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2022-03-31-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 2022

CHARITY REGISTRATION NO: 215174 SCOTTISH CHARITY REGISTRATION NO: SC037691

Principal Office

Territorial Headquarters: 101 Newington Causeway, London SE1 6BN www.salvationarmy.org.uk

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CONTENTS

Introduction from the Territorial Commander 3
Our Vision, Mission & Values 5
Objectives of The Salvation Army Social Work Trust 7
Our Organisation 7
Explaining Our Strategy, Structure, and Operation 8
•
Summary of what The Salvation Army Social
Work Trust does
•
The scale of the work of The Salvation Army
Social Work Trust
•
How We Work
Realigning Resource to Enable A ‘Flourishing’ And 13
Effective Salvation Army
Illustrating The Work and Achievements Of The 16
Salvation Army Social Work Trust 2021 / 2022
Giving Homeless People Shelter and Hope 16
In the Frontline Against Modern Slavery 19
Employment Plus Self-Esteem 21
Helping People Move on From Debt 23
Giving People Living With Addiction The Chance To Heal 25
A Richer, Fulfilling Later Life 26
Responding To Emergencies 27
Raising Funds 29
Subsidiaries 29
Modern Slavery and Anti-Human Trafficking Statement 31
Reviewing Finances 32
Reserves Policy 35
Investing for The Future 35
Structure, Governance and Management 39
Risk Management 40
Directors 44
Advisers 45
Independent Auditors’ Report 46
Financial Statements 49

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INTRODUCTION FROM THE TERRITORIAL COMMANDER Commissioner Anthony Cotterill

The Salvation Army’s purpose can be summed up in four words: ‘Love God Love Others’. These words come from the teaching of Jesus who when asked ‘what is the greatest commandment?’ replied: “’Love the Lord your God with all your heart and with all your soul and with all your mind.’. This is the first and greatest commandment. And the second is like it: ‘Love your neighbour as yourself’”. (Matthew 22: 37-39 New International Version).

The Salvation Army Social Work Trust is as committed to ‘Love God Love Others’ as any other part of The Salvation Army. The Social Work Trust was first established in 1891 to advance the ideas set out in our Founder’s book 'In Darkest England and the Way Out'. General William Booth’s plan was, at its heart, driven by his passion to restore people’s relationships with God, each other and reconnect communities that had been severely disrupted by the industrial revolution in Victorian England. Booth summarises his intentions in In Darkest England and The Way Out: ‘The Scheme I have to offer consists in the formation of these people into self-helping and self-sustaining communities, each being a kind of co-operative society, or patriarchal family, governed, and disciplined on the principles which have already proved so effective in the Salvation Army’ (William Booth, 1890, p91).

While language like ‘patriarchal family’ is now outdated, as you read The Salvation Army Social Work Trust’s Annual Report for 2021-2022, you will see that Booth’s principles and ideas are still changing lives for good in 21st century Britain. People with complex challenges and broken dreams are finding hope, restoring relationships, gaining confidence in themselves and positively contributing to community life with support from The Salvation Army. Many people previously struggling with addictions, homelessness or the consequences of modern slavery and human trafficking are now not simply surviving but thriving. People who wondered how they’d escape from debt or find a job are now productive members of society who’ve learnt how to manage their personal finances following life skills training from The Salvation Army.

Transformation of people and communities is The Salvation Army’s business. Our vision is ‘fullness of life for all with Jesus’. While we do not impost our faith on anyone, we passionately believe that everyone is made in the image of God and everyone should be able to enjoy fullness of life. How that is experienced is different for different people but you will gain some insights as you’ll read in this report. ‘Fullness of life’ for Wayne means a house giving him a ‘glimmer of hope’; for Sammy, it means escaping crime and drugs; for Gillian it means completing a course and re-engaging socially, for G, a victim of trafficking, it means rebuilding trust; for Molly it means improving her mental health; for Fireman Ryan it means a cup of tea and a sandwich in the midst of tragedy.

We could not do what we do without the generous backing of our financial supporters. A large amount of our funding comes from individual donors – people who trust us to do good with their money. Thank you for your generosity and confidence in us. We are determined to live up to the confidence you have entrusted to us.

The Social Work Trust receives almost all The Salvation Army’s funding from central and local governments. We are grateful for our partnerships with governments, trusts, foundations and corporations.

The pages of this Annual Report are full of more examples of people and communities experiencing more of the fullness of life that God wants everyone and everyplace to

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enjoy. Although the next few years are full of economic uncertainty, The Salvation Army is hopeful and ready to step out in confidence as we ‘love God love others’.

Thank you for your help and support. May God bless you.

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 inspire and guide all the work we do as a church and as a charity. We refreshed our statements in 2021 to reaffirm our sense of purpose and direction for The Salvation Army in the United Kingdom, Ireland, the Channel Islands and the Isle of Man. The refreshed statements have been adopted across the territory and their simplicity and boldness mean that all areas of the diverse work of The Salvation Army can be both anchored and inspired by them.

Vision statement:

This is ‘Our Vision’ for every part of The Salvation Army. It is inspired by the words of Jesus who said: ‘I have come that they may have life, and have it to the full’ (John 10:10 NIV). ‘Fullness of Life for All with Jesus’ includes every aspect of Salvation Army life. We believe everyone can enjoy fullness of life with Jesus. It is aspirational – we are not there yet – but this is what we strive towards.

Mission statement:

The Mission Statement is built on five principles – or priorities as we see them - which should act as the drivers for all we do, how we do it and why we do it, across the entire organisation. These short phrases communicate immense challenge and ambition and direction. When these priorities are present, The Salvation Army is working towards ‘Our Vision’ of ‘Fullness of Life for All with Jesus’. Each of the five priorities of ‘Our Mission’ are rich in meaning and help us explain to 21st century society why the Christian message and the work of The Salvation Army is relevant and desperately needed in our communities and nations.

Our values:

Our values have been refreshed and refocused on the behaviours that should result from living out the values. Our values are for everyone involved in The Salvation Army and must be reflected in our behaviour and result in good relationships, increased wellbeing and help us integrate what we do with how we do it. The basic standard of Christian behaviour, derived from our understanding of the character and action of God, is love so

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we need to continually be drawn back to understand how God is asking us to live and work together to help us be faithful to our calling to be God’s people.

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.

Statement of commitment:

We have one simple statement to explain why we are here which and frames all we are and all we do as a church and charity. Four words achieve this:

‘Love God, Love Others’

This is based on Jesus’ Greatest Commandment in Matthew 22:37–39 to ‘love the Lord your God’ and to ‘love your neighbour as yourself’. ‘Love God Love Others’ underpins, inspires and motivates everything we do, in every part of The Salvation Army.

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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 (Statistics from the 2022 Salvation Army Yearbook) 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) 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)

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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

6 Drug and Alcohol Services (Scotland)

Aberdeen Falkirk Glasgow Greenock Inverness Stirling

4 Child Contact Centres

Birmingham Newark Winchester Worthing

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6 Early Years Education Centres

Belfast Cardiff Clacton-on-Sea Droitwich Spa Douglas Failsworth

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 received 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.

While we have ongoing contractual commitments which it is our mission to meet, we are always looking to ensure that opportunities 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.

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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.

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REALIGNING RESOURCE TO ENABLE A ‘FLOURISHING’ AND EFFECTIVE SALVATION ARMY

The work and delivery of the Structure Coordination and Design Project 2022

Ensuring appropriate oversight and support and operational freedoms to more than 600 diverse and locally responsive Salvation Army churches and community centres is challenging. Add to that over 100 residential and non-residential social work centres that form The Social Work Trust, and the challenge of ensuring the most effective allocation of resource is truly demanding.

The Salvation Army has never been a static organisation and over its 150+ year life has been constantly evolving to match efficiency and effectiveness with changing times and changing needs. Over the last two years, the entire UK Salvation Army has engaged in a structured, extensive and disciplined process to look at how the people and resources we have can be marshalled and structured more effectively - with one goal – to enable our ‘frontline’ operations – our local mission expressions– whether they are corps or social work centres, to ‘flourish’.

By ‘flourishing’ we mean that every expression of The Salvation Army should actively be engaging with the five mission priorities (our Mission Statement) in order to achieve our vision.

This significant task, - termed The Structure Coordination and Design Project has been focused on three desired outcomes:

Starting in 2021 and over a two-year period, The Structure Coordination and Design Project conducted probably one of the most extensive pieces of internal research we have ever executed. The principal goal was to provide answers to the simple question, ‘What (change) is needed to enable our local mission to flourish?’. The process was deliberately designed to be ‘bottom-up’. Consultations were carried out within all the then 20 divisions, people involved in Social Work Trust programmes, as well as people working at headquarters, both territorial and divisional.

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The principal premise we worked to is this: A combination of effective oversight of the right things, combined with the allocation of adequate resources and support , and the effective release of our local mission expressions from unnecessary control, should result in people and communities flourishing.

The strength of this simple model is that it dovetails into the way The Salvation Army has always worked. We respond locally and meaningfully to local need in local ways. Organisational structures, administrative and decision-making processes can become burdensome and inefficient. Therefore, rooting and starting our thinking and planning for change in ‘local’ was the most sensible and potentially the most powerful way forward.

The diversity of Salvation Army work means that one approach does not fit every situation. Many of the programmes funded by The Social Work Trust support people facing complex challenges. Therefore, a more centralised organisational approach is appropriate for people experiencing homelessness or a survivor of modern slavery or a person recovering from addiction. This contrasts to the approach used in many of the programmes funded by our sister Salvation Army Trust which tend to be less centralised and more ‘organism’ than ‘organisation’. The Salvation Army accommodates these differences through different management structures to ensure support and oversight is appropriate in differing contexts.

The outcomes of the Structure Coordination and Design Project can be outlined as a series of significant changes to the way we work:

Release: We engaged and continue to engage in extensive rethink of how resources need to be marshalled and how the local delivery points can be ‘released’ to be as free as possible to decide on and deliver what they feel is needed in terms of service and services. One outcome is and will continue to be, a review of effectiveness and how investment directed more freely to where increased investment will deliver significant change for people and our communities.

Oversight: Effective oversight is vital for compliance and governance. Oversight ensures we are doing the right things in the right ways. However, the design process also looked at where supervision and some forms of oversight are unnecessary or could be released to be done locally, not centrally. We have a strong spirit of accountability in The Salvation Army and releasing of some aspects of oversight will mean more local ownership.

Support: We need to continue ensure that the support that is needed to enable local mission delivery to flourish, is available, but in the right ways. This means adequate funding streams, support for raising awareness locally, support for training and innovation and local growth.

An important priority for this project is integration and increasing local collaboration between all aspects of Salvation Army work in a particular geographical location. Irrespective of the governance and funding arrangements that apply to different Salvation Army expressions (Salvation Army Trust or Social Work Trust) there is nothing preventing teams jointly collaborating to achieve our shared vision (fullness of life for all with Jesus) and the five mission priorities. Initiatives such as ‘communities of practice’ and ‘mission focus groups’ are increasingly connecting Salvation Army people resulting in greater integration, streamlining and efficiencies.

A further cultural intention with this project has been to move away from seeing change as something that is affected once, to a culture of continual improvement. All aspects of The Salvation Army’s operation are therefore actively encouraged to submit proposals for

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how improvements, and innovations and changes can be introduced to enhance local mission delivery.

Changes introduced by this project will start to be felt during 2023. As this is a significant strategic development, it will be reported on in subsequent Annual Reports and Accounts.

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ILLUSTRATING THE WORK AND ACHIEVEMENTS OF THE SALVATION ARMY SOCIAL WORK TRUST 2021 / 2022

The Salvation Army Social Work Trust encompasses a very significant number of residential centres and programmes. The diversity of services and ways these services are delivered Is immense. Therefore, this report highlights some of the developments we have implemented in the last year 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.

GIVING HOMELESS PEOPLE SHELTER AND HOPE

Offering refuge and support

Home is important for our health and happiness. Without a safe and stable place to call home, life can quickly fall apart. Every day a homeless person dies from suicide, drugs or alcohol in England and Wales*. We open our arms with more than 80 Lifehouses across the UK and Ireland, night shelters and drop ins. Through initiatives, research and policy we tackle root causes of homelessness and give people hope for the future. * https://www.salvationarmy.org.uk/news/homeless-peoples-lives-are-risk-because-funding-cuts

Last year The Salvation Army accommodated a nightly average of 3,000 who were formally homeless.

Wayne has the stability of a home and new prospects

“I have slept all over the place, I was attacked on the street and I’ve tried to kill myself. That’s why The Salvation Army were such a glimmer of hope. They got me a house, it’s an anchor that stops me spinning out of control and I could move forward.” Wayne

Tough approach for rough sleeping

In September 21, Government statistics revealed a 39 per cent year-on-year increase in the total number of single households recorded as rough sleeping in England (to 11,580). We called on the Government to provide long-term investment in support services to help tackle the root cause of homelessness.

We warned that the situation would only worsen as COVID-19 support structures came to an end. The rise in rough sleeping came despite strenuous efforts to shelter all rough sleepers during the pandemic through schemes such as ‘Everyone In’ which housed 37,000 people, but these gains are already being lost.

Lorrita Johnson, The Salvation Army's Director of Homelessness Services, said: “Support services for homeless people have seen a decade of falling budgets and increased demand. Without timely and sustained investment, we will not eradicate rough sleeping by the end of this Parliament.

This can only be done through long-term support for the root cause of someone’s homelessness such as help with mental health, addiction, and job and life skills training.”

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1 in 3 rough sleepers in London is under 35*

Combined Homelessness and Information Network quarterly report Salvation Army survey of 2,000+UK adults aged 18-30

Words of praise for Housing First

Our Housing First programmes in Scotland and Wales were endorsed in a landmark report by MPs into ending homelessness, with the UK Government being called on to expand the Housing First approach across the UK.

What makes the programme so effective is that we provide access to specialist, coordinated support as well as housing. This is the key to breaking the cycle of homelessness and rough sleeping, so people have stability and the space to turn their lives around.

Housing First in Cardiff was lauded as a best practice model by the Welsh Government. In Scotland, Belgian government minister Meryame Kitir, visiting COP26, took time out to visit Glasgow’s Housing First project. She said: “We are looking at Scotland and Finland as good examples of homelessness work. This project and what I have heard today is something I will take [home] with me.”

Piecing together a solution to homelessness

In a pioneering move, we joined forces with award-winning developer Hill Group and Citizens UK to create the SCH Partnership. To mark its launch in June 2021, we unveiled the SoloHaus, a modular home which is furnished and ready to move into.

These modular houses help tackle homelessness and rough sleeping, while making people feel part of their community. The Partnership started work on setting up supported accommodation projects in Southend, Basildon and Bristol. We called on the Government, local authorities, and landowners to support this innovative programme.

Lieutenant Colonel Drew McCombe, of The Salvation Army said: “Modular housing is a more cost effective, and better quality alternative to temporary accommodation.”

News from our Lifehouses

Best foot forward

This year marked the tenth annual five-a-side football Partnership Trophy tournament, held at Goals in Manchester. We welcomed 15 teams from across our Lifehouses to celebrate their achievements on and off the pitch.

Former Manchester United, Arsenal and England star Paul Merson cheered on players and spoke movingly about his experiences with addiction. “Having people you can turn to is a huge help. The Salvation Army is doing a wonderful job in supporting them.” Another Manchester United player and Spanish midfielder, Juan Mata, joined Paul. Juan said: “It was a great experience and I enjoyed seeing what The Salvation Army do and witnessing the power of football to make people happy.”

Paul and Juan presented trophies to the winning teams Wallace of Campsie House from Glasgow and medals to the runners up Swan Lodge, Sunderland, The Orchard in Bradford and Pickfords.

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Growing health and wellbeing

At our allotment project at Charter Row in Sheffield, residents came up with ideas to improve the plot – including recycling a shelter for the site, and installing a fire pit so they can barbecue and relax. The project has been beneficial for residents’ physical and social health but also their mental wellbeing.

Last year, the idea for a gardening club at Catherine Booth House in Portsmouth was planted. This year, the project firmly took root. The club offers current and former residents and their families the knowledge and confidence to learn skills, discover nature and grow their own food.

Top marks all round

Swan Lodge in Sunderland, won multiple prizes at the One Awards Celebration of Learning 2021 – for ‘Learners Choice for Tutor’, ‘Learning Group’ and ‘Personal Progress’. Salvation Army tutor Sonia Park-Ritchie who leads classes won a Learners Choice for Tutor Award. One of her students, Gillian, said: “I have gained so much confidence from the courses available and the way they are delivered. I cannot thank and praise Sonia enough.”

Gillian, who found herself homeless last year, won a Personal Progress award. She added: “I have not only grown educationally but also as a person allowing me to re-engage socially.” Gillian completed a career preparation unit, functional skills Maths Entry 3, skills for employment, training and personal development.

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IN THE FRONTLINE AGAINST MODERN SLAVERY

We are all human beings who deserve dignity

Centuries after slavery was officially abolished, thousands of people are still being exploited across the UK. They are forced into labour, criminality, sexual exploitations and domestic servitude.

For the 11th year running, the Government contracted The Salvation Army and our partners to manage the support of adult victims of modern slavery in England and Wales. The year under review was the first year in which we managed the extended contract, entitling all survivors to receive support from The Salvation Army at all stages of their recovery.

In the past 11 years the total number of people coming to us for support each year has risen by 710% from 378 in the first year to 3068 this year.

‘G’ is a survivor of modern slavery supported by The Salvation Army “When I come in the safe house, I’m not trusting anyone. I was so broken. Mentally, physically, broken in every way. It’s very hard to believe someone, trust someone because I’m a victim of believing someone. So, they’ve given me time, they’ve given me space. They spend time with me.”

The real picture – listening to slavery survivors

The Salvation Army called for the voice of slavery survivors to be central in the debate around the Borders Bill, the cornerstone of the Government’s New Plan for Immigration. We wanted policymakers to understand the true nature of modern slavery, and to factor that into the new legislation. This is key to protecting people and gaining the information needed to combat the slavery traffickers.

During the Bill’s consultation period, we used our experience to make detailed recommendations we believed would be more effective and helpful for survivors of slavery. Major Kathy Betteridge, Director of Anti Trafficking and Modern Slavery for The Salvation Army said: “We support measures to ensure the system is not abused but this must not be at the expense of those who have endured modern slavery and are in need of our help”.

Report reveals impact of pandemic on human trafficking

A report, How has the International Anti-Trafficking Response Adapted to Covid-19? (August 2021), revealed that more is needed to protect vulnerable communities as traffickers found new ways to exploit people during the pandemic.

Testimonies include trafficking gangs going online to target children, and people being offered risky opportunities having lost their livelihoods. At the same time, social distancing and travel restrictions presented considerable challenges to supporting victims.

The report shared how charities and NGOs have recognised the risks and adapted well during the pandemic. A list of recommendations was drawn up to capitalise on the lessons learned. Tribeni Gurung from The Salvation Army’s International Anti Trafficking team said: “We’re encouraged to learn that charities, communities and governments have been able to develop stronger links due to working closely together during the pandemic and confident that this will help in a combined efforts to stamp out modern slavery in the future.”

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The Salvation Army to the rescue

We released a new report on Anti-Slavery Day (18 October 2021) about survivors who were referred to The Salvation Army and our partner organisations in the last year.

1,030 forced to work in places like farms, factories, building sites and restaurants for little or no pay

647 were survivors of sexual exploitation

470 forced to commit crimes such as growing or dealing drugs, begging and shoplifting.

187 had been working as domestic slaves

Modern slavery is a tough subject and it’s hard for adults as well as children to understand that people are being treated as slaves in the UK today. In October 2021, The Salvation Army launched a toolkit called True Story to help children understand more about modern slavery.

The toolkit helped children learn about this sensitive issue while suggesting ways they could make a difference, such as talking to their parents or taking to social media. All of the stories showed how The Salvation Army can bring hope for a happy ending.

Royal touch to art therapy

In November 2021, Her Royal Highness Princess Eugenie of York joined survivors of modern slavery at a Salvation Army Outreach hub in London as they were taking part in an art therapy session.

HRH Princess Eugenie took part in a session to create artwork around how each survivor feels about freedom. The informal setting enabled survivors to share freely with their guest and discuss the impact of the help they are now receiving from Salvation Army specialist support workers. One survivor said: “I enjoyed sharing our opinions and experiences. Life has good experiences if you are surrounded by good people.”

Making an impact that transforms lives

During Refugee Week (14-20 June 2021) Syrian refugee, Ayat, reflected on the help her family had received from The Salvation Army. Ayat, her husband and three children spent four and a half years in a Lebanese refugee camp before coming to the UK as part of the government’s Syrian Vulnerable Persons Resettlement Scheme.

They had been greeted by Salvation Army caseworker Alex Foden, who took them to their new home in Lancashire. Alex said: “Refugees have been living in such a traumatic situation, it’s hard for us to contemplate what it has been like for them. Some will have been imprisoned, experienced torture, children have seen family members die.”

The help Ayat’s family received from The Salvation Army was wide-ranging from buying furniture and food for their new home, opening bank accounts, registering them with doctors and the job centre, arranging English courses and getting their children settled in school. Ayat said: “The Salvation Army helped us a lot, they are our family in this country.”

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EMPLOYMENT PLUS SELF-ESTEEM

We empower people to overcome barriers

This year saw economic growth falling and inflation rising in the wake of the pandemic. Though unemployment rates were low, finding a job was hard. Many others were trapped in a cycle of low-paid work and zero-hours contracts.

The Salvation Army’s Employment Plus service continued to offer tailored support to help people become job-ready, get a job and stay in work. We’re not just interested in employment history, but to understand people’s personalities, experiences and goals in life.

Our Employment Plus programmes engaged with over 23,000 people, supporting them, coaching them and helping them into work across the UK.

Ian found self-worth, self-esteem and a new job

"Since I’ve been at Employment Plus, they’ve built up my confidence and helped me with approaching employers to find work and with doing job interviews."

New service added to Employment Plus

The Salvation Army has been expanding Employment Plus across the UK, and this year we opened up this service to the community in Crewe. Like many places, unemployment levels rose in Cheshire during the pandemic and after furlough schemes came to an end.

Corps officer Major Steven Watson said: “Unemployment has a devastating effect on families pushing them into poverty and increasing social exclusion.” The team supported people who have lost their jobs with food parcels and fuel vouchers. Advisors offered help with CVs, job searches and interview techniques.

Nationally the service was re-certified with the quality standard ISO 90001:2015. It shows our ability to offer employability services that meet customers and legal requirements. The audit took place when we had COVID-19 and remote working to contend with, so it is a huge achievement.

Kickstarting new opportunities

The Salvation Army continued to offer young people the chance to work for us and gain valuable work experience as part of the Government’s Kickstart scheme. Each Kickstarter will have a dedicated employability professional to support them on their journey.

Following the pandemic, young people bearing the brunt of job losses. By offering 85 paid job roles (funded by the Government) to 16–24 year-olds at most risk of long-term unemployment, we’re transforming lives.

Charlie, 23, became a Salvation Army Community Support Worker. He said: “The best thing about this job is that what I am doing is meaningful. It makes a difference and is helping people in my area. I am not just a number on a bit of paper, I am helping to make my community a better place.”

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Steps to Work steps up a gear

At our Strawberry Field training centre in Liverpool, the Steps to Work programme evolved to become ‘Steps at Strawberry Field’. We opened it up to people of all ages who may have learning difficulties or other barriers to employment, from across Liverpool.

The new scheme included ‘Steps to Work lite’ a condensed programme, ‘Steps to Volunteer’, for those who want to receive a formal volunteering qualification, and ‘Recycles’, a hands-on programme based at the Recycles project in Liverpool city centre.

Strawberry Field Mission Director Major Kathy Versfeld said: ‘We want people to know we are pulling out all the stops to support them in realising their dreams and in harnessing their unique potential, so that together we can build better, more inclusive and diverse workplaces.’

Partnerships bring employment and optimism

The Salvation Army and soft drinks manufacturer Clearly Drinks joined forces to create employment opportunities in North East England. It meant we could put a new coordinator on the ground in Sunderland, helping people to find new jobs and renewed hope – in an area prioritised by the Government’s Levelling Up policy.

In Blackpool our Recycles scheme saw manager Doug Cox and volunteer Brian Dodd team up to spruce up more than 100 old bicycles to sell. The project bridges a gap between people who are in crisis and regular cyclists in the community. Proceeds from the sale of the bicycles went back into the recycling project.

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HELPING PEOPLE MOVE ON FROM DEBT

Offering practical advice and pastoral care

Whether it’s losing a job, becoming ill or facing difficulties in the pandemic, financial instability is often the root cause of debt. People with high levels of debt are more likely to default on payments. It’s a vicious circle.

We help people get a handle on what they owe and work alongside them to make a realistic plan for repaying their debts. Through money education we help change habits and minimise the chance of debt recurring.

Our 22 debt advice centres saw requests for help increase by 28 per cent last year from 668 clients in 2019 to 852 clients in 2020 as pandemic poverty took hold of many vulnerable households.

Lucy’s debt left her feeling suicidal

“The Salvation Army has helped me and shown me there is a way. Before I couldn’t see a way through it, but now I can. I felt hopeless before, but they’ve shown me there is a path”.

Helping record numbers of people in debt

In April 2021, we reported that our 22 Financial Conduct Authority approved debt advice centres across the UK saw requests for help increase by 28 per cent as pandemic poverty affected vulnerable households.

Schemes like the Universal Credit uplift and furlough were lifelines, but were not enough to prevent many sliding into debt. Nearly a fifth of those who got in touch with us cited low income as the main source of their debt.

Our teams worked longer hours and services expanded across East Scotland, the Isle of Man, Birmingham, Middlesbrough and Exeter. As well as financial advice, we gave practical and emotional support to help people cope with the pressure of being in debt. We called on the Government to put in a range of measures to help those finding it hard to pay off debt and to stop more people falling into debt.

Lorraine Cook, Financial Inclusion Development Manager said: “Managing debt is more than just a repayment plan. We maintain a relationship with that person throughout their journey, linking them up with their local Salvation Army for ongoing support and companionship”.

Doing our level best

In September 2021, we warned that the end of Covid financial support would also impact the Government’s 'Levelling Up' plan to tackle regional inequalities.

We urged the Government to reconsider how funding is allocated from the Levelling Up Fund. In particular, we asked them to ensure deprived coastal communities receive sufficient investment, and to engage with communities about what investment will best level up their areas. We also called for investment in skills and employment support, including affordable childcare.

The Salvation Army’s Lieutenant Colonel Dean Pallant said: “We understand that the Covid financial safety net can’t continue indefinitely. But, we urge the Government to support the deprived communities it wants to help with its Levelling Up plan to transition from short-term emergency support to long-term financial security.”

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“I’m forever thankful.” Molly’s story

During the year Molly, a young mum, was taken to the small claims court by her former landlord. She had fallen into debt and had left her tenancy after she was made redundant. She turned to our Debt Advice Service and Debbie White, Debt Advice Co-ordinator, helped Molly through the court process.

Molly, who has Bipolar disorder, said: “The help I received from Debbie was fundamental for my mental health at a very vulnerable time in my life. Debbie was a shoulder to lean on and a shield against my debtors. She spent hours with me in preparation for my case and gave me the confidence to face my debt head on and to hold my head high in court. I'm forever thankful.”

Debbie and the team supported more than 100 people like Molly during the year, marking its first birthday in September 2021. Lorraine Cook, The Salvation Army’s financial inclusion development manager, said: “Debbie and her team have done a brilliant job launching a new service, which has already helped so many people, and will prove vital as the effects of the pandemic continue to be felt.”

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GIVING PEOPLE LIVING WITH ADDICTION THE CHANCE TO HEAL

We don’t judge a book by its cover

Around 80% of residents at The Salvation Army’s 80+ Lifehouses (hostels) arrive with drug and alcohol addiction issues. Many have been unable to access addiction support services before they step into our care.

During the year, we continued with our harm reduction approach to addiction. At its heart is the offer of non-judgemental support to help people address the reasons they are living with addiction. It means we don’t ask ‘Why the addiction?’ – instead we ask ‘Why the pain?’

The Salvation Army has worked with more than 950 people with addiction issues in the past year.

Sammy has found a new life beyond addiction

“I was basically being used as a drug dealer and I was an addict. I was committing crimes and selling drugs every day. I’ve been clean since March last year and I couldn’t have done it without The Salvation Army. If it wasn’t for them, I’d be dead.”

Reduction in drug overdose deaths

The Salvation Army released figures (September 2021) which showed how taking a harm reduction approach to treating drug problems is helping to save lives. 80% of people who move on from The Salvation Army addiction services are no longer using the drugs which brought them there to begin with. [ Source - Atlas: Apr 20-March 21]

Our addiction support team ensure our Lifehouse staff are able to swiftly administer naloxone, which reverses the effects of a drug overdose. Saving lives with naloxone has risen fivefold in the last three years. During the year in review more than 200 kits were used.

Our harm reduction approach is much more than preventing a death at the point of crisis. It is about acceptance and unconditional support for people in the throes of addiction. Viewing addiction through a judgemental lens causes harm, but understanding addiction as a response to trauma offers a chance to heal.

Lee Ball, Territorial Addiction Services Officer for The Salvation Army, said: “Prevention is key to ensuring the children in our services today, don't become the adults in our services tomorrow”.

Let’s talk about overdose - Overdose Awareness Day

On 31 August 2021, staff and residents at Lyndon House, a Salvation Army Lifehouse in Ipswich, marked International Overdose Awareness Day. Specialist Support Worker Simon Walker said: “Normally people don’t want to remember, but the day seemed to have the opposite effect.”

Most people at Lyndon House have been affected by an overdose in one way or another. The day focused on ways of reducing harm, remembering those who have been lost and celebrating life. Posters were put up to educate users about what to do in the event of an overdose while residents were also told how the drug naloxone could help save lives. Names were put on a remembrance tree, and a new tree of life was planted in the garden to symbolise hope for the future.

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A RICHER, FULFILLING LATER LIFE

Every person matters

Approaching older age can trigger fears for some people that they will become isolated, suffer from ill health and lose identity and purpose. As our communities live longer those in later life can feel alone and more vulnerable.

Whether it's activities in communities or our specialist residential are homes, we put people at the heart of our services and help make life rich and fulfilling.

The Salvation Army has 12 residential care homes and one regulated adult day centre across the United Kingdom and Ireland. Our Corps provide hundreds of dedicated activities, classes and clubs.

Pauline lives in one of our residential homes

“Living here, for me, is just lovely. Everyone’s nice and I couldn’t want anything any better. It’s just very good.”

Good work in action

The past year has been another challenging one for the care sector, in the wake of the pandemic. Our teams pulled together to ensure vulnerable, older people were safe, happy and felt loved.

We are proud of each and every member of our caring teams, and their bravery and dedication is an inspiration for us all. During the year, two members of our team marked milestone moments.

Three decades of service

Sandy Cummins started work as a carer at Lydon House near St Albans in 1991. After an incredible 30 years’ service, Sandy is now the Head of Care. We marked Sandy’s significant milestone with tea and cake alongside staff and residents.

Sandy said: “It has been such a privilege being able to spend time getting to know so many residents and having the opportunity to listen to their stories and experiences.”

Jenny Pattinson, The Salvation Army’s Interim Director of Older People’s Services, said: “Sandy is extremely hardworking and hugely valued, and 30 years is a milestone to be celebrated in a sector that often sees staff move on after only a couple of years.”

Top industry award nomination

Emma Bailie, Home Manager at The Salvation Army’s Youell Court in Coventry, was nominated for the Care Home Registered Manager award at the 2020 Great British Care Awards (delayed to 2021 due to the pandemic).

It recognised ‘exceptional skills’ in managing a care home and ‘commitment’ to high levels of person-centred care. Emma, who has worked at the home since January 2017, said: “Receiving the nomination itself is amazing. To know that our home and our team has been recognised is fantastic.”

To involve everyone in the celebration, the organisers asked staff and residents from each nominated home to perform a short routine to a pop song chosen by the awards body. All the videos will be collated and shown on the night. Emma added: “We dressed up in fancy dress, we had lots of dance practice, and we had so much fun with our residents”.

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RESPONDING TO EMERGENCIES

Today’s Good Samaritan

Every year, thousands of people and responders in communities around the UK are caught up in floods, fire and other emergencies.

As a Christian church with a strong social conscience, we seek to alleviate distress wherever it is found and to fulfil a crucial role during and after a major emergency.

The Salvation Army's Emergency vehicles attend around 250 call outs per year.

Planning ahead

In May 2021, we attended a House of Lords committee calling to be more closely involved in advance planning for major incidents such as floods, fires or pandemics.

Adrian Clee, the church and charities’ Emergency Response officer, told the committee that genuine engagement is still sporadic and that the vital role that the voluntary sector is very much an afterthought. He called for changes to legislation to strengthen the role of the voluntary sector in preparing and responding to emergencies in two ways:

Preparing with training and drills

In the North East – a two-day exercise by the National Resilience Urban Search and Rescue (USAR) was hosted at the service headquarters of Tyne and Wear Fire and Rescue Service. It prepared Salvation Army volunteers to respond during a major multi-agency incident.

The high level training featured a series of incident simulations which included a collapsed block of flats and an incident with a coach vehicle, so they could compare different types of specialist response. Participants used specialist equipment and learned cutting edge rescue techniques.

Chris Lowther, Chief Fire Officer for Tyne and Wear Fire and Rescue Service, said: “We were proud to welcome the National Resilience team to the region and for Tyne and Wear to host such an important and significant event.

In Essex – Salvation Army leaders welcomed a new partnership with Essex County Fire and Rescue Service to support firefighters at large-scale incidents. Similar partnerships already operate with other fire and rescue services in the UK. Ryan Ainger, Operational Policy Station Manager at Essex County Fire and Rescue Service said: “On behalf of our Service, I’d like to thank the Salvation Army for their support, which will make a big difference to our firefighters.

In Wales – the Salvation Army Emergency Response Unit supported a multi-agency, real life training exercise that took place in March 2022 at the Severn Tunnel Junction. This included providing refreshments for over 100 firefighters from the South Wales Fire and Rescue Service.

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Adrian Clee, Territorial Emergency Response Officer said: “It’s helpful to take part in these exercises, to give volunteers an opportunity to practice, and see the work that we do during an emergency response”.

In action on the ground

In Kent – Salvation Army church leaders and volunteers helped people in Ashford, Kent after an explosion destroyed two houses in May 2021.

Major Bramwell Hayes and Captain Rhonda Hayes from Ashford Salvation Army delivered refreshments to the local authority rest centre set up at St Mary’s Church, Willesborough for nearby residents evacuated from their homes.

In Lancashire – we supported 999 workers and residents who were evacuated from their homes in the early hours after a suspected gas explosion in Heysham. Tragically a twoyear-old boy died and four people were injured.

The Emergency Response Vehicle team arrived at 4.45am. About 80 fire fighters, 40 police officers, 15 paramedics, 40 council staff and 90 residents were given food and drink at the scene.

Major Nigel Tansley who runs the church and charity’s emergency response vehicles across the north west, said: “We were also able to offer a listening ear to those who needed it. I spent most of the time speaking to fire crews and people whose homes had been damaged. It was a distressing situation and our thoughts and prayers are with everyone affected.”

Around the country – our emergency response teams, including officers and volunteers, mobilised to offer help in the aftermath of Storm Eunice in February 2022.

Homelessness centres in St Helens, Blackburn, Coventry and London gave emergency beds to dozens of rough sleepers. In Stockport, the Army provided food, drink and emotional support to fire crews, mountain rescue teams and Hazardous Area Response Team paramedics.

The Salvation Army also distributed hot drinks and food to more than 60 homes in the village of Botesdale, Suffolk, where a tree crashed through a power line and left residents without electricity for three days.

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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 largely 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’.

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 (1,539 bed spaces): saha works in partnership with a number of organisations nationally to provide a wide range of Agency Managed Supported Housing services. These include residential centres (called Lifehouses) for homeless single people and homeless families, centres for those recovering from addictions, accommodation for exoffenders and individuals and families fleeing domestic violence. Within these partnerships, saha act as the landlord owning and maintaining the buildings, whilst the managing agents undertake the day to day management of the service.

2. General Needs (1,274 homes): saha own a range of accommodation that provides secure affordable housing for families and individuals. Generally, residents access this accommodation through local authority waiting lists as we have nomination arrangements in place with the local authority partners.

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

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studio flats to bungalows. Many of saha’s schemes have communal facilities where can engage in a range of activities.

4. Directly Managed Supported Housing (476 bed spaces): 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): saha own a number of registered care homes, working with a partnering agency to provide support and care for clients in a residential environment.

saha also manages over 718 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 zerotolerance 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

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		 2022
£m
73.5
71.7
24.6
169.7
5.3
23.5
1.4
1.4
201.4		 2021
£m
73.3
51.7
24.7
149.7
5.3
16.0
1.5
0.2
172.7

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 £1.4m and donations of £3.8m were received in the current year.

Grants from The Salvation Army Trust

The Salvation Army Trust provides financial support to the Social Work Trust. This includes the Big Collection Appeal which is an annual appeal undertaken 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		 2022
£m
88.5
73.7
24.8
187.0
0.1
187.1		 2021
£m
86.3
54.0
21.8
162.1
0.1
162.2

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.

Net gains/(losses) on investments

There has been an unrealised gain on investments of £10.4 million (2021: gain of £23.9 million).

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Funds

Excluding investment gains of £10.4 million, the Social Work Trust (excluding saha results) has generated a surplus of £11 million compared to a surplus of £9.1 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		 2022
2021
£m
£m
16.8
15.8
82.5
76.4
37.9
36.3
128.1
123.8
248.5
**236.5 **
23.5
19.6
71.2
64.8
15.4
12.9
110.1
**97.3 **
375.4
349.6

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.

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.

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. The Board of Directors (SATCo) approved a new commitment to a Sinking Fund, designating £4m for the replacement of major components of buildings as part of a

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larger project addressing the necessary investment in properties within the Social Work Trust.

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 Trust - 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. The target range for free reserves is currently set at £4m to £5m for free reserves. This will be reviewed by SATCo during the 2022/23 financial year.

Whilst as at the year-end general reserves amounted to £15.4 million, the Directors consider this to be appropriate as the charity enters a period of national hardship and an unknown social-economic political climate. The uncertainty due to the war in Ukraine, rising inflation and escalating energy costs will impact expenditure across the Trust which is heavily dependent on contract funding which is not growing at the same rate and at a time when the Trust’s services will be more heavily called upon.

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.

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

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

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

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

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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 (exUK)Equities FTSE All WorldDevelopedEurope (exUK)
Emerging MarketsEquities FTSE All WorldEmerging Markets
Asia Pacific Equities FTSE All World Developed Asia Pacific
United States Equities S&P 500
Property IPD UK Property

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 MarketsEquities FTSE All WorldEmerging Markets
AsiaPacificEquities FTSE All WorldDevelopedAsiaPacific
United StatesEquities S&P500
Property IPD UK Property
Cash and gilts under lien FTSE Gilts under 5 years

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

CIF1 CIF2
% %
Annual total return (gross of fees) 5.3 6.1
Benchmark return 13.6 13.6

For the year to 31 March 2022 CIF 1 and CIF 2 underperformed compared to global market benchmark. The performance is being monitored on a regular basis through discussions with the respective investment fund managers.

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

CIF1 CIF1 CIF1 CIF2 CIF2 CIF2
2022 2021 2020 2022 2021 2020
% % % % % %
(Decrease)/Increase in capital
value of fund		 6.8 22.3 -9.3 17.1 25.5 -8.4
Average net income return 0.4 0.5 1.7 0.7 0.8 2.1

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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, Charity 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 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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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 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 current 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 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.

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 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
Trust 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.

40

We deploy multiple measures to protect Cyber - The risk is that we fail to protect our systems and the information they hold. our information systems and the We work within an information security information they hold. 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 Trust was contained with temporary operational adjustments allowing the Trust to continue business as normal. As well as our data protection/GDPR Data Protection - The risk that we fail to policies and training we take steps to protect sensitive and personal data. 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. We continue to monitor the funding Financial Sustainability - The risk that situation and adjust our financial planning there is insufficient revenue income from and commitments accordingly to ensure we donations and reserves to support our are financially resilient. operating model resulting in the failure of The Trust to thrive in a rapidly changing environment We continue to maintain clear policies and Safeguarding - The risk is that we fail to procedures in relation to safeguarding and provide a safe environment, free from ensure the appropriate screening, training abuse, for everyone, including vulnerable and supervision of personnel. A beneficiaries. subcommittee of RMC – the Territorial Safeguarding Committee - oversees management of the risk. Comprehensive policies, procedures and Safe Mission – The risk is that we are not guidance are in place, alongside a able to ensure the health, safety and supervisory control framework. welfare of personnel, service users and Two RMC subcommittees – the Safe Mission members of the public who are affected by Council and the Sudden Deaths Review our activities, including in a CovidGroup – inform the management of this impacted environment. risk.

41

RECRUITMENT AND APPOINTMENT OF DIRECTORS (TRUSTEES)

There are 15 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.

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 each board meeting. 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 year, with some additional meetings scheduled as required in this reporting year. 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, under the leadership of the Chief Secretary.

During the 2019/20 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 was performing well and other areas for development. Another assessment has been requested by the Chairman of SATCo that will take place in the 2023/24 financial year.

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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 have regard to the Charity Commission’s general guidance on public benefit that is relevant to The Salvation Army Social Work Trust.

Remuneration of Key Management

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 seniority of position, 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 £17,684.18 to £24,628.20 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 9 and 10 to the Accounts.

On behalf of the Directors of The Salvation Army Trustee Company 18 November 2022

43

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 Colonel Jenine Main 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 Philip Edwards (appointed 09.09.22) 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, Major Jane Cowell, Tony Daniels, Major Mal Davies, Miguel Fiallos, Peter Grant, Major Judith Hilditch, Major Paul Kingscott, Major Mike Lloyd-Jones, Mitch Menagh, Alex O’Hara, Major Julian Watchorn, Major Richard Waters, 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 Risk Management Committee

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

Company Secretary

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

44

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

45

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 2022 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.

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.

46

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:

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:

47

including the requirement to correctly account for restricted funds. The Charity is also required to comply with the Health and Social Care Act and the regulations issued thereunder and compliance with the standards issued by the Care Quality Commission is a key issue.

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 Knox Cropper LLP London EC3A 2AD Chartered Accountants Registered Auditors

18 November 2022

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

48

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

FOR THE YEAR ENDED 31 MARCH 2022

Note
INCOME AND ENDOWMENTS FROM:
Donations and Legacies
Grants receivable: The Salvation
Army Trust
Donations
Legacies
Charitable Activities
Centres’ operations
2
Other social operations
3
Housing Association turnover
11
Investments
4
Other
Gains on disposal of fixed
assets
5
TOTAL INCOME
EXPENDITURE ON:
Raising Funds
Investment management costs
Charitable Activities
Centres’ operations
6
Other social operations
7
Housing Association operating
costs
11
TOTAL EXPENDITURE
8
Net Gains/(Losses) on
Investments
15
NET INCOME / (EXPENDITURE)
Transfers between Funds
20/21
Other Recognised Gains /
(Losses)
Actuarial Gains / (Losses) on
Defined Benefit Pension Schemes
11
NET MOVEMENT IN FUNDS
RECONCILIATION OF FUNDS:19/20/21
Total Funds brought forward
(as restated)
TOTAL FUNDS CARRIED FORWARD*		 Endowments
£000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
956
956
-
-
956
15,838
16,794		 Restricted
£000
-
2,917
1,423
4,340
1,068
3,071
24,579
28,718
148
1,437
34,643
-
-
3,987
1,647
24,835
30,469
30,469
3,068
7,242
3,754
944
11,940
236,520
248,460		 Unrestricted
£000
23,547
917
-
24,464
72,401
68,612
-
141,013

1,242
-
166,719

50
50
84,498
72,012
-
156,510

156,560

6,422
16,581
(3,754)
-
12,827
97,306

110,133
 2022
Total
£000
23,547
3,834
1,423
28,804
73,469
71,683
24,579
169,731

1,390
1,437
201,362

50
50
88,485
73,659
24,835
186,979

187,029

10,446
24,779
-
944
25,723
349,664

375,387
 2021
Total
£000
16,000
4,145
1,168
21,313
73,328
51,691
24,714
149,733
1,496
164
172,706
50
50
86,336
53,963
21,833
162,132
162,182
23,925
34,449
-
(2,583)
31,866
317,798
349,664

All income and expenditure has arisen from continuing activities. £21,425k of the net income of funds disclosed above arises in the parent charity (2021: net income of £33,050k). *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.

49

BALANCE SHEET

AS AT 31 MARCH 2022

Note
FIXED ASSETS
Tangible Fixed Assets
Properties
12
Property schemes in progress
13
Motor vehicles and equipment
14
Investments
15
TOTAL FIXED ASSETS
CURRENT ASSETS
Stocks
Debtors and prepayments
16
Short-term deposits
Bank balances and cash
CREDITORS:Amounts falling due within
one year
17(a)
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT
LIABILITIES
Creditors: Amounts falling due outside
one year
17(b)
Defined Benefit Pension Scheme Liability
10(c)
TOTAL NET ASSETS
FUNDS
Endowment Funds
19
Restricted Funds
20
Social Work Fund
Other Restricted Funds
Unrestricted Funds
21
TOTAL FUNDS
22		 Group
2022
2021
(restated)
£000
£000
191,060
195,477
5,600
4,671
406
239
163,411
152,965
360,477
353,352
174
130
23,392
12,373
10,730
10,727
27,083
37,848
61,379
61,078
(22,630)
(32,153)
38,749
28,925
399,226
382,277
(20,976)
(28,424)
(2,863)
(4,189)
375,387
349,664
16,794
15,838
82,543
76,422
165,917
160,098
248,460
236,520
110,133
97,306
375,387
349,664		 Parent
2022
2021
(restated)
£000
£000
73,763
76,422
5,523
4,370
199
205
131,411
123,914
210,896
204,911
174
130
21,767
10,909
10,730
10,727
17,683
24,460
50,354
46,226
(13,930)
(25,243)
36,424
20,983
247,320
225,894
-
-
-
-
247,320
225,894
16,794
15,838
82,543
76,422
37,850
36,328
120,393
112,750
110,133
97,306
247,320
225,894		 Parent
2022
2021
(restated)
£000
£000
73,763
76,422
5,523
4,370
199
205
131,411
123,914
210,896
204,911
174
130
21,767
10,909
10,730
10,727
17,683
24,460
50,354
46,226
(13,930)
(25,243)
36,424
20,983
247,320
225,894
-
-
-
-
247,320
225,894
16,794
15,838
82,543
76,422
37,850
36,328
120,393
112,750
110,133
97,306
247,320
225,894
76,422
4,370
205
123,914
204,911
130
10,909
10,727
24,460
46,226
(25,243)
20,983
225,894
-
-
225,894
15,838
76,422
36,328
112,750
97,306
225,894

Approved on behalf of The Salvation Army Trustee Company on 18 November 2022 by:

_________ Lieut-Colonel Alan Read (Director)

__________ Major Judith Hilditch (Director)

50

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2022

2022
2022
2021
Note
£000
£000
£000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Cash provided by/(used in) operating activities
23
(1,524)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment and rental income
1,390
1,496
Additions to properties
(4,855)
(1,518)
Additions to motor vehicles and equipment
(253)
(179)
Additions to property schemes in progress
(1,833)
(2,543)
Proceeds on disposal of motor vehicles and equipment
Purchase of investments
-
-
437
-
Proceeds on disposal of properties
4,107
648
Management of short-term deposits
(3)
3,187
Net Cash provided by investing activities
(1,447)
CASH FLOWS FROM FINANCING ACTIVITIES:
Interest payable
(865)
(1,037)
(Decrease)/Increase in Bank Loans
(6,929)
(2,268)
Net Cash provided by/(used in) financing activities
(7,794)
Change in Cash and Cash Equivalents in the year
(10,765)
Cash and Cash Equivalents at the beginning of the year
37,848
Cash and Cash Equivalents at the end of the year
27,083
ANALYSIS OF CHANGES IN NET DEBT
Balance
1 April
2021
Cash-Flows
Net Loan
Movements
£000
£000
£000
Cash at Bank
37,848
(10,765)
-
Loans falling due within one year
(1,565)
-
(942)
Loans falling due after more than one year
(27,671)
-
7,871
8,612
(10,765)
6,929		 2022
2022
2021
Note
£000
£000
£000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Cash provided by/(used in) operating activities
23
(1,524)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment and rental income
1,390
1,496
Additions to properties
(4,855)
(1,518)
Additions to motor vehicles and equipment
(253)
(179)
Additions to property schemes in progress
(1,833)
(2,543)
Proceeds on disposal of motor vehicles and equipment
Purchase of investments
-
-
437
-
Proceeds on disposal of properties
4,107
648
Management of short-term deposits
(3)
3,187
Net Cash provided by investing activities
(1,447)
CASH FLOWS FROM FINANCING ACTIVITIES:
Interest payable
(865)
(1,037)
(Decrease)/Increase in Bank Loans
(6,929)
(2,268)
Net Cash provided by/(used in) financing activities
(7,794)
Change in Cash and Cash Equivalents in the year
(10,765)
Cash and Cash Equivalents at the beginning of the year
37,848
Cash and Cash Equivalents at the end of the year
27,083
ANALYSIS OF CHANGES IN NET DEBT
Balance
1 April
2021
Cash-Flows
Net Loan
Movements
£000
£000
£000
Cash at Bank
37,848
(10,765)
-
Loans falling due within one year
(1,565)
-
(942)
Loans falling due after more than one year
(27,671)
-
7,871
8,612
(10,765)
6,929		 2021
£000
1,496
(1,518)
(179)
(2,543)
437
-
648
3,187		 2021
£000
15,675
1,528
(3,305)
13,898
23,950
37,848
Balance
31 March
2022
£000
27,083
(2,507)
(19,800)
(1,037)
(2,268)
8,612
(10,765)
6,929		 4,776

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

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, 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 Regulations 6 and 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).

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

Through careful budgeting and regular forecasting to ensure income and expenditure is close to expected, the Trust expects to continue to be able to meet its liabilities in the next 18 months and beyond. Careful financial management has ensured that our working capital (general reserve) is higher than the level directors have set it to be, and this will provide a buffer to manage through the impact of the War in Ukraine, rising inflation, escalating energy costs as well as providing real living salaries to our employees. The general reserve levels are continually monitored and the reserves policy will be reviewed by SATCo in financial year 2022/23.

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

52

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 10(c)). The group net defined benefit pension obligation at 31 March 2022 was £2,863,000.

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

53

are allocated over the range of charitable activities on an actual basis where possible, otherwise, on a basis which is consistent with the utilisation of resources.

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.

(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 1[st] January 2012, employees can join a defined contribution scheme.

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

(f) Fixed Assets

54

All properties are disclosed at cost less accumulated depreciation other than saha properties at the dates of acquisition (19 January 2011 and 23 March 2017) which were brought into account at those dates at fair values (being an existing use social housing valuation (EUV – SH) prepared by independent chartered surveyors). These properties are subsequently depreciated at the rates indicated below.

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 bid price). Realised gains on investments are calculated as the difference between sales proceeds and the market value of those investments.

The Salvation Army Social Work Trust does not hold any investment properties, however its subsidiary 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 and qualifications.

(h) Stocks

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

(i)

Funds

55

which, although the capital and income is available to meet the objects of the Social Work Trust (subject to any donor-imposed restrictions), it is the Trustee’s intention that the capital will be maintained.

(iv) Unrestricted Funds include:

(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.

56

2. CHARITABLE ACTIVITIES: CENTRE OPERATIONS

Social Services Centres
Older People
Single Homeless
Family and Children
Day Care
Addictions
Other Non-Residential
Programmes
Housing Association Centres
Older People
Single Homeless
Family and Children
Addictions
Social Enterprise
Total 2022
Total 2021		 ------------------------------------------------------2022------------------------------------------------ ------2021------
Maintenance
& Special
Care Allowance
Supporting
People
Local
Authority
& Other
Grants
Catering &
Miscellaneous
Income
Total
Total
£000
£000
£000
£000
£000
£000
12,551
-
56
-
12,607
11,945
8,008
9,564
917
105
18,594
18,288
1,394
2,392
734
228
4,748
4,286
-
231
14
33
278
544
483
728
2
-
1,213
1,244
71
1,192
1,558
683
3,504
3,029
22,507
14,107
3,281
1,049
40,944
39,336
1,093
-
3
-
1,096
1,094
18,368
9,748
1,574
32
29,722
31,210
725
595
51
14
1,385
1,371
-
-
-
-
-
7
20,186
10,343
1,628
46
32,203
33,682
-
31
102
189
322
310
42,693
24,481
5,011
1,284
73,469
73,328
42,998
23,206
6,142
982
73,328		 ------------------------------------------------------2022------------------------------------------------ ------2021------
Maintenance
& Special
Care Allowance
Supporting
People
Local
Authority
& Other
Grants
Catering &
Miscellaneous
Income
Total
Total
£000
£000
£000
£000
£000
£000
12,551
-
56
-
12,607
11,945
8,008
9,564
917
105
18,594
18,288
1,394
2,392
734
228
4,748
4,286
-
231
14
33
278
544
483
728
2
-
1,213
1,244
71
1,192
1,558
683
3,504
3,029
22,507
14,107
3,281
1,049
40,944
39,336
1,093
-
3
-
1,096
1,094
18,368
9,748
1,574
32
29,722
31,210
725
595
51
14
1,385
1,371
-
-
-
-
-
7
20,186
10,343
1,628
46
32,203
33,682
-
31
102
189
322
310
42,693
24,481
5,011
1,284
73,469
73,328
42,998
23,206
6,142
982
73,328		 ------------------------------------------------------2022------------------------------------------------ ------2021------
Maintenance
& Special
Care Allowance
Supporting
People
Local
Authority
& Other
Grants
Catering &
Miscellaneous
Income
Total
Total
£000
£000
£000
£000
£000
£000
12,551
-
56
-
12,607
11,945
8,008
9,564
917
105
18,594
18,288
1,394
2,392
734
228
4,748
4,286
-
231
14
33
278
544
483
728
2
-
1,213
1,244
71
1,192
1,558
683
3,504
3,029
22,507
14,107
3,281
1,049
40,944
39,336
1,093
-
3
-
1,096
1,094
18,368
9,748
1,574
32
29,722
31,210
725
595
51
14
1,385
1,371
-
-
-
-
-
7
20,186
10,343
1,628
46
32,203
33,682
-
31
102
189
322
310
42,693
24,481
5,011
1,284
73,469
73,328
42,998
23,206
6,142
982
73,328		 ------------------------------------------------------2022------------------------------------------------ ------2021------
Maintenance
& Special
Care Allowance
Supporting
People
Local
Authority
& Other
Grants
Catering &
Miscellaneous
Income
Total
Total
£000
£000
£000
£000
£000
£000
12,551
-
56
-
12,607
11,945
8,008
9,564
917
105
18,594
18,288
1,394
2,392
734
228
4,748
4,286
-
231
14
33
278
544
483
728
2
-
1,213
1,244
71
1,192
1,558
683
3,504
3,029
22,507
14,107
3,281
1,049
40,944
39,336
1,093
-
3
-
1,096
1,094
18,368
9,748
1,574
32
29,722
31,210
725
595
51
14
1,385
1,371
-
-
-
-
-
7
20,186
10,343
1,628
46
32,203
33,682
-
31
102
189
322
310
42,693
24,481
5,011
1,284
73,469
73,328
42,998
23,206
6,142
982
73,328
22,507
14,107		 3,281 1,049 39,336
1,093
-
18,368
9,748
725
595
-
-		 3
1,574
51
-		 -
32
14
-		 1,094
31,210
1,371
7
20,186
10,343		 1,628 46 33,682
-
31		 102 189 310
42,693
24,481		 5,011 1,284 73,328
42,998
23,206		 6,142 982 73,328

The income stream for Maintenance and Special Care Allowances is recognised when there is a recognised entitlement to the income which can be accurately measured.

£1,068,000 (2021: £6,510,000) of centres’ revenue income represents contracts restricted income predominantly being funding received from local authorities to fund the activities at specific centres.

£169,000 (2021: £251,000) of Government Grants, £2,736,000 (2021: £3,355,000) of Local Authority Grants and £1,244,000 (2021: £1,640,000) of Other Grants were received as part of the centre’s income.

57

3. OTHER SOCIAL OPERATIONS

Employment Plus
Anti-Human Trafficking
Defence Services Operations
Family Tracing, Counselling etc.		 Endowments
Restricted
Unrestricted
2022
Total
2021
Total
£000
£000
£000
£000
£000
-
-
4,877
4,877
3,148
-
3,071
63,521
66,592
48,353
-
-
173
173
144

-
-
41
41
46
-
3,071
68,612
71,683
51,691

Supporting People contract income of £62,108,000 (2021: £45,911,000) was received by the Anti-Human Trafficking Service. Government Grants of £1,570,000 (2021: £1,688,000) were received across the services as part of the income displayed in this note.

4. INVESTMENTS

4.
INVESTMENTS
Dividends and Interest
receivable
Rents receivable		 Restricted
Unrestricted
2022
Total
2021
Total
£000
£000
£000
£000
148
759
907
998
-
483
483
498
148
1,242
1,390
1,496

5. OTHER INCOME

Gain / (loss) on disposal of
properties
Gain on disposal of motor
vehicles and equipment		 Endowments
Restricted
Unrestricted
2022
Total
2021
Total
£000
£000
£000
£000
£000
-
1,437
-
1,437
160
-
-
-
-
4
-
1,437
-
1,437
164

58

6. ANALYSIS OF CENTRES’ OPERATIONS COSTS

-------------------------------------------------------------------2022--------------------------------------------------------------------2021-------

Social Services Centres
Older People
Single Homeless
Family and Children
Day Care Centres
Addictions
Other Non-Residential
Programmes
Housing Association Centres
Older People
Single Homeless
Family and Children
Addictions
Social Enterprise
Total Costs 2022
Total Costs 2021		 Salaries &
Other Staff
Costs
Catering,
Cleaning &
Other
Services
£000
£000
11,639
1,332
11,736
758
3,311
62
348
25
1,244
29
4,011
516		 Other
Operating
Costs
£000
613
4,012
329
98
67
439		 Property &
Furnishings
£000
1,357
2,185
550
148
200
402		 Support
Costs
£000
2,045
715
798
81
459
1,257		 Governance
Costs
Total
£000
£000
27
17,013
30
19,436
8
5,058
1
701
3
2,002
14
6,639
83
50,849
2
1,449
51
33,609
2
1,589
-
2
55
36,649
2
987
140
88,485
178		 Total
£000
15,592
20,901
4,590
879
1,656
5,566
32,289
2,722		 5,558 4,842 5,355 49,184
832
135
15,198
2,970
842
40
-
-		 50
1,421
126
2		 66
3,218
177
-		 364
10,751
402
-		 1,294
33,559
1,630
13
16,872
3,145		 1,599 3,461 11,517 36,496
338
178		 193 113 163 656
49,499
6,045		 7,350 8,416 17,035 86,336
47,549
6,021		 6,581 9,625 16,382 86,336

Governance costs include external audit fees, exclusive of VAT, of £112,200 (2021: £148,333).

£3,987,000 (2021: £3,970,000) of centres’ operations costs are funded from restricted funds.

Other Non-Residential Programmes expenditure in the above table includes expenditure of £1.37 million (2021: £0.95m) for Strawberry Field and £1.20 million (2021: £0.91m) for Hadleigh Farm.

59

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

Support Costs consist of,
Centres’ Support Costs
Other Support Costs
Personnel
Business Administration
Communications
Secretariat
Mission Service Management		 2022
£
10,911
903
3,587
570
990
74
17,035		 2021
£
10,492
868
3,450
549
952
71
16,382

7. OTHER SOCIAL OPERATIONS

2022 2021
Endowments Restricted Unrestricted Total Total
£000 £000 £000 £000 £000
Employment Plus - 23 5,511 5,534 3,403
Anti–Human Trafficking - 1,617 63,936 65,553 48,229
Defence Services Operations - - 324 324 260
Family Tracing, Counselling, etc. - 7 2,241 2,248 2,071
- 1,647 72,012 73,659 53,963

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.

8. ANALYSIS OF TOTAL EXPENDITURE

Raising funds
Charitable activities		 Staff Costs
Depreciation
Other
Costs
2022
Total
2021
Total
£000
£000
£000
£000
£000
-
-
50
50
50
70,475
7,175
109,329
186,979
162,132
70,475
7,175
109,379
187,029
162,182

60

9. PERSONNEL

9.
PERSONNEL
Allowances and salaries
Social security costs
Pension and similar costs
Redundancy costs		 2022
2021
2022
2021
2022
2021
Parent
Parent
Subsidiary Subsidiary
Total
Total
£000
£000
£000
£000
£000
£000
44,880
42,303
8,702
8,722
53,582
51,025
3,870
3,617
650
637
4,520
4,254
3,400
3,324
819
810
4,219
4,134
56
1
181
51
237
52
52,206
49,245
10,352
10,220
62,558
59,465

Redundancy Costs

Redundancy costs relating to employees in the Social Work Trust, including saha, amounted to £236,924 (2021: £51,590). 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		 2022
Headcount
2022
FTE
2021
Headcount
2021
FTE
No.
No.
No.
No.
75
63
86
82
1,847
1,573
2,210
1,619
1,922
1,636
2,296
1,701
315
203
330
217
2,237
1,839
2,626
1,918

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
£160,001 - £170,000		 2022
2022
2022
2021
Parent
Subsidiary
Total
Total
No.
No.
No.
No.
4
1
5
4
2
5
7
8
-
-
-
1
3
-
3
3
-
-
-
1
-
1
1
-
-
-
-
-
-
-
-
-
-
-
-
1
-
-
-
-
-
1
1
-
9
8
17
18

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 £17,684.18 to £24,628.20 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 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.

61

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 £200,942 (2021: £222,784). As detailed above, no allowances or salaries paid to any of the directors are charged directly to the Social Work Trust.

10. 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 9 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 non-contributory by the officer, but a contribution currently equivalent to £4,870 per officer, per annum (2021: £4,860), 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.

A recovery plan was agreed whereby the contribution was increased to an amount equivalent to £4,870 per officer, 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 2021/22 the capital contribution paid by The Salvation Army Trust was £4m (2020/21: £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.

62

(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 30.2% 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 2021.

The review was based on the following assumptions: -

Post-retirement discount rate 1.22% per annum Pre-retirement discount rate 0.72% per annum Rate of salary increases 3.55% per annum Rate of pension increase: On pensions accrued before 6 April 2006 3.0% per annum On pensions accrued after 6 April 2006 2.1% per annum Inflation: RPI 3.05% per annum CPI 2.3% per annum Deferred Pension Increases (pre 6 April 2009) 3.12% per annum Deferred Pension increases (post 6 April 2009) 2.02% per annum

The market value of the Fund’s assets on the valuation date was £213.7m and the value of technical provisions amounted to £211.1m giving rise to a funding surplus of £2.5m.

(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 2021 is £4,189k and £2,863k as at 31 March 2022.

saha have been notified by the Trustee of the Scheme that it has performed a review of the changes made to the Scheme’s benefits over the years and the result is that there is uncertainty surrounding some of these changes. The Trustee has been advised to seek clarification from the Court on these items. This process is ongoing and the matter is unlikely to be resolved before the end of 2024 at the earliest. It is recognised that this could potentially impact the value of Scheme liabilities, but until Court directions are received, it is not possible to calculate the impact of this issue, particularly on an individual employer basis, with any accuracy at this time. No adjustment has been made in these financial statements in respect of this potential issue.

63

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

(LIABILITY)
2022 2021
£000 £000
Fair value of plan assets 18,477 17,257
Present value of defined benefit obligation (21,340) (21,446)
Surplus/(deficit) in plan (2,863) (4,189)
Deferred tax - -
Net defined benefit asset/(liability) to be recognised (2,863) (4,189)
RECONCILIATION OF OPENING AND CLOSING BALANCES OF THE DEFINED BENEFIT OBLIGATION
2022 2021
£000 £000
Defined benefit obligation at start of period 21,446 17,614
Expenses 13 13
Interest expense 460 414
Actuarial losses/(gains) due to scheme experience 1,833 (386)
Actuarial (gains)/ losses due to changes in
demographic assumptions (340) 77
Actuarial (gains)/ losses due to changes in financial
assumptions (1,600) 4,139
Benefits paid and expenses (472) (425)
Defined benefit obligation 21,340 21,446

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
Benefits paid and expenses
Fair value of plan assets at end of period		 2022
£000
17,257
374
837
481
(472)
18,477		 2021
£000
15,592
371
1,247
472
(425)
**17,257 **

The actual return on the plan assets (including any changes in share of assets) over the period ended 31 March 2022 was £1,211,000 (2021: £1,618,000).

DEFINED BENEFIT COSTS RECOGNISED IN STATEMENT OF FINANCIAL ACTIVITIES

Expenses
Net interest expense
Total expense		 2022
£000
13
86
99		 2021
£000
13
43
56

64

DEFINED BENEFIT COSTS RECOGNISED IN OTHER RECOGNISED GAINS AND LOSSES

ASSETS
Experience on plan assets (excluding amounts included
in net interest cost) – gain/ (loss)
Experience gains and (losses) arising on the plan
liabilities
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)
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
Cash
Corporate Bond Fund
Liquid Credit
Long Lease Property
Secured Income
Liability Driven Investment
Currency Hedging
Net Current Assets
Total assets		 2022
£000
837
(1,833)
340
1,600
944
944
2022
£000
3,546
741
661
614
609
-
538
608
431
499
1,316
474
621
159
66
63
1,233
-
475
688
5,156
(72)
51		 2021
£000
1,247
386
(77)
(4,139)
(2,583)
(2,583)
2021
£000
2,750
952
498
543
650
2
697
628
414
358
1,151
412
439
517
473
-
1,020
206
338
718
4,386
-
105
**17,257 **
18,477

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.

65

KEY ASSUMPTIONS

2022 2021
% per annum % per annum
Discount Rate 2.79% 2.17%
Inflation (RPI) 3.59% 3.28%
Inflation (CPI) 3.20% 12.86%
Salary Growth 4.20% 3.86%
Allowance for commutation of pension for cash at 75% of 75% of
retirement maximum maximum
allowance allowance

The mortality assumptions adopted at 31 March 2022 imply the following life expectancies:

EMPLOYER PENSION CONTRIBUTIONS
Male retiring in 2022
Female retiring in 2022
Male retiring in 2042
Female retiring in 2042
Defined benefit employer contributions including deficit
contributions
Growth Plan deficit contributions
Auto-enrolment & SHPS Defined contribution including
deficit contribution		 Life expectancy at
age 65 (Years)
21.1
23.7
22.4
25.2
2022
2021
£000
£000
481
473
30
29

308
308
819
810		 Life expectancy at
age 65 (Years)
21.1
23.7
22.4
25.2
2022
2021
£000
£000
481
473
30
29

308
308
819
810
819
810

The defined benefit pension costs for Salvation Army Housing Association was £481,349 (2021: £472,175). 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 638 non-associated participating employers. The scheme is a defined benefit scheme in the UK. It is not possible for saha 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 2020. This valuation showed assets of £800.3m, liabilities of £831.9m and a deficit of £31.6m. To eliminate this funding shortfall, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows:

66

Deficit contributions

From 1 April 2022 to 31 January 2025: £3,312,000 per annum - payable monthly

Unless a concession has been agreed with the Trustee the term to 31 January 2025 applies. Note that the scheme’s previous valuation was carried out with an effective date of 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 30 September 2025: £11,243,000 per annum – (payable monthly and increasing by 3% each on 1[st ] 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

ECONCILIATION OF OPENING AND CLOSING CREDITOR
Present value of provision
Provision at start of period
Unwinding of the discount factor (interest expense)
Deficit contribution paid
Remeasurements - impact of any change in assumptions
Remeasurements - amendments to the contribution
schedule
Provision at end of period		 2022
2021
2020
£000
£000
£000
28
120
142
2022
2021
£000
£000
120
142
1
3
(31)
(29)
(1)
4
(61)
-
28
120

RECONCILIATION OF OPENING AND CLOSING CREDITOR

67

INCOME AND EXPENDITURE IMPACT

2022 2022 2021
£000 £000
Interest expense 1 3
Remeasurements – impact of any change in assumptions (1) (4)
Remeasurements – amendments to the contribution (61) -
schedule
ASSUMPTIONS
2022 2021 2020
% per % per % per
annum annum annum
Rate of discount 2.35
0.66		 2.53

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:

riod:
2022 2021 2020
£000 £000 £000
Year 1 10 30 29
Year 2 10 31 30
Year 3 9 32 31
Year 4 - 28 32
Year 5 - - 28
Year 6 - - -
Year 7 - - -
Year 8 - - -
Year 9 - - -
Year 10 - - -

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 (2021: £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 £288,259 (2021: £288,644) covering 298 employees (2021: 302 employees).

68

11. SALVATION ARMY HOUSING ASSOCIATION TURNOVER AND OPERATING COSTS

By virtue of saha’s governing instrument, The Salvation Army Social Work Trust has effective control of 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.

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

Turnover
Grants Received
Operating Costs
Staff Costs
Other Costs*
Interest Payable
Property Depreciation
Tax
Gain/ (Loss) on Disposal of Assets
(Note 5)
Gain/ (Loss) on revaluation of
investment properties (Note 15)
Interest Receivable (Note 4)
Social Housing Pension Scheme
(SHPS) Remeasurement of
Obligation
Actuarial Gain / (Loss)		 2022
£000
£000
24,579
-
24,579
(8,863)
(9,728)
(18,591)
(865)
(5,330)
(49)
659
2,950
1
-
944
4,298		 2021
£000
£000
24,714
-
24,714
(8,757)
(9,271)
(18,028)
(1,037)
(2,756)
(12)
(539)
(950)
7
-
(2,583)
(1,184)		 2021
£000
£000
24,714
-
24,714
(8,757)
(9,271)
(18,028)
(1,037)
(2,756)
(12)
(539)
(950)
7
-
(2,583)
(1,184)
24,714
(18,028)
(1,037)
(2,756)
(12)
(539)
(950)
7
-
(2,583)
(1,184)

*Other Costs includes temporary agency staff costs of £1,489,803 (2021: £1,462,151)

69

12. PROPERTIES

GROUP
Cost or Valuation
Balance at 1 April 2021
Additions during the year
Schemes completed during the
year (Note 13)
Less: Disposals
Balance at 31 March 2022
Accumulated Depreciation
Balance at 1 April 2021
Charge for the year
Less: Disposals
Balance at 31 March 2022
Net Book Value at 31 March 2022
Net Book Value at 31 March 2021		 Freehold
£000
207,716
2,610
487
210,813
(3,512)
207,301
49,004
4,780
(1,146)
52,638
154,663
158,712		 Leasehold
£000
50,811
2,245
-
53,056
(747)
52,309
14,046
2,309
(443)
15,912
36,397
36,765		 Total
£000
258,527
4,855
487
263,869
(4,259)
259,610
63,050
7,089
(1,589)
68,550
191,060
195,477

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 2021
Additions during the year
Schemes completed during the year
Less: Disposals
Balance at 31 March 2022
Accumulated Depreciation
Balance at 1 April 2021
Charge for the year
Less: Disposals
Balance at 31 March 2022
Net Book Value at 31 March 2022
Net Book Value at 31 March 2021		 Freehold
£000
109,267
-
487
109,754
(1,535)
108,219
33,423
1,764
(281)
34,906
73,313
75,844		 Leasehold
£000
693
-
-
693
(125)
568
115
14
(11)
118
450
578		 Total
£000
109,960
-
487
110,447
(1,660)
108,787
33,538
1,778
(292)
35,024
73,763
76,422

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.

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.

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

70

be investment properties as their availability for use, other than for the work of the charity, is typically of limited duration.

13 . PROPERTY SCHEMES IN PROGRESS

13.
PROPERTY SCHEMES IN PROGRESS
Group Parent
2022 2021 2022 2021
£000 £000 £000 £000
Balance at 1 April 2021 4,671 2,457 4,370 2,159
Additions during the year 1,833 2,543 1,833 2,540
6,504 5,000 6,203 4,699
Property schemes capitalised during
the year (487) (234) (487) (234)
Scheme’s revenue expenditure (417) (95) (193) (95)
Balance at 31 March 2022 5,600 4,671 5,523 4,370
14.
MOTOR VEHICLES AND EQUIPMENT
Balance at 1 April 2021
Additions during the year
Property schemes capitalised during
the year
Scheme’s revenue expenditure
Balance at 31 March 2022
14.
MOTOR VEHICLES AND EQUIPMENT		 Group
2022
2021
£000
£000
4,671
2,457
1,833
2,543
6,504
5,000
(487)
(234)
(417)
(95)
5,600
4,671		 Group
2022
2021
£000
£000
4,671
2,457
1,833
2,543
6,504
5,000
(487)
(234)
(417)
(95)
5,600
4,671		 Group
2022
2021
£000
£000
4,671
2,457
1,833
2,543
6,504
5,000
(487)
(234)
(417)
(95)
5,600
4,671		 Group
2022
2021
£000
£000
4,671
2,457
1,833
2,543
6,504
5,000
(487)
(234)
(417)
(95)
5,600
4,671		 Parent
2022
2021
£000
£000
4,370
2,159
1,833
2,540
6,203
4,699
(487)
(234)
(193)
(95)
5,523
4,370		 Parent
2022
2021
£000
£000
4,370
2,159
1,833
2,540
6,203
4,699
(487)
(234)
(193)
(95)
5,523
4,370		 Parent
2022
2021
£000
£000
4,370
2,159
1,833
2,540
6,203
4,699
(487)
(234)
(193)
(95)
5,523
4,370
4,699
(234)
(95)
4,370
GROUP
Cost
Balance at 1 April 2021
Additions during the year
Disposals
Balance at 31 March 2022
Accumulated Depreciation
Balance at 1 April 2021
Charge for the year
Disposals
Balance at 31 March 2022
Net Book Value at 31 March 2022
Net Book Value at 31 March 2021
PARENT
Cost
Balance at 1 April 2021
Additions during the year
Disposals
Balance at 31 March 2022
Accumulated Depreciation
Balance at 1 April 2021
Charge for the year
Disposals
Balance at 31 March 2022
Net Book Value at 31 March 2022
Net Book Value at 31 March 2021		 Motor
Vehicles
£000
1,348
62
-
1,410
1,144
67
-
1,211
199
204
Motor
Vehicles
£000
1,306
61
-
1,367
1,101
67
-
1,168
199
205		 Equipment
£000
1,654
191
(21)
1,824
1,619
19
(21)
1,617
207
35
Equipment
£000
-
-
-
-
-
-
-
-
-
-		 Total
£000
3,002
253
(21)
3,234
2,763
86
(21)
2,828
406
239
Total
£000
1,306
61
-
1,367
1,101
67
-
1,168
199
205

71

15. INVESTMENTS

FIXED ASSET INVESTMENTS

GROUP AND PARENT
Cost/Market Value at 1 April 2021
Additions
Unrealised Gains/(Losses)on investments
Cost/Market Value at 31 March 2022		 Unlisted
£000
5
-
-
5		 Units in
CIF 1
£000
3,505
-
237
3,742		 Units in
CIF 2
£000
120,404
-
7,260
127,664		 Total
£000
123,914
-
7,497
131,411

At 31 March 2022, units held in The Salvation Army Common Investment Fund No 1 had a unit value of £2.7720 (2021: £2.5966).

At 31 March 2022, units held in The Salvation Army Common Investment Fund No 2 had a unit value of £4.1406 (2021: £3.5374).

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.

INVESTMENT PROPERTIES

Balance at 1 April 2021
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
2022
2021
£000
£000
29,050
30,000
-
2,950
-
(950)
32,000
29,050
131,411
123,915
163,411
152,965		 Group
2022
2021
£000
£000
29,050
30,000
-
2,950
-
(950)
32,000
29,050
131,411
123,915
163,411
152,965
29,050
123,915
152,965

This property at Waterloo, London is used for student accommodation. The revaluation undertaken by Savills, professional external valuers, at 31 March 2022 has resulted in an increase in the property valuation.

16. DEBTORS AND PREPAYMENTS

Accommodation charges outstanding
Sundry debtors and accrued income
Connected Salvation Army Trusts and
Companies		 GROUP
2022
2021
£000
£000
1,526
916
13,937
11,457
7,929
-
23,392
12,373		 PARENT
2022
2021
£000
£000
893
636
12,945
10,273
7,929
-
21,767
10,909		 PARENT
2022
2021
£000
£000
893
636
12,945
10,273
7,929
-
21,767
10,909
10,909

72

17. (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 17(b))		 GROUP
2022
2021
£000
£000
13,494
15,435
3,384
2,651
3,245
4,784
-
7,718
2,507
1,565
22,630
32,153		 PARENT
2022
2021
£000
£000
10,412
12,485
273
256
3,245
4,784
-
7,718
-
-
13,930
25,243		 PARENT
2022
2021
£000
£000
10,412
12,485
273
256
3,245
4,784
-
7,718
-
-
13,930
25,243
25,243

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

Multi-Employer Pension Scheme (note 10(d))
Recycled Social Housing Grant
Loans repayable between 1 & 2 years
Loans repayable between 3 to 5 years
Loans repayable over five years		 GROUP
2022
2021
£000
£000
28
120
1,148
633
2,581
1,528
3,823
10,939
13,396
15,204
20,976
28,424		 PARENT
2022
2021
£000
£000
-
-
-
-
-
-
-
-
-
-
-
-		 PARENT
2022
2021
£000
£000
-
-
-
-
-
-
-
-
-
-
-
-
-

Housing loans from private sources are secured by charges on saha specific housing properties and are repayable between 2022 and 2044 at varying rates of interest between 0.89% and 11.50%.

18. 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
2022
2021
£000
£000
260
235
654
137
142
50
1,056
422
GROUP
2022
2021
£000
£000
193
195
591
604
11
145
795
944		 PARENT
2022
2021
£000
£000
-
-
-
-
-
-
-
-
PARENT
2022
2021
£000
£000
-
-
-
-
-
-
-
-		 PARENT
2022
2021
£000
£000
-
-
-
-
-
-
-
-
PARENT
2022
2021
£000
£000
-
-
-
-
-
-
-
-
-

73

19. 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
1 April
2021
£000
14,116
20
121
35
79
1
16
14
14
1,234
188
1,722
15,838		 New Funds
Received
£000
-
-
-
-
-
-
-
-
-
-
-
-
-		 Changes in
Market Value of
Investments
£000
851
-
9
-
-
-
-
-
-
83
13
105
956		 Transfers
£000
-
-
-
-
-
-
-
-
-
-
-
-
-		 Balance
31 March
2022
£000
14,967
20
130
35
79
1
16
14
14
1,317
201
1,827
16,794

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.

31 March 2021

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
1 April
2020
£000
11,275
20
96
35
79
1
16
14
14
1,009
154
1,438
12,713		 New Funds
Received
£000
-
-
-
-
-
-
-
-
-
-
-
-
-		 Changes in
Market Value of
Investments
£000
2,841
-
25
-
-
-
-
-
-
225
34
284
3,125		 Transfers
£000
-
-
-
-
-
-
-
-
-
-
-
-
-		 Balance
31 March
2021
£000
14,116
20
121
35
79
1
16
14
14
1,234
188
1,722
15,838

74

20. RESTRICTED FUNDS

GROUP

Social Work Fund

Other Restricted Funds

Social Work projects including property funding saha operations – property purposes

Expenditure
and
Actuarial
Income and Movement
Balance Movement on Defined Transfers Transfers
1 April in Market Benefit From/(to) between Balance
2021 Value of Pension Unrestricted Restricted 31 March
(restated) Investments Scheme Reserves Funds 2022
£000 £000 £000 £000 £000 £000
76,422 778 (1,778) 2,756 4,365 82,543
36,328 8,745 (3,856) 998 (4,365) 37,850
123,770 28,189 (23,892) - - 128,067
160,098 36,934 (27,748) 998 (4,365) 165,917
236,520 37,712 (29,526) 3,754 - 248,460

Social Work Fund represents sums already expended on the properties used by The Salvation Army in its social work throughout the United Kingdom and, with effect from 1 April 2021 includes work in progress and unspent allocated funds.

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.

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. Transfers between restricted funds included £4,365k in respect of property funding previously included as part of Social Work Projects but now included within Social Work Funds.

75

PARENT

PARENT
Social Work Fund
Funding of properties for charitable purposes
Other Restricted Funds
Social Work projects including property funding		 Balance
1 April
2021
(restated)
Income and
Movement
In Market
Value of
Investments
Expenditure
Transfers
From/(to)
Unrestricted
Reserves
Transfers
between
Restricted
Funds
Balance
31 March
2022
£000
£000
£000
£000
£000
£000
76,422
778
(1,778)
2,756
4,365
82,543
36,328
8,745
(3,856)
998
(4,365)
37,850
112,750
9,523
(5,634)
3,754
-
120,393

76

31 March 2021

GROUP

Social Work Fund
Other Restricted Funds
Social Work projects including property funding
saha operations – property purposes		 Balance
1 April
2020
(restated)
Income and
Movement
in Market
Value of
Investments
(restated)
Expenditure
and
Actuarial
Movement
on Defined
Benefit
Pension
Scheme
Transfers
From/(to)
Unrestricted
Reserves
(restated)
Transfers
between
Restricted
Funds
Balance
31 March
2021
(restated)
£000
£000
£000
£000
£000
£000
75,624
42
(2,614)
3,370
-
76,422
32,949
12,961
(2,593)
(6,989)
-
36,328
124,954
23,232
(24,416)
-
-
123,770
157,903
36,193
(27,009)
(6,989)
-
160,098
233,527
36,235
(29,623)
(3,619)
-
236,520

31 March 2021 PARENT

PARENT
Social Work Fund
Funding of properties for charitable purposes
Other Restricted Funds
Social Work projects including property funding		 Balance
1 April
2020
(restated)
Income and
Movement
In Market
Value of
Investments
(restated)
Expenditure
Transfers
From/(to)
Unrestricted
Reserves
(restated)
Transfers
between
Restricted
Funds
Balance
31 March
2021
(restated)
£000
£000
£000
£000
£000
£000
75,624
42
(2,614)
3,370
-
76,422
32,949
12,961
(2,593)
(6,989)
-
36,328
108,573
13,003
(5,207)
(3,619)
-
112,750

77

21.
UNRESTRICTED FUNDS
GROUP AND PARENT
General Reserves
Unrealised Investment Gains
Designated Reserves
Property Purposes
Vehicles
Social Work projects		 Balance
1 April
2021
(restated)
Income
and Movement
in Market Value
of Investments
Expenditure
Transfers
From/(to)
Restricted
Reserves
Transfers
between
Unrestricted
Funds
Balance
31 March
2022
£000
£000
£000
£000
£000
£000
12,864
166,530
(156,527)
(3,499)
(4,000)
15,368
64,816
6,422
-
-
-
71,238
77,680
172,952
(156,527)
(3,499)
(4,000)
86,606
15,087
172
(32)
(255)
4,000
18,972
1,472
16
-
-
-
1,488
3,067
-
-
-
-
3,067
19,626
188
(32)
(255)
4,000
23,527
97,306
173,140
(156,559)
(3,754)
-
110,133

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.

31 March 2021
GROUP AND PARENT
General Reserves
Unrealised Investment Gains
Designated Reserves
Property Purposes
Vehicles
Social Work projects		 Balance
1 April
2020
(restated)
Income
and Movement
in Market Value
of Investments
(restated)
Expenditure
Transfers
From/(to)
Restricted
Reserves
(restated)
Transfers
between
Unrestricted
Funds
Balance
31 March
2021
(restated)
£000
£000
£000
£000
£000
£000
8,197
135,692
(135,011)
3,986
-
12,864
44,087
20,729
-
-
-
64,816
52,284
156,421
(135,011)
3,986
-
77,680
14,608
846
-
(367)
-
15,087
1,468
4
-
-
-
1,472
3,198
-
(131)
-
-
3,067
19,274
850
(131)
(367)
-
19,626
71,558
157,271
(135,142)
3,619
-
97,306

78

22. ANALYSIS OF NET ASSETS BETWEEN FUNDS

GROUP
Fixed Assets
Properties
Property schemes in progress
Motor vehicles and equipment
Investments
Current Assets less Liabilities
Total Net Assets
PARENT
Fixed Assets
Properties
Property schemes in progress
Motor vehicles and equipment
Investments
Net Current Assets
Total Net Assets
31 March 2021
GROUP
Fixed Assets
Properties
Property schemes in progress
Motor vehicles and equipment
Investments
Current Assets less Liabilities
Total Net Assets
PARENT
Fixed Assets
Properties
Property schemes in progress
Motor vehicles and equipment
Investments
Net Current Assets
Total Net Assets		 Endowment
Funds
£000
Social
Work
Fund
£000
-
73,763
-
5,523
-
-
16,794
-
-
3,257		 Other
Restricted
Funds
£000
117,297
77
207
32,000
16,336		 Un-
restricted
Reserves
£000
Total
£000
-
191,060
-
5,600
199
406
114,617
163,411
(4,683)
14,910
16,794
82,543		 165,917 110,133
375,387
Endowment
Funds
£000
Social
Work
Fund
£000
-
73,763
-
5,523
-
-
16,794
-
-
3,257		 Other
Restricted
Funds
£000
-
-
-
-
37,850		 Un-
restricted
Reserves
£000
Total
£000
-
73,763
-
5,523
199
199
114,617
131,411
(4,683)
36,424
16,794
82,543		 37,850 110,133
247,320
Endowment
Funds
£000
Social
Work
Fund
£000
-
76,422
-
-
-
-
15,838
-
-
-		 Other
Restricted
Funds
(restated)
£000
119,055
4,671
34
29,051
7,287		 Un-
restricted
Reserves
(restated)
£000
Total
£000
-
195,477
-
4,671
205
239
108,076
152,965
(10,975)
(3,688)
15,838
76,422		 160,098 97,306
349,664
Endowment
Funds
£000
Social
Work
Fund
£000
-
76,422
-
-
-
-
15,838
-
-
-		 Other
Restricted
Funds
(restated)
£000
-
4,370
-
-
31,958		 Un-
restricted
Reserves
(restated)
£000
Total
£000
-
76,422
-
4,370
205
205
108,076
123,914
(10,975)
20,983
15,838
76,422		 36,328 97,306
225,894

79

23 . RECONCILIATION OF NET INCOMING RESOURCES TO NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES

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 inflow/(outflow) from operating activities		 2022
£000
25,723
(10,446)
(1,437)
86
7,089
(1,390)
-
(44)
(11,019)
417
(10,042)
(1,326)
865
(1,524)		 2021
£000
31,866
(23,926)
(160)
239
4,720
(1,496)
(4)
(25)
3,161
95
(1,999)
2,167
1,037
15,675

24. 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 £nil (2021: £58k).

25. RELATED PARTY TRANSACTIONS

During the current year grants totalling £23.5m (2021: £16.0m) were received from The Salvation Army Trust. An overhead recharge of £10.8m (2021: £10.0m) 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 of £68k (2021: £66k) were charged to The Salvation Army Social Work Trust for hire of rooms at corps premises.

80

26. PRIOR YEAR ADJUSTMENT

A detailed review during the year of the Trust’s restricted and designated reserves identified three designated funds, with an aggregate balance of £7.446m as at 31 March 2021, which were incorrectly classified as restricted funds in the previous financial statements. This error has been corrected in the current year by a prior year adjustment as below. The impact of the adjustment is an equal and opposite adjustment to the opening reserves position between restricted and unrestricted funds. There is no change to the result for the year ended 31 March 2021.

Summary of brought forward reserves at 1 April 2021 on Balance Sheet:

RESERVES
Restricted Funds
Social Work Projects including property
Unrestricted Funds
Property Purposes
Social Work Projects including property		 As originally
stated
£000
43,774
9,288
1,420		 Adjustments
£000
(7,446)
5,799
1,647
-		 As restated
£000
36,328
15,087
3,067

Summary of consolidated SOFA adjustments for the year ended 31 March 2021 on comparative SOFA:

Restricted Funds
Investments
Unrestricted Funds
Investments		 As originally
stated
£000
242
1,254		 Adjustments
£000
(189)
189
-		 As restated
£000
53
1,443

Restatement of brought forward reserves at 1 April 2020 on comparative SOFA:

RESERVES
Restricted Funds
Unrestricted Funds		 As originally
stated
£000
240,151
64,934		 Adjustments
£000
(6,624)
6,624
-		 As restated
£000
233,527
71,558

81

27. COMPARATIVE STATEMENT OF FINANCIAL ACTIVITY FOR THE YEAR ENDED 31 MARCH 2021

INCOME AND ENDOWMENTS FROM:
Donations and Legacies
Grants receivable: TSA Trust
Donations
Legacies
Charitable Activities
Centres’ operations
Other social operations
Housing Association turnover
Investments (as restated)
Other
Gains on disposal of fixed assets
TOTAL INCOME (as restated)
EXPENDITURE ON:
Raising Funds
Investment management costs
Charitable Activities
Centres’ operations
Other social operations
Housing Association operating costs
TOTAL EXPENDITURE
Net Gains on Investments
NET EXPENDITURE (as restated)
Transfers between Funds (as restated)
Actuarial Gains / (Losses) on Defined
Benefit Pension Schemes
NET MOVEMENT IN FUNDS (as restated)
RECONCILIATION OF FUNDS:
Total Funds brought forward (as restated)
TOTAL FUNDS CARRIED FORWARD
(as restated)		 Endowments
£000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,125
3,125
-
-
3,125
12,713
15,838		 Restricted
(restated)
£000
-
2,923
1,098
4,021
6,510
2,107
24,714
33,331
53
(539)
36,866
-
-
3,970
1,237
21,833
27,040
27,040
(631)
9,195
(3,619)
(2,583)
2,993
233,527
236,520		 Unrestricted
(restated)
£000
16,000
1,222
70
17,292
66,818
49,584
-
116,402

1,443
703
135,840

50
50
82,366
52,726
-
135,142

135,142

21,431
22,129
3,619
-
25,748
71,558

97,306
 2021
Total
£000
16,000
4,145
1,168
21,313
73,328
51,691
24,714
149,733
1,496
164
172,706
50
50
86,336
53,963
21,833
162,182
162,182
23,925
34,449
-
(2,583)
31,866
317,798
349,664

82

28. POST BALANCE SHEET EVENT

During February 2022 Russian forces invaded Ukraine causing a humanitarian and political crisis which had a global economic impact, giving rise to significant falls in the UK and global stock markets. The trust’s investment portfolio saw material unrealised losses after the year-end, reflecting the volatility of the global markets. The main portfolio value fell from £131.4m at 31 March 2022 to £119.9m at 30 September 2022, representing a 9% fall in market value. The investment portfolio is being managed as part of a long-term investment strategy and its performance is regularly being monitored. At the time of this report, we do not expect the Russian - Ukraine conflict to materially affect our planned activity.

The uncertainty, and the associated sanctions against Russia and Russian individuals, has led to volatility in investment markets. How those events might develop, the scale of those developments and the wider impacts are hard to predict, though a period of heightened uncertainty seems inevitable. The amount of exposure to Russia is regarded as immaterial to The Salvation Army Retired Officers Allowance Fund and The Salvation Army Employees’ Pension Fund. The Trustees of the pension schemes have not identified any material risks to the funds or employer covenant because of Russian Sanctions although the Trustees will continue to closely monitor the situation.

The mini-budget unveiled by the British Government in September 2022 has had a material impact on asset holdings of the pension schemes. When comparing the value of assets as at the last audited accounts (31st March 2022) the investments under management totalled £213.7m. The latest fund value, as at 14 October 2022, saw the investments under management reduce to £181.2m. It is expected that the liabilities will reduce over the period, due to bond yield prices moving, although at the time of these accounts being prepared the known number to indicate this change and whether the funding position on the technical provisions places the pension scheme in a surplus is unknown (although this is expected) but will be continued to be monitored and reviewed regularly.

83