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2021-03-31-accounts

The Salvation Army United Kingdom and Ireland Territory The Salvation Army Social Work Trust Report and Financial Statements for the United Kingdom in the year ended 31 March 2021 Charity Registration No: 215174 Scottish Charity Registration No: SC037691 Principal Office Territorial Headquarters: 101 Newington Causeway, London SE1 6BN www.salvationarmy.org.uk

CONTENTS

Introduction from the Territorial Commander ....................................................... 3 Our Vision, Mission & Values ........................................................................... 4 Objects of The Salvation Army Social Work Trust ................................................... 5 Our Organisation ......................................................................................... 5 Explaining Our Strategy, Structure, and Operation ................................................. 6 Summary of what The Salvation Army Social Work Trust does .............................. 6 The scale of the work of The Salvation Army Social Work Trust ............................. 7 How We Work ....................................................................................... 9 2020/2021 A Year in Review. Highlights, Achievements, Delivery, and Impact .................. 11 A Safe Place and A Fresh Start for Homeless People ............................................... 11 Breaking the Chains of Addiction ...................................................................... 12 In the Frontline Against Modern Slavery .............................................................. 13 Just the Job for Everyone .............................................................................. 15 Challenging Disability ................................................................................... 16 A Fuller Life for Older People .......................................................................... 17 Opening Doors for Children and Young People ...................................................... 18 Helping People Find Their Way Out of Debt ......................................................... 19 Speaking Up for Justice and Seeking Reconciliation ................................................ 20 Raising Funds ............................................................................................. 21 Subsidiaries ............................................................................................... 22 Modern Slavery and Anti-Human Trafficking Statement ............................................ 23 Reviewing Finances ..................................................................................... 24 Reserves Policy .......................................................................................... 27 Investing for The Future ................................................................................ 28 Structure, Governance and Management ............................................................. 31 Recruitment and Appointment of Directors (Trustees) ............................................. 32 • Training and Induction of Directors ............................................................ 32 • Decision Making .................................................................................. 32 • Directors’ Responsibilities ...................................................................... 33 • Remuneration of Key Management ............................................................ 33 • Risk Management & Principal Risks ............................................................ 34 Directors .................................................................................................. 36 Advisers ................................................................................................... 37 Independent Auditors’ Report ......................................................................... 38 Financial Statements .................................................................................... 42

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INTRODUCTION FROM THE TERRITORIAL COMMANDER

Commissioner Anthony Cotterill

Right from its earliest days as a Christian church with a social mission, The Salvation Army has been in the front line against the greatest evils that affect our society, including poverty, unemployment, homelessness and drugs. Never has that been truer than in the past year, when the lives and livelihoods of so many people were devastated by the coronavirus.

In so many ways, we were tested to the limit, but with God’s help we rose to the challenge, working harder and more effectively than ever before. That we were able to do so is down to the

energy and commitment of our officers, staff and volunteers across the Territory. But it is also due to the unique way The Salvation Army works.

Our local churches and centres were flexible and agile enough to respond to the needs of their own communities. At the same time, our specialist services – Lifehouses, employment services, debt advice services and many more – offered highly effective solutions to complex problems, delivered by skilled, professional staff. This report focuses mainly on these specialist services and the vital contribution they made to people’s lives.

At a time when so many business and public services were shutting down because of the pandemic and lockdowns, we were determined that this wouldn’t happen to our social services, precisely when they were needed more than ever. And yet we were not just satisfied to ‘keep calm and carry on’. We seized the opportunities to do more for people who were homeless, jobless and isolated by the lockdown, transforming and modernising our services where necessary.

We innovated and expanded our services in very many ways. To give just a few examples: there were new initiatives to help bring homeless people in off the streets; more services to support victims of modern slavery; and much-needed new programmes to protect the mental health of vulnerable young people. We were also a persistent and forceful advocate for the needs of vulnerable people in our discussions with the Government.

In the messages I write for our annual reports, I always like to give my thanks to all the people who make our work possible – our devoted officers, staff members and volunteers; and everyone who supports our work. This year I do so with particular warmth. Faced with an emergency like no other, everyone in the Salvation Army ‘family’ gave their time and effort unsparingly to serve others. I would also like to give special thanks to our donors and partners for their wonderful support at such a difficult time.

Last year we saw The Salvation Army at its very best. Thank you and God bless you for helping us rise to the challenge.

Commissioner Anthony Cotterill Territorial Commander of The Salvation Army in the United Kingdom and Ireland

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OUR VISION, MISSION & VALUES

Our Vision and Mission statements were explored and restated during 2020/2021 to reaffirm our sense of purpose and direction for the territory.

Vision statement:

Mission statement:

Our values:

Boldness – We will courageously and confidently share the good news, seek justice and reconciliation, nurture disciples of Jesus, serve others without discrimination, care for creation.

Compassion – We will serve with the unconditional love and grace of God as the pattern for our behaviour.

Passion – We will bring our best selves, our God given energies and convictions to our work, service and learning, whether as officers, members, employees or volunteers.

Respect - We will receive each person with the dignity of those created in the image of God, while seeking the transformation God.

Integrity – We will be honest and transparent in all our dealings with each other and those we serve, being open about our motives and agendas.

Mutual accountability – We will willingly and freely give full account for our actions to those we interact with and expect the same in return.

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THE OBJECTIVES OF THE SALVATION ARMY SOCIAL WORK TRUST

Promoting the charitable work of The Salvation Army in such one or more of the following ways as The Salvation Army Trustee Company shall think fit, namely:

OUR ORGANISATION

The Salvation Army was founded in 1865 by William and Catherine Booth and currently operates in more than 130 countries. The world leadership of The Salvation Army is provided by The General of The Salvation Army.

The General is assisted by officers and staff based at International Headquarters in London. The current General is Brian Peddle who was elected into office in August 2018.

The United Kingdom and Ireland Territory is under the command of a Territorial Commander, appointed by the General and responsible to him/her for the day-to-day administration of Salvation Army work throughout the British Isles, including the Channel Islands, the Isle of Man and the Republic of Ireland. Commissioners Anthony and Gillian Cotterill are the leaders of The Salvation Army in the UK and Republic of Ireland.

The Salvation Army in the UK is an integrated, yet diverse, organisation that contributes to the betterment of society in the service of God and people. Legally, we are structured under two main trusts. These are:

Therefore, we publish two separate reports and accounts. This document is the Annual Report and Accounts for The Salvation Army Social Work Trust. Together both trusts reflect the life and work of The Salvation Army as a whole and exist to enable effective management and accountability for the two main ways in which we work.

Further information on our legal structures and our governance is included later in this Report.

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EXPLAINING OUR STRATEGY, STRUCTURE AND OPERATION

The Salvation Army Social Work Trust is the charity registration through which we operate our centrally coordinated (i.e. not church or community centre based) programmes of support for people experiencing homelessness, older people in our care homes, our addictions services and our delivery of support for the victims of modern slavery and human trafficking, and other specialised forms of support.

The Salvation Army Trust, whose report and accounts form a ‘sister’ publication to this outline the church life of The Salvation Army and the community-based programmes of engagement and support that are delivered through our corps (churches) and community centres.

Summary of what The Salvation Army Social Work Trust does

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The scale of the work of The Salvation Army Social Work Trust in the UK

12 Care Homes for Older People

Belfast: The Sir Samuel Kelly Memorial Home (accommodation (hereon acc) 39) Buxton: The Hawthorns (acc 34) Coventry: Youell Court (acc 40) Edinburgh: Davidson House (acc 40), Eagle Lodge (acc 33) Glasgow: Eva Burrows Day Centre (places 24) Hassocks: Villa Adastra (acc 40, plus 5-day care) London: Glebe Court, Lewisham (acc 40) North Walsham: Furze Hill House (acc 40) Prestwich: Holt House (acc 31) Sandridge: Lyndon (acc 32) Southend-On-Sea: Bradbury Home (acc 34) Weston-super-Mare: Dewdown House (acc 40)

8 Centres for Families (Residential)

Belfast: Glen Alva (acc family units 20, max 77 residents), Belfast: Grosvenor House (acc family units 19, max 76 residents), Belfast: Thorndale Parenting Assessment (7 family units) Belfast: Thorndale Family Centre (acc family units 34, single bedsits 4, max 125 residents) Fleetwood: George Williams House (acc family units 9, max 36 residents) Portsmouth: Catherine Booth House (acc family units 21, max 40 residents), Portsmouth: St Paul’s House (acc family units 14, max 56 residents), Portsmouth: St Monica’s House (acc family units 10, max 40 residents)

2 Centres for People with Learning Disabilities

Kilbirnie: George Steven Centre Liverpool: Strawberry Field

Centre for Employment and Training

Hadleigh: Hadleigh Farm Estate

42 Centres for Single Homeless (Adults)

Belfast: Centenary House and Calder Fountain (acc direct access 120) Birmingham: William Booth Centre (acc 74) Blackburn: Bramwell House (acc 55) Bradford: The Orchard (acc 42) Braintree: New Direction Centre (acc 14) Bristol: Logos House (acc 69) Cardiff: Tŷ Gobaith (acc 78) Coventry: Harnall (acc 80), The Gateway (60) Dundee: Strathmore Lodge (acc 25), Burnside Mill (acc 20) Edinburgh: The Pleasance (acc 37) Glasgow: Eva Burrows 1st Stop Project (acc 40), Hamilton, Housing First, Huntershill Court (acc 10), Wallace of Campsie House (acc 52), William Hunter House (acc 43)

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Grimsby: The Booth Lifehouse (acc 35) Hull: William Booth House (acc 113) Huntingdon: Kings Ripton Court (acc 36) Ipswich: Lyndon House (acc 39) Liverpool: Ann Fowler House (acc 38), Darbyshire House (acc 45) London: Cambria House (acc 48), Founders House (acc 110), Riverside Complex (acc 50) Manchester: Discovery House (acc 10), Endeavour House (acc 15), Independence House (acc 15) Perth: Skinnergate (acc 30) Plymouth: Devonport House and Zion House (acc 72) Reading: Shepton House, Willow House (acc 38) Ryde: Fellowship House (acc 27) St Helens: Salisbury House (acc 68) Salford: Abbot Lodge (acc 20) Sheffield: Charter Row (acc 56), Lincoln Court (acc 15 self-contained units) Skegness: Witham Lodge Southampton: The Booth Centre (acc 46) Stoke-on-Trent: Vale St (acc 60) Sunderland: Swan Lodge (acc 65) Swindon: Booth House (acc 50) Warrington: James Lee House (acc 54)

4 Centres for Single Homeless (Young People)

Accrington: Crossroads (acc 11) Cardiff: Northlands (acc 26) Fleetwood: George Williams House (acc 6) London: Springfield Lodge (acc 40)

4 Homelessness Day Care/Drop In

Bradford: Day Centre Edinburgh: Niddry Street London: No 10 Project Norwich: Pottergate Arc

4 Housing First Programmes

Cardiff Glasgow Hamilton Merthyr Tydfil

5 Non-Residential Homelessness Services

Aberdeenshire Floating Support Cardiff Bus Project Cardiff Floating Support EIP York Inverness Floating Support

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6 Drug and Alcohol Services (Scotland)

Aberdeen Falkirk Glasgow Greenock Inverness Stirling

Our Employment Plus programmes engaged with over 7,500 people, supporting then, coaching them and helping them into work across the UK.

How We Work

While The Salvation Army is not unique as a provider of centrally coordinated residential and support services, it is certainly distinctive in terms of its structure, and this distinctiveness gives us a real opportunity to go about our work in impactful ways.

The Salvation Army is a church and charity that doesn’t just help people by providing immediate, practical support to overcome issues such as addiction, experiencing homelessness, social isolation or poverty and recovery from slavery; it also strives to address the reasons that cause these situations, with a view to effecting sustainable change in individuals and society at large.

What sets The Salvation Army apart from other organisations is that we have the combined strength of our centrally co-ordinated services and our locally co-ordinated churches and community centres which are all playing their part to bring about positive change. When this really comes together, as it does in many places across the UK, it models what we call ‘integrated mission’.

Our Social Work Trust, for which this is the Annual Report and Accounts, is the charitable registration through which we allocate and manage funds for our (principally) residential centres and centrally co-ordinated operations. Much of the funding for this work is channelled through government and local authority payments and grants, with the cost of the additional support, wellbeing and training services being met from a grant from our sister charity, The Salvation Army Trust. To see the full picture of our work, you will need to read both sets of Reports and Accounts.

Our strategy in the Social Work Trust has been to ensure the work of these mainly residential centres is effective and efficient, compliant and as transformative and as supportive as possible, and that all we do starts with the needs of people we serve. That is why in addition to statutory funding we are committed to deploying Salvation Army funds to provide the best possible additional support services we can, in order to achieve the best outcomes for the people in our care.

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While we have ongoing contractual commitments which it is our mission to meet, we are always looking to ensure that opportunities for us to make additional differences are identified, assessed, and when possible seized. Our strategy therefore is one of controlled and best possible ongoing delivery, and at the same time a disciplined ambition to do as much as we can in ways that are as meaningful and innovative as we can, in as much of the UK as we can. As we look forward, for as long as we can afford to, we will commit to identifying additional opportunities to deliver services.

The Salvation Army Trust provides centrally co-ordinated facilities – such as HR, finance, property, IT, PR and media support. This approach enables us to be efficient and effective in the use of resources.

Work has been ongoing in recent years to improve the quality of headquarters support to local units while ensuring cost efficiency and sustainability. This is led by the Structure Coordination and Design Project which is focused on three desired outcomes:

This project is complex and is seeking gradual change over the next couple of years.

This report illustrates just some of the developments we have implemented in the last year, in the context of a terrible pandemic, as we work to deliver our mission and strive to achieve our vision. We are blessed to have the resources to operate in this way and we believe – and know – that our approach helps transform the lives of thousands of people every day.

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2020/2021: A YEAR IN REVIEW – HIGHLIGHTS, ACHIEVEMENTS, DELIVERY AND IMPACT

In the early months of 2020, a tiny virus transformed the world completely. As the coronavirus pandemic spread to the UK and Ireland, it brought sickness, economic devastation, unemployment and poverty. It also brought loneliness, as many people became isolated in their own homes.

Never has The Salvation Army’s ‘can-do’ spirit been needed more. As a church and charity that is rooted in hundreds of communities and with a substantial, centrally managed and coordinated base of residential centres and contracted operations, we were right in the front line of the crisis – and we responded immediately to people’s needs, doing what needed to be done. This report highlights the way in which The Salvation Army responded to this crisis through The Salvation Army Social Work Trust.

A SAFE PLACE AND A FRESH START FOR HOMELESS PEOPLE

n Lifehouses and the pandemic. The pandemic and lockdowns created a huge challenge for the staff in our Lifehouses (residential centres for homeless people) across the UK and Ireland. Yet we stayed open and fully supported the Government’s Everybody In initiative, increasing the capacity of our Lifehouses to help bring vulnerable people in off the streets.

We also came to the aid of homeless people accommodated in hotels in many of our major cities, providing food parcels and emotional support to people who were temporarily housed and isolated during the lockdown.

n Hope after hospital. Last year, The Salvation Army introduced a new, much-needed service to homeless people who were due to be discharged from hospital. They were offered ‘stepdown beds’ at our St Ann’s building in Westminster, which gave them a safe space to recover while also freeing up NHS beds. We provided round-the-clock care, while a specialist nurse and housing worker from Guy’s and St Thomas’ NHS Foundation Trust visited the patients twice a week to support them with their health needs and help them move on to longer-term housing

Tess James, a clinical nurse specialist with Guy’s and St Thomas’ Homeless Health Team, said: ‘Many of the patients are clinically vulnerable and are unlikely to survive sleeping rough. By giving people a safe place to live, we can continue to provide the care they need.’ Patients were also signposted to legal and housing support and alcohol and drug services to help them get back on their feet and make a fresh start.

n Bringing rough sleepers to safety. During the pandemic, we continued our efforts to help bring rough sleepers in from the cold and dangerous streets. The work of the York Salvation Army’s Early Intervention and Prevention (EIP) team is a good example. Staff members continued to carry out regular street walks to help people experiencing homelessness find safe accommodation quickly. The EIP team also worked closely with food providers to co-ordinate deliveries to people already in emergency accommodation.

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n A safe refuge and a helping hand. Our Pottergate Day Service for homeless people in Norwich has continued to function throughout the pandemic and has now increased its provision to 7 days a week. The needle exchange programme – vital to prevent the spread of infection – was the only one available in the city, as the other services closed during lockdown. The Salvation Army staff continued to provide an excellent service, providing takeaway meals and shower facilities.

n A more settled future for rough sleepers. A new service, Hamilton 1st Stop Service , was opened in partnership with South Lanarkshire council to provide additional, short-term but more settled accommodation for former rough sleepers previously accommodated in hotels.

n Local initiatives. Despite the pandemic, The Salvation Army continued to find new and innovative responses to homelessness. We secured Government funding to extend ‘floating’ support for homeless people in Bristol and Swindon; Somewhere Safe to Stay provision (short-term accommodation for rough sleepers) in Southampton; and outreach in the Isle of Wight. Springfield House in Milton Keynes has been awarded £5,000 for a Mental Health and Wellbeing project.

n Client survey brings good news. During lockdown, we carried our satisfaction survey among the users of our homelessness services – and the results were remarkably encouraging. 830 people responded, of whom 94% were satisfied or very satisfied with ‘being made to feel welcome’ into our services; 90% were satisfied or very satisfied with our Covid safety measures; and 90% with the inhouse mental health support offered to them. Our director of Homelessness Services Lorrita Johnson commented: ‘The results show what a fantastic job our frontline staff and officers have been doing over this very difficult year.’

n Stopping the spread of disease. Staff members at The Salvation Army’s Devonport Lifehouse (centre for homeless people) in Plymouth have been praised by the council for stopping a coronavirus outbreak among its residents. One occupant tested positive for the virus and was immediately moved to a self-contained flat to self-isolate. The flat had been deep-cleaned in advance as part of the staff’s forward planning and kept empty in case it was needed.

BREAKING THE CHAINS OF ADDICTION

n Keeping going through the pandemic. The Salvation Army has three specialist addiction services, as well as an array of outreach services and community services that support people with addictions. When the pandemic struck, we were determined to keep this work going, knowing how vital it was. As addiction-related deaths continued to soar (estimated to have risen by a further 30% during Covid) and austerity continued to decimate drug and alcohol agencies and support services, we were – more than ever before – in the front line of the battle against addiction.

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n Getting to the roots of addiction. The Salvation Army has developed a distinctive approach to helping people break the grip of addiction – focusing less on ‘What’s wrong with…?’ and more on ‘What’s happened to…? In other words, we aim to address the root causes of addiction. We believe in each and every person’s unique strengths, character, and capacity to thrive given the right circumstances. – and we support our service users as they overcome their problems and move on with their lives. The work of our Addictions Development Team has also helped us to embed a culture of harm reduction in all our Lifehouses, day centres, outreach and other services – helping people stay as safe as possible and minimise risks to themselves and others.

n Core Recovery: - a spiritual journey from addiction to recovery. For many people, the journey towards recovery from addiction is at least partly a spiritual journey. That is why we have introduced a programme called Core Recovery into our addiction services. Booth House Lifehouse in Swindon is one of the Salvation Army services that has introduced Core Recovery Church in the last year. ‘The distinctive thing about our church is that it is interactive,’ explains chaplain Captain Brian Ward. ‘Most of the congregation are people who are in recovery from addictions. I deliver Christianity in a way the congregation can understand so that church can be accessible.

‘What we try to emphasise are that we’re not going to judge anyone, regardless of where they’ve been and what they’ve done, and that we’re going to journey with them,’ explains Brian. ‘It’s natural for people to seek God because it’s part of their spiritual DNA. So, it’s about recognising that and helping people understand what that means for their personal journey.’

IN THE FRONTLINE AGAINST MODERN SLAVERY

n The Salvation Army wins new victim care contract. In the year under review, The Salvation Army was awarded the Government’s new Modern Slavery Victim Care Contract to manage the support of adult victims of modern slavery in England and Wales from 2021 for at least five more years. We have held the contract since 2011 and have supported more than 10,000 adult victims of modern slavery and human trafficking since then. Under the new and extended contract, all survivors of modern slavery referred in England and Wales will now to entitled to receive support from The Salvation Army at all stages of their recovery. That includes a safe place to stay as well as a support worker to help them access the help they require.

Commissioner Anthony Cotterill, leader of The Salvation Army in the United Kingdom and Ireland Territory, said: ‘We are grateful for the opportunity not only to continue to serve these most vulnerable people but to extend the support available to them at all stages of their recovery.’

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n More British victims. Figures published in October 2020 revealed that The Salvation Army supported 79% more British slavery survivors in that year than in the previous year. The figures suggest that, although most of the victims of modern slavery are people who have been trafficked from abroad, more British people are falling victim to this form of cruel exploitation. Of the 243 British victims we helped last year, 111 were coerced into crime, 70 were victims of forced labour, 46 were forced into sexual exploitation, and nine were trapped in domestic servitude. Alarmingly, 40% of the people who came to us for help were young people, aged between 18 and 25.

Overall, 2,662 people entered The Salvation Army’s network of safe houses and outreach work between July 2020 and June 2021 – this is slightly more than the previous year despite the potential impact of restrictions to businesses, travel and opportunities to spot signs of slavery in the light of COVID-19.

n Call for vigilance. The Salvation Army called for members of the public to be ‘vigilant’ in spotting the signs of modern slavery. This followed a fall in the number of suspected modern slavery victims at the start of the lockdown, which is probably due to a decrease in opportunities for identifying victims, rather than a decrease in exploitation.

Our director of Anti-Trafficking and Modern Slavery, Major Kathy Betteridge said: ‘Our pressing concern is that slave masters are discarding people who they had been forcing to work in places like restaurants, hotels and car washes and that these people may not know what help is available. We would encourage anyone in this position to call The Salvation Army. We are also calling on the public to be vigilant in spotting the signs of people trapped in slave-like conditions and to report their suspicions to the police.’

n Outreach work grows. The past year saw a significant growth in our outreach work for victims of modern slavery in London and East Midlands. Our London outreach service had over 100 clients and the premises in Argyle Street became a central hub for staff and clients.

n Survivor support. Our Connect programme, offering ongoing survivor support, completed its pilot programme and was extended. It offers practical and holistic support to survivors who are awaiting their decision from the authority. It aims to support people on their journey from victim to survivor and provides a range of services, including a drop-in service, participation in community events and mentoring. Connect also continued to serve its clients virtually. A donor gave a gift of smartphones for those survivors who would otherwise not be able to access online services.

n Prize-winning film gets the message across. Hidden In Plain Sight , a Salvation Army short film made to raise awareness of modern slavery, was awarded a top prize in the Charity Film Awards. Four hundred charities entered the awards, and more than 110,000 people voted to select the winners.

n Anti-Slavery Day. The Salvation Army raised awareness of modern slavery for Anti-Slavery Day (18 October 2020) by asking people to buy a special edition #WeAreNotForSale face mask. All profits from the sale of the mask went to our Victim Support Fund to help survivors of modern slavery as they start to rebuild their lives. People who bought a face mask were encouraged to take a picture of themselves wearing it and share it online with the #WeAreNotForSale hashtag.

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n Cashless payments. The Salvation Army donated £20,000 from its Victim Care Fund to provide cashless payment support for victims of modern slavery living in safe houses and receiving outreach support. Money for food and living expenses would normally be provided in cash to help people on their journey of recovery. In partnership with B4B payments, The Salvation Army provided a prepaid Mastercard instead so that money could be accessed in a secure, safe way.

n The Salvation Army teams up with the Met. In May 2020 The Salvation Army partnered the Modern Slavery Investigation team of the Metropolitan Police in a series of raids tackling the sexual exploitation of women. Detectives made six arrests in the city of Westminster and rescued a number of women, who were offered protective care and specialist support provided by The Salvation Army. Detective Superintendent Tara McGovern said: ‘The Met will continue to work with partners including The Salvation Army to combat human trafficking and modern slavery.’

n International anti-slavery work. Our Anti-Trafficking and Modern Slavery team has been working across the globe with Salvation Army colleagues in Nepal, Ukraine, Russia, Poland, India, Nigeria, Ghana, Kenya, Philippines, Argentina, South Africa, Bangladesh, Tanzania and Uganda. We were able to support individuals returning to their countries of birth, who have been victims of trafficking and are now seeking to rebuild their lives.

JUST THE JOB FOR EVERYONE

n Personal support for jobseekers. The pandemic brought a huge economic downturn. Firms closed or shed jobs – and finding a job was harder than ever. That’s why The Salvation Army stepped up its efforts to help unemployed people find the right jobs and training for them. Even during the lockdown, our Employment Plus service didn’t shut up shop. When face-toface meetings became impossible, we used online and telephone contact to go on working for our clients.

Colin is one of the people we have helped during the past year. He was out of work for a year and was beginning to lose hope that he would find another job. But Sally, our local employment development officer, couldn’t have been more helpful. She helped him to apply for a job in a local supermarket and to prepare for the interview. He couldn’t believe it when the firm contacted him and offered him the job.

Like all Employment Plus staff, Sally gives jobseekers individual, personal support so they can find the right career for them. She also supports them emotionally, at a time when their self-esteem may be at a low ebb - encouraging them to believe in themselves and what they have to offer. Very often that can make all the difference.

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n A step on the ladder for jobless young people. The Salvation Army has offered young people the chance to work for us as part of the Government’s Kickstart scheme. Kickstart funds six-month job placements for people aged 16 to 24 who are at risk of being unemployed long-term. As youth unemployment became a serious concern in this country, we responded by offering 84 placements, fully funded by the Government, in a variety of Salvation Army services. A wide range of fulfilling roles were made available to young people, ranging from catering staff and gardeners to marketing assistants and activities co-ordinators.

n Apprenticeships open doors for jobseekers. The Salvation Army is among the major organisations in this country who recruit new employees as apprentices and give them training to develop the skills and knowledge for a rewarding career. In the past two years The Salvation Army enrolled more than 90 people on apprenticeship programmes across a variety of services. They included older people’s services, homelessness services, health and social care, early years education, and line management. The training is delivered by approved external providers, colleges and universities.

CHALLENGING DISABILITY

n Hadleigh Farm trainees keep on learning in lockdown. Adults with additional support needs and their carers continued to find help, advice and life-skills training from The Salvation Army’s Hadleigh training centre, even when it closed during the pandemic. Staff members adapted training programmes so that the centre’s 150 trainees didn’t miss out on vital learning and support for their well-being during lockdown.

Hadleigh estate director Ciaran Egan explained: ‘We contact our trainees at least once a week to check on their welfare. We personally deliver a different practical activity each week for them to complete. This has included hanging baskets, cupcake baking and sanding activities. Each activity is matched to a YouTube tutorial and a set of easy-to-read instructions.’ The centre also offered online electronic activities, along with scavenger hunts, word searches and recipes to use at home.

n Strawberry Field trainees work from home. At our Strawberry Field training centre in Liverpool, the Steps to Work programme helps young adults aged 18 to 25 with learning disabilities to gain the skills they need to find employment. However, it was apparent right from the start of lockdown that the programme would have to change because of the new restrictions.

Within the first two weeks of social distancing, a whole series of online activities was planned to keep the trainees motivated. They included virtual exercise and sharing happy memories. The popularity of online ‘keeping in touch’ sessions helped us to move on to Steps from Home, a programme of online training. Each day the trainees were invited to log on to Zoom and spend up to an hour with each other and the Steps to Work training professionals.

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n Strawberry Field’s story – told in pictures. Mike McCartney (better known as Mike McGear), the younger brother of Sir Paul McCartney, has documented the progress of our Strawberry Field site in Liverpool since the demolition of the 1970s building to the development of our new training centre there. He has done this by creating a collection of fascinating photos, a selection of which have been exhibited at the Strawberry Field visitor centre. They will also be published in a book.

The exhibition covers the interwoven stories of The Salvation Army, the children’s home that was previously on the site, John Lennon’s childhood and the writing of the famous Beatles song Strawberry Fields Forever . It also offers never-before-seen insights into the redevelopment of the site into the inspiring training centre for young people with learning disabilities, which is currently changing so many young lives.

A FULLER LIFE FOR OLDER PEOPLE

n Singing with joy. The Salvation Army in Wrexham helped people with dementia by hosting virtual singing sessions throughout the pandemic. Like many Salvation Army churches, our church in Wrexham runs a range of dementia-friendly activities, including our monthly Singing By Heart . This had to close during the lockdown, but we decided to continue supporting these vulnerable people by delivering the sessions online.

Karen, our community manager in Wrexham, says: ‘The people who used to attend our sessions really missed them when they closed. So, we applied for grants to buy new equipment, so we could take Singing By Heart into local care homes. The songs definitely ignite memories for people, which they love to share. It’s wonderful that our centre is once again filled with joy and laughter.’

n Spiritual comfort for older people. In addition to the work that our local churches did to support lonely and isolated older people through the pandemic, The Salvation Army launched a dedicated programme called Silver Linings on our Facebook page. This is an ongoing series of daily devotionals that started in March 2020. These are biblical reflections aimed at older people. Two Zoom ‘conversation’ events to celebrate the International Day of Older People focused on Ageing Well and Spiritual Health.

Our ministry partnership with Faith in Later Life also introduced Daily Hope , telephone line offering music, devotionals, scriptures and prayers via a freephone number. In the first six months it received 250,000 calls.

n Coronavirus safety. The Salvation Army care home in Prestwich, Greater Manchester, was praised in a report by the Care Quality Commission for its efforts to keep residents, staff members and visitors safe during the pandemic. Inspectors commended the care home for its purpose-built, enclosed and sealed visitor pod that provided a complete barrier between visitors and residents and could only be accessed by visitors from the garden. The report added that ‘people were kept as safe as possible by a new zoning rota system which promoted social distancing’. A number of other homes also remained coronavirus-free due to outstanding infection control and actively minimising the risk to our residents.

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OPENING DOORS FOR CHILDREN AND YOUNG PEOPLE

n Online resources to inspire young people. In the past year, The Salvation Army has developed a range of online resources to keep young people, raise their spirits, safeguard their mental health and deepen their spiritual understanding. They include Upbeat and Made To Be , two resources for boys and girls respectively to build help them build emotional resilience. We also introduced Inside Out , a resource to enable young people to get into the Bible and apply it to their lives today – in conjunction with which we also distributed 1,300 Youth Bibles. A special promotion called Young Volunteers aimed at encouraging young people to volunteer in charity shops in the school holidays.

n A step on the ladder for jobless young people. The Salvation Army has offered young people the chance to work for us as part of the Government’s Kickstart scheme. Kickstart funds six-month job placements for people aged 16 to 24 who are at risk of being unemployed long-term. As youth unemployment became a serious concern in this country, we responded by offering placements in a variety of Salvation Army services. A wide range of fulfilling roles were made available to young people, ranging from catering staff and gardeners to marketing assistants and activities co-ordinators.

n Coping emotionally in the pandemic. The Salvation Army’s Southwark Young People’s Service in London (formerly Springfield Lodge Lifehouse) faced a huge challenge due to the pandemic. The Service performs a vital role as a resettlement service providing accommodation and support for young people. The young people here have experienced poverty, poor education and gang culture and need a fresh start with a highly trained team of staff to motivate them and support them. However, with so many of our support services locked down, we had to rethink how we worked.

Support workers continued to hold their regular key work sessions and one-to-one support sessions, often by telephone. Due to many of our young people not being in college or not working during the lockdown (many of them work in hospitality) staff had to coach them in how to be happy in their own company and look after their own mental health. They were difficult times, but for young people and staff alike, the important thing was to know that we were there for each other.

n Going the extra mile for homeless young people. The pandemic has been a difficult time for homeless young people, so The Salvation Army has gone the extra mile to help them. ‘For a young person who’s been homeless, moving to new accommodation can be worrying – and during lockdown there was an added level of anxiety,’ says Sally, who works for the Cardiff Young Persons Supported Accommodation Partnership, led by The Salvation Army. ‘Despite the challenges of social distancing, our team have worked at full capacity to help young people settle in and start making plans for the future.’

She adds: ‘It’s been a tough time, but the staff came up with some great ways to boost morale. We organised a social distancing pizza night and film evenings with safely spaced chairs. We also used social media to contact young people who are already living in their own home to check on their wellbeing. We made sure that they had food every day – and, very importantly, that they didn’t get lonely during lockdown.’

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HELPING PEOPLE FIND THEIR WAY OUT OF DEBT

n Easing the burden of pandemic poverty. The Salvation Army’s Financial Inclusion Service continued all through the pandemic to support people burdened by debt. The service manager Lorraine Cook says: ‘For the people we were already helping, our aim was to support them so that they would continue making payments to their creditors and would not run up extra debt. There were also many new clients needing our help.’

During the pandemic, our debt advice centres saw requests for help increase by 28% as pandemic poverty took hold of many vulnerable households. Lorraine says: ‘It’s not just people who have lost jobs. Nearly a fifth of those who got in touch with us cited low income as the main cause of their debt.’

n Keeping it personal. Our debt advice service is normally face-to-face, so we had to adapt it during lockdown so that we could provide an online service. We contacted people using whatever technology is available, which might be been a video call using WhatsApp or a telephone call. Nonetheless, service manager Lorraine Cook emphasises that debt advice is a person-to-person service which helps people in a holistic way.

Lorraine says: ‘Managing debt is more than just a repayment plan. The mental strain of being unable to pay basic bills is often overlooked, and it’s part of our job to address this. We can provide people with the food parcels they need to manage while we look for longer-term solutions. We maintain a relationship with each individual throughout their journey, linking them up with their local Salvation Army for ongoing emotional support and companionship.’

n Nadine’s story. Our Devon and Cornwall Debt Advisor, Nadine, told us about a case that moved her: ‘A man in his 60s came to us having been made redundant after 40 years in employment and he was living on the breadline. He couldn’t afford food, wasn’t able to pay for basic bills and was facing the prospect of living in his car as he was unable to pay for rent.

‘Thankfully we were able to intervene. We gave him a food parcel, ensured he had an energy supply and advised him on how to apply for Universal Credit and other benefits. We negotiated with the landlords, explained to him his legal rights and the processes to get help with housing. I don’t know what would have happened to him if he hadn’t sought our help, but nobody can survive without food and live in a car during winter’.

n Debt Relief Orders – call for reform. The Salvation Army responded to the Government’s consultation on debt relief orders, drawing on the knowledge and experience we have gained from our work helping people outdo debt. We welcomed the proposals to give people in debt a 60-day breathing space to get their affairs in order. However, we warned that longer-term solutions were needed to stop people facing hardship during the pandemic from building up debts.

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SPEAKING UP FOR JUSTICE AND SEEKING RECONCILIATION

n A guiding light for our times. In 1890 The Salvation Army’s Founder William Booth wrote In Darkest England in which he described the social problems of the time and his own blueprint for tackling poverty and social exclusion. Now The Salvation Army has published a new book In Darkest England: 130 Years On showing how Booth’s principles are still relevant today.

Lieut-Colonel Dean Pallant, Secretary for Communications for The Salvation Army in the UK and the Republic of Ireland, says: ‘The challenges people were facing in the late 19th Century are not too different from those people are experiencing today. Pandemic Britain is concerned about rising unemployment, debt, alcohol abuse, modern forms of slavery, a lack of affordable housing and people still living on the streets. Booth’s solutions are, 130 years on, still relevant and, more importantly, we know they work.’

n The Salvation Army warns of a poverty crisis. Even before the pandemic, The Salvation Army was warning of a poverty crisis, as the number of people living in poverty increased. Then, when the lockdown began, and many people lost their jobs and income, the number of people claiming Universal Credit grew sharply. Yet at the time there was a five-week wait before claimants receive their first payment – and we knew that a quarter of UK households had no savings. We therefore urged the Government to rethink the waiting period, which was leaving many families and young people in desperate poverty. We called for advance payment loans to be replaced by grants. We also urged the Government to retain the temporary £20 uplift to Universal Credit.

n Speaking up for rough sleepers. We warmly welcomed the Government’s interim housing plan, which provided £105 million towards interim housing for rough sleepers during the pandemic. However, we warned, as this assistance was only due to last for 12 months, it could not solve the problem of rough sleeping permanently. We urged the Government to do more in the longer term to bring rough sleepers in from the streets.

During the worst of the pandemic, the number of rough sleepers fell, as the Government’s Everybody In initiative helped to move them into temporary accommodation. However, The Salvation Army warned that the UK still faced a longer-term crisis. Our director of Homelessness Services Lorrita Johnson said: ‘Getting everybody in is only part of the solution. People need support to overcome the reasons why they ended up rough sleeping in the first place. Without sustained support, our experience tells us that these vulnerable people may end up back on the streets.’

We published our own report entitled Future-proof the Roof setting out what we believed needed to be done to reduce homelessness. The proposals included improving data collection to assess the number of people rough sleeping and their needs, as National Audit research has shown that the Government underestimated the number of people needing temporary accommodation in the first lockdown. It also included sustained investment to build on the progress made during the pandemic; and providing a steady supply of suitable homes.

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n Speaking up for vulnerable jobseekers. The Salvation Army welcomed the Government’s pledge to double the number of work coaches in jobcentres and offer more support for under-25s. However, we also warned that vulnerable jobseekers, such as those who lack computer skills or have mental health problems, could be locked out of the job market for years. We called for funding through the UK Shared Prosperity Fund to address the problem. The scheme is the Government’s post-Brexit replacement for EU funding that supported the most deprived communities in the UK.

n Defending refugees. Asylum seekers and refugees attract unwarranted criticism in some quarters. But as Christians we believe they have the right to be treated with dignity and humanity. We know that many have had no choice but to make a dangerous journey to seek safety from conflicts, persecution and violence.

We joined other churches to call on the Government to stop housing asylum seekers in military barracks but to find more suitable accommodation for them. We also joined with the Lift the Ban coalition of organisations in urging the Government to allow people seeking refugee status to have the right to work.

During the year, we welcomed the support of asylum seekers and refugees who volunteered to assist with our coronavirus response work. Many of them rolled their sleeves up to pack essential food parcels or cook meals for people who were going hungry.

n An inclusive church. In the past year, The Salvation Army issued strong statements against discrimination on grounds of sexual orientation or gender identity, race, religion and ethnicity. In the words of our inclusion statement, The Salvation Army ‘aims to be a church where everyone is welcome’.

RAISING FUNDS

The income streams for The Salvation Army Social Work Trust consist mainly of statutory funding and, to a lesser degree, income from the sale of assets and income from legacies and donations which have been specifically made to and received directly by this Trust.

Fundraising for the overall work of The Salvation Army, including the work carried out by The Salvation Army Social Work Trust, is managed through and executed under The Salvation Army Trust, a separate charity from The Salvation Army Social Work Trust.

One of the distinctive features in the delivery of services covered by The Social Work Trust is that we always seek to do the best we can to help people experience holistic change. Often this means providing additional support services, training and skills development. This comes at a cost, and therefore to meet this additional cost The Salvation Army Trust makes a grant to The Salvation Army Social Work Trust based on funding needs.

This grant is agreed in advance as part of the budgeting process, and the actual value of the grant made during the year appears in The Social Work Trust as ‘Grants Receivable: The Salvation Army Trust’.

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No active fundraising is carried out by The Salvation Army Social Work Trust.

Our fundraising and appeals programme feature the work of both trusts.

The Salvation Army Trust Report and Accounts form a sister publication to these reports and accounts.

SUBSIDIARIES

The Salvation Army Social Work Trust works in harmony with its subsidiary Salvation Army Housing Association (saha). saha operates nationally in 80 local authorities across England and has five main areas of operation:

  1. Agency Managed Centres (1,559 bed spaces):

saha works in partnership with a number of organisations nationally to provide a wide range of Agency Managed Supported Housing services.

  1. General Needs (1,280 homes):

saha has a range of accommodation for mainly single people; we also have flats and houses for families. Generally, residents access this accommodation through local authority waiting lists as we have nomination arrangements in place with the local authority partners.

  1. Accommodation for the over-55s (293 bed spaces):

  2. Some of saha’s accommodation is specifically designed for those over the age of 55, including a scheme manager providing on-site support. In accommodation where there is no staff on site, there will be an alarm call system and other types of floating or community support available. Styles of accommodation vary from studio flats to bungalows. Many of saha’s schemes have communal facilities where activities and clubs take place.

  3. Directly Managed Supported Housing (476 bed spaces):

  4. saha directly manage a number of schemes throughout England, both managing the building and delivering the day to day management and support. As with the Agency Managed schemes these support a wide range of homeless people and families. All of these schemes have 24 hour staff support, and residents engage in a range of activities to promote independence with the aim of resettlement into independent living.

  5. Registered Care Homes (52 bed spaces):

  6. saha manages a number of registered care homes, both directly and working with the parenting agency to provide support and care for clients in a residential environment.

saha also manages over 728 residential properties on behalf of The Salvation Army, providing a housing management service throughout the country.

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MODERN SLAVERY AND ANTI HUMAN TRAFFICKING STATEMENT

As the Salvation Army in the United Kingdom and Ireland Territory we hold a zero-tolerance stance on acts of modern slavery and human trafficking and on any breach of our Ethical Policy and will not condone any such action by our contractors, suppliers or consultants. We take this issue very seriously and are committed to preventing acts of modern slavery and human trafficking from occurring within our supply chain. Our Procurement Ethical Policy is integral to all supplier contracts and sets out the overall standards surrounding human rights, child labour, discrimination, corruption, bribery or other financial impropriety, legal compliance and ethical conduct with which our suppliers must comply.

A Supplier Ethical Declaration is referenced in the standard purchase terms and conditions of The Salvation Army and compliance is a contractual requirement for all suppliers operating under these standard terms and conditions. In addition, all suppliers and contractors submitting tender responses must confirm their agreement and acceptance of the terms and conditions and sign the ethical declaration and apply these standards to their own supply chains.

Our Procurement Unit continually reviews its supply base, examining suppliers in those areas that represent the highest risk of modern slavery, particularly in spend areas relating to temporary labour, cleaning, catering, linen, branded goods and building services. Where possible trade and industry best practice standards are used as the benchmark and the Salvation Army has adopted the use of Constructionline for tendering and selecting building suppliers.

Due to the importance of training and education in the fight against modern slavery, the Procurement Unit has partnered with Stronger Together to deliver training to members of its team on identifying potential victims of modern slavery. All members of the Procurement team compete the Chartered Institute of Purchasing and Supply ethical procurement assessment annually.

The Procurement team holds regular Helping the Salvation Army Buy Better training seminars for stakeholders where ethical supply chain issues are covered. The Procurement team has also hosted a supplier conference with a specific focus on providing education on combating supply chain labour abuses. The commitment to ensuring ethical supply chain standards is also embedded in the recently adopted Salvation Army Fiscal Stewardship Principles and the Procurement Unit will be asked to report against these standards regularly.

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REVIEWING FINANCES

Income

Income
Charitable activities:
Centres’ revenue income
Other social operations
Housing association turnover
Legacies and donations
Grants from The Salvation Army Trust
Investment and rental income
Other income
Total income		 2021
2020
£m
£m
73.3
75.7
51.7
36.2
24.7
26.3
149.7
138.2
5.3
3.5

16.0
16.0
1.5
2.7
0.2
0.0
172.7
160.4

Centres’ revenue income

The main elements are:

Other social operations

The main elements are:

Our Employment Plus team provides services to help unemployed people into work through several Work Programme contracts where The Salvation Army is a subcontractor. Income fluctuates as it is dependent on the number of referrals and also on clients securing and retaining employment.

We provided support to the victims of modern slavery under a contract with the Ministry of Justice. The demand for this service has increased year on year.

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Housing Association turnover

This represents the turnover of The Salvation Army Housing Association (saha), a subsidiary of the Social Work Trust, adjusted to reflect the accounting policies and reporting requirements of the Social Work Trust.

Legacies and donations

Legacies of £1.2m and donations of £4.1m were received in the current year.

Grants from The Salvation Army Trust

The Salvation Army Trust provide financial support to the Social Work Trust. This includes the Big Collection Appeal which is an annual door-to-door appeal by corps (church) members specifically for social work programmes.

Expenditure

Charitable activities:
Centres’ operations
Other social operations
Housing association operating costs
Cost of raising funds
Total expenditure		 2021
2020
£m
£m
86.3
100.8
54.0
40.6
21.8
28.2
162.1
169.6
0.1
0.1
162.2
169.7

Centres’ operations

This represents the operating costs of care homes for older people, Lifehouses, detox centres, day care centres and other non-residential projects. Decreased costs reflects significantly decreased activity at certain centres due to the pandemic.

Other social operations

The increased costs reflect the increase in the number of victims of trafficking being helped by our service as well as Employment Plus and family tracing.

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Net gains/(losses) on investments

There has been an unrealised gain on investments of £23.9 million (2020: loss of £7.6 million).

Funds

Including investment gains of £23 million, the Social Work Trust (excluding saha results) has generated a surplus of £33 million compared to a deficit of £16.0 million in the previous year.

Total funds at the year end were as follows:

Endowment funds
Restricted funds:
Social Work Fund
Social Work projects
saha operations
Total restricted funds
Unrestricted funds:
Designated funds
Unrealised investment gains
General reserve
Total unrestricted funds
Total funds		 2021
2020
£m
£m
15.8
12.7
76.4
75.6
43.8
39.6
123.8
125.0
244.0
240.2
12.2
12.6
64.8
44.1
12.9
8.2
89.9
64.9
349.7
317.8

Endowment funds

All endowment funds are represented by investment in the Common Investment Funds and the movement is due to the increase in market value of the investments. The capital value of the funds is retained but the income is applied to fund our work.

Restricted funds

Social Work Fund represents property assets including Lifehouses, care homes and other properties used for the operations of the parent charity. These funds are not therefore available to spend.

All income generated from defence services operations is restricted for this work. Funds restricted for social work projects represent legacies and donations given for specific purposes.

All saha funds are treated as restricted in the group accounts.

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Unrestricted funds

Designated reserves

These are funds set aside by the directors for capital projects, major repairs and refurbishments and future programmes. These will be used in the next three years to fund new developments and significant refurbishment projects as they are approved.

Unrealised gains

These are book profits subject to fluctuations in the stock market.

General reserve

This represents funds which are freely available for the general purposes of the charity.

RESERVES POLICY

Our reserves policy focuses on the level of general reserves.

We work with vulnerable and disadvantaged members of society, principally through our residential centres. We need reserves so that we can maintain continuity of our services in the event of a decrease in income or unexpected expenditure.

The directors have reviewed the main income streams, the risks associated with them, the main categories of expenditure and the extent to which these can be curtailed if required. A significant proportion of our income is received under contract from local authorities. As such this is subject to regular competitive tendering and to changes in central and local government policies. The Trust also receives a grant from its sister trust – The Salvation Army - generated from its fundraising to support work of the trust. There is a much smaller portion of income that is voluntary income which can be uncertain and fluctuate from year to year.

The level of general reserves is reviewed on a regular basis considering the risks and changes in the income and expenditure streams. During the year the Directors reviewed the reserves policy taking into account the risks and uncertainties faced by the Charity. Based on this review a target range of £4m to £5m was set for free reserves.

Whilst as at the year-end general reserves amounted to £12.9 million, given the uncertainties created by the ongoing pandemic, the Directors consider this to be appropriate.

The levels of designated funds are reviewed annually. These are funds set aside by the directors for new projects and to meet known future commitments such as maintenance of our properties.

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INVESTING FOR THE FUTURE

The charity holds its investments in The Salvation Army Common Investment Funds. These funds were set up under Schedule 2 of The Salvation Army Act 1980 to act as common investment schemes for certain Salvation Army Trusts.

The Salvation Army Common Investment Fund (No 1) consists of permanent endowments which are restricted by the wishes of the donor. In most cases the income is to be used for restricted purposes. The Salvation Army Common Investment Fund (No 2) is operated for those Salvation Army Trusts without permanent endowments. Both funds are managed by The Salvation Army Trustee Company. Cazenove Capital Management manages CIF1 and 50 per cent of CIF2, whilst Sarasin & Partners LLP manage 50 per cent of CIF2.

The funds are subject to The Salvation Army Act 1980 and the following guidelines:

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The Funds’ benchmark and ranges of distribution are as follows:

Asset Class
Equities:
Global
Bonds
Property
Cash		 Benchmark Range
%
%
40
+/-10
0
+/-10
10
+/-10
0
+10
100

The aims and objectives of the Common Investment Funds are as follows:

CIF1

Fund strategy is:

The performance objective of the Fund is to achieve an annual total return which exceeds the composite benchmark below by at least 1.25 per cent per annum, gross of fees, measured over rolling three-year periods.

Asset Class

Performance Benchmark

UK Equities FTSE All-Share Europe (ex UK) Equities FTSE All World Developed Europe (ex UK) Emerging Markets Equities FTSE All World Emerging Markets Asia Pacific Equities FTSE All World Developed Asia Pacific United States Equities S&P 500 Property IPD UK Property

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CIF2

The Fund strategy is to aim for capital growth rather than income. The performance objective of the Fund, excluding cash and gilts under lien, is to achieve an annual total return which exceeds the composite benchmark below by at least 1.25 per cent per annum, gross of fees, measured over rolling three-year.

Asset Class Performance Benchmark
UK Equities FTSE All-Share
Europe (ex UK) Equities FTSE All World Developed Europe (ex UK)
Emerging Markets Equities FTSE All World Emerging Markets
Asia Pacific Equities FTSE All World Developed Asia Pacific
United States Equities S&P 500
Property IPD UK Property
Cash and gilts under lien FTSE Gilts under 5 years

Performance for the year compared to the benchmark was as follows:

CIF1 CIF2
% %
Annual total return (gross of fees) 25.8 27.5
Benchmark return 27.1 27.1

For the year to 31 March 2021 CIF 1 slightly underperformed compared to benchmark, whilst CIF 2 met its benchmark performance objective.

In absolute terms the performance of the Common Investment Funds for the year was as follows:

CIF1 CIF1 CIF1 CIF1 CIF2 CIF2
2021 2020 2019 2021 2020 2019
% % % % % %
(Decrease)/Increase in capital value of fund 22.3 -9.3 8.8 25.5 -8.4 6.4
Average net income return 0.5 1.7 1.6 0.8 2.1 1.9

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STRUCTURE, GOVERNANCE AND MANAGEMENT

The United Kingdom and Ireland Territory is under the command of a Territorial Commander, appointed by the General and responsible to him/her for the day-to-day administration of Salvation Army work throughout the British Isles, including the Channel Islands, the Isle of Man and the Republic of Ireland.

The Salvation Army’s property in the United Kingdom Territory is held by The Salvation Army Trustee Company (SATCo), a company limited by guarantee, registered in England (No 00259322), with its registered office at 101 Newington Causeway, London SE1 6BN.

The two main trusts under which The Salvation Army in the United Kingdom operates are:

  1. The Salvation Army Social Work Trust, whose accounts are contained in this Report

  2. The Salvation Army Trust, Registration No 214779 in England and SCO09359 in Scotland

The governing document of The Salvation Army Trust is The Salvation Army Act 1980, as amended. Under Section 12(1) (a) The Salvation Army Trustee Company is appointed as the sole ordinary trustee of the trusts listed in Schedule 5 to that Act.

The governing document of The Salvation Army Social Work Trust is the Deed Poll dated 30 January 1891 and a supplementary deed dated 26 March 1969.

The Salvation Army Social Work Trust acts as managing agent for a number of projects on behalf of several registered housing associations, including The Salvation Army Housing Association.

Salvation Army Housing Association

The Salvation Army Social Work Trust holds one £1 share and has the power to exercise control over the Salvation Army Housing Association (saha). saha is registered with the Co-operative and Community Benefit Societies Act 2014 and is a registered social landlord regulated by The Regulator of Social Housing.

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RECRUITMENT AND APPOINTMENT OF DIRECTORS (TRUSTEES)

There are 14 directors, 10 by virtue of their appointments within The Salvation Army. One director is a divisional leader responsible for one of The Salvation Army’s 22 divisions. There are normally five external non-executive directors and the vacant position as at year-end is being reviewed.

Each non-executive director brings expertise in a relevant field – property, finance, fundraising/marketing, investments or social services. The appointment of non-executive directors is made by the General on the recommendation of the Nominations Committee

Training and Induction of Directors

The Company Secretary briefs new directors on their legal responsibilities and familiarises them with the Company’s governance folder (and previous Board minutes). This includes the articles of association of SATCo, the Charity Commission’s essential trustee guidance, and other key documents and policies (including the Conflicts of Interest Policy). The Company Secretary regularly delivers a written governance update on relevant issues at board meetings. Directors are also informed of and provided with the opportunity to attend several training sessions throughout the year.

Organisational Structure and Decision Making

SATCo’s board (the ‘Board’) is assisted by an Audit Committee, a Nominations Committee, an Investment Advisory Committee and a Risk Management Committee. The Audit Committee comprises a non-executive director chair and three independent members with a remit to review The Salvation Army’s internal and external audit arrangements and consider reports issued by internal and external auditors including the annual financial statements. The role of the Nominations Committee is to recommend new non-executive Board members. The Investment Advisory Committee includes three external advisers in its membership and advises on appropriate investments. The Risk Management Committee is referred to below under Risk Management.

The Board met bi-monthly in this reporting year, with some additional meetings scheduled as required. In addition to its oversight and governance role, the following matters require consideration and approval by the Board:

The Board has delegated day-to-day operational matters to the Territorial Operations Board.

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During the previous financial year, the Internal Audit Department reviewed SATCo’s performance against the Charity Governance Code for larger charities. The review identified a number of areas in which SATCo is performing well and other areas for development. The areas for development are being taken forward in preparation for another assessment that will take place in the next three years.

Directors’ Responsibilities

The directors of SATCo are required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of The Salvation Army Social Work Trust, and of the income and expenditure for that period. In preparing the financial statements, the directors are required to:

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy the financial position of The Salvation Army Social Work Trust and are required to ensure the financial statements comply with The Salvation Army Act 1980, the Charities Act 2011 and The Charities and Trustees Investment (Scotland) Act 2005. They are also responsible for safeguarding the Trust’s assets, taking reasonable steps to prevent and detect fraud and other irregularities.

The directors confirm they have taken account of the Charity Commission’s general guidance on public benefit when reviewing the charity’s aims and objectives and planning future activities and consider how planned activities will contribute to the aims and objectives set.

Key Management Remuneration

Key management personnel of The Salvation Army comprise Salvation Army officers and employees. Salvation Army officers do not receive a salary; instead they receive an allowance based on length of service and, as ministers of religion, are provided with furnished accommodation and a motor vehicle. The allowances received by officers in positions of key management range from £18,148.92 to £24,249.88 per annum.

For employees, we are committed to ensuring a proper balance between paying salaries which will enable us to attract and retain staff of the appropriate calibre and careful stewardship of charitable funds. All senior salaries are benchmarked against senior staff salaries of comparable organisations in the not-for-profit sector.

No remuneration of key management personnel is charged directly to the Social Work Trust. Further information is disclosed in Note 10 to the Accounts.

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Risk Management

The Salvation Army identifies, assesses and manages risks that could impact its activities so it can better achieve its objectives, comply with relevant laws and regulations and safeguard its funds and assets.

The Board (SATCo) has ultimate responsibility for overseeing risk management, in accordance with Charity Commission guidance (CC26). The Board’s Risk Management Committee (RMC) directs an enterprise-wide risk management programme to inform decision making and ensure effective procedures to identify and evaluate risks and implement effective controls.

The RMC considers the most recent developments in the most significant risks, while also prioritising broader developments to the Salvation Army’s approach to risk management. The most recent three-year plan promotes a deepening appreciation of the complexities of risk management within a wide-ranging structure, the importance of metrics to inform risk management and the implications of macro and global risks that may have consequences for the organisation.

Risk management operates through a top-down review by the RMC and bottom-up review by individual functions, enabling the identification and prioritisation of key and emerging risks. This enables site and service specific concerns to be identified and managed, whilst retaining high level oversight and assurance of the most significant risks facing the organisation. The RMC reports to the Board at least twice yearly on key risks. Through this risk management process the trustees have considered the major risks facing the organisation and satisfied themselves that controls are established to manage them.

Unfortunately, the nature of our work means that despite the steps we take, serious incidents can still arise, and we continue to place the utmost importance on reporting these to our regulators.

The Covid-19 pandemic not only had a significant impact on the Salvation Army’s Corps (churches) and services, but it also created significant new risks as essential provision continued, and in the reopening of sites. The management of some of our principal risks in the reporting year related to business continuity and Safe Mission (health and safety) which changed considerably as a result, while the mitigations of other risks were also adapted. The following table outlines the most significant risks for the reporting period, taking account of their impact and likelihood, and the mitigations in place to manage them.

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Principal Risks

The Salvation Army’s work is diverse, geographically spread across a broad range of settings and has a variety of beneficiaries. The risk landscape is therefore varied, and controls are deployed appropriately at different levels of the organisation. The following outline indicates the most significant TSA risks in the reporting period, and some of the strategic level mitigations we have in place.

Principal Risks Mitigation
Business Continuity- There is a risk
that the occurrence of a significant
incident where, during and after the
incident, The Salvation Army will not
be able to continue to be viable and
meet stakeholder expectations.		 Business continuity policies and procedures, including the application
of ISO27001 for some parts of the organisation, prepare us for
management of interruptions. Our business continuity plans have
been invoked to manage the pandemic response, enabling us to
continue delivering key services in challenging circumstances.
Cyber- The risk is that we fail to
protect our information systems and
the information they hold.		 We deploy multiple measures to protect our systems and the information
they hold. We work within an information security international standard
(ISO27001) and build on lessons from our internal and external audits in
this area.
The Salvation Army United Kingdom and Ireland Territory experienced
an IT incident in June of 2021, the impact on the work of the Social
Work Trust was contained with temporary operational adjustments
allowing the Trust to continue business as normal.
Data Protection- The risk that we
fail to protect sensitive and personal
data.		 As well as our data protection/GDPR policies and training we take
steps to ensure that personal data is treated properly through
appropriate security measures, staff training, the use of data
protection impact assessments and contractual requirements with
organisations we work with who process our personal data.
Financial Sustainability- The risk
that there is insufficient revenue
income and reserves to support
our operating model resulting in
the failure of The Salvation Army
to thrive in a rapidly changing
environment		 We continue to monitor the funding situation and adjust our financial
planning and commitments accordingly to ensure we are financially
resilient. We adjusted our approach during the pandemic to offer
enhanced monitoring of this risk, and acknowledging that contractual
income streams are significant, over the coming months/years careful
monitoring will be heightened as the UK moves forward in an ever-
changing socio-economic climate. Our Fiscal Stewardship Principles
guide our financial decision making.
Safeguarding- The risk is that we fail
to provide a safe environment, free
from abuse, for everyone, including
vulnerable beneficiaries.		 We continue to maintain clear policies and procedures in relation
to safeguarding and ensure the appropriate screening, training and
supervision of personnel. A subcommittee of RMC – the Territorial
Safeguarding Committee – oversees management of the risk.
Safe Mission– The risk is that we are
not able to ensure the health, safety
and welfare of personnel, service
users and members of the public
who are affected by our activities,
including in a Covid-impacted
environment.		 As Covid-related rules and guidance have changed, so have our processes.
Thanks to the continuation of our business continuity measures throughout
much of the pandemic, we have been adaptable and responsive in
ensuring that health and safety measures are proportionate and offer the
right protection for our personnel and beneficiaries.
Two RMC subcommittees – the Safe Mission Council and the Sudden
Deaths Review Group – inform the management of this risk.

Lieut-Colonel Alan Read, Director

On behalf of the Directors of The Salvation Army Trustee Company 10 December 2021

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DIRECTORS

The current directors of The Salvation Army Trustee Company and those who held office during the year are as follows:

Commissioner Anthony Cotterill ............... Chair Colonel Paul Main ............................... Deputy Chair (Appointed 20.11.20) Colonel William Lee Graves ................... (Resigned 31.10.20) Colonel Jenine Main ............................. (Appointed 20.11.20) Colonel Deborah Graves ....................... (Resigned 31.10.20) Lieut-Colonel Alan Read ....................... Managing Director Lieut-Colonel Andrew McCombe Lieut-Colonel Beverley McCombe Lieut-Colonel Dean Pallant Lieut-Colonel Judith Payne Major Noreen Batt Major Judith Hilditch Helen O’Brien Mark Puller Peter Gale Graham Roper ................................... (until 19.09.21) Andrew Stickland

The Chief Secretary, Colonel Paul Main, is responsible for the day-to-day management of the charity.

Committee Members (current)

Territorial Operations Board

Colonel Paul Main (Chair), Commissioner Gillian Cotterill, Tony Daniels, Major Mal Davies, Miguel Fiallos, Peter Grant, Major Judith Hilditch, Lorrita Johnson, Lieut-Colonel Andrew McCombe, Lieut-Colonel Beverley McCombe, Mitch Menagh, Alex O’Hara, Lieut-Colonel Dean Pallant, David Rice, Lieut-Colonel Alan Read, Julius Wolff-Ingham

Audit Committee

Andrew Stickland (Chair), Stephen Bright, Hannah Greenfield, Mike Grills

Investment Advisory Committee

Peter Gale (Chair), Mark Colton, William Dalziel, Major Judith Hilditch, Mary Haly, Major Beverly Lloyd, Lieut-Colonel Alan Read, Philip Rotherham, Daniel Wills

Nominations Committee

Peter Gale, Colonel Paul Main, Lieut-Colonel Alan Read, Elliot Thomas

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Risk Management Committee

Helen O’Brien (Chair), Lieut-Colonel Andrew McCombe, Lieut-Colonel Beverley McCombe, Lieut-Colonel Dean Pallant, David Rice, Lieut-Colonel Alan Read, Major Elwyn Harries, Elliot Thomas, Daniel Wills, Major Julian Watchorn, Julius Wolff-Ingham

Company Secretary

Elliot Thomas is Company Secretary of The Salvation Army Trustee Company.

ADVISERS

Bankers

Reliance Bank Limited, Faith House, 23/24 Lovat Lane, London EC3R 8EB

Auditors

Knox Cropper LLP, Chartered Accountants, 65 Leadenhall Street, London EC3A 2AD

Solicitors

England and Wales: Slaughter and May, 1 Bunhill Row, London EC1Y 8YY Scotland: Blackadders, 5 Rutland Square, Edinburgh EH1 2AX

Investment Advisers

BWCI Consulting Limited, PO Box 68, Albert House, South Esplanade, St Peter Port, Guernsey GY1 3BY

Investment Managers

Cazenove Capital Management, 12 Moorgate, London EC2R 6DA Sarasin & Partners LLP, Juxon House, 100 St Paul’s Churchyard, London EC4M 8BU Legal & General Investment Ltd, One Coleman Street, London, EC2R 5AA

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Independent Auditors Report to the Salvation Army Trustee Company, the Managing Trustee

Opinion

We have audited the consolidated financial statements of The Salvation Army Social Work Trust Group for the year ended 31 March 2021 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Parent Balance Sheets, the Consolidated Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the 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 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.

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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 charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The trustee is responsible for the other information.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Charities Act 2011 and the Charity Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:

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Responsibilities of trustee

As explained more fully in the trustee’s responsibilities statement, the trustee is 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 trustee 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 trustee is responsible for assessing the 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 trustee either intends to liquidate the charity or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under section 144(1) of the Charities Act 2011 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.

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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A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorseresponsibilities

This description forms part of our auditor’s report.

Use of our report

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

65 Leadenhall Street London EC3A 2AD

Knox Cropper LLP Chartered Accountants Registered Auditors

10 December 2021

Knox Cropper LLP is eligible to act as an auditor in terms of Section 1212 of the Companies Act 2006

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The Salvation Army Social Work Trust Financial Statements

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2021

Endowments Restricted Unrestricted 2021 2020
Total Total
Note £000 £000 £000 £000 £000
INCOME AND ENDOWMENTS FROM:
Donations and Legacies
Grants receivable: TSA Trust - - 16,000 16,000 16,000
Donations - 2,923 1,222 4,145 2,444
Legacies - 1,098 70 1,168 1,018
- 4,021 17,292 21,313 19,462
Charitable Activities
Centres’ operations 2 - 6,510 66,818 73,328 75,687
Other social operations 3 - 2,107 49,584 51,691 36,167
Housing Association turnover 12 - 24,714 - 24,714 26,368
- 33,331 116,402 149,733 138,222
Investments 4 - 242 1,254 1,496 2,741
Other
Gains on disposal of fixed assets 5 - (539)
703		 164 5
TOTAL INCOME - 37,055 135,651 172,706 160,430
EXPENDITURE ON:
Raising Funds
Investment management costs - - 50 50 50
- - 50 50 50
Charitable Activities
Centres’ operations 7 - 3,970 82,366 86,336 100,762
Other social operations 8 - 1,237 52,726 53,963 40,636
Housing Association operating costs 12 - 21,833 - 21,833 28,203
- 27,040 135,092 162,132 169,601
TOTAL EXPENDITURE 9 - 27,040 135,142 162,182 169,651
Net Gains/(Losses) on Investments 16 3,125 (631)
21,431		 23,925 (7,628)
NET INCOME/(EXPENDITURE) 3,125 9,384 21,940 34,449 (16,849)
Transfers between Funds * 21/22 - (2,986)
2,986		 - -
Other Recognised Gains/(Losses)
Actuarial Gains/(Losses) on Defined
Benefit Pension Schemes 12 - (2,583)
-		 (2,583)
2,620
NET MOVEMENT IN FUNDS 3,125 3,815 24,926 31,866 (14,229)
RECONCILIATION OF FUNDS: 20/21/22
Total Funds brought forward 12,713 240,151 64,934 317,798 332,027
TOTAL FUNDS CARRIED FORWARD 15,838 243,966 89,860 349,664 317,798

All income and expenditure has arisen from continuing activities. £33,050k of the net income of funds disclosed above arises in the parent charity (2020: net expenditure of £16,018k). *Transfers between funds arise from property transactions, because all funds expended on property assets are reflected as restricted funds, net of funding of homeless and older people’s services centres from legacy funds.

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42

BALANCE SHEET AS AT 31 MARCH 2021

BALANCE SHEET
AS AT 31 MARCH 2021
Note
FIXED ASSETS
Tangible Fixed Assets
Properties
13
Property schemes in progress
14
Motor vehicles and equipment
15
Investments
16
TOTAL FIXED ASSETS
CURRENT ASSETS
Stocks
Debtors and prepayments
17
Short-term deposits
Bank balances and cash
CREDITORS: Amounts falling due within one year
18(a)
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT LIABILITIES
Creditors: Amounts falling due outside one year
18(b)
Defined Benefit Pension Scheme Liability
11(c)
TOTAL NET ASSETS
FUNDS
Endowment Funds
20
Restricted Funds
21
Social Work Fund
Other Restricted Funds
Unrestricted Funds
22
TOTAL FUNDS
23		 Group
Parent
2021
2020
2021
2020
£000
£000
£000
£000
195,477
198,933
76,422
75,624
4,671
2,457
4,370
2,159
239
732
205
138
152,965
129,039
123,914
99,039
353,352
331,161
204,911 176,960
130
105
130
105
12,373
15,534
10,909
13,495
10,727
13,914
10,727
13,914
37,848
23,950
24,460
14,830
61,078
53,503
46,226
42,344
(32,153)
(33,132)
(25,243) (26,460)
28,925
20,371
20,983
15,884
382,277
351,532
225,894
192,844
(28,424)
(31,712)
-
-
(4,189)
(2,022)
-
-
349,664 317,798
225,894 192,844
15,838
12,713
15,838
12,713
76,422
75,624
76,422
75,624
167,544
164,527
43,774
39,573
243,966
240,151
120,194
115,197
89,860
64,934
89,860
64,934
349,664 317,798
225,894 192,844

Approved on behalf of The Salvation Army Trustee Company on 10 December 2021 by:

Lieut-Colonel Alan Read (Director)

Major Judith Hilditch (Director)

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43

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2021

2021
2021
2020
2020
Note
£000
£000
£000
£000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Cash provided by/(used in) operating activities
25
15,675
13,151
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment and rental income
1,496
2,741
Additions to properties
(1,518)
(1,806)
Additions to motor vehicles and equipment
(179)
(505)
Additions to property schemes in progress
(2,543)
(9,679)
Proceeds on disposal of motor vehicles and equipment
437
72
Purchase of investments
-
(24)
Proceeds on disposal of properties
648
194
Management of short-term deposits
3,187
6,232
Net Cash provided by investing activities
1,528
(2,775)
CASH FLOWS FROM FINANCING ACTIVITIES:
Interest payable
(1,037)
(1,249)
(Decrease)/Increase in Bank Loans
(2,268)
(1,998)
Net Cash provided by/(used in) financing activities
(3,305)
(3,247)
Change in Cash and Cash Equivalents in the year
13,898
7,129
Cash and Cash Equivalents at the beginning of the year
23,950
16,821
Cash and Cash Equivalents at the end of the year
37,848
23,950
ANALYSIS OF CHANGES IN NET DEBT
Balance
Cash-
Net Loan
Balance
Flows
Repayments
1 April 2020
31 March 2021
£000
£000
£000
£000
Cash at Bank
23,950
13,898
-
37,848
Loans falling due within one year
(1,552)
-
(13)
(1,565)
Loans falling due after more than one year
(29,952)
-
2,281
(27,671)
(7,554)
13,898
2,268
8,612		 2021
2021
2020
2020
Note
£000
£000
£000
£000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Cash provided by/(used in) operating activities
25
15,675
13,151
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment and rental income
1,496
2,741
Additions to properties
(1,518)
(1,806)
Additions to motor vehicles and equipment
(179)
(505)
Additions to property schemes in progress
(2,543)
(9,679)
Proceeds on disposal of motor vehicles and equipment
437
72
Purchase of investments
-
(24)
Proceeds on disposal of properties
648
194
Management of short-term deposits
3,187
6,232
Net Cash provided by investing activities
1,528
(2,775)
CASH FLOWS FROM FINANCING ACTIVITIES:
Interest payable
(1,037)
(1,249)
(Decrease)/Increase in Bank Loans
(2,268)
(1,998)
Net Cash provided by/(used in) financing activities
(3,305)
(3,247)
Change in Cash and Cash Equivalents in the year
13,898
7,129
Cash and Cash Equivalents at the beginning of the year
23,950
16,821
Cash and Cash Equivalents at the end of the year
37,848
23,950
ANALYSIS OF CHANGES IN NET DEBT
Balance
Cash-
Net Loan
Balance
Flows
Repayments
1 April 2020
31 March 2021
£000
£000
£000
£000
Cash at Bank
23,950
13,898
-
37,848
Loans falling due within one year
(1,552)
-
(13)
(1,565)
Loans falling due after more than one year
(29,952)
-
2,281
(27,671)
(7,554)
13,898
2,268
8,612		 2021
£000		 2021
£000		 2020
£000		 2020
£000
23,950
13,898
-
37,848
(1,552)
-
(13)
(1,565)
(29,952)
-
2,281
(27,671)
(7,554)
13,898
2,268
8,612

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

1. ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the financial statements for the Social Work Trust, which have been consistently applied (except where indicated), are as follows:

(a) Basis of Accounting

The financial statements have been prepared under the historical cost convention, subject to the inclusion of certain financial instruments and investment properties at fair value and donated properties at valuation on acquisition, and are in accordance with the Charities SORP (FRS 102) ‘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) (second edition – October 2019)’, Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’, The Salvation Army Act 1980, the Charities Act 2011, the Charities and Trustee Investment (Scotland) Act 2005 and Regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).

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

The trustees have assessed whether the use of the going concern basis is appropriate and have considered possible events or conditions that might cast significant doubt on the ability of The Salvation Army Social Work Trust to continue as a going concern. The trustees have made this assessment for a period of at least one year from the date of approval of the financial statements and has considered the continued impact of the Covid-19 pandemic. Much of the activity within the Social Work Trust involves supporting vulnerable people and therefore this work has continued throughout this financial year. The Trust has continued to provide safe places for homeless people to live, residential care for elderly people, safe places for trafficked people, online employment services and debt advice. The income for the Social Work Trust has increased as compared to pre pandemic, although income for residents in our lifehouses is slightly reduced due to the continued requirement to reduce occupancy for social distancing compliance. In our Contracted services there have been grants and extra payments made by Local Authorities to support the extra costs of PPE, extra cleaning, and the need for Agency workers to cover staff who had to self-isolate, shield or who caught COVID 19. Restricted legacies and reserves have been reviewed and where possible, used to further support the work of the Trust. This has resulted in the continued good work of the Social Work Trust and given confidence that the work is financially stable for the coming years.

On the basis of the above, the trustee has concluded that there is no material uncertainty about the Trust’s ability to meet is debts as they fall due for at least 12 months following approval of the financial statements and therefore continues to adopt the going concern basis in preparing its financial statements.

(b) Basis of Consolidation

The accounts of The Salvation Army Social Work Trust Group consolidate saha’s accounts using the acquisition method.

(c) Key judgements and estimates used in preparing these financial statements

i. Financial instrument classification

The classification of financial instruments as ‘basic’ or ‘other’ requires judgement as to whether all applicable conditions as basic are met. This includes consideration of the form of the instrument and its return. It also includes the review of existing financial liabilities, such as loan agreements, to assess whether any modifications to the agreement will affect the classification of the instrument and its possible re-measurement. All financial instruments, including loans, are classified as ‘basic’.

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ii. Capitalisation of property improvement and development costs

Property improvement and development schemes are reviewed to ascertain whether expenditure should be capitalised or charged to the Statement of Financial Activities. Expenditure which enhances the social use of the property or improves its economic return is capitalised. Expenditure which repairs a property and brings it back to its original condition is written off.

iii. Useful lives of property, motor vehicles and equipment

The remaining useful lives of depreciable assets are reviewed by management at each reporting date and, if necessary, the depreciation charge adjusted accordingly.

iv. Bad debt provision

Gross debtor balances are regularly reviewed by management and where they assess that there is sufficient doubt as to recoverability a provision is made. In particular, accommodation charges outstanding are reviewed on a line-by-line basis and the provision is based on a number of factors including the age of the debt.

v. Defined Benefit Obligation

Management’s estimate of the defined benefit obligation is based on a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the liability and the annual defined benefit expenses (as analysed in Note 11(c)). The net defined benefit pension obligation at 31 March 2021 was £4,189,000.

vi. Identification and valuation of investment properties

The Group’s property portfolio is reviewed annually to identify investment properties, which are those properties held to earn income or for capital appreciation rather than to be used for its charitable purposes. Properties no longer used for charitable purposes but retained until market conditions allow their disposal are not treated as investment properties, provided disposal is intended within a reasonable time scale.

After initial recognition, investment property is measured at its fair value based either on valuation by The Salvation Army Property Department or by an independent valuer. In either case the valuer will hold a recognised and relevant professional qualification. The property will be valued at each subsequent reporting date.

(d) Income

(e) Expenditure

i. Total expenditure includes:

Charitable Activities costs reflect all expenditure relating directly to the objects of the charity, attributable overheads and allocation of governance costs. Attributable overheads are allocated over the range of charitable activities on an actual basis where possible and on a basis which is consistent with the utilisation of resources otherwise.

Governance Costs reflect the costs incurred under the governance arrangements of the charity which consist of the costs of complying with legislation including audit, legal services and strategic planning. These costs are then allocated to charitable activities on a basis consistent with the utilisation of resources.

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iv. Pension and Similar Costs

The Salvation Army Social Work Trust contributes to three pension or similar schemes in respect of its staff:

The Salvation Army Retired Officers Allowance Fund is a registered charity and operates on the same basis as a defined benefit scheme but the benefits are not guaranteed. A standard annual contribution per unit is made to the Retired Officers Allowance Fund, which is charged in the accounts in the year in which payment is made.

The Salvation Army Employees Pension Fund is a defined benefit pension scheme which was closed to new members on 31 December 2011. The scheme is a multi-employer scheme and the actuary has confirmed that it is not practical to allocate the assets and liabilities of the scheme between participating employers. Pension costs are therefore reflected in the accounts when payments to the pension scheme fall due. The charity also recognises any contractual liability to fund a past service deficit as agreed with the Pension Scheme Trustees. Any resulting expense will be reflected through the Statement of Financial Activities. When the contribution is not expected to be settled prior to 12 months after the year end the full liability is recognised at the present value of the contributions payable using a discounted rate. No such contractual liability existed at the current year end. Since 1st January 2012, employees can join a defined contribution scheme.

The Salvation Army Housing Association (saha) participates in the following pension schemes –

(f) Fixed Assets

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iii. In accordance with FRS 102 component accounting has been adopted for Freehold and Long leasehold properties. A property comprises of major components with substantially different useful lives. Depreciation is charged on major components so as to write off the cost of the components to their residual values, over their estimated useful lives, using the straight-line method, as follows: Freehold Land Not depreciated Building – Main Fabric (structure) 50 years Major Components Roof structure and covering 50 years Bathrooms and WCs 20-30 years Lifts 25 years Mechanical and Electrical Systems 25 years Windows and External Doors 25 years Kitchens 20 years

Short leasehold properties are depreciated over the term of the lease.

Motor Vehicles - 25%-33 pa on cost Office Equipment - 10-33% pa on cost

(g) Investments & Investment Properties

To comply with the Charities SORP, investments are included at fair value (their market value). Realised gains on investments are calculated as the difference between sales proceeds and the market value of those investments at the last balance sheet date, or cost if acquired during the year.

The Salvation Army Social Work Trust does not hold any investment properties. saha owns properties held for market rent or commercial lettings and these are included as investment properties and are recorded at fair value with changes in the market value reported annually in the statement of financial activities. The fair value of the investment property is determined by using a valuation undertaken by Savills, an independent professional valuer, or by members of staff with relevant experience.

(h) Stocks

Stocks are valued at the lower of cost and net realisable value.

(i) Funds

iv. Unrestricted Funds include:

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

48

(j) Foreign Currency Translation

Exchange gains and losses arising from overseas operations are dealt with through the Statement of Financial Activities and are reflected under Charitable Expenditure. Transactions in foreign currencies are translated at the rates prevailing at the beginning of the month whereas monetary assets and liabilities at the year end are translated at the closing rates.

2. CHARITABLE ACTIVITIES: CENTRE OPERATIONS

2021
Maintenance
Supporting
Other
Local
Catering &
Total
& Special
People
Contract
Authority Miscellaneous
Care
Income
& Other
Income
Allowance
Grants
£000
£000
£000
£000
£000
£000
Social Services Centres
Older People
11,924
-
-
21
-
11,945
Single Homeless
7,172
8,765
-
2,329
22
18,288
Family and Children
1,317
2,015
-
752
202
4,286
Day Care
242
220
-
69
13
544
Addictions
572
672
-
-
-
1,244
Probation
-
-
-
-
-
-
Other Non-Residential
Programmes
23
1,009
-
1,531
466
3,029
21,250
12,681
-
4,702
703
39,336
Housing Association Centres
Older People
1,092
-
-
2
-
1,094
Single Homeless
19,918
9,938
-
1,286
68
31,210
Family and Children
732
557
-
77
5
1,371
Addictions
6
-
-
-
1
7
21,748
10,495
-
1,365
74
33,682
Social Enterprise
-
30
-
75
205
310
Total 2021
42,998
23,206
-
6,142
982 73,328
Total 2020
44,810
23,688
-
3,495
**3,694 **		 2020
Total
£000
13,434
18,840
5,185
756
1,129
222
4,046
43,612
1,162
28,870
1,353
171
31,556
519
75,687
75,687

£6,510,000 (2020: £4,141,000) of centres’ revenue income represents contracts restricted income predominantly being funding received from local authorities to fund the activities at specific centres. Local Authority & Other Grants includes Government grants of £1.812m received in respect of the COVID-19 pandemic.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

49

3. OTHER SOCIAL OPERATIONS

3. OTHER SOCIAL OPERATIONS
Employment Plus
Anti-Human Trafficking
Defence Services Operations
Family Tracing, Counselling etc		 Endowments
Restricted
Unrestricted
2021
2020
Total
Total
£000
£000
£000
£000
£000
-
4
3,144
3,148
1,568
-
2,103
46,250
48,353
34,380
-
-
144
144
189
-
-
46
46
30
-
2,107
49,584 51,691 36,167

4. INVESTMENTS

4. INVESTMENTS
Restricted Unrestricted 2021 2020
Total Total
£000 £000 £000 £000
Dividends and Interest receivable 8 990
998
2,368
Rents receivable 234 264
498
373
242 1,254
1,496
2,741
5. OTHER INCOME
Endowments Restricted Unrestricted 2021 2020
Total Total
£000 £000 £000 £000 £000
Gain/(loss) on disposal of properties - (539) 699
160
3
Gain on disposal of motor vehicles
and equipment - - 4
4
2
- (539) 703
164
5
6. ANALYSIS OF COSTS OF CHARITABLE ACTIVITIES
Endowments Restricted Unrestricted 2021 2020
Total Total
£000 £000 £000 £000 £000
Centres’ Operations (Note 7) - 3,970 82,366
86,336		 100,762
Other Social Operations (Note 8) - 1,237 52,726
53,963
40,636
saha Operating Costs (Note 12) - 21,833 -
21,833
28,203
- 27,040 135,092 162,132 169,601

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

50

7. ANALYSIS OF CENTRES’ OPERATIONS COSTS

2021
Salaries Catering,
Other Property & Support
Governance Total
& Other Cleaning Operating Furnishings
Costs
Costs
Staff
& Other
Costs
Costs
Services
£000
£000
£000
£000
£000
£000
£000
Social Services Centres
Older People
11,059
1,342
710
1,698
750
33
15,592
Single Homeless
11,862
823
3,679
2,257
2,235
45
20,901
Family and Children
2,842
58
202
752
727
9
4,590
Day Care Centres
454
35
83
174
131
2
879
Addictions
1,207
17
61
160
208
3
1,656
Probation
-
-
-
-
-
-
-
Other Non-Residential
Programmes
3,492
287
351
588
837
11
5,566
30,916
2,562
5,086
5,629
4,888
103
49,184
Housing Association Centres
Older People
862
120
62
79
168
3
1,294
Single Homeless
14,597
3,217
1,331
3,627
10,719
68
33,559
Family and Children
812
20
92
206
497
3
1,630
Addictions
9
3
-
-
1
-
13
16,280
3,360
1,485
3,912
11,385
74
36,496
Social Enterprise
353
99
10
84
109
1
656
Total Costs 2021
47,549
6,021
6,581
9,625 16,382
178
86,336
Total Costs 2020
49,356
6,340
6,582
14,654 23,675
155		 2020
Total
£000
17,257
25,338
6,855
904
1,412
256
8,111
60,133
1,569
36,124
1,696
254
39,643
986
100,762
100,762

Governance costs include external audit fees, inclusive of VAT, of £178,000 (2020: £155,000). £3,970,000 (2020: £15,064,000) of centres’ operations costs are funded from restricted funds. Other Non-Residential Programmes expenditure in the above table includes expenditure of £0.95 million (2020: £1.74m) for Strawberry Field and £0.91 million (2020: £1.6m) for Hadleigh Farm.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

51

7. ANALYSIS OF CENTRES’ OPERATIONS COSTS (Cont.)

Support Costs consist of:
Centres’ Support Costs
Other Support Costs
Personnel
Business Administration
Communications
Secretariat
Mission Service Management		 2021
2020
£
£
10,492
15,163
868
1,255
3,450
4,986
549
793
952
1,376
71
102
16,382
23,675

8. OTHER SOCIAL OPERATIONS

Employment Plus
Anti-Human Trafficking
Defence Services Operations
Family Tracing, Counselling, etc		 Endowments
Restricted
Unrestricted
2021
2020
Total
Total
£000
£000
£000
£000
£000
-
49
3,354
3,403
3,314
-
1,182
47,047
48,229
35,149
-
-
260
260
201
-
6
2,065
2,071
1,972
-
1,237
52,726
53,963
40,636

Employment Plus includes a number of matched funding contracts. As part of these contracts The European Commission funds 50% of the total expenditure and the other 50% is matched by The Salvation Army and charged against the Social Work Trust’s reserves.

9. ANALYSIS OF TOTAL RESOURCES EXPENDED

Raising funds
Charitable activities		 Staff Costs
Depreciation
Other Costs
2021
2020
Total
Total
£000
£000
£000
£000
£000
-
-
50
50
50
64,479
4,959
92,694
162,132
169,601
64,479
4,959
92,744 162,182
169,651

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

52

10. PERSONNEL

Allowances and salaries
Social security costs
Pension and similar costs
Redundancy costs		 2021
2020
2021
2020
2021
2020
Parent
Parent
Subsidiary
Subsidiary
Total
Total
£000
£000
£000
£000
£000
£000
42,303
41,271
8,722
9,569
51,025
50,840
3,617
3,434
637
702
4,254
4,136
3,324
3,302
810
838
4,134
4,140
1
3
51
195
52
198
49,245
48,010
10,220
11,304
59,465
59,314

Redundancy Costs

Redundancy costs relating to employees in the Social Work Trust, including saha, amounted to £51,950 (2020: £197,247). These costs are the result of staff restructuring at centres and closure of centres. Redundancy costs are recognised once a decision to make a post redundant has been communicated to an individual or the workforce.

The average number of officer and employees and full time equivalent (FTE) officers and employees was:

Trust
Number of officers
Number of employees
Subsidiary
Total		 2021
2021
2020
2020
Headcount
FTE
Headcount
FTE
No.
No.
No.
No.
86
82
97
85
2,210
1,619
2,182
1,577
2,296
1,701
2,279
1,662
330
217
358
236
2,626
1,918
2,637
1,898

Higher-Paid Employees

The following indicates the number of the group’s employees earning between:

£60,001 - £70,000
£70,001 - £80,000
£80,001 - £90,000
£90,001 - £100,000
£100,001 - £110,000
£110,001 - £120,000
£120,001 - £130,000
£130,001 - £140,000
£140,001 - £150,000
£150,001 - £160,000
£180,001 - £190,000		 2021
2021
2021
2020
Parent
Subsidiary
Total
Total
No.
No.
No.
No.
4
-
4
5
4
4
8
5
-
1
1
1
3
-
3
1
-
1
1
-
-
-
-
3
-
-
-
-
-
-
-
-
-
1
1
1
-
-
-
1
-
-
-
1
11
7
18
18

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

53

The directors of The Salvation Army Trustee Company comprise Salvation Army officers and employees and other external directors with specialist expertise. All active Salvation Army officers receive an allowance based on length of service and, as ministers of religion, are provided with furnished accommodation and a motor vehicle. They are also members of the Salvation Army Retired Officers Allowance Fund. The allowances received by the officers serving as directors ranged from £18,148.92 to £24,249.88 per annum and they did not receive any additional remuneration for their duties as directors. No allowances or salaries paid to any of the directors are charged direct to the Social Work Trust.

No trustees’ expenses were charged to the Social Work Trust.

The costs of indemnity insurance, to protect The Salvation Army Trustee Company directors against claims for neglect or default, were borne by the The Salvation Army Trust.

Certain directors of saha are remunerated. Lieut-Colonel Drew McCombe is a director of both saha and of The Salvation Army Trustee Company. He is remunerated £4,000 which is donated to The Salvation Army Trustee Company.

Key Management Personnel

The key management personnel of the Trust are those persons having authority and responsibility for planning, directing and controlling the activities of the Trust, directly or indirectly, including the directors of The Salvation Army Trustee Company as the Corporate Trustee of the Trust. The Trustee considers the key management personnel of the Trust to be the executive directors (officers and employees) of the Board. The total aggregate remuneration, including pension contributions, paid to key management personnel during the year was £222,784 (2020: £233,142). As detailed above, no allowances or salaries paid to any of the directors are charged directly to the Social Work Trust.

11. PENSION AND SIMILAR COSTS

The Salvation Army Social Work Trust contributes to three pension or similar schemes in respect of its staff:

Amounts charged in respect of pension fund contributions for the year are disclosed in Note 10 above.

(a) SALVATION ARMY RETIRED OFFICERS ALLOWANCE FUND

The Salvation Army Retired Officers Allowance Fund was established by The Salvation Army Act 1963 under the legal name, The Salvation Army Officers Pension Fund. It is a registered charity and operates on the same basis as a defined benefit scheme, but the benefits are not guaranteed. It is noncontributory by the officer, but a contribution per officer, at present £4,860 per annum (2020: £4,740), is made by The Salvation Army. Officers in both principal Trusts (The Salvation Army Trust and The Salvation Army Social Work Trust) participate in the scheme and it is not possible to allocate the assets and constructive liabilities of the Fund between the Trusts. Therefore, the Fund is accounted for in a similar way as a multi-employer pension fund.

The Salvation Army Retired Officers Allowance Fund was subject to a triennial actuarial review on 31 March 2019, using the Attained Age Method, and this was based on the following principal assumptions:

Post-Retirement Discount Rate 2.7% per annum Pre-Retirement Discount Rate 3.4% per annum Rate of Increase in Allowances and Pensions 4.1% per annum Rate of Inflation 3.6% per annum

The market value of the Fund’s assets at the valuation date amounted to £231.6m whereas the value of past service ongoing liabilities amounted to £238.8m revealing a funding shortfall of £7.2m.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

54

A recovery plan was agreed whereby the contribution per officer was increased to £4,860 per annum, from 1 April 2020, and The Salvation Army Trust would make an annual capital contribution to the scheme of £2m over a period of approximately 13 years. In practice, capital contributions in excess of this amount are being paid in order to fund the deficit over a shorter period of time and in 2020/21 the capital contribution paid by The Salvation Army Trust was £4m (2019/20 £4m).

Although the pension benefits are not guaranteed, they do represent a constructive liability as there are expectations that the pensions will be paid. Therefore, a provision is made in the financial statements of The Salvation Army Trust for the total discounted value of the future capital contributions which it has agreed to pay. At the year end, The Salvation Army Trust had fully paid the deficit contributions which it had agreed to pay and had paid an additional amount in advance amounting to £621,000. As this will reduce the requirement for future contributions, this amount has been accounted for in The Salvation Army Trust’s financial statements as a payment in advance within debtors.

(b) SALVATION ARMY EMPLOYEES’ PENSION FUND

The Salvation Army Employees’ Pension Fund is a funded defined benefit scheme. The contribution rate payable by members is 8% of pensionable salaries and the employer’s contribution is 23.9% of pensionable salaries.

The Scheme is a multi-employer scheme incorporating six employers. It closed to new members with effect from 31 December 2011. The actuary has confirmed that it is not practical to allocate the assets and liabilities of the scheme between participating employers and therefore it is accounted for as a multi-employer scheme.

The Scheme is subject to triennial actuarial valuations. The last actuarial valuation was completed, using the Projected Unit Method, at 31 March 2018.

The review was based on the following assumptions:

Post-retirement discount rate 2.3% per annum Pre-retirement discount rate 3.8% per annum Rate of salary increases 4.0% per annum Rate of pension increase: On pensions accrued before 6 April 2006 3.4% per annum On pensions accrued after 6 April 2006 2.3% per annum Inflation: RPI 3.5% per annum CPI 2.75% per annum Deferred Pension Increases (pre 6 April 2009) 2.75% per annum Deferred Pension increases (post 6 April 2009) 2.5% per annum

The market value of the Fund’s assets on the valuation date was £167.8m and the value of technical provisions amounted to £178.4m giving rise to a funding shortfall of £10.6m.

The trustees and employers agreed a recovery plan to eliminate the shortfall which involved lump sum payments into the fund by each of the employers. The amount payable by The Salvation Army Trust amounted to £3.6m and this was fully accounted for in the 2018/19 financial year.

(c) SOCIAL HOUSING PENSION SCHEME (SHPS)

saha participates in SHPS, a multi-employer pension scheme which provides benefits to non-associated participating employers. The scheme is classed as a defined benefit scheme in the UK. The scheme is classified as a ‘last man standing’ arrangement. Therefore, saha is potentially liable for other participating employers’ obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme. Under the defined benefit pension accounting approach, the SHPS net deficit as at 1 April 2020 is £2,022k and £4,189k as at 31 March 2021.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

55

PRESENT VALUES OF DEFINED BENEFIT OBLIGATION, FAIR VALUE OF ASSETS AND DEFINED BENEFIT ASSET/(LIABILITY)

Fair value of plan assets
Present value of defined benefit obligation
Surplus/(deficit) in plan
Deferred tax
Net defined benefit asset/(liability) to be recognised
RECONCILIATION OF OPENING AND CLOSING BALANCES
OF THE DEFINED BENEFIT OBLIGATION
Defined benefit obligation at start of period
Current service cost
Expenses
Interest expense
Contributions by plan participants
Actuarial losses/(gains) due to scheme experience
Actuarial losses/(gains) due to changes in demographic assumptions
Actuarial losses/(gains) due to changes in financial assumptions
Benefits paid and expenses
Defined benefit obligation
RECONCILIATION OF OPENING AND CLOSING BALANCES
OF THE FAIR VALUE OF PLAN ASSETS
Fair value of plan assets at start of period
Interest income
Experience on plan assets (excluding amounts included in interest income)
– gain/(loss)
Contributions by the employer
Contributions by plan participants
Benefits paid and expenses
Fair value of plan assets at end of period		 2021
2020
£000
£000
17,257
15,592
(21,446)
(17,614)
(4,189)
(2,022)
-
-
(4,189)
(2,022)
2021
2020
£000
£000
17,614
19,259
-
(25)
13
13
414
437
-
25
(386)
1,103
77
(175)
4,139
(2,384)
(425)
(639)
21,446
17,614
2021
2020
£000
£000
15,592
14,211
371
326
1,247
1,164
472
505
-
25
(425)
(639)
17,257
15,592

The actual return on the plan assets (including any changes in share of assets) over the period ended 31 March 2021 was £1,618,000 (2020: £1,490,000).

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

56

DEFINED BENEFIT COSTS RECOGNISED IN STATEMENT OF FINANCIAL ACTIVITIES

Current service cost
Expenses
Net interest expense
Total expense
DEFINED BENEFIT COSTS RECOGNISED IN OTHER RECOGNISED
GAINS AND LOSSES
Experience on plan assets (excluding amounts included in net interest cost)
– gain/(loss)
Experience gains and losses arising on the plan liabilities – gain/(loss)
Effects of changes in the demographic assumptions underlying the present
value of the defined benefit obligation – gain/(loss)
Effects of changes in the financial assumptions underlying the present
value of the defined benefit obligation – gain/(loss)
Total actuarial gains and losses (before restriction due to some of the
surplus not being recognisable) – gain/(loss)
Total amount recognised in other recognised gains/(losses)		 2021
2020
£000
£000
-
(25)
13
13
43
111
56
99
2021
2020
£000
£000
1,247
1,164
386
(1,103)
(77)
175
(4,139)
2,384
(2,583)
2,620
(2,583)
2,620

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

57

ASSETS

ASSETS
Global Equity
Absolute Return
Distressed Opportunities
Credit Relative Value
Alternative Risk Premia
Fund of Hedge Funds
Emerging Markets Debt
Risk Sharing
Insurance-Linked Securities
Property
Infrastructure
Private Debt
Opportunistic Liquid Credit
High Yield
Opportunistic Credit
Corporate Bond Fund
Liquid Credit
Long Lease Property
Secured Income
Liability Driven Investment
Net Current Assets
Total assets		 2021
2020
£000
£000
2,750
2,281
952
813
498
300
543
428
650
1,090
2
9
697
472
628
527
414
479
358
343
1,151
1,160
412
314
439
377
517
-
473
-
1,020
889
206
6
338
270
718
592
4,386
5,175
105
67
17,257
15,592

None of the fair values of the assets shown above include any direct investments in the employer’s own financial instruments or any property occupied by, or other assets used by, the employer.

KEY ASSUMPTIONS

KEY ASSUMPTIONS
2021 2020
%per annum %per annum
Discount Rate 2.17% 2.38%
Inflation (RPI) 3.28% 2.62%
Inflation (CPI) 12.86% 1.62%
Salary Growth 3.86% 2.62%
Allowance for commutation of pension for cash at retirement 75% of 75% of
maximum allowance maximum allowance

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

58

The mortality assumptions adopted at 31 March 2021 imply the following life expectancies:

Life expectancy at age 65(Years) expectancy at age 65(Years)
Male retiring in 2021 21.6
Female retiring in 2021 23.5
Male retiring in 2041 22.9
Female retiring in 2041 25.1
EMPLOYER PENSION CONTRIBUTIONS
2021 2020
£000 £000
Defined benefit employer contributions including deficit contributions 473 505
Growth Plan deficit contributions 29 29
Auto-enrolment & SHPS Defined contribution including deficit contribution
308		 304
810 838

The defined benefit pension costs for Salvation Army Housing Association was £472,175 (2020: £505,204). The pension cost is assessed in accordance with the advice of a qualified actuary using the Projected Unit Fund Method and is not materially different from that arising from the current employer’s contribution rate.

(d) THE GROWTH PLAN

saha participates in the scheme, a multi-employer scheme which provides benefits to some 950 nonassociated participating employers. The scheme is a defined benefit scheme in the UK. It is not possible for the company to obtain sufficient information to enable it to account for the scheme as a defined benefit scheme. Therefore, it accounts for the scheme as a defined contribution scheme.

The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK.

The scheme is classified as a ‘last-man standing arrangement’. Therefore, saha is potentially liable for other participating employers’ obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme.

A full actuarial valuation for the scheme was carried out at 30 September 2017. This valuation showed assets of £794.9m, liabilities of £926.4m and a deficit of £131.5m. To eliminate this funding shortfall, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows:

Deficit contributions

From 1 April 2019 to 31 January 2025: £11,243,000 per annum - (payable monthly and increasing by 3% each on 1 April)

Unless a concession has been agreed with the Trustee the term to 31 January 2025 applies.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

59

Note that the scheme’s previous valuation was carried out with an effective date of 30 September 2014. This valuation showed assets of £793.4m, liabilities of £969.9m and a deficit of £176.5m. To eliminate this funding shortfall, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows:

Deficit contributions

From 1 April 2016 to 30 September 2025: £12,945,440 per annum – (payable monthly and increasing by 3% each on 1 April) From 1 April 2016 to 30 September 2028: £54,560 per annum – (payable monthly and increasing by 3% each on 1 April)

The recovery plan contributions are allocated to each participating employer in line with their estimated share of the Series 1 and Series 2 scheme liabilities.

Where the scheme is in deficit and where the group has agreed to a deficit funding arrangement the group recognises a liability for this obligation. The amount recognised is the net present value of the deficit reduction contributions payable under the agreement that relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures. The unwinding of the discount rate is recognised as a finance cost.

PRESENT VALUE OF PROVISION

PRESENT VALUE OF PROVISION
2021 2020 2019
£000 £000 £000
Present value of provision 120 142 172
RECONCILIATION OF OPENING AND CLOSING CREDITOR
2021 2020
£000 £000
Provision at start of period 142 172
Unwinding of the discount factor (interest expense) 3 2
Deficit contribution paid (29) (28)
Remeasurements – impact of any change in assumptions 4 (4)
Remeasurements – amendments to the contribution schedule - -
Provision at end of period 120 142
INCOME AND EXPENDITURE IMPACT
2021 2020
£000 £000
Interest expense 3 2
Remeasurements – impact of any change in assumptions (4) (4)
Remeasurements – amendments to the contribution schedule - -

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

60

ASSUMPTIONS

ASSUMPTIONS
Rate of discount 2021
2020
2019
%per annum
%per annum
%per annum
0.66
2.53
1.39

The discount rates shown above are the equivalent single discount rates which, when used to discount the future recovery plan contributions due, would give the same results as using a full AA corporate bond yield curve to discount the same recovery plan contributions.

The following schedule details the deficit contributions agreed between the group and the scheme at each year end period:

Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10		 2021
2020
2019
£000
£000
£000
30
29
29
31
30
29
32
31
30
28
32
31
-
28
32
-
-
28
-
-
-
-
-
-
-
-
-
-
-
-

The group must recognise a liability measured as the present value of the contributions payable that arise from the deficit recovery agreement and the resulting expense in the income and expenditure account i.e. the unwinding of the discount rate as a finance cost in the period in which it arises. It is these contributions that have been used to derive the group’s balance sheet liability.

saha also allows the employees to pay additional voluntary contributions (AVCs) into their pension scheme. The amount charged to the Statement of Comprehensive Income represents the contributions payable to the scheme in respect of the financial year. The contributions due in the year were £nil (2020: £nil).

AUTO-ENROLMENT

As a result of the introduction of pensions “auto-enrolment” by the Government, the cost of the new defined contribution scheme administered by SHPS was £288,644 (2020: £304,464) covering 302 employees (2020: 349 employees). This cost is inclusive of contributions in relation to the former SHPS Defined Benefit members who got transferred to the SHPS defined contribution scheme effective from 1 July 2019.

12. SALVATION ARMY HOUSING ASSOCIATION TURNOVER AND OPERATING COSTS

On 19 January 2011, pursuant to a change to saha’s governing instrument (the new governing instrument obtaining FSA approval on that date), The Salvation Army Social Work Trust gained effective control of the Salvation Army Housing Association (saha).

The net assets of saha and its subsidiaries have been consolidated within these accounts. The net assets of the saha Group were, on acquisition, adjusted to fair values.

For the purpose of establishing fair values, saha’s property portfolio was valued by an independent chartered surveyor on an existing use social housing (EUV – SH) basis.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

61

saha’s results, adjusted to reflect The Salvation Army Social Work Trust’s accounting policies, were as follows.

2021
£000
£000
Turnover
24,714
Grants Received
-
24,714
Operating Costs
Staff Costs
(8,757)
Other Costs
(9,271)
(18,028)
Interest Payable
(1,037)
Property Depreciation
(2,756)
Tax
(12)
Gain/(Loss) on Disposal of Assets (Note 5)
(539)
Gain/(Loss) on revaluation of investment properties (Note 16)
(950)
Interest Receivable (Note 4)
7
Social Housing Pension Scheme (SHPS) Remeasurement of Obligation
-
Actuarial Gain/(Loss)
(2,583)
(1,184)
Other Costs includes temporary agency staff costs of £1,462,151 (2020: £1,807,062)		 2020
£000
£000
25,744
624
26,368
(9,497)
(11,609)
(21,106)
(1,249)
(5,831)
(17)
-
975
29
-
2,620
1,789
(9,497)
(11,609)

13. PROPERTIES

GROUP
Cost or Valuation
Balance at 1 April 2020
Additions during the year
Schemes completed during the year (Note 14)
Less: Disposals
Balance at 31 March 2021
Accumulated Depreciation
Balance at 1 April 2020
Charge for the year
Less: Disposals
Balance at 31 March 2021
Net Book Value at 31 March 2021
Net Book Value at 31 March 2020		 Freehold
Leasehold
Total
£000
£000
£000
208,202
50,857
259,059
218
1,300
1,518
234
-
234
208,654
52,157
260,811
(938)
(1,346)
(2,284)
207,716
50,811
258,527
44,424
15,702
60,126
4,713
7
4,720
(133)
(1,663)
(1,796)
49,004
14,046
63,050
158,712
36,765
195,477
163,778
35,155
198,933

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

62

Both saha’s portfolio (on 19 January 2011) and, saha’s acquisition, Chapter 1’s portfolio (on 23 March 2017) were brought into account at valuation, performed by independent chartered surveyors on an existing use social housing (EUV-SH) basis. All other properties are reflected at cost.

PARENT
Cost
Balance at 1 April 2020
Additions during the year
Schemes completed during the year
Less: Disposals
Balance at 31 March 2021
Accumulated Depreciation
Balance at 1 April 2020
Charge for the year
Less: Disposals
Balance at 31 March 2021
Net Book Value at 31 March 2021
Net Book Value at 31 March 2020		 Freehold
Leasehold
Total
£000
£000
£000
106,334
693
107,027
3,131
-
3,131
234
-
234
109,699
693
110,392
(432)
-
(432)
109,267
693
109,960
31,305
98
31,403
2,165
17
2,182
(47)
-
(47)
33,423
115
33,538
75,844
578
76,422
75,029
595
75,624

All properties are used for charitable purposes. The market values of these properties are significantly higher than their book values but the costs of estimating these exceed any benefits accruing.

One property owned by the trust with costs of £6.521m, has attracted capital funding from the Department for Communities and Local Government totalling £5.422m. Should The Salvation Army dispose of this property, the grants received would be refundable unless the Secretary of State agrees otherwise.

Group properties and schemes in progress have attracted capital funding from Homes England of £150.521m (£17.174 million by the parent charity). Should these properties be sold, this amount will be repayable to Homes England (the amounts repayable being limited by the proceeds of sale) unless Homes England consent to this funding being recycled to other schemes.

Included within parent charity additions is the consideration paid for the surrender of property leases from the charity’s subsidiary, saha. This transaction is removed on consolidation.

The Salvation Army, in common with other churches, provides ministers of religion (officers) and retired ministers of religion with accommodation and holds a portfolio of properties to allow it to do so. Occasionally properties are not required immediately to provide accommodation to officers and retired officers and these, where possible, are let on short-term tenancies until required to accommodate officers. The Salvation Army does not consider these properties to be investment properties as their availability for use, other than for the work of the charity, is typically of limited duration.

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63

14. PROPERTY SCHEMES IN PROGRESS

Balance at 1 April 2020
Additions during the year
Property schemes capitalised during the year
Scheme’s revenue expenditure
Balance at 31 March 2021
15. MOTOR VEHICLES AND EQUIPMENT
GROUP
Cost
Balance at 1 April 2020
Additions during the year
Disposals
Balance at 31 March 2021
Accumulated Depreciation
Balance at 1 April 2020
Charge for the year
Disposals
Balance at 31 March 2021
Net Book Value at 31 March 2021
Net Book Value at 31 March 2020		 GROUP
PARENT
2021
2020
2021
2020
£000
£000
£000
£000		 GROUP
PARENT
2021
2020
2021
2020
£000
£000
£000
£000
2,457
10,456
2,159
9,055
2,543
9,679
2,540
9,614
5,000
20,135
4,699
18,669
(234)
(13,725)
(234)
(12,733)
(95)
(3,953)
(95)
(3,777)
4,671
2,457
4,370
2,159
Motor Equipment
Total
Vehicles
£000
£000
£000
1,261
4,461
5,722
87
92
179
-
(2,899)
(2,899)
1,348
1,654
3,002
1,124
3,866
4,990
20
219
239
-
(2,466)
(2,466)
1,144
1,619
2,763
204
35
239
137
595
732

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

64

PARENT
Cost
Balance at 1 April 2020
Additions during the year
Disposals
Balance at 31 March 2021
Accumulated Depreciation
Balance at 1 April 2020
Charge for the year
Disposals
Balance at 31 March 2021
Net Book Value at 31 March 2021
Net Book Value at 31 March 2020		 Motor Equipment
Total
Vehicles
£000
£000
£000
1,219
-
1,219
87
-
87
-
-
-
1,306
-
1,306
1,081
-
1,081
20
-
20
-
-
-
1,101
-
1,101
205
-
205
138
-
138

16. INVESTMENTS

FIXED ASSET INVESTMENTS
GROUP AND PARENT
Cost/Market Value at 1 April 2020
Additions
Unrealised Gains/(Losses) on investments
Cost/Market Value at 31 March 2021		 Unlisted
Units in
Units in
Total
CIF 1
CIF 2
£000
£000
£000
5
2,867
96,167
99,039
-
-
-
-
-
638
24,237
24,875
5
3,505
120,404
123,914

At 31 March 2021, units held in The Salvation Army Common Investment Fund No 1 had a unit value of £2.5966 (2020: £2.1236).

At 31 March 2021, units held in The Salvation Army Common Investment Fund No 2 had a unit value of £3.5374 (2020: £2.8251).

Salvation Army Social Work Trust holds one £1 share and has the power to control Salvation Army Housing Association (saha). The Salvation Army Housing Association is registered with the Co-operative and Community Benefit Societies Act 2014 and is a registered social landlord regulated by The Regulator of Social Housing. saha itself owns the whole of the issued share capital of Kingsown Limited and saha Developments Limited, companies incorporated in England. The results and net assets of saha, Kingsown and saha Developments have been consolidated within these accounts.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

65

INVESTMENT PROPERTIES
Balance at 1 April 2020
Additions during the year
Property revaluation adjustment – increase/decrease
in value
Investment property valuation at year end
Fixed Assets Investments (from above)
Total Investments		 GROUP
2021
2020
£000
£000
30,000
29,000
-
25
(950)
975
29,050
30,000
123,915
99,039
152,965
129,039

This property at Waterloo, London is used for student accommodation. The revaluation undertaken by Savills, professional external valuers, at 31 March 2021 has resulted in a decrease in the property valuation, and this decrease has been recognised through the revaluation reserve for investment properties. This valuation has been carried out on the basis of no on-going COVID-19 restrictions.

17. DEBTORS AND PREPAYMENTS

17. DEBTORS AND PREPAYMENTS
Accommodation charges outstanding
Sundry debtors and accrued income		 GROUP
PARENT
2021
2020
2021
2020
£000
£000
£000
£000
916
2,385
636
2,192
11,457
13,149
10,273
11,303
12,373
15,534
10,909
13,495

18. (a) CREDITORS: Amounts falling due within one year

Trade creditors and accruals
Deferred Income
Tax and Social Security
Connected Salvation Army Trusts and Companies
Bank Loans repayable within one year (Note 18(b))		 GROUP
PARENT
2021
2020
2021
2020
£000
£000
£000
£000
15,435
14,389
12,485
11,524
2,651
5,963
256
3,708
4,784
4,401
4,784
4,401
7,718
6,827
7,718
6,827
1,565
1,552
-
-
32,153
33,132
25,243
26,460

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

66

18. (b) CREDITORS: Amounts falling due after more than one year

Multi-Employer Pension Scheme (note 12(d))
Recycled Social Housing Grant
Loans repayable between 1 & 2 years
Loans repayable between 3 to 5 years
Loans repayable over five years		 GROUP
PARENT
2021
2020
2021
2020
£000
£000
£000
£000
120
142
-
-
633
1,618
-
-
1,528
1,561
-
-
10,939
11,108
-
-
15,204
17,283
-
-
28,424
31,712
-
-

Housing loans from private sources are secured by charges on saha specific housing properties and are repayable between 2021 and 2044 at varying rates of interest between 0.89% and 11.50%.

19. OPERATING LEASES

19. OPERATING LEASES
The Group has future minimum lease commitments of:
Land and Buildings
Within one year
One to five years
Over five years
Other operating leases
Within one year
One to five years
Over five years		 GROUP
PARENT
2021
2020
2021
2020
£000
£000
£000
£000
235
234
-
-
137
316
-
-
50
62
-
-
422
612
-
-
GROUP
PARENT
2021
2020
2021
2020
£000
£000
£000
£000
195
298
-
-
604
124
-
-
145
23
-
-
944
445
-
-

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

67

20. ENDOWMENTS

GROUP AND PARENT
Expendable Endowment
Xenia Field Capital Fund
Permanent Endowments
H.M. Brant
J.B. Crighton
Miss M.B. Hill
C.J. and E.J. Melbourne
Blackmore Mission
M.J. Fowler
R. Pattison
Leeds Guardian Homes Trust
E.S. Brant Trust
Birmingham Girls Trust		 Balance
New
Changes
Transfers
Balance
1 April
Funds
in Market
31 March
2020
Received
Value of
2021
Investments
£000
£000
£000
£000
£000
11,275
-
2,841
-
14,116
20
-
-
-
20
96
-
25
-
121
35
-
-
-
35
79
-
-
-
79
1
-
-
-
1
16
-
-
-
16
14
-
-
-
14
14
-
-
-
14
1,009
-
225
-
1,234
154
-
34
-
188
1,438
-
284
-
1,722
12,713
-
3,125
-
15,838

The Expendable Endowment represents the Xenia Field Fund. Whilst the capital and income of the Fund can be expended on social work projects, it is the Trustee’s intention that the capital be maintained. Permanent Endowment funds represent bequests and donations, the capital of which cannot be expended but any income can be applied to social work projects without restriction.

The E.S. Brant Trust was established by a trust deed dated 16 June 1965. The annual income can be applied to the social work of The Salvation Army.

The Birmingham Girls Trust consists of endowment funds transferred from Birmingham City Council, the income on which can be applied for the benefit of girls in distress in the Birmingham area.

All endowment funds are represented by investments in The Salvation Army’s Common Investment Funds.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

68

31 March 2020
GROUP AND PARENT
Expendable Endowment
Xenia Field Capital Fund
Permanent Endowments
H.M. Brant
J.B. Crighton
Miss M.B. Hill
C.J. and E.J. Melbourne
Blackmore Mission
M.J. Fowler
R. Pattison
Leeds Guardian Homes Trust
E.S. Brant Trust
Birmingham Girls Trust		 Balance
New
Changes
Transfers
Balance
1 April
Funds
in Market
31 March
2019
Received
Value of
2020
Investments
£000
£000
£000
£000
£000
12,249
-
(974)
-
11,275
20
-
-
-
20
107
-
(11)
-
96
35
-
-
-
35
79
-
-
-
79
1
-
-
-
1
16
-
-
-
16
14
-
-
-
14
14
-
-
-
14
1,112
-
(103)
-
1,009
170
-
(16)
-
154
1,568
-
(130)
-
1,438
13,817
-
(1,104)
-
12,713

21. RESTRICTED FUNDS

GROUP
Social Work Fund
Other Restricted Funds
Social Work projects
including property
funding
saha operations –
property purposes		 Balance
Income and
Expenditure
Transfers
Transfers
Balance
1 April
Movement in
and Actuarial
From/(to)
between
31 March
2020
Market Value of
Movement on
Unrestricted
Restricted
2021
Investments Defined Benefit
Reserves
Funds
PensionScheme
£000
£000
£000
£000
£000
£000
75,624
42
(2,614)
3,370
-
76,422

39,573
13,150
(2,593)
(6,356)
-
43,774
124,954
23,232
(24,416)
-
-
123,770
164,527
36,382
(27,009)
(6,356)
-
167,544
240,151
36,424
(29,623)
(2,986)
-
243,966

Social Work Fund represents sums already expended on the properties used by The Salvation Army in its social work throughout the United Kingdom.

Other Restricted Funds represents unexpended balances of donations and legacies held on trusts which can only be expended in accordance with the specific terms laid down by the donors. All saha funds are treated as restricted in the group’s accounts.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

69

Transfers between funds arise from property transactions, because all funds expended on property assets are reflected as restricted funds, net of funding of homeless and older people’s services centres from legacy funds. In addition, this year £7.482m has been transferred from restricted funds to the general fund to reimburse Strawberry Field project expenditure initially charged against general funds.

PARENT Balance Income and Expenditure Transfers Transfers Balance
1 April Movement in From/(to) between 31 March
2020 Market Value of Unrestricted Restricted 2021
Investments Reserves Funds
£000 £000 £000 £000 £000 £000
Social Work Fund
Funding of properties
for charitable
purposes 75,624 42 (2,614) 3,370 - 76,422
Other Restricted Funds
Social Work projects
including property
funding 39,573 13,150 (2,593) (6,356) - 43,774
115,197 13,192 (5,207) (2,986) - 120,196

Social Work Fund represents sums already expended on the properties used by The Salvation Army in its social work throughout the United Kingdom.

Other Restricted Funds represents unexpended balances of donations and legacies held on trusts which can only be expended in accordance with the specific terms laid down by the donors.

31 March 2020

31 March 2020
GROUP Balance Income and Expenditure Transfers Transfers Balance
1 April Movement in From/(to) between 31 March
2019 Market Value of Unrestricted Restricted 2020
As restated Investments Reserves Funds
£000 £000 £000 £000 £000 £000
Social Work Fund 64,808 3 (1,916) 12,729 - 75,624
Other Restricted Funds
Social Work projects
including property
funding 46,408 6,031 (13,505) 639 - 39,573
saha operations –
property purposes 123,165 27,372 (25,583) - - 124,954
169,573 33,403 (39,088) 639 - 164,527
234,381 33,406 (41,004) 13,368 - 240,151

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

70

31 March 2020
PARENT Balance Income and Expenditure Transfers
Transfers		 Balance
1 April Movement in From/(to)
between		 31 March
2019 Market Value of Unrestricted
Restricted		 2020
Investments Reserves Funds
£000 £000 £000 £000 £000 £000
Social Work Fund
Funding of properties
for charitable
purposes 64,808 3 (1,916) 12,729 - 75,624
Other Restricted Funds
Social Work projects
including property
funding 46,408 6,031 (13,505) 639 - 39,573
111,216 6,034 (15,421) 13,368 - 115,197
22. UNRESTRICTED FUNDS
GROUP AND PARENT
Balance Income and Expenditure Transfers
Transfers		 Balance
1 April Movement in From/(to)
between		 31 March
2020 Market Value of Restricted Unrestricted 2021
Investments Reserves Funds
£000 £000 £000 £000 £000 £000
General Reserves 8,197 135,692 (135,011) 3,986 - 12,864
Unrealised Investment
Gains 44,087 20,729 - - - 64,816
52,284 156,421 (135,011) 3,986 - 77,680
Designated Reserves
Property Purposes 9,631 657 - (1,000)
-		 9,288
Vehicles 1,468 4 - - - 1,472
Social Work projects 1,551 - (131) - - 1,420
12,650 661 (131) (1,000) - 12,180
64,934 157,082 (135,142) 2,986 - 89,860

The General Reserve is required to fund the day-to-day needs of The Salvation Army Social Work Trust. Unrestricted Funds include designated reserves which have been set aside by the Trustee for specific purposes.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

71

31 March 2020 GROUP AND PARENT

31 March 2020
GROUP AND PARENT
General Reserves
Unrealised Investment
Gains
Designated Reserves
Property Purposes
Vehicles
Social Work projects		 Balance
Income and
Expenditure
Transfers
Transfers
Balance
1 April
Movement in
From/(to)
between
31 March
2019
Market Value of
Restricted
Unrestricted
2020
Investments
Reserves
Funds
£000
£000
£000
£000
£000
£000
10,125
127,851
(125,889)
(3,890)
-
8,197
51,440
(7,353)
-
-
-
44,087
61,565
120,498
(125,889)
(3,890)
-
52,284
18,759
-
(138)
(8,990)
-
9,631
1,954
2
-
(488)
-
1,468
1,551
-
-
-
-
1,551
22,264
2
(138)
(9,478)
-
12,650
83,829
120,500
(126,027)
(13,368)
-
64,934

23. ANALYSIS OF NET ASSETS BETWEEN FUNDS

GROUP Endowment Social Other Unrestricted Total
Funds Work Fund Restricted
Reserves
Funds
£000 £000 £000 £000 £000
Fixed Assets
Properties - 76,422 119,055 - 195,477
Property schemes in progress - - 4,671 - 4,671
Motor vehicles and equipment - - 34 205 239
Investments 15,838 - 29,051 108,076 152,965
Current Assets less Liabilities - - 14,733 (18,421) (3,688)
Total Net Assets 15,838 76,422 167,544 89,860 349,664
PARENT Endowment Social Other Unrestricted Total
Funds Work Fund Restricted
Reserves
Funds
£000 £000 £000 £000 £000
Fixed Assets
Properties - 76,422 - - 76,422
Property schemes in progress - - 4,370 - 4,370
Motor vehicles and equipment - - - 205 205
Investments 15,838 - - 108,076 123,914
Net Current Assets - - 39,404 (18,421) 20,983
Total Net Assets 15,838 76,422 43,774 89,860 225,894

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

72

31 March 2020
GROUP Endowment Social Other Unrestricted Total
Funds Work Fund Restricted
Reserves
Funds
£000 £000 £000 £000 £000
Fixed Assets
Properties - 75,624 123,309 - 198,933
Property schemes in progress - - 2,457 - 2,457
Motor vehicles and equipment - - 594 138 732
Investments 12,713 - 31,681 84,645 129,039
Current Assets less Liabilities - - 6,486 (19,849) (13,363)
Total Net Assets 12,713 75,624 164,527 64,934 317,798
PARENT Endowment Social Other Unrestricted Total
Funds Work Fund Restricted
Reserves
Funds
£000 £000 £000 £000 £000
Fixed Assets
Properties - 75,624 - - 75,624
Property schemes in progress - - 2,159 - 2,159
Motor vehicles and equipment - - - 138 138
Investments 12,713 - 1,681 84,645 99,039
Net Current Assets - - 35,733 (19,849) 15,884
Total Net Assets 12,713 75,624 39,573 64,934 192,844

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

73

24. RECONCILIATION OF NET INCOMING RESOURCES TO NET

CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES

24. RECONCILIATION OF NET INCOMING RESOURCES TO NET
CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES
Net income/(expenditure)
Unrealised loss/(gain) on investments
Realised (gain) on disposal of properties
Depreciation of motor vehicles and equipment
Depreciation of properties
Investment and rental income
(Profit) on sale of motor vehicles
Increase in stocks
(Increase)/Decrease in debtors
Schemes in progress written off
Increase/(Decrease) in creditors
Increase/(Decrease) in Defined Benefit pension scheme liability
Interest payable
Net infow/(outfow) from operating activities		 2021
2020
£000
£000
31,866
(14,229)
(23,926)
7,628
(160)
(3)
239
697
4,720
7,177
(1,496)
(2,741)
(4)
(2)
(25)
-
3,161
1,086
95
3,953
(1,999)
11,362
2,167
(3,026)
1,037
1,249
15,675
13,151

25. CAPITAL COMMITMENTS

At the balance sheet date, commitments made by The Salvation Army Social Work Trust Group in relation to the construction or refurbishment of property amounted to £58k (2020: £2.951m).

26. RELATED PARTY TRANSACTIONS

During the current year grants totalling £16.0m (2020: £16.0m) were received from The Salvation Army Trust. An overhead recharge was charged from The Salvation Army Trust during the year, representing the Social Work Trust’s share of central overhead costs which were incurred by The Salvation Army Trust. In addition, recharges were charged to The Salvation Army Social Work Trust for hire of rooms at corps premises.

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

74

27. COMPARATIVE STATEMENT OF FINANCIAL ACTIVITY FOR THE YEAR ENDED 31 MARCH 2020

Endowments Endowments Restricted Unrestricted 2020
Restated Total
£000 £000 £000 £000
INCOME AND ENDOWMENTS FROM:
Donations and Legacies
Grants receivable: TSA Trust - - 16,000 16,000
Donations - 550 1,894 2,444
Legacies - 925 93 1,018
- 1,475 17,987 19,462
Charitable Activities
Centres’ operations - 4,141 71,546 75,687
Other social operations - 1 36,166 36,167
Housing Association turnover - 26,368 - 26,368
- 30,510 107,712 138,222
Investments - 589 2,152 2,741
Other
Gains on disposal of fixed assets - 3 2 5
TOTAL INCOME - 32,577 127,853 160,430
EXPENDITURE ON:
Raising Funds
Investment management costs - - 50 50
- 50 50
Charitable Activities
Centres’ operations - 15,064 85,698 100,762
Other social operations - 357 40,279 40,636
Housing Association operating costs - 28,203 - 28,203
- 43,624 125,977 169,601
TOTAL EXPENDITURE - 43,624 126,027 169,651
Net Gains on Investments (1,104) 829 (7,353)
(7,628)
NET EXPENDITURE (1,104) (10,218) **(5,527) ** (16,849)
Transfers between Funds - 13,368 (13,368)
-
Actuarial Gains/(Losses) on Defined Benefit Pension Schemes - 2,620 - 2,620
NET MOVEMENT IN FUNDS (1,104) 5,770 **(18,895) ** (14,229)
RECONCILIATION OF FUNDS:
Total Funds brought forward (as restated) 13,817 234,381 83,829 332,027
TOTAL FUNDS CARRIED FORWARD 12,713 240,151 64,934 317,798

The Salvation Army Social Work Trust Report and Financial Statements for the year ended 31 March 2021

75

Charity Registration No: 215174 Scottish Charity Registration No: SC037691

www.salvationarmy.org.uk