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2022-03-31-accounts

Annual Report and Accounts 2021– 2022

Company Registration Number 07168381 Charity registration number 212563

Annual Report 2021 – 2022

Contents

Chair and CEO intro 1
Trustees’ Annual Report 2021/22 2
Who we are and what we do 4
Review of 2021/22 5
Aims for 2022/23 6
Equality Diversity and Inclusion 7
Finance Review 16

Annual Report 2021 – 2022

Chair and CEO Intro

Last year was a year of consolidation and strategic planning for Barts Charity to ensure the success of our mission and focus on the people of East London which is central to all our activities. We had a twin focus through the year to deliver against the goals we had set ourselves for our 2017-2022 Strategy and also to develop and plan a clear roadmap and set of high-level strategic objectives for the next phase from April 2022-2027.

In parallel to this, like everyone else, we were emerging from the worst of the global pandemic and assessing its impact upon our staff and our working practices. We also wanted to consider how best to honour the remarkable milestone of the 900th anniversary of the founding of St Bartholomew’s Hospital – acknowledging this extraordinary heritage but using that as a springboard to develop future health services for East London for many years to come.

As we set out later in this report, we are pleased with the progress that we made through the year and we are also delighted to share our 2022-27 Strategy with you and to reaffirm our commitment to making life-changing improvements to the heath of people living in East London. At its heart is our continued, strong partnership with Barts Health NHS Trust and the Faculty of Medicine & Dentistry at Queen Mary University London (FMD), which builds on so much of the work of the last five years to identify, develop and fund transformational projects. We believe that the strong partnership between Barts Health and FMD strengthens both them and us and provides our greatest opportunity to have real and lasting impact and deliver on our mission.

We have also laid the foundations for our Barts 900 Campaign, which is set to be our largest ever campaign both in terms of funding and fundraising.

We are working closely with Barts Health to develop two flagship projects which aim to be transformative for healthcare in East London for many years to come – a new Barts Breast Cancer Centre and Barts Life Sciences Clinical Research Facility, a new purpose-built state of the art clinical research facility. Our fundraising ambition is to raise £20m for the Barts 900 projects, which will be in addition to the £10m which the Charity is itself committing to the campaign as a cornerstone funder.

In the last year we have reorganised and grown our Fundraising team, building a Barts 900 campaign strategy and investing in other support resources to give ourselves the best possible chance of success in what is admittedly a challenging fundraising environment. Our new strategy recognises that significant fundraising growth will be driven by much more integrated and larger scale campaigns delivered by our Fundraising team working closely with and supported by our communications strategy. The Barts 900 Campaign will be a template for that approach.

Our planning for the future was not at the expense of our commitment to fund medical research and healthcare delivery projects to the value of c£30m per year. In 2021/22 our funding totalled £28.5m and you can read about some of the projects we funded in this report. Over the last five years we have given over £145m to fund transformative research and healthcare projects in East London and we are proud of the impact our funding has achieved. Guided by our new strategy we will build on this with a further £150m+ to be given over the next five years in key areas of research and healthcare.

The Charity is fortunate to have a highly talented and engaged staff, Board and advisers to whom we should like to extend our thanks for all they do. We look ahead together with a renewed clarity of purpose, ambitious for our next five years.

Andy Bruce Fiona Miller Smith Chair of Trustees CEO

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Annual Report 2021 – 2022

Trustees’ Report

The Trustees present their report and the audited financial statements for the year ended 31 March 2022. The introduction from the Chair and Chief Executive on page 1, the Regulatory information on page 14 and the Statement of Trustees’ Responsibilities on page 15 form part of this Trustees’ report.

The financial statements as at 31 March 2022 and for the year then ended have been prepared under the historical cost convention in accordance with applicable United Kingdom Accounting Standards comprising the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) including Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), and the Companies Act 2006.

What We Do

We are a charity dedicated to supporting improvements to healthcare and transformative research with a primary focus on the issues that matter to the people of East London. We do this by funding high quality research, innovative patient care projects and NHS staff wellbeing initiatives that would otherwise not be funded by the NHS or other funders.

We mainly award our funding to Barts Health (which runs St Bartholomew’s, The Royal London, Mile End, Whipps Cross and Newham Hospitals) and to the Faculty of Medicine and Dentistry at Queen Mary University of London, where there are six medical research institutes. We also support researchers at the School of Health Sciences at City, University of London.

Vision

Life changing improvements to health for the people of East London.

Mission

A charity with its roots in East London, dedicated to supporting improvements to healthcare and transformative research for local health benefit.

We work in partnership with the NHS, local research institutes and others who can help us achieve our goals and maximise our impact.

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Annual Report 2021 – 2022

Barts Charity Strategy 2022 – 2027 strategic objectives

We wanted Barts Charity’s new vision and mission to provide the strategic context for each area of our charitable activity and we have used them to frame five strategic objectives for 2022-2027.

Research

We fund high quality and innovative research that enhances our understanding of health and illness and has the potential to improve and/or save lives in East London.

Healthcare

We facilitate transformation to patient care and support for our dedicated NHS staff, primarily focusing our efforts at Barts Health.

Fundraising and Communications

We are transforming our approach to fundraising to significantly grow revenue and enable us to achieve our ambitions for our mission.

We aim to inspire greater support by communicating about the people and projects we fund and the impact they make.

Endowment

We manage our endowment to ensure we take full advantage of potential opportunities to deliver our mission, now and in the future.

How we work

We set ourselves high standards for how we operate and aim to maximise the impact we make with our resources.

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Annual Report 2021 – 2022

Our funding principles and focus

As part of our strategy process, we also looked at the key funding principles that underpin our approach to ensure that they were completely aligned with our strategic objectives. To achieve our funding and impact strategic objectives we will focus our funding where:

Our values

We are proud of the work we do. We have created a set of values that express who we are as a charity, the way we want to work and the culture that we want to live and breathe every day.

One Team

Barts Charity’s primary focus is on our funding being relevant to, and having an impact in, East London but we expect that much of the activity we support will continue to have wider health benefit, both across the UK and globally.

We adhere to robust funding processes to ensure the Charity's resources are applied to deliver impact in improvements to healthcare and transformative research and our funding processes and policies are inclusive and unbiased. We are a member of the Association of Medical Research Charities and as such can demonstrate high standards of governance around funding decision processes and monitoring of funded activity.

We work collaboratively as one team, supporting and respecting each other and embracing diverse experiences and perspectives.

Ambitious

We care passionately about Barts Charity’s mission, empowering each other to constantly improve and achieve our best.

Open

We are honest and transparent, sharing information willingly and encouraging the giving and receiving of constructive feedback.

Accountable

We take pride in doing the right thing and acting with integrity. We take ownership of our actions and learn from our mistakes.

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Annual Report 2021 – 2022

Barts Charity Annual Report: Review of 2021/22

In our 2021 Annual Report we set out our strategic targets for 2021/22 - we summarise below how we have performed against them:

Target How we performed
To set our corporate strategy for the period 2022-27 Completed
To confirm and implement our Equity, Diversity and Inclusion
vision and principles		 • EDI Commitment and Priorities confirmed
• Implementation Plan for 2022/23 agreed and under delivery
Complete the planning for and undertake the first stages
of the Barts 900 campaign, our most ambitious fundraising
campaign yet, aiming to raise £40m for up to four major
Barts Health projects		 • Planning completed, including creation of a single
fundraising team and recruitment to additional roles across
the Charity to fill skills gaps and provide additional support
for Barts 900 and future campaigns
• Funding target has been adjusted to two flagship projects
with target for approval in the first half of 2023 – Barts
Breast Cancer Centre and Clinical Research Facility
• Fundraising target has been adjusted to £30m, with Barts
Charity committing £10m of this as a cornerstone funder
To sustain our grant-giving programme at £30m per year
(averaged over a five year period) and maintain a quality
pipeline of impactful funding opportunities		 • Total funding in 2021/22 was £28.5m
• Funding pipeline of grants under discussion at £111m
To manage the return of staff to office-based working,
implementing a new Agile Working Policy		 • Hybrid Working Policy implemented
• Co-designed with staff, the Charity mandates Tuesdays and
Wednesdays in the office for all staff, with remote working
an option on other days. A recent staff survey suggests this
is popular with staff
• A full office refurbishment took place in summer 2022.
Designed to provide more spaces for working in
collaboration in person, it demonstrates our commitment
to providing energising and supportive office space which
can accommodate the whole team
To complete the implementation of a new finance system and
a database upgrade, and commence a shift to better analysis
of both financial and non- financial data		 • Largely completed, although some delay owing to project
management issues
• We have successfully reconciled the finance system with our
CRM and can upload monthly fundraising and grant-related
information accurately and quickly
To re-instigate our programme of staff engagement across the
five hospitals to promote fundraising from patients and their
families		 • Deferred to 2022/23
• Continued Covid-19 pressures in the hospitals during
202021/22 meant this could not be progressed
• Clinician Engagement Workshops have taken place to
support Barts 900 campaign fundraising
• New Head of Public Fundraising starts October 2022
To progress the review of hospital-based restricted funds
and complete the review of permanent endowment funds
to increase both value and flexibility of funds held		 • Deferred to 2022/23
• Continued Covid-19 pressures in the hospitals during
2021/22 meant discussions about the hospital-based
restricted funds could not be progressed

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Annual Report 2021 – 2022

Managing the endowment

The management of our endowment is designed to provide financing, alongside voluntary income, for our funding programme. Assets in the portfolio are therefore chosen in order that they enhance their value over time to achieve a financial return. A managed approach to risk is taken and the Trustees and management work with a number of advisors in order to provide an appropriate balance of risk against a targeted return.

The Trustees have delegated investment decision-making to the Investment Committee; the Investment Committee appoints and monitors investment advisors to assist them in managing both financial and property elements of the portfolio. The Investment Committee meets quarterly and reports back to the Trustee board after each meeting.

Since April 2021 the Investment Committee has been working with Mercer as its financial investment advisor. Last year we undertook a strategic review of our investment beliefs and as a result set a new investment strategy for the next five to seven years, which aims to further diversify the overall sources of risk and return. This includes a new strategic asset allocation framework.

Our aims for 2022/23

Funding

Fundraising & communications

Endowment

How we work

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Annual Report 2021 – 2022

Commitment to Equality, Diversity & Inclusion (EDI)

We believe that our commitment to EDI is best demonstrated through action. In December 2021, the Board approved the Charity’s EDI Commitment, Priorities and Definitions (available in full on our website).

Barts Charity’s EDI Commitment

We want everyone connected with Barts Charity to feel valued and respected. We will create and sustain a truly inclusive culture where everyone feels they can contribute. We know that this will take action and we must keep working at it.

We recognise that a diverse Barts Charity is not just the right thing to be, but will also make us better at what we do. Embracing a breadth of perspectives and experiences will help us to make better decisions and be more effective and impactful in all our activity.

We will be transparent about how we deliver on this commitment. We will publish our objectives and report our progress (or lack of it) so that our colleagues, supporters, beneficiaries and stakeholders can hold us to account.

Concurrently with developing our corporate strategy and our EDI Commitment & Priorities, we were also taking steps to improve our approach to EDI. We have:

Barts Charity’s EDI Priorities

Culture

Governance

Data/insight

Funding

Personnel

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Annual Report 2021 – 2022

2022/23 EDI plan

Our plans for 2022/23 are as follows:

ACTION

Culture

Governance

Data/Insight

Funding

Personnel

Actions involve all the teams and will be incorporated into our respective team delivery plans which will be assessed mid-year (October) and year end (March), and we will report our progress against each item.

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Annual Report 2021 – 2022

Finance Review

Review of financial performance

Our financial strategy is to manage and grow our investment assets and voluntary income in order to support annual grant giving and operating activities for the long term. Net assets as at 31 March 2022 increased by £18m to £449m (2021: £431m).

In reviewing the performance of our investments we consider the total return of the portfolio, both income and capital. By showing the total return which combines both income generated by our assets and the associated capital gains/losses, as opposed to separating these out, we ensure that we see the full picture of our finances.

We use this concept as a basis for addressing the two basic principles of our financial strategy:

As presented in the Investment Review section below in this regard the return of the portfolio was 7%, which is ahead of the return target of CPI+4.5%.

The Statement of Financial Activities (on page 19) shows that during the financial year the Charity received income of £14.5m, (2021: £20.4m), of which £12.2m was unrestricted (2021: £13.2m). At the same time total expenditure increased over the same period to £34.6m (2021: £31.2m). The proportion of charitable activities spending to total expenditure remained relatively constant (84%, 2021: 88%).

As stated above, and as shown in the Statement of Financial Position, the Charity’s net assets were £449m (2021: £431m). The endowment increased in value due entirely to unrealised gains; restricted funds reduced marginally in value in line with the Charity’s wish to consolidate and close the large number of low value funds, designated funds remained unchanged and the remaining deficit reduced general funds.

In terms of assets and liabilities, the Charity’s level of operational fixed assets (particularly capitalised software) was written down substantially, reflecting changes to the way in which software is produced and maintained.

Investment Review

The value of the Charity’s investments increased by £36m to £516m, reflecting a return to steadier growth in the wake of the pandemic.

The majority of the 12-month period was shaped by a strong global economic recovery supported by economies reopening, higher increased household savings and loose monetary policy. This position fell under pressure early in 2022 amid sharply rising inflation, tightening monetary policy, the conflict in Ukraine and renewed lockdowns in China, just when there was hope that supply chains would improve and Covid-19 would cease to cause major economic disruptions.

The Charity continued to navigate well through this continued market volatility. In the financial year ended 31 March 2022, the portfolio returned a total of +7.1%, net of fees. The long-term target for the portfolio is an average total return of CPI+4.5% per year (net of fees) over rolling threeyear periods and an annualised return in excess of the portfolio’s blended benchmark. As at 31 March 2022, the annualised portfolio total return over the trailing three-year period was +7.0%, slightly behind the total return target for the same period of +7.7% and the blended benchmark of +7.8%.

The long-term investment objective for the Charity remains to achieve a total annualised return of CPI +4.5% over rolling three year periods, however the Investment Committee recognises that, given the high rate of inflation forecast in 2022, this will be a challenging target to achieve over the shorter term.

Investment performance is monitored quarterly by our Investment Committee with the assistance of our investment advisor, Mercer, who provides advice and monitoring services for the financial portfolio. Gryphon Property Partners provides similar support for the property portfolio, while Workman provides tactical advice and management services for the property portfolio.

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Annual Report 2021 – 2022

Reserves

The Charity holds assets in funds, each type of which dictates how the funds may be disbursed:

For these objectives, the Trustees have determined that the value of reserves should be deemed to be the amount(s) held in the Charity’s investment portfolio.

Endowment funds – there are a number of

segregated individual personal endowments which are usually created in the form of a will trust that limits the use of both the original capital and any investment gains attaching thereto. There is also an aggregated expendable endowment fund – these funds and gains arising from them are permitted to be applied generally by the Trustees in the delivery of the Charity’s objectives.

Restricted funds are those amounts given under a restriction agreed between the donor and the Charity that specifies the area of the Charity’s work to be supported. Barts Charity have a large number of these funds supporting the many areas of the NHS Trust’s work.

All other funds held by the Charity form the general funds ; however Trustees may choose (and have chosen) to set aside designated funds to ensure a particular objective is given prominence. Trustees may remove a designation if they so choose.

Reserves policy

Given the nature of the Charity’s activities and our grant-making strategy the Trustees have determined that the reserves policy, taken in conjunction with spending and long-term investment policies, is intended to deliver the following objectives:

The Charity annually sets a minimum reserve level it considers necessary to maintain in order to achieve this balance between current and future activity; for 2021/22 this minimum reserve level is £347m (2021:£327m).

The level of total reserves as at 31 March 2022 was £516m (2020/21: £487m) and therefore the Trustees consider that the Charity has sufficient funds to meet its purposes over its anticipated operating future.

If the level of these reserves goes below or is projected to come within 5% of the minimum level, the Trustees will consider the level of spending and grant-giving in light of the prevailing market conditions and outlook. It is not expected that the Charity would react to short term volatility. The reserve, spending and long-term investment policies are reviewed at least annually and adjusted if necessary.

Responsible Investing

Barts Charity believes that it is right to consider environmental, social, and governance (ESG) factors in investment decisions, in order to identify material risks as well as to earn sustainable, longterm returns. The Charity also recognises that longterm sustainability issues, including climate change, present risks and opportunities that increasingly may require explicit consideration. The Charity believes that it is possible to invest with a positive impact without reducing investment returns. Areas of particular interest include improving societal health care outcomes.

As a result, ESG considerations are integrated in the investment process, including manager selection and monitoring, and ongoing review of the portfolio’s ESG characteristics compared to relevant benchmarks and peers. The Charity has no direct investments in tobacco stocks. The Charity monitors exposure to tobacco through pooled funds, including passive index trackers as well as actively managed strategies, aiming to have less than 1% of equities in tobacco companies (i.e. approximately ½ or less vs the aggregated equity benchmark).

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Annual Report 2021 – 2022

The Charity has a strategic equity exposure achieved through investment in pooled equity funds. The Charity accepts that it cannot directly influence how ESG considerations affect the equity investments.

The Charity also considers how ESG (including but not limited to climate change) and stewardship considerations are integrated within investment processes in appointing new investment managers.

Going Concern Statement

The preparation of the accounts for the year ended 31 March 2022 has been undertaken on the basis that Barts Charity is a going concern.

As part of the assessment of the going concern basis of the Charity, stressed scenarios and a multi- year projection of reserve levels has been undertaken. This has demonstrated that the Charity is expected to hold sufficient assets to meet its reserve policy levels, as set out below. Whilst the Charity’s portfolio is sensitive to movements in investment values, it still has sufficient liquidity to meet its obligations and is able to meet its planned grant commitments without being a forced seller of assets. Based on these assessments the Trustees have determined the Charity to be a going concern and the basis of the preparation of the annual report and accounts on a going concern basis is therefore appropriate.

Public Benefit

The Trustees confirm that they have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing Barts Charity’s aims and objectives and in planning future activities and setting the grant-making policy for the year.

Fundraising policy

We are very grateful to our supporters, who contribute significantly to our work, in giving generously in terms of donations and in terms of carrying out fundraising activities in the wider Barts communities.

We aim to fundraise in a way that is compelling, respectful and in-keeping with our values.

The Charity is registered with the Fundraising Regulator and is committed to adhering to the Code of Fundraising Practice. We are also members of the Institute of Fundraising and refer to their best practice guidance. Our own practice and policies ensure that no individual, including vulnerable persons, is put under undue pressure to make a donation. In the year to 31 March 2022, more than 1200 individuals and organisations supported us through donations or fundraising and we received no complaints related to fundraising. We have refreshed our privacy policy in line with the General Data Protection Regulation (GDPR) and both this and our complaints policy are freely available on our website.

In 2021/22 we received 18 legacies and 6 donations from individuals over £5,000. Organisations which made donations over £5,000 are as follows:

Abbott Medical

Allianz Global Investors Aspen Insurance UK Bank of Montreal Corinthia St Georges Bay Embassy of The State of Kuwait Garfield Weston Foundation Kusuma Trust UK Mainstay Medical Monday Charitable Trust NHS Charities Together Sandra Jacobs Charity The Swire Charitable Trust Ugroup Media

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Annual Report 2021 – 2022

Risk Management

Our Trustees have adopted a Risk Management Policy and regularly review the major risks to which Barts Charity is exposed. Risks are assessed by their likelihood and impact, and also their velocity (speed to impact). Where appropriate, systems and procedures have been established to mitigate risks, and these are also reviewed regularly. The risks and mitigations are recorded in a risk register which is reviewed regularly by the SMT and submitted quarterly to the Finance & Audit Committee for consideration.

The major strategic risks and principal mitigations as at 31 March 2022 are set out below.

Risk Actions to manage the risk
Strategy
Failure to deliver the 2022-27 strategy,
or be unable to evidence it		 • Regular review by SMT and trustees of progress against the strategic plans
• Clear identification of internal and external risks and issues as they
arise and flexibility of approach
• KPIs, monitoring and impact reporting
Funding
Impact of inflation on significant capital projects
under development		 • Include contingency in costs surrounding capital builds and potential
inflationary increases in costs between design and point of tender
• Expert review of significant capital projects under development and Charity
representation on relevant project and design boards to ensure Barts Charity
has early sight on any potential funding risks that arise
Fundraising
Economic downturn has potential negative impact
upon Barts 900 campaign fundraising		 • Investment in campaign strategy, team and resources
to optimise chances of meeting targets
Endowment
Period of stagflation means that endowment asset
allocation does not generate target annual return
and potentially results in a real term fall in value		 • Asset allocation includes assets which tend to be more inflation-resilient,
such as property and equities (including listed infrastructure)
• Allocations to asset classes with greater focus on contractual income,
such as property, private debt and growth fixed income
• Charity invests for the long term and has significant buffer above its minimum
reserve level so that it can withstand periods of lower return without impact
upon operational or funding expenditure
How we work
The Charity suffers financial/reputational loss as
a result of a cyber security incident/data breach		 • Additional security has been put in place in partnership
with our IT partners
• Regular threat testing and systems monitoring
• Staff training
• Penetration testing and vulnerability assessment

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Annual Report 2021 – 2022

Structure, Governance & Management Constitution

Barts Charity is a company limited by guarantee (registration number 7168381) and a registered charity in England and Wales (registration number 212563). It is governed by Articles of Association most recently updated on 12 December 2016. It is fully independent of the Department of Health and Social Care and regulated only by the Charity Commission.

The Board has assessed its governance against the Charity Commission’s Governance Code for larger charities and is pleased to report high levels of compliance against the suggested standards. An area of continued focus for the Board is to ensure that the Charity is representative of its grantees and the communities it serves across both staff and non-executives.

Charitable purposes

Our charitable purposes relate to hospital services (including research), or to any other part of the health service associated with any hospital as our Trustees think fit. In practice, we focus our support for improvement and innovation in healthcare on the Barts Health group of hospitals and FMD, and we also support the School of Nursing at City University, London. Although we are careful to consult with representatives of grantee organisations to ensure alignment of strategic priorities and to secure the greatest impact from our funding, we retain our independence to act in the best interests of Barts Charity and the communities we serve.

Non-executives and Committees

Barts Charity acts through its Board of Directors (who are known as Trustees). At the end of March 2022, there were 12 Trustees; since then one Trustee has resigned and one has been appointed. All Trustees give of their time freely and no Trustee

remuneration is paid. Details of Trustee expenses and related transactions are disclosed in notes 13 and 14 to the accounts. Trustees are required to disclose all relevant interests and register them with the Company Secretary and, in accordance with the Charity’s policy, withdraw from decisions where a conflict of interest arises.

Power to appoint new Trustees lies with the existing Trustees, in accordance with the provisions of our Articles of Association. All Trustees are appointed for a fixed term of not more than three years, renewable to a maximum of nine years in total, although exceptionally the Board may decide to extend this maximum term for a Trustee in appropriate circumstances.

The Board has established a series of Committees so that much of the Charity’s detailed governance work can be conducted by groups of Trustees and specialist members with the most relevant experience and expertise. Committee membership is confirmed annually. Board Advisers are appointed for a term of two years renewable to five in total. Specialist Committee members who are not also Trustees are appointed annually, renewable up to a total term of five years. All new Trustees and Committee members have an induction programme, during which they are familiarised with key constitutional and operating documents, meet senior Trustees and management, and tour the hospitals.

The Board and each Committee conduct an annual review of their performance in accordance with the Charity’s Performance Review Policy against a checklist of questions to consider, covering matters such as objects, terms of reference, relationship with Executive, documentation, conduct of meetings and skill set.

The Board has established a Scientific Review Panel to supplement the peer review of research grant applications. We are fortunate to be able to call upon a cadre of eminent scientists from across the UK with appropriate expertise relative to the subject matter of the applications; they meet to discuss the full applications and submit their views and recommendations to the Grants Committee for its consideration. Final decision-making authority rests with the Grants Committee for funding requests up to £650,000 and with the Board for requests over this amount.

Management arrangements

The Trustees delegate the management of the Charity to the staff team led by the Chief Executive and the senior management team (SMT). The Chief Executive has been in place since May 2016.

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Annual Report 2021 – 2022

Staff Remuneration

Staff remuneration is closely scrutinised to ensure that the Charity can attract and retain the best talent, whilst keeping salaries aligned with the market. We use a live salary database run by specialist reward consultants to create and monitor the benchmark salary range for each role, taking into account a number of factors such as comparable sectors, the nature and seniority of the role, the Charity’s location, number of employees and turnover. A salary review is undertaken each year (effective 1 April), taking into account inflation and data from comparable foundations, the Association of Medical Research Charities, the Association of Charitable Foundations and the wider third sector. The Charity reserves the discretion not to award an increase, especially when an employee’s salary is already at the top of their benchmark range. The same principles apply to the pay of the SMT, which is approved by the Appointments and Remuneration Committee.

Prof David Rampton (to September 2022) Dr Thomas Round Rt Hon Jacqui Smith (ex officio Trustee, Chair of Barts Health NHS Trust from October 2021) Dr Lorna Williamson

Board Adviser

Moira Gitsham (communications)

Appointments and Remuneration Committee

Andy Bruce, Chair Sally Flanagan Ian Hart (from November 2021)

Finance and Audit Committee

Claire Brown, Chair Vijay Bharadia (to June 2022) Ian Hart (from January 2022) Dr Richard Lewis Mohammad Memon Nimesh Patel

Grants Committee

Pension

The Charity operates a non-contributory individual money-purchase scheme for all eligible members of staff, contributing the equivalent of 8% of pensionable salary to each employee’s fund (10% for SMT members). Employees can additionally choose to make employee contributions to their pension as a deduction from salary. The scheme is fully compliant with auto-enrolment regulations.

Dr Lorna Williamson (Chair) Prof Mirela Delibegovic (from September 2022) Prof Adrian Dixon Prof Catherine Godson Dr Richard Lewis (to March 2022) Dr Ultan McDermott (from June 2022) Prof David Rampton (to September 2022) Prof Kanchan Rege Thrasher (from September 2022) Dr Thomas Round

Regulatory

Registered & principal office

12 Cock Lane London EC1A 9BU Company registered number: 07168381 Charity registered number: 212569

Non-executives – includes changes effective prior to 21 December 2022

Investment Committee

Sally Flanagan, Chair Andy Bruce Philip Glaze Ian Hart Jean Murphy

Senior Management Team

Trustees

Andy Bruce, Chair Vijay Bharadia (to June 2022) Claire Brown Sally Flanagan Prof Catherine Godson Ian Hart, Deputy Chair Professor Dame Parveen Kumar Dr Richard Lewis Jean Murphy (from April 2022) Ian Peters (ex officio Trustee, Chair of Barts Health NHS Trust to October 2021)

Fiona Miller Smith, Chief Executive Fiona Bickley, Chief Operating Officer Hannah Daws, Director of Marketing & Communications (from September 2021) Steve Harris, Chief Finance Officer (to April 2022) David Lyon, Interim Finance Director (April to September 2022) Victoria King, Director of Funding & Impact Ilia Ralphs, Director of Fundraising Prabhakar Sundaresan, Director of Finance & Resources (from September 2022) Adrian Thomas, Director of Marketing & Communications (to September 2021)

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Annual Report 2021 – 2022

Statement Of Trustees’ Responsibilities

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

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

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

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity’s transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

This Trustees' report, incorporating the Strategic report, was approved by the Board of Trustees of Barts Charity and signed on its behalf.

Andy Bruce Chair

Date: 21 December 2022

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Annual Report 2021 – 2022

Independent auditor's report to the members of Barts Charity

Opinion on the financial statements

In our opinion, the financial statements:

We have audited the financial statements of Barts Charity (the Charitable Company) for the year ended 31 March 2021 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions related to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Charitable Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

Other information

The Trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. The other information comprises the Trustees’ Annual Report. 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.

Independence

We remain independent of the Charitable Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

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Annual Report 2021 – 2022

Other Companies Act 2006 reporting

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

In the light of the knowledge and understanding of the Charitable Company and its environment obtained in the course of the audit, we have not identified material misstatement in the Strategic report or the Trustee’s report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion;

Responsibilities of Trustees

As explained more fully in the statement of Trustees’ responsibilities, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

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

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Annual Report 2021 – 2022

Appropriate audit procedures included the review of the Charitable Company’s documentation of risks and associated mitigating actions, review of Trustee Board and Finance & Audit Committee meeting minutes, and enquiries regarding any matters identified as a Serious Incident reportable to the Charity Commission. Note that auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of Those Charged with Governance and other management, and inspection of regulatory and legal correspondence if any.

We also completed the following procedures:

heritage assets, particular aspects of revenue recognition, the calculation of current and non-current grant commitments, and the cost allocation methodology.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

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

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

Use of our report

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

Gareth M Jones

(Senior Statutory Auditor) For and on behalf of BDO LLP, statutory auditor London, UK

Date: 22 December 2022

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

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Annual Report 2021 – 2022

Statement of Financial Activities

(incorporating an income and expenditure account)

for the financial year ended 31 March 2022

Unrestricted Restricted Endowment 2022 2021
funds funds funds Total funds Total funds
Notes £’000 £’000 £’000 £’000 £’000
Income
Voluntary income 2.1 726 2,317 - 3,043 7,460
Investment income 2.2 11,468 - - 11,468 12,910
Total income 12,194 2,317 - 14,511 20,370
Expenditure
Total costs of raising funds 3.1 5,707 - - 5,707 3,819
Charitable activities 3.1 23,589 5,264 - 28,853 27,338
Total expenditure 3.1 29,296 5,264 - 34,560 31,157
Net expenditure before revaluation
of investments		 (17,102) (2,947) - (20,049) (10,787)
Gains on revaluation and disposal
of investment assets		 7.2 7,282 - 31,130 38,412 70,193
Net (expenditure) / income (9,820) (2,947) 31,130 18,363 59,406
Transfers between funds 11 (6,447) - 6,447 - -
Net movement in funds (16,267) (2,947) 37,577 18,363 59,406
Fund balances brought forward 85,244 19,077 326,684 431,005 371,599
Fund balances carried forward 68,977 16,130 364,261 449,368 431,005

All activities refer to continuing activities. The notes on pages 22 to 39 form part of these financial statements

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Annual Report 2021 – 2022

Statement of Financial Position

as at 31 March 2022

Unrestricted Restricted Endowment 2022 2021
funds funds Total Total funds Total funds
Notes £’000 £’000 £’000 £’000 £’000
Fixed assets
Tangible operational fixed assets 5a 40 - - 40 75
Intangible operational fixed assets 5b 121 - - 121 273
Heritage assets 6 - - 16,600 16,600 16,600
Investments 7 152,283 16,130 347,661 516,074 480,683
Total fixed assets 152,444 16,130 364,261 532,835 497,631
Current assets
Debtors 8 3,170 - - 3,170 3,327
Cash at bank and in hand 7,524 - - 7,524 18,927
Total current assets 10,694 - - 10,694 22,254
Creditors <1yr 9 (20,568) - (20,568) 19,264
Net current liabilities (9,874) - - (9,874) 2,990
Creditors >1yr 10 (73,592) - - (73,592) (69,616)
Total net assets 68,977 16,130 364,261 449,368 431,005
Funds: Capital Funds
Endowment Funds 11.1 364,261 364,261 326,684
Income funds:
Restricted funds		 11.2 16,130 16,130 19,077
Unrestricted funds:
Designated funds		 11.3 434 434 434
General funds 11.3 68,543 68,543 84,810
Total funds 68,977 16,130 364,261 449,368 431,005

Company registration 07168381

Signed on behalf of the Board of Trustees on 21 December 2022

Andy Bruce Board Chair

Claire Brown Chair of Finance and Audit Committee

The notes on pages 22 to 39 form part of these financial statements

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Annual Report 2021 – 2022

Cash Flow Statement

for the year ended 31 March 2022

2022 2021
Notes £'000 £'000
Cash flows from operating activities
Net cash used in operating activities 12.1 (23,212) (10,947)
Cash flows from investing activities
Dividends interest and rents from investments 11,468 12,910
Payments to acquire tangible and intangible fixed assets - (246)
Payments to acquire investment assets (59,839) (76,568)
Receipts from sale of investment assets 60,180 81,066
Net cash provided by investing activities 11,809 17,162
Change in cash and cash equivalents in the year (11,403) 6,215
Cash and cash equivalents at the beginning of the reporting year 18,927 12,712
Cash and cash equivalents at the end of the reporting year 12.2 7,524 18,927

The notes on pages 22 to 39 form part of these financial statements

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Annual Report 2021 – 2022

Financial statements for the year ended 31 March 2022 Notes to the Accounts

1 Accounting Policies

A. Accounting convention

The financial statements have been prepared under the historic cost convention, with the exception of investments and heritage assets, which are included at market value. The financial statements have been prepared in accordance with the Statement of Recommended Practice (2nd edition): Accounting and Reporting by Charities issued in October 2019, the Financial Reporting Standards 102 applicable in the UK and Republic of Ireland (FRS102), and the Charities Act 2011. The Charity constitutes a public benefit entity as defined by FRS 102.

B. Going concern

The preparation of the accounts for 2021/22 has been undertaken on the basis that Barts Charity is a going concern. The Charity currently meets day to day working capital requirements through its existing cash facilities. In conjunction with the Charity’s investment advisors modelling has been undertaken incorporating expected asset values of the porfolio in stressed scenarios and net spending over the next 10 years.

This has demonstrated that the Charity is expected to hold sufficient assets to meet its reserve policy levels. Whilst the Charity’s porfolio is sensitive to movements in investment values, it still has sufficient liquidity to meet its obligations and can meet its planned grant commitments without being a forced seller of assets.

Based on these assessments the Trustees have determined the Charity to be a going concern and the basis of the preparation of the annual report and accounts on a going concern basis is therefore appropriate. For further details, please refer to the Trustees report.

C. Accounting judgements and estimates

In preparing the financial statements, the Trustees have made judgements, estimates and assumptions that affect the application of the Charity’s accounting policies and the reported assets, liabilities, income and expenditure and the disclosures made in the financial statements. These estimates and judgements are continually reviewed and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The key judgements and estimates are:

a. Valuation of property

A full property valuation is undertaken tri-annually with an annual desk top valuation in the years between. A desk top valuation was completed for 2021/22 by LHR Chalkhouse LLP, Chartered Surveyors, (refer to note 1.7c). The valuation has been prepared using a fair value basis, being the price that would be received to sell an asset, in an orderly transaction between market participants at the measurement date.

b. Valuation of private equity and private credit investments

Due to the nature of private investments, there is no quoted market price for the funds. The value at the balance sheet date is deemed to be the most recent valuation from the private investment group, adjusted for those cashflows up to and including the balance sheet date. This is then reviewed in light of valuations which become available post balance sheet date up to accounts signature.

c. Grant creditors settled over multi-year time period

Many grant commitments will be settled over multiple financial years and so the short term and long term grant creditor balances represent the best estimate of the expected cash ouflows as at the balance sheet date. This is based on historical drawdown levels and status of existing grants. The time value of money is considered annually and adjusted in the accounts if material.

d. Allocation of income, expense and gain/loss to restricted and endowment funds

In preparing the financial statements judgements and estimates have been made in relation to the extent of allocation to the restricted and endowment funds.

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Annual Report 2021 – 2022

e. Valuation of accrued dividend income

Dividend income from the Charity’s investments is accrued at the year-end in line with historical and commercial expectations.

f. Heritage assets

Heritage Assets are not depreciated but are revalued every five years with the last valuation completed by Gurr Johns, auctioneers and valuers, in March 2019. Any surplus or deficit on revaluation is credited or debited to the Statement of Financial Activities. Please refer to Note 6 for further details.

D. Fund structure

a. Restricted funds are funds for which a legal restriction exists over their use and related income is restricted to the purpose of the fund as set out in note 11.2.

b. Endowment funds include the following:

(i) Permanent endowment funds: capital is held in perpetuity but the related income may be used for unrestricted or restricted purposes as specified by the donor.

(ii) Expendable endowment: donations received by the hospitals of Barts Health NHS Trust prior to 5 July 1948 (the date on which the NHS was established). The income and capital are available for such expenditure related to sections 220(3) and 220(5) and paragraph 10(1) of Schedule 4, of the National Health Service Act 2006 (see c (i) below).

c. Unrestricted funds and their related income are available for use at the discretion of the Trustees for general charitable purposes relating to the following:

(i) General Sections 220(3) and 220(5) and paragraph 10(1) of Schedule 4 of the National Health Service Act 2006: To hold the property on trust for such purposes relating to hospital services (including research), or to any other part of the health service associated with any hospital, as the person holding the property thinks fit.

E. Income

Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the item(s) of income have been met, it is probable that the income will be received and the amount can be measured reliably.

Legacy income is recognised when three criteria are met. Entitlement is established, receipt of the income is probable and it can be reliably measured. Where legacies have been notified to Barts Charity and the criteria for Income recognition have not been met the legacy is treated as a contingent asset and disclosed if material.

Rental income from investment properties is reported as an operating lease and the lease incentive is amortised on a straight-line basis.

Dividend income from the Charity’s investments is accrued at the year-end in line with historical and commercial expectations.

F. Expenditure

All expenditure is accounted for on an accruals basis. Direct costs of generating funds (including fundraising), charitable activities and support costs are charged to the relevant category or activity according to the area to which the expenditure relates. Support and governance costs incurred that relate to more than one cost category are apportioned based on estimates of time spent on activity in each area. Charitable activities include grants approved by the Trustees in the year, and are recognised as commitments in the year of approval.

G. Fixed assets

Operational fixed assets (tangible or intangible) are capitalised when a separable asset can be identified with a value of £10,000 or more (inclusive of irrecoverable VAT), and where the estimated useful life of the asset (without the need for additional spend) can be estimated as three years or more.

(ii) Designated The Trustees have chosen to earmark these funds for specific areas within the general charitable purposes (refer to note 11.3).

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Annual Report 2021 – 2022

a. Tangible fixed assets

Tangible fixed assets are included in the Statement of Financial Position at cost less accumulated depreciation. Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, and any impairments are shown as reducing both the initial cost and brought forward depreciation. Depreciation is charged on a straight line basis to support costs over their estimated useful lives (Fixtures, fittings and equipment — 5 years).

b. Intangible fixed assets

Intangible fixed assets are included in the Statement of Financial Position at cost less accumulated amortisation. Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, and any impairments are shown as reducing both the initial cost and brought forward amortisation. Amortisation is charged on a straight line basis to support costs over their estimated useful lives (IT software – 3 years).

c. Heritage assets

Heritage assets are capitalised and include art collections, historic archives, sculptures, ceramics surgical instruments, uniforms, teaching materials, and other items. They are reported on the balance sheet at their insured values, which are based on replacement values in the retail market or, where appropriate, in the second-hand retail market with items of a similar nature, age, condition and quality. They are not depreciated but are revalued every five years with the last valuation completed by Gurr Johns, auctioneers and valuers, in March 2019.

Any surplus or deficit on revaluation is credited or debited to the Statement of Financial Activities. Assets are reviewed regularly for significant damage and appropriate remedial works are carried out wherever possible to preserve the assets or prevent further deterioration. See note 6 for further details.

H. Investments

Quoted investments are stated at market value at the year end date. Asset purchases and sales are recognised at date of trade. Unquoted pooled financial investments are valued based on the number of units held and the price per unit provided by the custodian or fund manager.

These net asset valuations are calculated independently by third party administrators and are subject to annual audit. Private investments are held through funds managed by private investment groups. As there is no identifiable market price for private investment funds, these funds are included at the most recent valuations from the private investment groups and adjusted for cash flows if the valuation is not available at the balance sheet date.

The annual market valuation of Barts Charity's investment properties has been carried out in accordance with the Royal Institution of Chartered Surveyors Valuation - Global Standards 2020, incorporating the NSC International Valuation Standards. The valuations were carried out by LHR Chalkhouse LLP, Chartered Surveyors, who have been instructed as external valuer to value Barts Charity’s freehold and long leasehold interests at 31 March 2022. They have reported their Opinion of the aggregate of the values of Barts Charity's interest in the individual buildings.

I. Realised and unrealised gains and losses

Realised and unrealised gains and losses on investment assets are included in 'gains and losses on investment assets' within the Statement of Financial Activities.

J. Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Long term debtors are defined as fully recoverable amounts outstanding for more than 12 months at the balance sheet date.

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Annual Report 2021 – 2022

K. Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

L. Cash

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

M. Financial Instruments

Basic financial instruments are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. The Statement Of Financial Activities includes the net gains and losses arising on revaluation and disposals throughout the year. The Charity does not acquire put options, derivatives or other complex financial instruments directly. Where individual investment managers have discretion to use financial instruments, valuation is in line with market practice.

N. Pensions contributions

The cost of employer contributions to the NHS Pension Scheme and the Defined Contribution Scheme, is charged to the Statement of Financial Activities. Certain past and present employees are covered by the provisions of the NHS Pensions Scheme. Details of benefits payable under these provisions can be found on the NHS Pensions Website (www.nhsbsa.nhs.uk/nhs-pensions). The Scheme is an unfunded, defined benefit scheme, preparing its own statements, that covers NHS employers, general practices and other bodies allowed under the direction of the Secretary of State, in England and Wales. The Scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying Scheme assets and liabilities. Therefore, the Scheme is accounted for as if it were a defined contributions scheme: the cost to an NHS body of participating in the Scheme is taken as equal to the contributions payable to the Scheme. Applicable rates for employee contributions for the NHS Pension Scheme ranged from 12.5% to 13.5% for 2021/22 and 2020/21. Employer contributions were 14.38% for both 2021/22 and 2020/21. Employees employed after 1 April 2011 can choose to belong to a Defined Contribution Scheme which is a Group Personal Pension Scheme. For 2021/22 the rates of employer contribution for the Defined Contribution Scheme were 10% for SMT and 8% for other staff (unchanged from 2020/21). Employee contributions are voluntary.

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Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

2 Income

2.1 Voluntary income

Unrestricted Restricted 2022
funds funds Total
£’000 £’000 funds
Donations 145 1,503 1,648
Legacies 581 814 1,395
Total 726 2,317 3,043
Unrestricted Restricted 2021
funds funds Total
£’000 £’000 funds
Donations 161 6,460 6,621
Legacies 286 553 839
Total 447 7,013 7,460

2.2 Investment income

2.2 Investment income
2022 2021
£’000 £’000
Investment properties 3,846 5,119
Investments listed on stock exchange 5,880 5,850
Private investments 1,741 1,937
Interest on cash held as part of the investment portfolio 1 4
Total 11,468 12,910

Restricted investment income amounted to £nil in 2021/22 (£142k in 2020/21).

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Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

3 Expenditure

3 Expenditure
3.1 Total expenditure Costs of raising Charitable Support 2022
funds expenditure costs Total funds
£’000 £’000 £’000 £’000
Direct expenditure
Grants - Research - 15,918 - 15,918
Grants - Service delivery - 11,400 - 11,400
Grants written back - (6) - (6)
Costs of generating income
Financial and property investment 2,955 - - 2,955
Fundraising 240 - - 240
Total direct expenditure 3,195 27,312 - 30,507
Staff and Support costs
Salaries 725 478 964 2,167
Other staff and related costs 38 7 217 262
Marketing and Communications - - 168 168
Legal, accounting and IT - - 612 612
Office costs - - 452 452
Grant administration - 36 - 36
Loss on disposal of operational fixed assets - - 85 85
Irrecoverable VAT 271 - - 271
Subtotal staff and other costs 1,034 521 2,498 4,053
Allocation of staff and overheads 1,478 1,020 (2,498) -
Total 5,707 28,853 - 34,560
Costs of raising Charitable Support 2021
funds expenditure costs Total funds
£’000 £’000 £’000 £’000
Direct expenditure
Grants - Research - 17,392 - 17,392
Grants - Service delivery - 8,486 - 8,486
Grants written back - (437) - (437)
Costs of generating income
Financial and property investment 2,328 - - 2,328
Fundraising 198 - - 198
Subtotal direct expenditure 2,526 25,441 - 27,967
Support costs 606 394 2,190 3,190
Overheads
Allocation of staff and overheads 687 1,503 (2,190) -
Total 3,819 27,338 - 31,157

Although Barts Charity maintains regular contact with grant-holders, there are occasions when planned expenditure is not achievable and the related grant accrual is reversed.

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Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

3.2 Direct charitable expenditure by institution

2022 2021
£'000 £'000
Barts Health 11,059 10,739
Barts and the London SMD 15,774 13,423
Other 171 772
Grant funded activity 27,004 24,934
Direct other spending 308 507
Total grants 27,312 25,441

4 Staff remuneration

4.1 Analysis of staff costs

2022 2021
£'000 £'000
Salaries and wages 1,816 1,663
Social security costs 195 186
Other pension costs 156 144
Total 2,167 1,993
Average number of full time equival 31 30
Average head count 30 31

Staff costs include termination payments of £111,003 to three employees (£35,492 in 2020/21)

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Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

4.2 Higher paid employees

The following number of employees received emoluments falling within the ranges indicated:

2022 2021 2022 2021
£’000 £’000 £’000 £’000 2022 2021
Number of employees Value of pension contributions Number of staff in receipt
60,000 - 70,000 4 3 16 16 4 3
70,001 - 80,000 1 1 11 6 1 1
80,001 - 90,000 1 3 4 34 1 3
90,000 - 100,000 2 1 14 10 2 1
100,000 - 110,000 2 1 20 10 2 1
160,001- 170,000 1 1 17 17 1 1

Key management personnel (the senior management team of the charity) received aggregate employee benefits of £971,929 (2020/21: £911,119).

5 Operational fixed assets

5a. Tangible operational fixed assets

5b. Intangible operational fixed assets

Office
equipment Software
At Cost £'000 At Cost £'000
As at 1 April 2021 174 As at 1 April 2021 384
Additions in year - Additions in year -
Disposals in year (1) Disposals in year (170)
As at 31 March 2022 173 As at 31 March 2022 214
Depreciation Amortisation
As at 1 April 2021 99 As at 1 April 2021 111
Disposals in year (1) Disposals in year (85)
Annual charge 35 Annual charge 67
As at 31 March 2022 133 As at 31 March 2022 93
Net book value Net book value
As at 31 March 2022 40 As at 31 March 2022 121
As at 31 March 2021 75 As at 31 March 2021 273

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Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

6 Heritage assets

6 Heritage assets
2022 2021
£'000 £'000
Valuation at start of year 16,600 16,600
Valuation at end of year 16,600 16,600
Types of heritage asset
Antique furniture 1,253 1,253
Paintings prints and drawings 8,792 8,792
Books and manuscripts 3,003 3,003
Other 3,552 3,552
Total 16,600 16,600

Paintings, prints and drawings include two William Hogarth paintings which have been valued at £3m and £2.6m respectively (£3m and £2.6m in 2020/21). Other heritage assets include clocks, barometers, works of art, sculptures, ceramics, glass, silver and gold. Heritage Assets are not depreciated but are revalued every five years with the last valuation completed by Gurr Johns, auctioneers and valuers, in March 2019.

Heritage Assets are included within the endowment fund and are revalued every five years with the most recent valuation being for March 2019. Prior to this, the asset valuations for 2013/14, 2014/15, 2015/16, 2016/17 and 2017/18 were based on the March 2014 valuation which was £14.428m. (See note 1.7b). This is the only change in the last five years.

7 Investments

7.1 Analysis of fixed asset investments

2022 2021
Property Financial Total Total
£'000 £'000 £'000 £'000
Fixed asset investments
Market value at 1 April 2021 70,391 410,212 480,603 419,912
Less: Disposal proceeds - (60,180) (60,180) (81,066)
Add: Acquisition at cost - 59,839 59,839 76,568
Net gain on revaluation and disposals 5,734 30,078 35,812 65,269
Market value at 31 March 2022 76,125 439,949 516,074 480,683

GB Sterling cash balances which are used for both investment cash and operational payments are now classified as a current asset under cash at bank and in hand. The comparative amount has also been reclassified.

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Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

2022 2021
Total Total
£'000 £'000
Market value at 31 March
Investment properties 76,125 70,471
Investment listed on stock exchange 372,552 358,987
Private investments 66,081 50,438
Instant access money markets funds held within the investment portfolio 1,316 787
Total 516,074 480,683
2022 2021
Total Total
Market value at 31 March: £’000 £’000
Unrestricted funds 152,284 144,866
Restricted funds 16,129 32,086
Endowment funds 347,661 310,084
Total 516,074 487,036

Financial investments held 31 March 2022 include 16 unit trust funds, representing 85% of the total value, and 27 separate private investments (in 2020/21 16 unit trust funds representing 88% and 26 separate private investments).

At the year end, the Charity had undrawn commitments to private equity funds of £44.7m, which are expected to be called at various future dates, whilst the current investments in private equity funds will be expected to be realised by a return of capital. The carrying value of the private equity investments of £66.1m reported above represents the latest valuations of the funds at or prior to 31 March 2022 as provided by relevant fund managers. However, it is not possible for the trustees to liquidate these investments prior to the future return of capital.

7.2 Analysis of gains and losses on revaluation and disposal of investment assets

2022 2022 2022 2021
Unrestricted Endowment Total Total
£’000 £’000 £’000 £’000
Gains on revaluation and disposal of financial investments 5,702 24,376 30,078 66,469
Gains on revaluation and disposal of property investments 1,087 4,647 5,734 (1,200)
Subtotal: gains and losses 6,789 29,023 35,812 65,269
Gross overage receipt on disposal of property investment - - - 5,023
Other currency gains/(losses) 493 2,107 2,600 (99)
Total 7,282 31,130 38,412 70,193

An analysis of gross income arising from the property assets is set out in Note 2.2

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Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

8 Current assets

8.1 Analysis of Debtors

8.1 Analysis of Debtors
2022 2021
£'000 £'000
Trade debtors 1,323 1,566
Prepayments 44 121
Accrued income 1,801 1,618
Other debtors 2 22
Total 3,170 3,327

All debtors relate to unrestricted funds. Accrued income largely relates to income on financial investments and amortisation of rent free period for related leases (see note 1.5).

Included within accrued income is an amount of £0.6m which relates to rent amortisation due to be released after more than 1 year (31 March 2021: £0.7m)

8.2 Cash at bank and in hand

2022 2021
£'000 £'000
Cash in UK clearing bank accounts 991 12,574
Cash held with investment bank 6,533 6,353
7,524 18,927

Cash comprises amounts held in combined accounts at NatWest Bank including current and savings accounts plus amounts held by Northern Trust, primary custodian of the charity’s investments (see note 7).

Although predominantly utilised to manage the charity’s acquisition and management of its investments, these funds are liquid and also used from time to time to supplement the charity’s operational working capital.

32

Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

9 Creditors due in one year

2022 2021
Amounts falling due within one year as at 31 March £’000 £’000
Trade creditors 530 616
Other creditors 292 405
Grants accruals 19,168 17,160
Deferred Income 578 1,083
Total 20,568 19,264

Deferred income represents rent billed to tenants in advance for the first quarter of the following financial year

2022 2021
£'000 £'000
Deferred income brought forward 1,083 1,159
Released (3,769) (1,159)
Deferred 3,264 1,083
Deferred income at 31 March 578 1,083

10 Creditors due after more than one year

2022 2021
£'000 £'000
Grant accruals 73,592 69,616

33

Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

11 Funds - Year ended 31 March 2022

11.1 Endowment Funds Opening Other Closing balance
balance as at Income Expenditure gains and as per 31 March
1 April 2021 2021-22 2021-22 Transfers* losses 2022
£’000 £’000 £’000 £’000 £’000 £’000
H F Bailey 1,240 - - (1,240) - -
Aylwen Bursaries 2,954 - - 276 3,230
Edward Hewlett 2,426 - - 227 2,653
JJ Guthrie Blandford and
George Shuter Staff Benefit		 445 - - (445) - -
Hannington 956 - - 89 1,045
David Hughes 148 - - (148) - -
Bailey City and Hackney 299 - - (299) - -
Hamblen Thomas 298 - - 28 326
MacCready Mann 294 - - 27 321
Levy Family 254 - - 24 277
MAEL Jones 235 - - 22 257
Funds <£200k 786 - - (310) 45 520
Expendable endowments 316,349 - - 8,889 30,392 355,630
Total endowment funds 326,684 - - 6,447 31,130 364,261

11.2 Restricted funds

Material funds (over £500k at start of year)

Cardiac 2,400 15 (57) - - 2,358
Margaret Centre 1,171 - (48) - - 1,123
Covid-19 response 1,146 6 (566) - - 586
Gastroenterology 957 217 (130) - - 1,044
Barts Hospital 646 - - - - 646
Renal Disease Research 564 24 (213) - - 375
Funds 400-500 424 1 - - - 425
Funds 300-400 2,376 3 (733) - - 1,646
Funds 200-300 2,355 499 (371) - - 2,483
Funds 100-200 1,940 37 (138) - - 1,839
Others 5,100 1,514 (3,009) - - 3,605
Total restricted funds 19,079 2,316 (5,265) - - 16,130

11.3 Designated and general funds

Cardiac Fund 122 - - - - 122
Whipps Cross General Fund 128 - - - - 128
Funds up to £100k 184 - - - - 184
Total designated funds 434 434
General funds 84,810 12,194 (29,296) (6,447) 7,282 68,543
Total designated and general funds 85,244 12,194 (29,296) (6,447) 7,282 68,977
Total funds 431,005 14,511 (34,561) - 38,412 449,368

34

Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

11.4.1 Endowment Funds - comparator

Opening Other Closing balance
balance as at Income Expenditure gains and as per 31 March
1 April 2020 2020-21 2020-21 Transfers losses 2021
£’000 £’000 £’000 £’000 £’000 £’000
H F Bailey 6,449 (6,906) 1,697 1,240
Aylwen Bursaries 2,339 615 2,954
Edward Hewlett 1,921 505 2,426
JJ Guthrie Blandford and
George Shuter Staff Benefit		 1,690 (1,690) 445 445
Hannington 757 199 956
David Hughes 563 148 711
Bailey City and Hackney 237 (563) 62 (264)
Hamblen Thomas 236 62 298
MacCready Mann 233 61 294
Levy Family 201 53 254
MAEL Jones 186 49 235
Funds <£200k 719 (123) 190 786
Expendable endowments 268,592 47,757 316,349
Total endowment funds 284,123 - - (9,282) 51,843 326,684

11.4.2 Restricted Funds - comparator

Material funds (over £500k at start of year)

Cardiac fund 2,335 113 (48) 2,400
Guthrie Blandford & Shuter nurses 303 49 (813) 1,690 1,229
Inflammatory Bowel disease Research 1,181 7 (17) 1,171
Margaret Centre 992 15 (50) 957
Gastroenterology Whipps Cross 645 - 0 645
Barts Hospital Fundraising 216 380 (32) 564
Funds 400-500 428 3 (7) 424
Funds 300-400 1,978 4,303 (3,872) 2,409
Funds 200-300 1,973 479 (94) 2,358
Funds 100-200 1,868 156 (83) 1,941
Others 5,686 1,650 (2,483) 126 4,979
17,605 7,155 (7,499) 1,816 - 19,077

11.4.3 Designated and general funds - comparator

Cardiac Fund 122 122
Whipps Cross General Fund 128 128
Funds up to £100k 152 32 184
Total designated funds 402 - - 32 - 434
General funds 69,469 13,215 23,658 7,434 18,350 84,810
Total designated and general funds 69,871 13,215 23,658 7,466 18,350 85,244
Total funds 371,599 20,370 16,159 - 70,193 431,005

35

Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

11.5 Funds (additional)

Endowment funds

Note 1D on page 23 provides further details of the endowment fund structure. There were no other resources received, expended or transferred in 2021/22. Expenses have not been charged to the endowment funds. Due to the historic nature of these, there is no certainty that the terms of the trust of the endowed gift would allow this. In conjunction with ongoing works to consider the provenance of these funds, we continue to review this methodology.

Restricted funds

Note 1D on page 23 provides further details of the restricted fund structure. There was no allocation of interest or expense to the funds in 2021/22, given that they are funded from readily available cash. The Charity is continuing a review of its restricted funds at hospital sites. The target is to consolidate these into fewer funds with more flexible purposes at each site in order to promote more effective expenditure. Finalised changes will be reported in FY2022/23.

Details of material funds

Name of fund Nature and purpose of fund
Cardiac Treatment of and research into cardiac disease
Margaret Centre Provision of palliative care at the Margaret Centre (Whipps Cross Hospital)
Covid-19 response Emergency fund set up to provide an immediate response to the Covid-19 pandemic
Gastroenterology Gastroenterology unit (Whipps Cross Hospital)
Barts Hospital Restricted to innovative work at St Bartholomew’s Hospital
Renal Disease Research Treatment of and research into renal disease

Transfers between funds

Included in the balances brought forward are amounts relating to permanent endowments that had been agreed to be closed by the Charity Commission in 2020. The amounts shown in this column therefore represent the closure of the permanent endowment funds and the transfer of the final amounts to the expendablr endowment fund,or else a previously agreed restricted fund, or in one case, the general fund. Two of the funds were classified as being below the value required for separate disclosure.

11.6 Prior year distribution of net assets and gains/losses

Unrestricted Restricted Endowment 2021 Total
funds funds funds funds
Distribution of net assets between funds £'000 £'000 £'000 £'000
Total fixed assets 145,214 32,086 326,684 503,984
Current assets 15,901 - - 15,901
Current liabilities (16,588) (2,676) - (19,264)
Creditors: amounts falling due after more than one year (59,283) (10,333) - (69,616)
Total net assets 85,244 19,077 326,684 431,005
Net (losses) on investments and heritage assets 18,350 - 51,843 70,193

36

Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

12 Notes to the cash flow statement

12.1 Net cash used in operating activities

2022 2021
£’000 £’000
Net income / expenditure for the year 18,363 59,406
Adjust for:
Gains on revaluation or disposal of investment assets (35,812) (64,705)
Investment income (11,468) (12,910)
Depreciation charge 102 71
Loss on disposal of fixed assets 85 -
Change in debtors 157 1,890
Change in creditors 5,361 5,865
Net cash used in operating activities (23,212) (10,383)

12.2 Analysis of changes in cash and cash equivalents

2021 Movement 2022
£'000 £'000 £'000
Cash in hand and at bank 18,957 (11,433 ) 7,524

As at 31 March 2022, the charity had no loans, leases or other financial instruments classified as debt (2021: none).

13 Trustee transactions

Trustees were reimbursed the following amounts in 2021/22 and 2020/21

2022 2021
Trustee expenses £ no £ no
Reimbursement of fees 136 1 - -
Hospitality expenses 249 2 135 1
385 3 135 1

Premiums for Trustee indemnity insurance were paid by the charity on the part of Trustees, £4,210 (2020/21: £1,558).

37

Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

14 Related party donations

The total amount of related party donations made, without conditions, was £4,200 (2020/21: donations of £240).

The total amount of related party donations with conditions was £20 (2020/21: £nil).

During the year Barts Charity made revenue and capital grants as detailed below.

2022 2021
£m £m
Barts Health NHS Trust 11.1 10.7
Barts and The London School of Medicine and Dentistry 15.8 13.4
Total 26.9 24.1

15 Operating leases

15.1 Operating lease income

The Charity generates income from leasing out space within its investment properties.

The future minimum lease payments receivable under non-cancellable operating leases are:

2022 2021
Total Total
£’000 £’000
Not later than one year 3,096 3,316
Later than one year and not later than five years 4,179 6,531
Later than five years 446 496
Total 7,721 10,343

15.2 Operating lease commitments

At 31 March 2022 Barts Charity were committed to making the following payments in respect of operating leases:

2022 2021
Total Total
£’000 £’000
Not later than one year 242 105
Later than one year and not later than five years 363 -
Total 605 105

38

Annual Report 2021 – 2022

Financial Statements

for the year ended 31 March 2022

Notes to the financial statements (continued)

16 Net (expenditure)/income for the year

2022 2021
Total Total
£’000 £’000
This is stated after charging:
Auditor’s remuneration 66 59
Other payments to auditor:
Tax advice - 9
Accounts preparation - 4
Amortisation 67 40
Depreciation 35 31

39

Barts Charity

Ground Floor 12 Cock Lane London EC1A 9BU

E: hello@bartscharity.org.uk

T: 020 7618 1717 Registered charity no. 212563 Registered company no. 07168381

www.bartscharity.org.uk