2016 Charitable Settlement Ray Daniels

Diana Edgson Wright Charitable Trust DL Hailes Charitable Trust

DXC Technology Dyers’ Company Edith Murphy Foundation ESS – Defence

Florabella Trust

Florence Turner Trust Flower, Smith and Jones Trust

Fort Foundation

Pascal Fournier

Gale Family Charitable Trust

G and P Hartley’s Hillards Charitable Trust George Bessell DFM Trust GM Morrison Charitable Trust

Grace Trust

Heroes Drinks

John Isabel

Isabel Blackman Charitable Trust

James Weir Foundation John James Bristol Foundation Joron Charitable Trust

Joyce Lomax Bullock Charitable Trust JR Asprey Charitable Foundation

Knight Sportswear

Linden Charitable Trust

Lockheed Martin UK

Loppylugs and Barbara Morrison Charitable Trust

Lord Belstead Charitable Trust Maud Elkington Charitable Trust May Hearnshaw Charitable Trust MBDA UK

Donagh McCullagh

MEB Charitable Trust

Medlock Charitable Trust

Midshires Mobility Group

Miss Caroline J Spence’s Fund

Morton Charitable Trust

Mrs F B Laurence’s Charitable Trust

Mrs Mary Stephanie Warren-Coleman Charitable Trust

Out of the Blue Foundation Paul Bassham Charitable Trust PF Charitable Trust

Princess Anne’s Charities Trust

Proludic Ltd RAFA Formby

RAF Club

Red Arrows Trust

Riada Trust

Robert Clutterbuck Charitable Trust Rose and Henry Deeks Charitable Trust Rothley Trust Scott-Davidson Charitable Trust Scottish Veterans Fund Selkirk Charitable Trust Sir John Eastwood Foundation Sisters of St Joseph of the Apparition Spurrell Charitable Trust Thales Charitable Trust

The April Fools’ Club The Beaujolais Run

The Gordon-Watkins Family The Inter-Livery Target Rifle Shoot

The Mercury Foundation

The National Lottery Community Fund, Young Start

Tony and Audrey Watson Charitable Trust Tory Family Charitable Trust

Una Sarah Maxwell-Mellor Trust

WB Rhodes-Moorhouse VC Charitable Trust WG Edwards Charitable Foundation Winifred E Kemp Charitable Trust WM Mann Foundation Worshipful Company of Grocers Worshipful Company of Turners Worth Waynflete Foundation

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TRUSTEES’ REPORT

~~GRANT MAKING~~

As part of our work, we provide financial support and give grants to eligible people in times of financial difficulty. Our grant making is means tested. We also provide non-financial services which any member of the RAF Family can access. Our welfare strategy is guided by research, underpinned by impact frameworks, and we measure its results through evaluation and outcomes.

~~THE PURPOSE OF OUR GRANTS~~

Where we are able to help, our grants support the RAF Family with unexpected and unaffordable one-off costs, priority bills and debts (when supported by an independent debt adviser’s report), and regular and temporary financial assistance. We also provide grants for domestic assistance to help RAF Family members live independently at home, and to help people who are isolated take part in social activities. We provide mobility and disability equipment and help with care home top-up fees too.

We try to help people in need as much as we can. For some, this will involve a small grant, support or advice. For others, our support is much greater. Above all, we try to be caring, supportive and compassionate in all we do.

~~APPLYING FOR OUR GRANTS~~

RAF Family members can apply for individual grants throughout the year. A trained caseworker normally completes applications from former RAF personnel or their partners, with any grant usually channelled through the caseworking body. Additionally, in 2021, for the first time, we introduced three new Welfare Support Executives to help with more complex applications.

To make our grants more accessible, we have an online portal to assist with applications for sums up to £750. We can involve caseworkers if an RAF Family member needs more support or we can see that there is a bigger problem that needs addressing and we can help with.

On request, we can also award grants to RAF stations, with the aim of increasing the overall efficiency of the RAF. By providing welfare support to meet RAF community needs, our work aims to increase morale, retention and wellbeing within the serving RAF community, including for families.

~~GIVING GRANTS TO OTHER ORGANISATIONS~~

We commission and partner with quality organisations to deliver targeted assistance to the RAF Family. In 2021, we relet the contract for our Airplay programme to a collaboration of YMCAs across England, Wales and Scotland, a major undertaking.

We also give discretionary grants to other charities to help them support members of the RAF Family, provided their help is consistent with our impact framework. We gave £399K to the RAF Family through these organisations during 2021.

Caseworking organisations, such as RAFA and SSAFA, investigate the majority of our cases. They distributed £8.4M in grants on our behalf in 2021. We are very grateful to them and their dedicated volunteers for supporting our work.

~~FINANCIAL HIGHLIGHTS~~

Legacies: £11.5M /45%

(2020: £7.7M/40%)

Donations and other fundraising: £4.8M /19%

TOTAL INCOME £25.5M

(2020: £6.4M/34%)

Investment income: £2.5M /10%

(2020: £19.1M)

Charitable activities: £1M /4%

(2020: £1.2M/6%)

Other income: £5.7M /22%

(2020: £1.1M/6%)

Direct support to individuals: £9.5M /42%

(2020: £15.6M/50%)

Welfare programmes and grants: £4.5M /20%

TOTAL EXPENDITURE £22.4M (2020: £31.1M)

(2020: £4.9M/16%)

Respite care: £1.3M /6% (2020: £3.9M/13%)

Housing Trust provision: £2.4M /11% (2020: £1.6M/5%)

Generating income: £4.7M /21% (2020: £5.1M/16%)

RAF serving personnel can apply through their station HR staff, who have some delegated powers to give out smaller sums. We always consider the station staff’s recommendations as part of our holistic approach to welfare but are not limited by them and quite often provide additional support.

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TRUSTEES’ REPORT

~~FINANCIAL REVIEW~~

~~OVERVIEW~~

~~INCOME~~

2021 was the second year of our ‘Stabilise and Adjust’ strategy. The year kicked off with a lot of uncertainty driven primarily by the Covid-19 pandemic. In response to the external environment, we adjusted how we steward our financial resources, aiming to ensure we have a financially sustainable model so we can continue to make the biggest possible impact on the RAF Family now and in the future. We aimed to continue to support members of the RAF Family in need but to reduce our reliance on financial reserves to fund annual activity, as this is unsustainable in the long term.

Our total income in 2021 was £25.5M, £6.4M (33%) higher than the £19.1M generated in 2020. We sold our Princess Marina House (PMH) site towards the end of the year. Our income included a £5.5M (2020: £0.9M) gain on the disposal of fixed assets, of which £4.2M related to PMH. We also saw a £3.8M increase in legacy income after lockdown-related delays suppressed this income stream in 2020.

£24.6M (2020: £18.3M) representing 96% (2020: 95%) of total income received was unrestricted.

Of the £21.3M raised, excluding the income from the disposal of PMH, 80p in the pound was spent on charitable activities. We have set aside the £4.2M profit from the disposal of PMH to fund the development of future welfare services.

A number of factors affected our 2021 financial outcomes, including the continuing impact of Covid-19 and the related fallout, revising our strategy and priorities, shifts in demand for our services, fixed asset disposal and the performance of investment markets.

In 2021, £16.3M (2020: £14.1M) was received from donations, legacies and other fundraising activities, making up 64% (2020: 74%) of total income.

Our overall spending was lower than planned. We saw a fall from 2020’s peak levels across some of our traditional welfare services such as financial grants, but an increase in areas such as wellbeing services.

Our legacy income in 2021 was £11.5M (2020: £7.7M). This £3.8M (49%) growth was the main cause of our year-on-year increase in income. Increased legacy income was in part due to the easing of 2020’s probate delays. Donation and other fundraising income dropped from £6.4M in 2020 to £4.8M in 2021, a £1.6M (25%) fall. Our 2020 donation income included a one-off gift of £1M from the Headley Court Charity and a £594K grant from the government’s Coronavirus Job Retention (Furlough) Scheme.

Even though expenditure was lower than planned we were able to deliver significant impact in unprecedented circumstances. We offered life-changing support to members of the RAF Family across all age groups, including children, young people and elderly veterans. We also invested in improving the experience of RAF Family members who approach us for help.

Our financial outcomes set us on solid ground for sound financial stewardship, aligning expenditure with our strategic aims and spending income received wisely and in a manner that achieves maximum impact for the RAF Family.

Our fundraising performance was mixed as we continued to emerge from pandemicrelated disruption to our activities. Some areas performed well against plan while others continued to face challenges.

~~INCOME £25.5M~~

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Support from the serving RAF through the Service Day’s Pay Giving scheme was stable, again generating £1.6M in the year, as in 2020. Community fundraising, which struggled in 2020 because many events and activities had to be cancelled, performed well with significantly higher income. We developed a small number of initiatives that worked well and which we plan to take forward in 2022, including our Dambusters Ride cycling challenge. Income from trusts and corporates suffered as other organisations adjusted their decisions in response to the external environment.

~~EXPENDITURE~~

In 2021 our total expenditure was £22.4M (2020: £31.1M), a £8.7M or 28% year-on-year decrease. This was mainly due to a reduction in welfare expenditure, as explained below.

79% (2020: 84%) of total expenditure, representing £17.7M (2020: £26M), was on charitable activities. Our activities include providing financial support to individuals, providing welfare services mainly through provider organisations, awarding grants to RAF stations and organisations who support the RAF Family and offering affordable and adapted housing.

Our gross investment income was £2.5M (2020: £2.8M), an 11% decrease. The drop was due to a combination of disinvestments and year-on-year market performance, particularly within our medium-term fixed interest portfolio. Income distribution from our long-term portfolios was maintained.

We are seeing a fall in our traditional grant making work, but a rise in our wellbeing services. The effects of the pandemic continued to limit our welfare delivery. Engaging with the RAF Family became more challenging, respite facilities remained closed and sadly older beneficiaries passed away. Nevertheless, our welfare activity was more complex and positive than the related financial outlay might suggest. The two main areas that had reduced expenditure were direct support to individuals and respite care.

Our income from charitable activities was £1M (2020: £1.2M) with 94% (2020: 81%) coming from rents. We received £23K (2020: £181K) in respite care contributions.

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TRUSTEES’ REPORT

~~EXPENDITURE £22.4M~~

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Grant funding to support the veteran community was £399K (2020: £690K) and grant funding to the serving RAF was £197K (2020: £172K).

£9.5M (2020: £15.6M) representing 42% (2020: 50%) of our total expenditure was to provide support to individuals from the veteran and serving communities, a £6.1M or 39% reduction. The number of individual grants was 30% down on 2020 due to reduced demand. Also, the £15.6M spent directly supporting individuals in 2020 included £1.1M spent on our successful multi-channel campaign launched in 2019, to encourage more members of the RAF Family to come to us for support.

Our housing support expenditure was £2.4M (2020: £1.6M) a £740K or 45% increase. There were more requests for assistance in this area due to a Covid-19-related backlog. The general shortage in building material supplies and high demand for building services had an impact on costs but this was managed by focusing on beneficiaries with the highest needs.

We spent £4.5M (2020: £4.9M) on welfare programmes and grants, a £385K or 8% reduction. Included in this was £3M (2020: £3.4M) spent on providing support through contracted services and discretionary grants to other organisations. Again, the most significant of these services in financial terms was through contracts for Airplay, our youth support programme, on which we spent £1.3M (2020: £1.7M). There was an increase in the use of our wellbeing services, costing £1M (2020: £766K).

£1.3M (2020: £3.9M) was spent on respite and care, a £2.6M or 67% reduction. 2020 expenditure included £2.7M of final PMH costs. In addition, the pandemic adversely affected this area of our work.

We spent £4.7M (2020: £5.1M) on raising funds, of which £3.3M (2020: £3.4M) was direct expenditure on raising income. Allocated support costs came to £1.4M (2020: £1.7M). There were expenditure reductions associated with cancelled fundraising activities, but we took advantage of opportunities to invest towards gaining medium- to long-term income returns.

In all other areas of spend, we worked hard to reduce our cost base. This included staffing levels, where we removed a director’s post. Thus, total support costs allocated, including the costs of IT, administration and management, premises, governance, depreciation of fixed assets, finance, human resources, and system improvements, reduced by 13% to £4.7M (2020: £5.4M).

~~HOUSING AND LOANS~~

Through our subsidiary the RAF Benevolent Fund Housing Trust Limited, we purchase and maintain properties that are let out to RAF Family members with particular needs at affordable rents. The rent received equated to just under 50% of the open market rent of these properties. We consider the income forgone to be a charitable expenditure supporting the most needy members of the RAF Family, although it is not reflected in the Group accounts. The Housing Trust owned 203 properties on 31 December 2021. We purchased and adapted six new properties (2020: three) in the year, at a cost of £2.1M (2020: £0.9M) and sold eight properties (2020: six) realising £2.2M (2020: £1.5M) in sales proceeds and £1.3M (2020: £0.9M) in net gain.

We awarded £131K (2020: £109K) in new secured loans to RAF Family members. The interest charged is much below market rates and repayments are determined on the basis of an individual’s ability to repay the loan. We received £815K in loan repayments (2020: £776K) in 2021. The total value of loans to beneficiaries at the end of the year was £7.9M (2020: £8.6M). We proactively review our loan book to ensure that the value is not impaired, and the recoverability of balances is assessed and reported fairly.

~~INVESTMENTS~~

Our approach is to enhance the value of investments as well as earn an appropriate return by adopting a managed, diversified portfolio at acceptable levels of risk. Our main investment objectives are:

y To hold investments in a manner that will help us deliver our objectives in the short, medium and long term

BlackRock Investment Management (UK) Limited and CCLA Investment Management Limited have managed our long-term portfolios since 2016. In 2019 we appointed Close Brothers Asset Management to manage the funds we would need to spend in the short to medium term. Our medium-term objective is to ensure our cash requirements are met without undue exposure to investment risk, while still achieving good returns. Assets held with fund managers were valued at £82.6M (2020: £77.7M). This includes our designated, endowment and restricted funds. Income yield from these investments was £2.4M (2020: £2.6M).

The value of our funds managed by BlackRock – Armed Forces Charities Growth and Income Fund, a Charity Authorised Investment Fund (CAIF), on 31 December 2021 was £22.3M (2020: £20.4M). We aim to provide a net return on investment over a period of five or more consecutive years beginning at the point of investment, generated through an increase to the value of the assets held by the Fund and income received from those assets. We have a flexible approach to asset allocation and seek to achieve our investment objective through a variety of asset classes. The fund is actively managed in accordance with our investment policy. Over the year a net return of 13.1% was achieved against a 12.9% benchmark. Dividend yield in the 12 months to 31 December 2021 was 3.2% (2020: 3.5%).

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TRUSTEES’ REPORT

Environmental, social and governance (ESG) information is incorporated into BlackRock’s decisions to strengthen qualitative and quantitative insights without compromising financial returns. The fund has 61.9% of the portfolio in equity and corporate bonds of which 93.9% has carbon data. The benchmark is 60% equities, of which 98.2% has carbon data.

The value of our funds managed by CCLA – COIF Charities Investment Fund on 31 December 2021 was £47.2M (2020: £34.3M). This included the £8M proceeds from PMH that were invested in this fund late in the year. The investment objective of the fund is to provide real long-term growth and an income, rising over time from a portfolio managed within a clear risk control framework.

To meet these objectives, the portfolio has a bias towards real assets, predominantly global equities, but also property and to non-traditional areas such as infrastructure. Stock selection is on a ‘bottom-up’ basis, and companies with a robust financial position and the potential to grow faster and more consistently are favoured more than the broad trend in the economy. Over the year a net return of 17.4% (2020: 9.8%) was achieved against a 16.9% (2020: 3.95%) benchmark. Dividend yield in the 12 months to 31 December 2021 was 2.7% (2020: 2.9%).

CCLA believes that changing legislation, regulation and societal preferences will impact negatively on the most unsustainable business models. To ensure that they are not unduly exposed to these risks, they assess the ESG standards of every company before investing. They avoid companies that have uncompensated, unwanted, unwarranted and unmitigated extra-financial risks, evidenced by:

Our investments managed by Close Brothers Asset Management are invested in a bespoke portfolio of short-dated, high-quality corporate bonds with a maturity profile to meet liquidity requirements. All maturities are expected to be met and the income paid out is expected to be in line with original expectations. The value of the portfolio on 31 December 2021 was £13.1M (2020: £23M). The net yield on this portfolio in the year was 0.4% (2020: 2.4%).

The RAF Benevolent Fund is the charity trustee of The Royal Air Force Disabled Holiday Trust (DHT). DHT held property investments valued at £546K at the year end (2020: £532K).

Unrealised gains on investments at the year end stood at £6.6M (2020: £2.6M).

~~RESERVES~~

Total funds as at 31 December 2021 were £122M (2020: £109.9M) and comprised unrestricted funds of £109.2M (2020: £97.9M). Restricted and endowment funds were £12.8M (2020: £12M).

Unrestricted reserves included operational assets of £36.8M (2020: £40.9M), designated funds of £29.1M (2020: £17.4M) and free reserves of £43.3M (2020: £39.6M).

We have been supporting members of the RAF Family for more than 100 years. The commitment we made in 1919 to be here for the long haul remains as firm today as it was back then. We will continue to stand beside the RAF Family for the next 100 years, through all of life’s challenges and hardships, from the moment the brave young men and women sign up to serve their country, to the day they leave Service and re-enter civilian life, then into their twilight years.

To honour these long-term commitments, we continue to take a risk-based approach to determining our free reserves minimum requirement. We must ensure funds are available to deliver welfare services and to secure, as far as possible, future financial viability. This year, we have taken into account our 2022–2026 Shaping The Future strategy, and the management of risks

associated with that strategy, particularly the uncertainty of future income, the timing of cash receipts from gifts in Wills and welfare demand. This risk is further heightened by the current inflationary environment, with inflation being higher than it has been for 30 years. We have also factored in our discretionary commitment to the Dependants Fund.

Free reserves as at 31 December 2021 stood at £43.3M. Trustees have determined that at this time we should hold a minimum of £40M in free reserves to be assured that we are able to sustain the support we provide to the RAF Family in these unprecedented times and in the long term, as well as meet other obligations, irrespective of fluctuations in income.

Designated funds were £29.1M (2020: £17.4M). In 2021, during our ‘Stabilise and Adjust’ phase, total expenditure from designated funds was £1.8M (2020: £7.1M). The retirement of the previous strategy meant £8.9M of unspent designated funds were released and new designations made to align the spending of reserves with the new strategic plan. The £8M consideration received from the disposal of Princess Marina House in December 2021 has been included in designated funds to be used to augment welfare delivery.

The £29.1M designated funds will be spent on welfare in three main areas. The first is strategy acceleration to bring forward welfare services included in the 2022-2026 strategic plan, so we can help RAF Family members earlier. The second is additional expenditure that will accrue when some of the welfare policy changes introduced in 2021 are revised to reflect current circumstances. Finally, the money will be spent on augmenting our core welfare offer, in response to identified need. Setting aside funds for welfare is now even more critical as inflation and energy prices affect our beneficiaries, increase the cost of our services and erode the value of income.

£8.2M has been set aside to fund our pension deficit recovery contributions up until October 2028 as agreed with the Trustee of the Staff Pension Fund.

£8.1M (2020: £7M) reserves of the

Dependants Fund have also been set aside to meet our promise of support to RAF personnel who are subscribers to the Fund. The Dependants Fund’s reserves increased by £1.1M (2020: £505K gain) due to the market gains on investments of £958K (2020: £406K) and a £87K operating surplus (2020: £99K).

Restricted funds representing the unspent balance of funds received for specific charitable activities were £5.9M (2020: £5.7M). £3M, the largest single restricted fund, is for the maintenance and upkeep of the Bomber Command Memorial.

Endowment funds include both permanent and expendable funds and were £6.9M (2020: £6.3M). These funds represent income donated to us but subject to the condition that the capital remains unspent. The increase in the year was due to capital gains on invested funds.

The Trustees are assured that the Charity has adequate resources to continue to operate for the foreseeable future and the Charity therefore continues to adopt the going concern basis in preparing its financial statements.

~~PENSION DEFICIT~~

Under FRS 102 the closed defined benefit pension scheme had a deficit of £13.5M (2020: £16.5M). The actuarial valuation of the Scheme as at 31 December 2020 revealed a funding shortfall (Technical Provisions minus value of assets) of £12.3M.

This position was updated on 31 October 2021 so we could put together a recovery plan to reflect more up-to-date information about the Scheme’s funding progress. The funding shortfall at this date was £8.6M. To eliminate this, the Staff Pension Fund Trustee and Fund have agreed that the Fund will pay deficit funding contributions of £100,000 per month from 1 January 2021 until 31 October 2028.

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TRUSTEES’ REPORT

~~GOVERNANCE AND RISK~~

also building more value-adding donor relationships, using data and insight to inform fundraising activities and have plans to invest in growing our supporter database. We have a robust risk-based Reserves Policy which we regularly monitor and review as appropriate.

The Board of Trustees has overall

responsibility for managing risks faced by the Fund and its subsidiary entities. That responsibility is, in part, delegated to the various Fund committees. They exercise oversight on the Board’s behalf by receiving regular reports, providing recommendations and updating the Board on risks associated with their specific remit. The Board then discusses strategic risks at each Board meeting. The Fund’s executive leadership team routinely manages risks, regularly assessing these alongside any associated management procedures.

y Failure to meet the needs of the RAF

Family. This could be due to a number of reasons:

Our management of risk helps us achieve our objectives to support the RAF Family, make informed decisions, comply with regulations and the law, and protect our people and maintain strong stewardship. We recognise that risks present threats but also opportunities.

We are mitigating this risk through key objectives in our 2022–2026 strategy that will increase our engagement on the ground and give us greater control over our service delivery. We are strengthening our Community Engagement Worker programme and embedding our new Welfare Navigators so we have greater involvement with caseworking.

All aspects of the Fund’s operations carry – to varying degrees – the risk of reputational damage. Every person associated with the Fund (including Trustees, volunteers and members of staff) must be responsible for protecting the Fund’s reputation in all that they do.

The significant risks we face are:

We also have a new engagement strategy to underpin how we work with key stakeholders. We only work with suppliers who share our values. We use data and analysis to understand the shape, size and needs of the RAF Family and the environment we work in. We strive to engage closely with our sister charities to avoid overlap and competition as well as promote collaboration and partnership working where possible. In particular, we maintain strong relationships with our caseworking partners and third-party welfare services providers.

y Failure to maintain long-term financial sustainability because we may be unable to raise sufficient income, from a diverse range of reliable sources, to fund the welfare needs of the RAF Family, which evidence shows we should meet. Through our new 2022-2026 strategy, we will mitigate this risk by delivering our core offering within balanced budgets and use our reserves to enhance and augment our welfare offering in a way that aligns with our strategic aims. We are

y Failure in our safeguarding processes

that may result in harm to our supporters or beneficiaries. We mitigate this risk by ensuring that we have robust safeguarding policies that are reviewed regularly and that our staff and Trustees are aware of these policies and receive appropriate training. Key members of staff have the specific responsibility for ensuring that we meet best practice. We also have a Safeguarding Lead Trustee who has the expertise to guide on safeguarding matters.

y The Dependants Fund may have insufficient assets to meet the level of expected death grants in the event of a series of incidents or a single major incident resulting in loss of life. We mitigate this risk by taking out calamity insurance and factoring it into determining our free reserves requirement.

y Our obligation to our legacy Staff Pension Fund could compel us to divert resources from charitable activities necessary to meet the needs of the RAF Family. We have mitigated this risk by

appointing a Sole Professional Trustee

who understands our purpose and values and is able to balance these with the need to meet obligations to members of the pension scheme. We have endorsed a revised pension investment strategy with the Pensions Trustee that should provide better returns to the pension fund and reduce the scheme’s reliance on the charity sooner.

Climate change is a key risk that we expect to emerge in the medium term (three to five years). Our position is that the Fund must always operate in a responsible and sustainable way. This is central to our decision-making. We must understand what our direct and indirect impact is on carbon emissions, whether it be through our fundraising, investment or welfare provision activities, or in internal processes and supply chains.

Our sustainability credentials will become increasingly important to our ability to operate. Over the next couple of years, we will develop plans to move towards net zero emissions. The legal requirement to complete mandatory Energy Performance Certificate (EPC) improvements to our Housing Trust properties and any followon carbon reduction activities is a risk that provides a threat to and an opportunity for us. We ensure that we keep abreast of developments and regulatory requirements and that properties purchased meet minimum EPC standards.

32

33

TRUSTEES’ REPORT

~~STRUCTURE, GOVERNANCE AND MANAGEMENT~~

that our Board is sufficiently diverse to adapt to macro changes and understand and respond to the needs of the RAF Family.

~~REFERENCE AND ADMINISTRATIVE DETAILS~~

The Royal Air Force Benevolent Fund has the Charity Commission registration number 1081009. As the Fund owns land and properties in Scotland, it is also registered with the Office of the Scottish Charity Regulator to comply with the Charities and Trustee Investment (Scotland) Act 2005. The registration number is SCO38109. The restricted and endowed funds of the Fund have a separate registration number, 207327. In accordance with the provisions of Section 96 of the Charities Act 1993 (now replaced by Section 20 of the Charities Act 2011), the Charity Commission has previously directed that for all or any of the purposes of the Act, the two charities, having the same charity Trustees, are to be treated as a single charity.

We generally recruit Trustees through advertisements in the media and via a range of digital networks. A Nominations Committee considers applications on behalf of our Board of Trustees and our Council. We provide each new Trustee with a briefing pack and agree and implement an individual

induction programme. This covers all aspects of the role, their responsibilities, the requirements of the regulators and our work.

As much as possible (due to the pandemic) our Board, either as a whole or through its subcommittees, continued in 2021 to receive ongoing briefings and training from senior management and external advisers in critical areas such as risk management, reserves, fundraising practices, safeguarding and data protection.

The Fund is also registered as a Royal Charter Company with the Companies House registration numbers ZC000201/RC000773.

Our Board of Trustees is made up of no fewer than 10 and no more than 15 Trustees, reflecting a mixture of those who have served in the RAF and those who have a background in industry, law, commerce or other sectors. Our Board is assisted by committees overseeing welfare, finance, fundraising and communications, grant giving, trustee appointments and remuneration activities. We review the terms of reference for our Board and these committees annually to ensure we are maintaining compliance and relevance.

The RAF Benevolent Fund Group also encompasses other entities, details of which can be found at the back of this report.

~~STRUCTURE AND GOVERNANCE~~

The Fund, which was set up in 1919, was incorporated by Royal Charter in 1999. Trustees are appointed by our Council for a four-year term, after which they are eligible for re-election for a further fouryear term. Trustees may not hold office for a continuous period exceeding eight years without the consent of our Board.

We also annually review the terms of reference for our Safeguarding Lead Trustee (who advises our Board on all safeguarding matters and ensures that we comply with all legal and good practice requirements in relation to safeguarding) and our Senior Independent Trustee (who

New Trustees are selected with a view to ensuring that our Board has an appropriate balance of skills, background and experience relevant to our strategic and operational requirements. We continue to be guided by our Diversity Policy to ensure

acts as a sounding board for our Chair and as an alternative route for consultation or conflict resolution for either our Trustees or executive should normal channels be unsuitable).

Our Board of Trustees is responsible for setting our strategy and policies to achieve our charitable objects as set out in our Royal Charter. It is also responsible, through its committees, for monitoring the activities of our executive staff. It reviews our position and receives reports from the committees and the executive leadership team, led by our Controller. Our Board also conducts annual performance reviews of our Controller and the Chair of the Board of Trustees and undergoes its own periodic Board appraisal. Our Controller, as our Chief Executive, is responsible for the day-to-day management of our affairs.

Our Board met four times in full session in 2021. It also met for a strategy session and held two extraordinary meetings to finalise the sale of Princess Marina House, our former respite and care centre in West Sussex.

We believe good governance is key to our ongoing success. As part of our cost rationalisation effort, we reduced the size of our executive leadership team by abolishing our Chief of Staff/Director of Governance post. We appointed a new Head of Governance so that our continued compliance with the Charity Governance Code and application of best practice in governance matters is assured.

~~STAFF REMUNERATION POLICY~~

We continue to be strongly committed to recruiting, developing and retaining people with the necessary skills and knowledge to deliver our objectives and with the ability to make a positive contribution. We believe making effective decisions in relation to remuneration and reward is crucial to the achievement of our overall aims.

Our Remuneration Policy centres on the following principles:

We focus on a ‘total reward’ approach, recognising that broader aspects of employment offers including nonfinancial benefits such as flexible working, development opportunities, as well as the values we uphold as an organisation are of increasing value to employees.

~~REMUNERATION REVIEW~~

Our Remuneration Committee reviews our Remuneration Policy annually to ensure we are adhering to its principles and that those principles remain appropriate. The committee reviews our pension and broader reward provision and considers an annual pay award. Committee decisions are supported by external expert analytics and benchmarks and all recommendations are submitted to our Board of Trustees for approval.

We aim to match, where appropriate and affordable, competitive salaries based on current market conditions for any given role as detailed by the responsibilities derived from the job evaluation. We changed our approach in 2021 so that all new employees join the Fund on spot rates. The prior pay system is still in operation for employees who joined before this time.

In reviewing salary recommendations for 2022, our Trustees considered a number of factors including the current economic climate and rising inflation, the increase to employee National Insurance contributions from April 2022, and the impact of the coronavirus pandemic on the workforce. A 3% annual pay award was agreed.

34

35

TRUSTEES’ REPORT

~~STATEMENT OF TRUSTEES’ RESPONSIBILITIES~~

Our Trustees are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England and Wales requires our Trustees to prepare financial statements for each financial year which give a true and fair view of the state of the affairs of the Fund and the group and of the incoming resources and application of resources of the Fund for that period. In preparing these financial statements, our Trustees are required to:

Our Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Fund and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 and the provisions of its Royal Charter.

They are also responsible for safeguarding the assets of the Fund and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the Trustees are aware:

y They have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

~~TRUSTEE DECLARATION~~

Trustees hereby approve the 2021 Annual Report

Richard Daniel BSc (Hons) FRAeS, Chair, Royal Air Force Benevolent Fund

Signed on 21 June 2022

~~PRINCIPAL PROFESSIONAL ADVISERS~~

Independent auditor

Saffery Champness LLP 71 Queen Victoria Street London EC4V 4BE

Bankers

Barclays Bank plc 1 Churchill Place London E14 5HP

Actuary

Broadstone Corporate Benefits Limited 55 Baker Street London W1U 7EU

Solicitors

Charles Russell Speechlys LLP 5 Fleet Place London EC4M 7RD

Investment managers

BlackRock Investment Management (UK) Limited 12 Throgmorton Avenue London EC2N 2DL

CCLA Investment Management Limited Senator House 85 Queen Victoria Street London EC4V 4ET

Close Brothers Asset Management 55 Grosvenor Street London W1K 3HY

36

37

INDEPENDENT AUDITOR’S REPORT

~~INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES~~

~~OPINION~~

~~BASIS FOR OPINION~~

We have audited the financial statements of the Royal Air Force Benevolent Fund (the ‘parent charity’) and its subsidiaries (the ‘group’) for the year ended 31 December 2021 which comprise the consolidated statement of financial activities, the consolidated and charity balance sheets, the statement of cash flows and notes to the financial statements, including 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).

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

~~CONCLUSIONS RELATING TO GOING CONCERN~~

In our opinion the financial statements:

y Give a true and fair view of the state of the affairs of the group and the parent charity at 31 December 2021 and of the group’s incoming resources and application of resources for the year then ended;

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group or the parent charity’s ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.

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

~~OTHER INFORMATION~~

The 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. 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 course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

~~MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION~~

We have nothing to report in respect of the following matters in respect of which the Charities (Accounts and Reports) Regulations 2008 and the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:

y We have not received all the information and explanations we require for our audit.

~~RESPONSIBILITIES OF TRUSTEES~~

As explained more fully in the statement of Trustees’ responsibilities set out on page 36, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the group and the parent charity’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 charity 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 auditors under the Charities Act 2011 and the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with regulations made under those Acts.

Our objectives are to obtain reasonable assurance about whether the group and parent charity 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.

38

39

INDEPENDENT AUDITOR’S REPORT

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the group and parent charity’s financial statements to material misstatement and how fraud might occur, including through discussions with the Trustees, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent charity by discussions with informed management and updating our understanding of the sector in which the group and parent charity operates.

Laws and regulations of direct significance in the context of the group and parent charity include the Charities Act 2011, the Charities and Trustee Investment (Scotland) Act 2005, the Charities (Accounts and Reports) Regulations 2008, the Charities Accounts (Scotland) Regulations 2006 (as amended) and guidance issued by the Charity Commission for England and Wales and the Office of the Scottish Charity Regulator.

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the parent charity’s records of breaches of laws and regulations, minutes of meetings and correspondence with relevant

authorities to identify potential material misstatements arising. We discussed the parent charity’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or had knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above 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 would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities . This description forms part of our auditor’s report.

~~Lena USE OF OUR REPORT~~

This report is made solely to the parent charity’s Trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008 and Regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the parent charity’s Trustees 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 parent charity and the parent charity’s Trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Saffery Champness LLP

Chartered Accountants

Statutory Auditors

71 Queen Victoria Street, London EC4V 4BE

Date: 28 July 2022

Saffery Champness LLP is eligible to act as an auditor in terms of Section 1212 of the Companies Act 2006.

40

41

FINANCIAL STATEMENTS

~~FINANCIAL STATEMENTS~~

CONSOLIDATED STATEMENT

OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2021

2021 2020
Note Unrestricted
funds
£’000		 Restricted
funds
£’000		 Endowed
funds
£’000		 Total
£’000		 Unrestricted
funds
£’000		 Restricted
funds
£’000		 Endowed
funds
£’000		 Total
£’000
Income and endowments from
Donations and legacies 15,028 15,028
685		 685
- 15,713		 - 15,713 - 15,713 12,864 12,864
857		 857
- 13,721		 - 13,721
Charitable activities 1,030 1,030
20		 20
-		 -
1,050		 1,050 1,212 1,212
20		 20
-		 -
1,232
Other tradingactivities 547 547
19		 19
-		 -
566		 566 360 360
-		 -
-		 -
360
Investments 2,268 2,268
216		 216
-		 -
2,484		 2,484 2,748 2,748
(3)		 - -
2,745
Other income 5,715 5,715
-		 -
-		 -
5,715		 5,715 1,080 1,080
-		 -
-		 -
1,080
Total income 2 24,588 24,588
940		 940
- 25,528		 - 25,528 - 25,528 18,264 874 - 19,138 - 19,138
Expenditure on raising funds 4,683 4,683
19		 19
-		 -
4,702		 4,702 5,096 5,096
11		 11
-		 -
5,107
Expenditure on charitable activities
Direct support to individuals 8,970 8,970
513		 513
-		 -
9,483		 9,483 14,950 14,950
606		 606
- 15,556		 - 15,556
Welfareprogrammes andgrants 4,199 4,199
312		 312
-		 -
4,511		 4,511 4,254 4,254
642		 642
-		 -
4,896
Respite care 1,163 1,163
114		 114
-		 -
1,277		 1,277 3,494 3,494
436		 436
-		 -
3,930
HousingTrust support 2,318 2,318
68		 68
-		 -
2,386		 2,386 1,465 1,465
181		 181
-		 -
1,646
16,650 16,650
1,007		 1,007
- 17,657		 - 17,657 - 17,657 24,163 1,865 - 26,028 - 26,028
Total expenditure 3 21,333 21,333
1,026		 1,026
- 22,359		 - 22,359 - 22,359 29,259 29,259
1,876		 1,876
- 31,135		 - 31,135
Net income/(expenditure) before
gains on investments		 3,255 3,255
(86)		 - -
3,169 (10,995)		 3,169 (10,995) 3,169 (10,995) (1,002) - (11,997) - (11,997)
Transfers between funds 4 4
(4)		 - -
-		 - 415 415
(415)		 - -
-
Netgains on investments 11 5,790 5,790
221		 221
611		 611
6,622		 6,622 2,250 2,250
69		 69
292		 292
2,611
Net income/(expenditure) 9,049 9,049
131		 131
611		 611
9,791		 9,791 **(8,330) ** (1,348) 292 292(9,386)
Other recognisedgains and losses:
Actuarial gains/(losses) on defined
benefitpension scheme		 15 2,266 2,266
-		 -
-		 -
2,266		 2,266 (3,538) - -
- (3,538)		 - (3,538)
Net movement in funds 11,315 11,315
131		 131
611 12,057		 611 12,057 611 12,057 **(11,868) ** (1,348) 292 292(12,924)
Total funds brought forward 97,859 97,859
5,728		 5,728
6,319 109,906 109,727		 6,319 109,906 109,727 6,319 109,906 109,727 6,319 109,906 109,727 7,076 6,027 122,830
Total funds carried forward 23 109,174 109,174
5,859		 5,859
6,930 121,963		 6,930 121,963 6,930 121,963 97,859 5,728 **6,319 ** 109,906

The notes on pages 45 to 77 form part of the financial statements. All amounts relate to continuing operations.

All gains and losses recognised in the year are included in the statement of financial activities.

CONSOLIDATED AND CHARITY

BALANCE SHEETS AS AT 31 DECEMBER 2021

Note Group
2021		 Group
Group
2020		 Group
Charity
2021		 Charity
Charity
2020
£’000 £’000 £’000 £’000
Fixed assets
Intangible assets 9 187 274 187 274
Tangible assets 10 28,663 32,059 4,878 8,805
Investments 11 83,114 78,255 75,429 71,528
Loans to beneficiaries 12 7,948 8,593 7,948 8,593
119,912 119,181 88,442 89,200
Current assets
Stock 3 3
6		 - -
-
Debtors andprepayments 13 10,623 10,623
7,273		 21,763 21,763
18,412
Cash at bank and in hand 7,449 7,449
3,393		 5,633 5,633
2,164
18,075 10,672 27,396 20,576
Current liabilities
Creditors and accrued charges:
amounts fallingdue within oneyear		 14 (2,559) (3,416) (2,101) (3,044)
Net current assets 15,516 7,256 25,295 17,532
Net assets excluding long-term liabilities
andpension liability		 135,428 126,437 113,737 106,732
Defined benefitpensions liability 15 (13,465) (16,531) (13,465) (16,531)
Total net assets 121,963 109,906 100,272 90,201
Funds
Endowment funds 6,930 6,319 6,930 6,319
Restricted funds 5,859 5,728 5,859 5,728
Designated funds 29,062 17,404 21,000 21,000
10,387
General funds 93,577 96,986 79,948 79,948
84,298
Pension reserve (13,465) (16,531) (13,465) (16,531)
23 121,963 109,906 100,272 90,201

Approved by the Board of Trustees on 21 June 2022 and signed on its behalf by

Richard Daniel BSc (Hons) FRAeS Chair, Board of Trustees

42

43

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2021

----- Start of picture text -----
2021 2020
£’000 £’000
Net cash used in operating activities (8,829) (13,987)
Cash flows from investing activities
Dividends and interest from investments 2,484 2,860
Proceeds from the sale of property 10,097 1,538
Purchase of property and equipment (2,143) (1,557)
Net proceeds from sale of investments 1,763 6,631
Net cash provided by investing activities 12,201 9,472
Cash flows from financing activities
Loans awarded (131) (109)
Loan repayments 815 776
Net cash provided by financing activities 684 667
Change in cash and cash equivalents in the year 4,056 (3,848)
Cash and cash equivalents as at 1 January 3,393 7,241
Cash and cash equivalents as at 31 December 7,449 3,393
Reconciliation of net income to net cash flow from
operating activities
Net income/(expenditure) for the year ended 31 9,791 (9,386)
December
Adjustments for:
Depreciation charges and amortisation 1,031 1,185
Gains on investments (6,622) (2,611)
Income attributable from joint venture - 115
Dividends and interest from investments (2,484) (2,860)
Profit on the sale of fixed assets (5,502) (867)
Loan interest (43) (57)
Loans converted to grants 4 74
Loans written off - 28
Decrease/(increase) in stock 3 (1)
(Increase)/decrease in debtors (3,350) 596
(Decrease)/increase in creditors (857) 532
Pension interest expense 200 265
Pension fund costs (1,000) (1,000)
Net cash used in operating activities (8,829) (13,987)
Analysis of cash and cash equivalents
Current accounts 7,449 3,393
Total cash and cash equivalents 7,449 3,393
----- End of picture text -----

Analysis of changes in net debt

----- Start of picture text -----
At 1 January Cash flows At 31 December
2021 2021
£’000 £’000 £’000
Cash - current accounts 3,393 4,056 7,449
At 1 January Cash flows At 31 December
2020 2020
£’000 £’000 £’000
Cash - current accounts 7,241 (3,848) 3,393
----- End of picture text -----

~~NOTES TO THE FINANCIAL STATEMENTS~~

FOR THE YEAR ENDED 31 DECEMBER 2021

1 PRINCIPAL ACCOUNTING POLICIES

These are the financial statements of the Royal Air Force Benevolent Fund and its related entities. The Charity was incorporated by Royal Charter in England and Wales on 29 December 1999. The Trustees of the Charity are named on page 2. The registered office is 67 Portland Place, London W1B 1AR.

following the Statement of Recommended Practice (FRS 102) rather than Accounting and Reporting by Charities: Statement of Recommended Practice (revised 2005) which has been withdrawn.

~~ACCOUNTING CONVENTION~~

These financial statements have been prepared on a going concern basis under the historical cost convention, with the exception of investments which are included at market value, and in accordance with applicable accounting standards.

~~BASIS OF PREPARATION~~

The consolidated financial statements have been prepared to give a true and fair view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a true and fair view. This departure has involved

The financial statements have been prepared in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).

44

45

FINANCIAL STATEMENTS

The Charity is a public benefit entity for the purposes of FRS 102 and therefore the financial statements have been prepared in accordance with the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (Charities SORP (FRS 102)), the Charities Act 2011 and the Charities Accounts (Scotland) Regulations 2006 as amended by the Charities Accounts (Scotland) Amendment (No. 2) Regulations 2014.

The statement of financial activities (SOFA) and balance sheet consolidate the financial statements of the Charity and its subsidiary undertakings. The results of the subsidiary entities are consolidated on a line by line basis. A Charity-only SOFA is not shown separately. A summary of the results of the subsidiary entities is shown in Note 27.

The Group’s share of net income of the joint venture (20%) is accounted for using the equity method and is shown in the consolidated SOFA with the share of net assets shown on the balance sheet as an investment.

~~FUNCTIONAL CURRENCY~~

The Charity’s functional and presentational currency is GBP and is shown as £’000s in the financial statements.

~~GOING CONCERN~~

The Trustees have assessed whether the use of the going concern basis is appropriate, taking into account business plans, income and expenditure projections and the Charity’s level of reserves. Their conclusion is that there is no doubt about the Charity’s ability to continue operating as a going concern.

The Trustees have made this assessment for a period of at least one year from the date of approving the financial statements and are assured that the Charity has adequate resources to continue to operate for the foreseeable future.

The Charity therefore continues to adopt the going concern basis in preparing its financial statements.

~~FUND ACCOUNTING~~

General funds are unrestricted funds that are available for use at the discretion of the Trustees in furtherance of the general objects of the Charity and that have not been designated by the Trustees for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the Trustees for particular purposes. The aim and use of the designated funds are set out in the notes to the financial statements.

Restricted funds are funds that are to be used in accordance with specific restrictions imposed by donors or that have been raised by the Charity for particular purposes. The costs of raising and administering such funds are charged against specific funds. The aim and use of the larger restricted funds is set out in the notes to the financial statements.

Endowment funds are either permanent or expendable. Permanent funds are normally held indefinitely, while Trustees have the power to convert expendable funds into income. These funds are set out in Note 26. The return on endowment investments is made up of income earned and gains or losses in the market value of the investments.

Income generated from endowment funds is spent on charitable activities. Investment income and gains are allocated to the appropriate fund.

~~RECOGNITION OF INCOME~~

Income is recognised in the SOFA when the Charity becomes entitled to it, it is more likely than not that the income will be received, and the monetary value of the income can be estimated with sufficient accuracy. Entitlement to legacy income is assumed when there is sufficient evidence that a gift has been left to the Charity, usually through the notification of a Will.

Receipt of legacy income is deemed probable

when there has been a grant of probate, and it has been established that there are sufficient assets in the estate to pay the legacy and there are no conditions attached to the legacy that are outside the control of the Charity or uncertainty around receipt of this gift. Income from pecuniary legacies is recognised upon notification or receipt if earlier.

Gifts donated for resale are included as income when they are sold. No amounts are included in the financial statements for services donated by volunteers.

~~RECOGNITION OF EXPENDITURE~~

Expenditure is recognised in the SOFA on an accrual basis when an obligation that can be measured or reliably estimated exists at the reporting date and it is more than likely that payment will be paid in settlement.

Two main categories of expenditure shown in the SOFA are expenditure on raising funds and expenditure on charitable activities. Expenditure on raising funds includes all expenditure incurred to raise voluntary income to spend on charitable purposes as well as investment management fees. Expenditure on charitable activities includes all costs incurred by the Charity in carrying out its charitable aims to support the beneficiaries of the RAF Benevolent Fund.

~~SUPPORT COSTS~~

Support costs have been classified as: information technology and facilities, depreciation, general management and administration, finance and payroll, HR and governance. These costs have been allocated to activities on a basis consistent with the use of resources, and indirect costs have been apportioned on a headcount basis or in proportion to direct costs or income.

Support costs include £235K spent on the administration and management of the legacy staff pension scheme to ensure that the charity as the sponsoring employer continued to meet its legal obligations in the right way.

~~GRANT COMMITMENTS~~

Grants awarded are expensed in the SOFA in the year in which they are approved by the Trustees and the offer is conveyed to the recipient. Grants awarded but not paid are recorded as a liability within the balance sheet.

~~TANGIBLE FIXED ASSETS AND DEPRECIATION~~

Tangible fixed assets costing more than £1K (£5K in the RAF Benevolent Fund Housing Trust Limited) are capitalised and included at cost, including any incidental expense of acquisition.

Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost on a straight-line basis over their expected useful economic lives as follows:

y Freehold land – nil

A full year’s depreciation is provided in the year of asset acquisition, and none in the year of disposal.

~~INTANGIBLE FIXED ASSETS AND AMORTISATION~~

Software is classified as an intangible fixed asset and is capitalised where the cost plus incidental expenses incurred in acquisition is more than £1K.

Amortisation is provided on intangible fixed assets to write off the capitalised value on a straight-line basis over three years. A full year’s amortisation is provided in the year of asset acquisition, and none in the year of disposal.

46

47

FINANCIAL STATEMENTS

~~FOREIGN CURRENCIES~~

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities are retranslated at the exchange rate ruling at the balance sheet date. All differences are taken to the SOFA.

~~RELATED PARTY DISCLOSURES~~

The Charity has made the required disclosures in accordance with the Charities SORP (FRS 102).

Transactions with group undertakings are eliminated on consolidation.

~~INVESTMENTS~~

Investments are stated at market value at the balance sheet date. The SOFA includes the net gains and losses arising on revaluation and disposals throughout the year. Income receivable on investments is recognised in the SOFA on the accruals basis.

~~JOINT VENTURE~~

The RAF100 Appeal (Registered Charity 1167398; Company Registration: 9977273) was formed to bring the four major RAF charities and the RAF itself together to mark the centenary of the RAF with a programme of events. To assist with providing initial working capital, the Fund and the other RAF charities each provided a £25K short-term interest free loan to the RAF100 Appeal which has been subsequently repaid. On completion of the joint venture project any surplus reserves have been or will be distributed as agreed among the joint venture partners.

The income receivable from the RAF100 Appeal will be recognised in the Charity’s accounts when the Charity becomes entitled to it, and the amount can be estimated with sufficient accuracy.

~~STOCK~~

Stock consists of purchased goods for resale. Stocks are valued at the lower of cost and net realisable value. Items donated for resale or distribution are not included in the financial statements until they are sold or distributed.

~~PENSION COSTS~~

Pensions are accounted for in accordance with FRS 102 section 28, with a valuation undertaken by an independent actuary for the defined benefit scheme, the Royal Air Force Benevolent Fund Staff Pension Fund, which is closed to future accrual. Net pension finance income or costs are included immediately in other income or employee costs as appropriate.

Actuarial gains and losses are recognised immediately on the face of the SOFA. The scheme deficit is included as a liability in the balance sheet. Details of the pension scheme are included in Note 15 to the accounts.

The amounts charged to the SOFA for defined contribution schemes represent the contributions payable in the period.

~~FINANCE AND OPERATING LEASES~~

The Charity does not have any finance leases. Rentals payable under operating leases are charged to the SOFA over the period in which the cost is incurred on a straight-line basis.

~~LOANS~~

Loans are awarded to beneficiaries in furtherance of charitable activities. The particular circumstances of each case will determine whether or not the loan is awarded free of interest. When interest is charged the rate is considerably lower than prevailing market rates. Loans are recognised as assets at the value of the award. Accrued interest, where applicable, is recognised as income and added to the balance of the loan. Repayments are made as provided in the loan agreement. To facilitate the relief of hardship and distress, the commencement of repayments can be deferred.

~~FINANCIAL INSTRUMENTS~~

The Charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments. Financial instruments are recognised in the Charity’s balance sheet when the Charity becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

With the exceptions of prepayments and deferred income all other debtor and creditor balances are considered to be basic financial instruments under FRS 102. See Notes 13 and 14 to the accounts.

~~JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY~~

In the application of the Charity’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The most significant estimates and assumptions which affect the carrying amount of assets and liabilities in the accounts relate to:

Useful economic lives – The annual

depreciation charge for property and equipment is sensitive to change in the estimated useful economic lives and residual value of assets. These are reassessed annually and amended where necessary to reflect current circumstances.

Unsecured loans – A small proportion of loans to beneficiaries are not secured and therefore a general provision for nonrepayment is made. The calculation of this provision is based on the historical average rate of default and equates to 10% of the total value of unsecured loans at the balance sheet date.

Pension scheme deficit – The underlying assumptions used by the actuary in valuing the scheme are in accordance with FRS 102 and based on assumptions recommended by the actuary.

48

49

FINANCIAL STATEMENTS

2 INCOME AND ENDOWMENTS

----- Start of picture text -----
£’000 £’000 £’000 £’000 £’000 £’000
Donations and legacies
Royal Air Force service personnel 1,576 - 1,576 1,559 - 1,559
General donations 2,419 198 2,617 3,316 533 3,849
Government grants (Job Retention 34 - 34 594 - 594
Scheme)
Legacy income 10,999 487 11,486 7,395 324 7,719
15,028 685 15,713 12,864 857 13,721
Charitable activities
Housing 964 20 984 974 20 994
Respite care 23 - 23 181 - 181
Loan interest 43 - 43 57 - 57
1,030 20 1,050 1,212 20 1,232
Other trading activities
Income from fundraising events 400 19 419 268 - 268
Trading income 147 - 147 92 - 92
547 19 566 360 - 360
Investment income
Dividends from pooled funds 2,268 216 2,484 2,742 112 2,854
Interest earned - - - 6 - 6
Movement in share of joint venture - - - - (115) (115)
2,268 216 2,484 2,748 (3) 2,745
Unrestricted Restricted Total 2021 Unrestricted Restricted Total 2020
----- End of picture text -----

3 ANALYSIS OF EXPENDITURE

----- Start of picture text -----
Direct External Support Total Direct External Support Total
costs grants costs 2021 costs grants costs 2020
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Raising funds
Donations and legacies 2,378 - 1,405 3,783 2,608 - 1,696 4,304
Regional engagement 495 - - 495 501 - - 501
Other trading activities 121 - - 121 87 - - 87
Investment management fees 303 - - 303 215 - - 215
3,297 - 1,405 4,702 3,411 - 1,696 5,107
Charitable activities
Direct support to individuals 8,013 - 1,470 9,483 13,675 - 1,881 15,556
Welfare programmes and grants 751 2,956 804 4,511 751 3,374 771 4,896
Respite care 1,105 - 172 1,277 3,732 - 198 3,930
Housing Trust support 1,487 - 899 2,386 824 - 822 1,646
11,356 2,956 3,345 17,657 18,982 3,374 3,672 26,028
Total expenditure 14,653 2,956 4,750 22,359 22,393 3,374 5,368 31,135
----- End of picture text -----

See Note 22 for analysis of welfare programmes and grants relating to external grants.

RAF100 allocated the remaining balance of its funds in 2020. The 20% share of the joint venture has been adjusted to reflect this (see Note 11).

Other income
Gains on the sale of fxed assets		 5,502 - 5,502 867 - 867
Pension interest income 213 - 213 213 - 213
5,715 - 5,715 1,080 - 1,080

The gains on the sale of fixed assets includes the sale of Princess Marina House for £8M in December 2021 which generated a gain of £4.2M. The remainder of the gain (£1.3M) came from the disposal of eight Housing Trust properties.

Total income

24,588 940 25,528 18,264 874 19,138

50

51

FINANCIAL STATEMENTS

4 ANALYSIS OF SUPPORT COSTS

----- Start of picture text -----
Raising Direct Welfare Respite Housing Total
funds support to programmes care Trust 2021
individuals and grants support
£’000 £’000 £’000 £’000 £’000 £’000
Information technology and 507 505 297 84 102 1,495
facilities
Depreciation and 136 109 82 40 663 1,030
amortisation
General management and 129 125 74 22 26 376
administration
Finance and payroll 274 319 152 10 47 802
HR 139 161 77 5 23 405
Governance 220 251 122 11 38 642
Total 1,405 1,470 804 172 899 4,750
Raising Direct Welfare Respite Housing Total
funds support to programmes care Trust 2020
individuals and grants support
£’000 £’000 £’000 £’000 £’000 £’000
Information technology and 572 586 295 87 81 1,621
facilities
Depreciation and 204 164 111 50 657 1,186
amortisation
General management and 172 175 80 26 25 478
administration
Finance and payroll 278 359 104 11 21 773
HR 187 242 71 8 14 522
Governance 283 355 110 16 24 788
Total 1,696 1,881 771 198 822 5,368
----- End of picture text -----

5 STAFF COSTS

----- Start of picture text -----
2021 2020
£’000 £’000
Wages and salaries 5,155 6,469
Social security costs 576 855
Pension costs 509 650
Termination and redundancy costs 172 743
6,412 8,717
----- End of picture text -----

Due to the Covid-19 pandemic in 2020 the Board took the decision to close our respite care centre Princess Marina House (PMH) permanently with a loss of 114 posts. Prior year staff costs include termination and redundancy costs for 100 employees who worked at PMH.

The number of employees whose pay and benefits (excluding pension contributions) amounted to more than £60,000 in the year was as follows:

----- Start of picture text -----
|||| |---|---|---| |2021|2020| |No.|No.| |£60,001 - £70,000|6|11| |£70,001 - £80,000|4|4| |£80,001 - £90,000|1|1| |£90,001 - £100,000|-|1| |£100,001 - £110,000|1|2| |£110,001 - £120,000|2|1| |£120,001 - £130,000|2|1| |16|21|

----- End of picture text -----

15 employees (2020: 19) whose pay and benefits amounted to more than £60,000 in the year were members of the Group Personal Pension Plan, a money purchase scheme.

The average number of employees, calculated on a headcount basis, analysed by function was:

----- Start of picture text -----
|||| |---|---|---| |2021|2020| |No.|No.| |Charitable activities|56|139| |Cost of generating funds|36|38| |Governance, administration and support|25|29| |117|206|

----- End of picture text -----

The average number of employees in charitable activities fell as result of the closure of PMH and the resulting staff redundancies made in September 2020.

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53

FINANCIAL STATEMENTS

10 TANGIBLE FIXED ASSETS

6 KEY MANAGEMENT PERSONNEL

The key management personnel of the RAF Benevolent Fund are the Trustees and the Executive Leadership Team (ELT). Until September 2021, the latter included the Controller, the Chief of Staff, the Director of Welfare and Policy, the Director of Fundraising and Communications and the Director of Finance. From September 2021 the roles of the Chief of Staff and the Director of Finance were combined into one role, the Director of Resources. Total employee pay and benefits received by ELT for services to the Charity in 2021 were £601K (2020: £632K).

7 NET EXPENDITURE

----- Start of picture text -----
2021 2020
£’000 £’000
Net expenditure for the year is stated after charging:
----- End of picture text -----

Net expenditure for theyear is stated after charging:
Audit fees 64 66
Audit fees – additional fees reprioryear audit - 16
Investment management fees 303 215
Amortisation of intangible assets 168 177
Depreciation 863 1,008
Operating leases
Proft on disposal of fxed assets		 48
(5,502)		 68
(867)

8 TRUSTEES’ REMUNERATION

The Trustees neither received nor waived any emoluments during the year 2021 (2020: £nil) Out-of-pocket expenses were reimbursed to Trustees as follows:

----- Start of picture text -----
2021 2020 2021 2020
No. No. £ £
Travel 5 nil 1,209 nil
----- End of picture text -----

9 INTANGIBLE ASSETS

----- Start of picture text -----
Group Charity
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Software costs
Cost on 1 January 3,457 3,255 3,457 3,255
Additions during the year 81 202 81 202
Disposals during the year (1,005) - (1,005) -
Cost at 31 December 2,533 3,457 2,533 3,457
- - - -
Amortisation at 1 January (3,183) (3,006) (3,183) (3,006)
Amortisation for the year (168) (177) (168) (177)
Amortisation on disposals 1,005 - 1,005 -
Accumulated amortisation at 31 December (2,346) (3,183) (2,346) (3,183)
----- End of picture text -----

----- Start of picture text -----
Group 2021 Charity 2021
Property Equipment Total Property Equipment Total
£’000 £’000 £’000 £’000 £’000 £’000
Cost on 1 January 43,565 2,340 45,905 12,703 2,340 15,043
Additions during the year 2,062 - 2,062 5 - 5
Disposals during the year (6,724) (1,978) (8,702) (5,441) (1,978) (7,419)
Cost at 31 December 38,903 362 39,265 7,267 362 7,629
Depreciation at 1 January (11,528) (2,318) (13,846) (3,920) (2,318) (6,238)
Depreciation for the year (863) - (863) (230) - (230)
Depreciation on disposals during 2,151 1,956 4,107 1,761 1,956 3,717
the year
Accumulated depreciation at 31 (10,240) (362) (10,602) (2,389) (362) (2,751)
December
Net book value 31 December 2021 28,663 - 28,663 4,878 - 4,878
Group 2020 Charity 2020
Property Equipment Total Property Equipment Total
£’000 £’000 £’000 £’000 £’000 £’000
Cost on 1 January 43,107 2,519 45,626 12,275 2,519 14,794
Additions during the year 1,355 - 1,355 428 - 428
Disposals during the year (897) (179) (1,076) - (179) (179)
Cost at 31 December 43,565 2,340 45,905 12,703 2,340 15,043
Depreciation at 1 January (10,827) (2,416) (13,243) (3,582) (2,416) (5,998)
Depreciation for the year (955) (53) (1,008) (338) (53) (391)
Depreciation on disposals during 254 151 405 - 151 151
the year
Accumulated depreciation at 31 (11,528) (2,318) (13,846) (3,920) (2,318) (6,238)
December
Net book value 31 December 2020 32,037 22 32,059 8,783 22 8,805
----- End of picture text -----

Net book value 31 December

187 274 187 274

54

55

FINANCIAL STATEMENTS

10 TANGIBLE FIXED ASSETS (cont)

----- Start of picture text -----
2021 2020
Property Equipment Total Property Equipment Total
£’000 £’000 £’000 £’000 £’000 £’000
Net book value at 31 December is analysed as follows:
Gulf Trust Fund (restricted fund) 129 - 129 134 - 134
Princess Marina House - - - 3,680 22 3,702
RAFBF respite homes 403 - 403 407 - 407
Headquarters - London 4,346 - 4,346 4,562 - 4,562
Charity 4,878 - 4,878 8,783 22 8,805
RAFBF Housing Trust Ltd 23,785 - 23,785 23,254 - 23,254
Group 28,663 - 28,663 32,037 22 32,059
The net book value of properties comprises:
Freehold 28,269 31,498
Long leasehold 394 539
28,663 32,037
----- End of picture text -----

Properties held by the RAF Benevolent Fund Housing Trust Limited support charitable activities. Properties are held so that beneficiaries, including wounded, injured or sick personnel who have been medically discharged from the RAF, can live in suitable, usually heavily adapted, accommodation. Properties are stated at historical cost and depreciated as per the policy stated in Note 1.

11 FIXED ASSET INVESTMENTS

----- Start of picture text -----
Group Charity
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Market value as at 1 January 78,255 82,275 71,528 75,953
Additions 8,547 1,083 8,547 1,083
Withdrawals (10,310) (7,714) (10,256) (7,714)
Net investment gains 6,622 2,611 5,610 2,206
Market value at 31 December 83,114 78,255 75,429 71,528
Share of joint venture
Joint venture RAF100 Appeal as at 1 January - 115 - -
Movement in share of joint venture - (115) - -
Joint venture RAF100 Appeal as at 31 December - - - -
Total fixed asset investments 83,114 78,255 75,429 71,528
Investments are represented by:
Listed investments 79,797 74,529 72,112 67,802
Cash holdings in investments 2,771 3,194 2,771 3,194
RAF Disabled Holiday Trust Bonds 546 532 546 532
Total 83,114 78,255 75,429 71,528
----- End of picture text -----

The Charity is the only Trustee of the RAF Disabled Holiday Trust whose net assets to the value of £546K are included within investments. Also included is the Charity’s share capital in the RAFBF Trading Co Limited of £1. The results of this subsidiary entity are shown in Note 27.

The RAF100 Appeal (established in January 2016) has largely been wound up. Its principal activity was to agree and coordinate plans and associated fundraising activities for the RAF centenary year. On completion of the joint venture project any surplus reserves will be distributed as agreed among the joint venture partners. The Charity’s 20% share of the net assets of the joint venture is shown above as part of the total fixed asset investments. The investment and the net income attributable are calculated on the basis of the funds under the joint venture’s control.

56

57

FINANCIAL STATEMENTS

15 PENSION COMMITMENTS

12 LOANS TO BENEFICIARIES

----- Start of picture text -----
Group Charity
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Balance at 1 January 8,593 9,305 8,593 9,305
New loans 131 109 131 109
Interest charged 43 57 43 57
8,767 9,471 8,767 9,471
Repayments (815) (776) (815) (776)
Loans converted to grants (4) (74) (4) (74)
Bad debts written off - (28) - (28)
Balance at 31 December 7,948 8,593 7,948 8,593
----- End of picture text -----

Loans are provided so that beneficiaries can continue to live in their own homes. Loan interest is charged depending on the nature of the case and, where applicable, the interest rate is substantially below commercial rates. The outstanding loans include balances totalling £7.9M (2020: £8.5M) which are secured by legal charges on the assets of the beneficiaries. The majority of loans have no fixed repayment date and are normally repayable from the beneficiary’s estate. Provision for loan conversion is calculated at 10% of unsecured loans. Total outstanding unsecured loans at the year end are £91K (2020: £96K).

13 DEBTORS

----- Start of picture text -----
Group Charity
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Legacies 9,901 6,558 9,901 6,558
Inter-company balance - - 11,253 11,232
Other debtors 576 535 462 456
Prepayments 146 180 147 166
10,623 7,273 21,763 18,412
----- End of picture text -----

14 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

----- Start of picture text -----
|||||| |---|---|---|---|---| |Group|Charity| |2021|2020|2021|2020| |£’000|£’000|£’000|£’000| |Trade creditors|628|430|612|430| |Taxation and social security costs|191|246|184|240| |Accruals for grants payable|1,471|2,291|1,159|2,014| |Other creditors|269|449|146|360| |2,559|3,416|2,101|3,044|

----- End of picture text -----

The RAF Benevolent Fund pension arrangements are as follows:

A Group Personal Pension Scheme made up of a collection of individual pension plans arranged by the Fund is provided by an insurance provider. This service has been provided by Royal London since November 2016. The liability of the employer is limited to the contributions it makes which amounted to £509K (2020: £650K) of which £nil remained payable at the year end (2020: £55K).

The RAF Benevolent Fund Staff Pension Fund is a defined benefit scheme. The scheme was closed to new members on 31 August 2005 and was closed to future accrual on 1 April 2014. The most recent actuarial valuation was carried out as at 31 December 2020. Under the schedule of contributions agreed as part of the actuarial valuation as at 31 December 2020, the employer paid £1M during 2021 (2020: £1M). The new deficit contribution plan agreed that the employer would make contributions at the rate of £100K per month until 31 October 2028.

----- Start of picture text -----
2021 2020
£’000 £’000
Reconciliation of funded status to balance sheet
Defined benefit obligation (39,680) (41,561)
Fair value of plan assets 26,215 25,030
Net defined benefit liability (13,465) (16,531)
The amounts recognised in the SOFA are as
follows:
Net interest expense on net defined benefit 200 265
liability
Total pension expense recognised in the SOFA 200 265
Reconciliation of defined benefit obligation over the year
Defined benefit obligation as at 1 January (41,561) (37,767)
Interest expenses on defined benefit obligation (511) (740)
Remeasurement - effect of experience 317 268
adjustments gain
Remeasurement - effect of changes in 762 (4,890)
assumptions loss
Benefits paid 1,313 1,568
Defined benefit obligation as at 31 December (39,680) (41,561)
Changes in the fair value of plan assets over the year:
Fair value of plan assets as at 1 January 25,030 24,039
Interest income on plan assets 311 475
Remeasurement - return on plan assets excluding 1,187 1,084
interest income gain
Contributions by employer 1,000 1,000
Benefits paid (1,313) (1,568)
Fair value of plan assets as at 31 December 26,215 25,030
Return on plan assets 1,498 1,559
----- End of picture text -----

58

59

FINANCIAL STATEMENTS

15 PENSION COMMITMENTS (cont)

----- Start of picture text -----
2021 2020
£’000 £’000
Remeasurements recognised in SOFA
Remeasurement - effect of experience 317 268
adjustments gain
Remeasurement - effect of changes in 762 (4,890)
assumptions gain/(loss)
Remeasurement - return on plan assets excluding interest 1,187 1,084
income gain
Total remeasurement gain/(loss) recognised in SOFA 2,266 (3,538)
2021 2020
£’000 % £’000 %
Assets:
Target Return Fund 25,744 98.2% 24,484 97.8%
Cash/other 471 1.8% 546 2.2%
26,215 100% 25,030 100%
2021 2020
Principal actuarial assumptions at the balance sheet date:
Discount rate 1.8% 1.3%
RPI inflation rate 3.5% 3.0%
CPI inflation rate 2.9% 2.3%
Increases to pensions in deferment (CPI max 5%) 2.9% 2.3%
Increases to pensions in payment (CPI max 5%) 2.8% 2.3%
Commutation (% of pension) 25% 25%
Mortality - base table S3PA S2PA
Mortality - allowance for future improvements CMI CMI
2020 2017
1.0% LTR 1.0% LTR
Life expectancies from age 63:
Male currently aged 63 86.6 86.7
Female currently aged 63 89.0 88.7
Male currently aged 43 87.6 87.9
Female currently aged 43 90.2 90.0
----- End of picture text -----

Amounts for current and previous four periods are as follows:

----- Start of picture text -----
||||||| |---|---|---|---|---|---| |2021|2020|2019|2018|2017| |£’000|£’000|£’000|£’000|£’000| |Defined benefit obligation|(39,680)|(41,561)|(37,767)|(34,526)|(37,973)| |Fair value of plan assets|26,215|25,030|24,039|22,231|22,958| |Deficit|(13,465)|(16,531)|(13,728)|(12,295)|(15,015)|

----- End of picture text -----

16 RELATED PARTY DISCLOSURE

Donations to the value of £505 (2020: £100) were received from individual Trustees in the year. Details of all inter-company transactions are shown in Note 27 on subsidiary entitities. There were no other related party transactions.

17 ULTIMATE CONTROLLING PARTY

The Trustees do not consider there to be an ultimate controlling party.

18 CAPITAL COMMITMENTS

There are no major planned capital commitments for 2022.

19 ANALYSIS OF GROUP NET ASSETS BETWEEN FUNDS

----- Start of picture text -----
Unrestricted Restricted Endowment Total funds
funds funds funds
2021 2020 2021 2020 2021 2020 2021 2020
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Fund balances at 31 December are represented by:
Tangible, intangible 28,721 32,199 129 134 - - 28,850 32,333
fixed assets
Investments 73,248 68,715 2,922 3,207 6,944 6,333 83,114 78,255
Loans to beneficiaries 7,948 8,455 - 138 - - 7,948 8,593
Current assets 14,807 7,918 2,808 2,249 460 505 18,075 10,672
Current liabilities (2,085) (2,897) - - (474) (519) (2,559) (3,416)
Pension liability (13,465) (16,531) - - - - (13,465) (16,531)
Total net assets 109,174 97,859 5,859 5,728 6,930 6,319 121,963 109,906
----- End of picture text -----

20 OPERATING LEASES

At 31 December 2021 the group had total annual commitments under non-cancellable operating leases, all for office equipment and vehicles, as follows:

----- Start of picture text -----
2021 2020
£ £
Payments due: office equipment and vehicles
Within one year 61,629 25,364
Within two to five years 47,468 22,434
Total 109,097 47,798
----- End of picture text -----

60

61

FINANCIAL STATEMENTS

21 CONTINGENT LIABILITY

The last triennial valuation of the Staff Pension Fund (SPF) identified a deficit of £12.275M as at 31 December 2020, on an agreed prudent funding basis. The Charity is required to enter into a Recovery Plan to extinguish the deficit. The plan commits the Charity to making annual payments of £1.2M until the earlier of 31 October 2028 or such date as when the deficit is extinguished.

The Trustees of the RAF Benevolent Fund have granted a legal mortgage over the Charity’s head office at 67 Portland Place and 45 Devonshire Close, London, in favour of the Trustee of the SPF.

This charge is to secure future payments from the Charity to the SPF to extinguish the deficit. The obligation secured by the mortgage is in accordance with applicable statutory requirements. The Trustees have also complied with the requirements of section 124 of the Charities Act 2011 to obtain and consider proper advice.

A formal valuation of the property which is held on a long leasehold (virtual freehold) interest, was carried out in August 2019 and the market value was placed at £11M. This property is shown at a net book value of £4.2M in the balance sheet.

22 WELFARE PROGRAMMES AND GRANTS

----- Start of picture text -----
2021 2020
£ £
GRANT FUNDING TO THE SERVING ROYAL AIR FORCE
General welfare
Citizens Advice Station Outreach Clinic
Mid Lincolnshire CAB (RAF Digby, Coningsby, Cranwell) - 4,000
- 4,000
Station grants
----- End of picture text -----

Stationgrants - 4,000
603 RAuxAF Sqn Edinburgh 500 -
RAF Akrotiri 35,500 38,546
RAF Benson 500 1,970
RAF Boulmer - 386
MOD Boscombe Down 500 -
RAF Brize Norton 26,694 16,113
RAF Coningsby 500 2,870
RAF Corsham(MOD) - 1,015
RAF Cosford 500 2,500
RAF College Cranwell 6,500 7,425
Defence Animal TrainingRegiment 4,739 -
RAF Digby 250 2,500
RAF Episkopi 3,416 9,539
RAF Fylingdales 500 13,712
RAF Halton 4,974 3,952
RAF Henlow 500 1,856
RAF High Wycombe(2020 unspent balance forprevious awards) 500 (49,368)
RAF Honington 79,541 1,089
RAF Leeming - 19,950
RAF Lossiemouth 500 7,888
RAF Marham 500 5,510
RAF NaplesJFC - 3,739
RAF Northolt 14,008 394

----- Start of picture text -----
2021 2020
£ £
RAF Odiham 500 1,880
RAF Scampton 500 13,662
RAF Spadeadam - 610
RAF St Mawgan - 1,990
RAF Valley 9,994 6,395
RAF Waddington 500 8,791
RAF Wittering 2,000 40,421
MOD Worthy Down 3,000 -
RAF Wyton - 2,219
RAF(U) Swanwick - 650
197,116 168,204
TOTAL GRANT FUNDING TO THE SERVING ROYAL AIR FORCE 197,116 172,204
CONTRACTED SERVICES TO SUPPORT THE SERVING ROYAL AIR FORCE
Airplay programme
RAF stations - youth support programme 1,250,497 935,139
RAF stations - Ben Play parenting and play parks 58,621 770,554
1,309,118 1,705,693
General support
RAF Families Federation 15,000 15,000
Relate - Building Stronger Families 3,000 21,624
18,000 36,624
TOTAL CONTRACTED SERVICES TO THE SERVING ROYAL AIR 1,327,118 1,742,317
FORCE
TOTAL GRANTS AND CONTRACTED SERVICES TO SUPPORT 1,524,234 1,914,521
THE SERVING ROYAL AIR FORCE
CONTRACTED SERVICES TO SUPPORT THE SERVING AND
VETERANS’ COMMUNITIES
Wellbeing partnerships
Headspace (mental wellbeing) 67,511 71,424
Silver Line/Age UK 144,419 94,022
Work Stress Management (listening and counselling) 335,889 343,452
Manage Health (listening and counselling) 272,532 66,540
Relate (young people listening and counselling) 43,130 18,216
Anxiety UK (listening and counselling) - 32,887
GamCare (gambling support) 2,400 -
Workshop and coaching 22,300 9,600
888,181 636,141
Relationship support
Relate - relationship counselling/mediation 144,665 130,163
TOTAL CONTRACTED SERVICES TO SUPPORT THE SERVING 1,032,846 766,304
AND VETERANS’ COMMUNITIES
----- End of picture text -----

62

63

FINANCIAL STATEMENTS

----- Start of picture text -----
2021 2020
£ £
GRANT FUNDING TO THE VETERAN COMMUNITY
Addaction - 15,000
Age Concern Spain - ACASA 10,000 17,000
Age UK Portsmouth - 8,000
Alabare Christian Care Centres 13,000 -
Bridge For Heroes - 5,000
British Embassy Slovakia 3,120 -
British Nuclear Test Veterans Association 3,000 -
Combat Stress 76,000 167,120
Czech Veterans - 4,732
Defence Medical Welfare Service 13,000 15,000
Fares4Free - 7,000
Farm-Able Foundation 4,000 -
Fighting With Pride 17,000 -
Goodwill Solutions - The Learning Academy - 3,000
ILM Highland - 7,500
Improving Lives Plymouth - 5,000
International Bomber Command Memorial 150 -
Medical Emergency Response Team (MERT) Club 6,000 -
Military Wives Choir Foundation - 10,000
National Gulf Veterans and Families Association 7,500 10,000
Not Forgotten Association 7,500 -
On Course Foundation 3,000 5,000
PAFA 750 -
Polish Veterans 4,680 6,240
Poppy Scotland - ASAP 20,000 20,000
Project Propeller - 5,000
RAF Widows’ Association - 34,712
Royal Commonwealth Ex-Services League (includes support 20,000 35,473
towards caseworking costs)
Save the Skymaster 3,500 -
Scotty’s Little Soldiers - 6,000
Spinal Injuries Association - 10,000
SSAFA, the Armed Forces Charity (includes support towards 30,720 65,275
caseworking costs)
Stoll 12,000 12,000
Team Endeavour Racing - 4,000
The Gwennili Trust - 2,000
The Ripple Pond - 2,500
Veterans Outreach Support - 10,000
Waterloo Uncovered 1,800 3,000
Widows’ Association of Great Britain - 5,000
Workplace Chaplaincy Scotland 2,500 -
259,220 500,552
----- End of picture text -----

----- Start of picture text -----
2021 2020
£ £
Employment support
The Poppy Factory - 15,000
HighGround - 10,000
Regular Forces Employment Association 62,436 111,037
Walking With The Wounded 7,000 -
The Warrior Programme 8,000 -
77,436 136,037
Housing support
Broughton House 18,000 33,000
Royal British Legion Industries 2,000 -
Veterans Aid 15,000 15,000
Queen Elizabeth Hospital Birmingham Hospital Charity - Fisher 10,000 5,000
House
45,000 53,000
Residential and respite care
Care for Veterans 15,000 -
The Curphey Home 2,000 -
17,000 -
TOTAL GRANT FUNDING TO THE VETERAN COMMUNITY 398,656 689,589
TOTAL GRANT AND CONTRACTED SERVICES PAYMENTS TO 2,955,736 3,370,414
THIRD PARTIES
Total contracted services 2,359,964 2,508,621
Total discretionary grants 595,772 861,793
TOTAL COST OF SUPPORT THROUGH GRANT AND 2,955,736 3,370,414
CONTRACTED SERVICES
----- End of picture text -----

64

65

FINANCIAL STATEMENTS

23 STATEMENT OF FUNDS

----- Start of picture text -----
At 1 Income Expenditure Net gains/ Transfers Group Charity
January (losses) at 31 at 31
2021 December December
2021 2021
£’000 £’000 £’000 £’000 £’000 £’000 £’000
General reserve 96,986 24,193 (19,329) 4,832 (13,105) 93,577 79,948
Designated funds 17,404 395 (1,804) 958 12,109 29,062 21,000
- see Note 24
Pension reserve (16,531) - (200) 2,266 1,000 (13,465) (13,465)
Total unrestricted funds 97,859 24,588 (21,333) 8,056 4 109,174 87,483
Restricted income funds 5,728 940 (1,026) 221 (4) 5,859 5,859
- see Note 25
Endowment funds 6,319 - - 611 - 6,930 6,930
- see Note 26
Total funds 109,906 25,528 (22,359) 8,888 - 121,963 100,272
At 1 Income Expenditure Net gains/ Transfers Group Charity
January (losses) at 31 at 31
2020 December December
2020 2020
£’000 £’000 £’000 £’000 £’000 £’000 £’000
General reserve 99,765 17,873 (22,163) 1,844 (333) 96,986 84,298
Designated funds 23,690 391 (6,831) 406 (252) 17,404 10,387
- see Note 24
Pension reserve (13,728) - (265) (3,538) 1,000 (16,531) (16,531)
Total unrestricted funds 109,727 18,264 (29,259) (1,288) 415 97,859 78,154
Restricted income funds 7,076 874 (1,876) 69 (415) 5,728 5,728
- see Note 25
Endowment funds 6,027 - - 292 - 6,319 6,319
- see Note 26
Total funds 122,830 19,138 (31,135) (927) - 109,906 90,201
----- End of picture text -----

Unrestricted funds

The sum of £29.1M (2020: £17.4M) is included in unrestricted funds and relates to the following designated reserves:

£8.1M (2020: £7M)

£nil (2020: £1.2M) £nil (2020: £2.7M) £8.2M (2020: £nil) £12.8M (2020: £6.5M)

The transfer of £1M (2020: £1M) from general reserves to the pension reserve represents the Fund’s contribution paid into the defined benefit pension scheme in the year.

Restricted income funds - over £100K

Bomber Command Memorial Maintenance of the Bomber Command Memorial in Green Park, Piccadilly Gulf Trust These funds are held in a ring-fenced fund for the benefit of RAF Gulf War veterans Lowe Trust Supports Battle of Britain veterans and their descendants Respite Care - LIBOR LIBOR funding received to increase and develop our respite care provision RAF Disabled Holiday Trust Providing holidays to severely disabled serving and ex-RAF personnel and their immediate dependants Afghan Brain Injury Support to veterans of Afghanistan who have sustained a brain injury Royal Observer Corps Support to veterans of the Royal Observer Corps

66

67

FINANCIAL STATEMENTS

24 DESIGNATED FUNDS

----- Start of picture text -----
At 1 January Income Expenditure Net gains Transfers At 31 December
2021 2021
£’000 £’000 £’000 £’000 £’000 £’000
Fundraising development and systems upgrade 1,209 - (391) - (818) -
Investment in Airplay programmes 2,692 - (1,059) - (1,633) -
New and enhanced welfare services 6,486 - (46) - (6,440) -
Pension deficit recovery contributions - - - - 8,200 8,200
Enhanced welfare provision - - - - 12,800 12,800
Total designated funds - Charity 10,387 - (1,496) - 12,109 21,000
RAF Dependants Fund 7,017 395 (308) 958 - 8,062
Total designated funds - Group 17,404 395 (1,804) 958 12,109 29,062
At 1 January Income Expenditure Net gains Transfers At 31 December
2020 2020
£’000 £’000 £’000 £’000 £’000 £’000
Fundraising development and systems upgrade 1,970 - (509) - (252) 1,209
Investment in Airplay programmes 3,567 - (875) - - 2,692
New and enhanced welfare services 5,197 - (4,080) - 5,369 6,486
Reaching out campaign and associated 6,444 - (1,075) - (5,369) -
additional costs
Total designated funds - Charity 17,178 - (6,539) - (252) 10,387
RAF Dependants Fund 6,512 391 (292) 406 - 7,017
Total designated funds - Group 23,690 391 (6,831) 406 (252) 17,404
----- End of picture text -----

68

69

FINANCIAL STATEMENTS

25 RESTRICTED FUNDS

----- Start of picture text -----
As at Income Expenditure As at 31 As at Income Expenditure As at 31
1 January December 1 January December
2021 2021 2020 2020
£ £ £ £ £ £ £ £
Education
Group Captain W E Purdin Memorial Fund 100 101 (201) - - 100 - 100
RAF Prize Trust - 8,884 (8,884) - - 8,771 (8,771) -
RAFBF Educational Endowment Fund - 19,999 - 19,999 - 19,746 (19,746) -
RAFBF Educational Expendable Fund 2,011 5,518 (7,529) - - 5,541 (3,530) 2,011
RAFBF Education - 23,247 (23,247) - - 4,057 (4,057) -
Douglas Turner Benefaction 4,700 4,760 (9,460) - - 4,700 - 4,700
6,811 62,509 (49,321) 19,999 - 42,915 (36,104) 6,811
Princess Marina House and respite care
Princess Marina House Amenities Fund - - - - 64,884 - (64,884) -
Princess Marina House Shencot/Seacot House - 1,030 (1,030) - - 10,472 (10,472) -
The April Fools’ Club - serving respite care - - - - 109,188 - (109,188) -
- 1,030 (1,030) - 174,072 10,472 (184,544) -
Housing
Housing Trust General Restricted Fund - 108,156 (29,181) 78,975 - 153,100 (153,100) -
Housing adaptations (Lincoln) - 5,000 (5,000) - - - - -
The Hobson Charity - property adaptations - - - - - 10,000 (10,000) -
- 113,156 (34,181) 78,975 - 163,100 (163,100) -
Other
Bomber Command Memorial 2,652,758 361,867 (58,728) 2,955,897 2,512,584 210,746 (70,572) 2,652,758
Gulf Trust 430,001 20,254 - 450,255 410,111 19,890 - 430,001
3,082,759 382,121 (58,728) 3,406,152 2,922,695 230,636 (70,572) 3,082,759
Welfare programmes
Aged Veteran Fund 230 125 (355) - - 230 - 230
Aged Veteran Lunch Club - - - - 4,716 - (4,716) -
Airplay - 31,000 (31,000) - - 60,000 (60,000) -
Armed Forces Covenant Fund - 9,120 - 9,120 - 158,500 (158,500) -
Capital Project Childcare Facility - - - - - 27,000 (27,000) -
Caseworking Transformation Project - - - - - 24,053 (24,053) -
Mrs H M Jerham Memorial Fund 2,928 1,097 - 4,025 2,928 - - 2,928
RAF stations - 100 (100) - - 18,877 (18,877) -
Bereavement support - - - - 2,506 - (2,506) -
Mental health services 104 832 (936) - - 104 - 104
Youth mental health (Lossiemouth) - 15,907 - 15,907 - - - -
MBDA Fund - - - - - 9,790 (9,790) -
Restricted to RAF Valley - 42,678 (9,994) 32,684 9,449 - (9,449) -
Restricted to serving RAF - - - - - 7,975 (7,975) -
Restricted to serving RAF (LIBOR) - - - - 473,932 - (473,932) -
3,262 100,859 (42,385) 61,736 493,531 306,529 (796,798) 3,262
----- End of picture text -----

70

71

FINANCIAL STATEMENTS

25 RESTRICTED FUNDS (cont)

----- Start of picture text -----
As at Income Expenditure As at 31 As at Income Expenditure As at 31
1 January December 1 January December
2021 2021 2020 2020
£ £ £ £ £ £ £ £
Individual welfare
Advice and Advocacy - 8,966 (8,966) - 5,748 10,183 (15,931) -
Afghan Brain Injury 226,728 495 - 227,223 226,728 - - 226,728
Afghan: LIBOR 366 - (366) - 189,316 - (188,950) 366
Various legacies - beneficiaries in Lossiemouth - 10,000 - 10,000 - - - -
Various legacies - beneficiaries in Scotland - 293,131 (246,285) 46,846 - 57,924 (57,924) -
RAF Disabled Holiday Trust 554,312 15,323 569,635 575,760 10,321 (31,769) 554,312
Fulmer Fund 211,278 - (145,176) 66,102 240,555 - (29,277) 211,278
Garden maintenance - - - - - 7,500 (7,500) -
General welfare (individual) - 6,600 (6,600) - - 10,000 (10,000) -
General welfare (mobility aid) - 1,500 (1,500) - - 7,500 (7,500) -
General welfare (respite and care) - 15,000 (3,495) 11,505 - - - -
General welfare - Devon, Cornwall & Somerset 300 3,600 (3,900) - - 300 - 300
Lowe Trust 572,209 - - 572,209 572,209 - - 572,209
Restricted to Isle of Wight - - - - - 5,000 (5,000) -
Restricted to Bedford (veterans) - 3,000 (2,790) 210 - - - -
Restricted to Birmingham (veterans) - 800 (800) - - - - -
Restricted to Cheshire (veterans) - 1,000 (1,000) - - - - -
Restricted to Essex (veterans) - 5,000 (5,000) - - - - -
Restricted to Scotland 65,030 9,500 (74,530) - - 74,500 (9,470) 65,030
Restricted to Suffolk - 250 (250) - - - - -
Restricted to South East England - 3,000 - 3,000 - - - -
Restricted to North of England - 1,500 (1,500) - - 10,000 (10,000) -
Restricted to Lincolnshire (veterans) - 12,000 (12,000) - - - - -
Restricted to Liverpool (veterans) - 5,000 (2,057) 2,943 - - - -
Restricted to Leicester (veterans) - 1,500 - 1,500 - - - -
Restricted to Norfolk (veterans) - 3,000 (3,000) - - - - -
Restricted to Yorkshire (veterans) - 2,000 (2,000) - - - - -
Restricted to Nottinghamshire (veterans) - 3,500 (3,225) 275 - - - -
Improving social isolation - 19,974 (7,000) 12,974 - - - -
Royal Observer Corps 58,640 75,000 (22,124) 111,516 - 100,000 (41,360) 58,640
Stafford Trust 15,120 - (15,120) - - 15,120 - 15,120
Scotland veterans over 65 - - - - - 25,000 (25,000) -
1,703,983 500,639 (568,684) 1,635,938 1,810,316 333,348 (439,681) 1,703,983
Respite care - LIBOR Funds
Respite care lunch clubs - - - - 71,838 - (71,838) -
Respite care property 135,433 - (6,859) 128,574 441,317 - (305,884) 135,433
Respite breaks and care hotels 280,324 - (25,911) 254,413 316,550 - (36,226) 280,324
Contribution to Community Engagement Workers 431,847 - (219,349) 212,498 591,240 - (159,393) 431,847
Management support 85,684 - (25,212) 60,472 142,101 - (56,417) 85,684
933,288 - (277,331) 655,957 1,563,046 - (629,758) 933,288
RAF100 Appeal - 20% share in joint venture - - - - 114,758 - (114,758) -
Total restricted funds 5,730,103 1,160,314 (1,031,660) 5,858,757 7,078,418 1,087,000 (2,435,315) 5,730,103
----- End of picture text -----

72

73

FINANCIAL STATEMENTS

26 ENDOWMENT FUNDS

The purpose of funds exceeding £100K is set out under Note 23.

----- Start of picture text -----
As at Unrealised As at 31 As at Unrealised As at 31
1 January 2021 gain December 2021 1 January 2020 gain December 2020
£ £ £ £ £ £
Permanent endowment funds with unrestricted income
Pilot Officer J P L Branson Memorial Fund 51,494 4,981 56,475 49,117 2,377 51,494
Pilot Officer James Erskine Cunning Memorial Fund 48,461 4,688 53,149 46,224 2,237 48,461
Flying Officer L S Delaney Trust 14,076 1,362 15,438 13,426 650 14,076
Paddy Finucane Memorial Fund 20,972 2,029 23,001 20,004 968 20,972
Louise Alice Kay Memorial Fund 43,324 4,191 47,515 41,324 2,000 43,324
Mosquito Memorial Fund 12,174 1,178 13,352 11,612 562 12,174
Flying Officer Douglas Frank Newsham Memorial Fund 38,680 3,741 42,421 36,894 1,786 38,680
Viscount Nuffield Endowment 1,119,759 108,315 1,228,074 1,068,063 51,696 1,119,759
Helen Mary Renton Fund 45,707 4,421 50,128 43,597 2,110 45,707
RAF Rugby Union Fund 53,753 5,199 58,952 51,271 2,482 53,753
Peter Henry Slater-Eiggert Memorial Fund 154,240 14,920 169,160 147,119 7,121 154,240
The Revd. James Edmund Strickland Memorial Fund 111,098 10,747 121,845 105,969 5,129 111,098
1,713,738 165,772 1,879,510 1,634,620 79,118 1,713,738
Expendable endowment funds with unrestricted income
Flying Officer William Dron Memorial Fund 2,598 251 2,849 2,478 120 2,598
Frederick Eley Fund 5,006 484 5,490 4,775 231 5,006
Wing Commander J Higginson Fund 10,224 989 11,213 9,752 472 10,224
Peter Grattan Holt Memorial Fund 53,282 5,154 58,436 50,822 2,460 53,282
E H Jubb Fund 354,883 34,328 389,211 338,499 16,384 354,883
Middle East Relief Fund 45,323 4,384 49,707 43,231 2,092 45,323
Morley Fund 7,429 719 8,148 7,086 343 7,429
Orlebar Memorial Fund 8,407 813 9,220 8,019 388 8,407
Shattock Memorial Scholarship Fund 12,624 1,221 13,845 12,041 583 12,624
Wooding Memorial Fund 9,006 871 9,877 8,590 416 9,006
508,782 49,214 557,996 485,293 23,489 508,782
Permanent endowment funds where the use of the income is restricted
Newton Driver Memorial Fund 2,273,650 219,932 2,493,582 2,168,682 104,968 2,273,650
Group Captain W E Purdin Memorial Fund 2,903 281 3,184 2,769 134 2,903
RAFBF Educational Endowment Fund 575,758 55,694 631,452 549,177 26,581 575,758
Douglas Turner Benefaction 137,050 13,257 150,307 130,723 6,327 137,050
2,989,361 289,164 3,278,525 2,851,351 138,010 2,989,361
Expendable endowment funds where the use of the income is restricted
Mrs H M Jerham Memorial Fund 31,586 3,055 34,641 30,128 1,458 31,586
Hector Pilling Memorial Fund 669,254 64,738 733,992 638,356 30,898 669,254
RAF Prize Trust 255,759 24,740 280,499 243,951 11,808 255,759
RAFBF Educational Expendable Fund 151,083 14,614 165,697 144,108 6,975 151,083
1,107,682 107,147 1,214,829 1,056,543 51,139 1,107,682
Total endowment funds 6,319,563 611,297 6,930,860 6,027,807 291,756 6,319,563
----- End of picture text -----

74

75

FINANCIAL STATEMENTS

27 SUBSIDIARY ENTITIES

The results of the Fund’s wholly owned subsidiary entities are included within the consolidated SOFA as follows:

----- Start of picture text -----
RAFBF RAF RAF RAFBF Housing RAF Disabled Subsidiary
Trading Dependants Dependants Trust Ltd Holiday Trust entities
Ltd Fund Income
Trust Ltd
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Income from:
Donations and legacies - - 44 - - - 115 8 2 10 161 18
Investments - - 213 209 - - - - - - 213 209
Other trading activities 143 108 - - - - - - - - 143 108
Charitable activities - - - - - - 964 974 - - 964 974
Profit on sale of properties - - - - - - 1,297 876 - - 1,297 876
Subscriptions - - 182 182 31 31 - - - - 213 213
143 108 439 391 31 31 2,376 1,858 2 10 2,991 2,398
Expenditure on:
Charitable activities 101 58 280 263 - - 1,687 1,770 24 2 2,092 2,093
Other trading activities 34 41 - - - - - - - - 34 41
Management and administration 8 9 28 29 31 31 - - - - 67 69
143 108 308 292 31 31 1,687 1,770 24 2 2,193 2,203
Net gains/(loss) on investment assets - - 958 406 - - - - 14 (25) 972 381
Net result of subsidiary - - 1,089 505 - - 689 88 (8) (17) 1,770 576
----- End of picture text -----

RAFBF Trading Limited Company number: 07768120

A company set up for the RAF Benevolent Fund to conduct trading in support of its charitable objectives. The company donated £101,300 to the Fund in 2021 which is shown in charitable activities in the above table (2020: £58,468). The inter-company balance owed to the Fund at year end was £132,542 (2020: £66,409). The net assets at year end were £1 (2020: £1).

RAF Dependants Fund

Charity number: 253492

A charity with the RAF Benevolent Fund as custodian Trustee. Set up to promote the efficiency of the RAF through relieving dependants of deceased serving personnel from financial distress. There were 16 deaths in 2021 (2020: 15) and the dependants were paid £17,500 in each case. The inter-company balance owed to the Charity at year end was £3,926 (2020: £3,042). The net assets at year end were £8,106,464 (2020: £7,017,317).

RAF Dependants Income Trust Limited

Company number: 01285364

A company set up for RAF Dependants Fund subscribers to make further financial provision for their dependants in the event of their death in service. There were 7 member deaths in 2021 (2020: 10) and beneficiaries received payments made on behalf of the Trust by the underwriters Aviva. The company donated £nil to the Charity in 2021 (2020: £nil) .The intercompany balance owed to the Charity at year end was £5,103 (2020: £3,595). The net assets at year end were £3,339 (2020: £3,339).

RAF Benevolent Fund

Housing Trust Limited

Company number: 1058896 Charity number: 264636 Scottish registered number: SCO38218

A wholly owned subsidiary of the RAF Benevolent Fund. Its sole activity is to hold and operate properties of beneficiaries of the RAF Benevolent Fund. The inter-company balance owed to the Fund at year end was £11,366,322 (2020: £11,159,566). The net assets at year end were £13,373,342 (2020: £12,684,037).

RAF Disabled Holiday Trust

Charity number: 286019

A wholly owned subsidiary of the RAF Benevolent Fund. Its sole activity is to provide holidays to disabled serving and former members of the RAF and their dependants. The Trust purchases holiday bonds which entitles it to book holidays in the UK and Europe for its beneficiaries. The inter-company balance owed by the Charity at year end was £19,531 (2020: £2,629). The net assets at year end were £546,124 (2020: £554,312). RAF Benevolent Fund Gift in Kind amounted to £nil (2020: £nil).

76

77

~~SUBSIDIARY ORGANISATIONS~~

~~RAF BENEVOLENT FUND HOUSING TRUST LIMITED~~

Companies House: 01058896 Charity Commission: 264636 OSCR: SC038218

Directors/Trustees:

Air Vice-Marshal Chris Elliot (Chair) Patrick Aylmer (from 1 July 2021) Al Bennett (until 27 May 2021) Wing Commander Sarah Davis Victoria Fakehinde Air Commodore Paul Hughesdon Emrys Rogers

~~RAFBF TRADING LIMITED~~

Companies House: 07768120 Directors:

Air Vice-Marshal Chris Elliot (Chair) Alison Benjamin (from 15 October 2021) Graeme Craig James Dooley Victoria Fakehinde Graeme Shankland (until 7 July 2021) Jason Shauness (from 6 July 2021) Mike Straney (until 23 April 2021)

~~RAF DISABLED HOLIDAY TRUST~~

Charity Commission: 286019

Trustee:

Royal Air Force Benevolent Fund (Reg Charity: 1081009)

~~RAF DEPENDANTS INCOME TRUST LIMITED~~

Companies House: 01285364

Directors:

Air Vice-Marshal Chris Elliot (Chair) Group Captain Jacqueline East (until 11 May 2021) Group Captain Colin Owen (from 11 May 2021 to 13 December 2021)

Frances Brindle (until 21 December 2021) Richard Cryer (from 15 October 2021) Victoria Fakehinde Air Commodore Paul Hughesdon Sarah Meek (from 15 October 2021 to 25 February 2022) Graeme Shankland (until 7 July 2021)

~~RAF DEPENDANTS FUND~~

Charity Commission: 253492

Trustee:

Royal Air Force Benevolent Fund (Reg Charity: 1081009)

Management Committee members:

Air Vice-Marshal Chris Elliot (Chair) Group Captain Jacqueline East (until 11 May 2021) Group Captain Colin Owen (from 11 May 2021 to 13 December 2021) Frances Brindle (until 21 December 2021) Richard Cryer (from 15 October 2021) Victoria Fakehinde Air Commodore Paul Hughesdon Sarah Meek (from 15 October 2021 to 25 February 2022) Graeme Shankland (until 7 July 2021) Scheme Manager: Andy Cairns

~~RAF BENEVOLENT FUND TRUSTEES LIMITED (DORMANT)~~

Companies House: 00945083 Directors:

Air Vice-Marshal Chris Elliot (Chair) Patrick Aylmer (from 1 July 2021) Wing Commander Sarah Davis Victoria Fakehinde Air Commodore Paul Hughesdon Al Bennett (until 27 May 2021) Emrys Rogers

~~ROYAL OBSERVER CORPS BENEVOLENT FUND (DORMANT)~~

Charity Commission: 209640 OSCR: SCO37659

Trustee:

Royal Air Force Benevolent Fund (Reg Charity: 1081009)

~~RAFBF PROPERTY COMPANY LIMITED~~

Companies House: 10456754 Directors:

Air Vice-Marshal Chris Elliot (Chair) Richard Ingham (until 25 March 2021) Air Vice-Marshal Elaine West (until 23 April 2022) Air Commodore Paul Hughesdon Victoria Fakehinde

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Find out more about our impact and our work at rafbf.org.uk/impact

Royal Air Force Benevolent Fund 67 Portland Place London W1B 1AR

0300 102 1919 mail@rafbf.org.uk

The RAF Benevolent Fund is a registered charity in England and Wales (1081009) and Scotland (SCO38109)

Cobseo The Confederation of Service Charities