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2021-03-31-accounts

REGISTERED COMPANY NUMBER: 00090288 (England and Wales) REGISTERED CHARITY NUMBER: 222041

REPORT OF THE TRUSTEES AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021 FOR

CHILDREN NORTH EAST (A COMPANY LIMITED BY GUARANTEE)

Read, Milburn & Co 71 Howard Street North Shields Tyne and Wear NE30 1AF

CHILDREN NORTH EAST

CONTENTS OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Page
Report of the Trustees 1 to 20
Report of the Independent Auditors 21 to 23
Consolidated Statement of Financial Activities 24
Consolidated Balance Sheet 25 to 26
Consolidated Cash Flow Statement 27
Notes to the Financial Statements 28 to 45

CHILDREN NORTH EAST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2021

The trustees, who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 March 2021. The trustees have adopted the provisions of 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) (effective 1 January 2019).

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing documents

Children North East is a registered charity in the United Kingdom and a company limited by guarantee registered in England. The governing instruments are the memorandum and articles of association as adopted by special resolution passed in 2007.

Recruitment and appointment of trustees

Trustees of Children North East are also directors of the company. They are appointed at the annual general meeting for three years. A third of Trustees (selected by those longest in office) retire in rotation at each annual general meeting but may be re-elected for a further 3-year period. The Board also appoints during the year as necessary.

Since the last annual report four trustees have retired, with two of these being subsequent to the financial year end. The Board reviews expertise among the existing trustees and recruits people with expertise that the Board lacks. The Board is currently undergoing a recruitment process to appoint additional Trustees to ensure there is the right mix of skills and experience among the trustees.

Trustee induction, training and appraisal

New trustees are provided with information about the charity, the role of the Board and the responsibilities of trustees.

Induction training is tailored to the experience, skills and interests of each trustee but includes meetings with the chief executive and key staff. Induction may include: visiting projects and meeting staff and volunteers. All trustees have an annual conversation with the chair to review their contribution.

Organisational structure

The governing body is the Board, which normally comprises twelve trustees. The Board is responsible for the strategic direction, policy and finances of the charity. The Board exercises its responsibilities through full board meetings and operational board meetings. The Chief Executive manages the charity on behalf of the trustees. There is a clear structure and reporting accountabilities that runs through the whole organisation.

Risk management

Trustees maintain a register of the main strategic, business and operational risks to the charity and ensure that systems and procedures have been established to reduce the risks. Risks are reviewed, actions recommended and monitored in board and sub-committee meetings.

The key controls used by the charity to mitigate risks include:

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Trustees are satisfied that the major risks identified have been adequately mitigated.

OBJECTIVES

The charity's objects are:

Children North East exists ‘because growing up can be hard’ for children, young people and their parents. The charity pays particular attention to transition stages during growing up when things can go wrong but can be put right relatively easily by effective early intervention. The five stages and the outcomes that the charity aims to achieve are:

  1. Pregnancy and Babyhood – we want babies to feel safe and loved

  2. Starting School – we want children to feel ready and looking forward to starting school

  3. Changing School – we want children and young people to feel confident in school

  4. Adolescence – we want young people to feel valued and confident

  5. Becoming independent – we want young people to feel they are given a chance

Put together these outcomes add up to Children North East’s mission that ‘children and young people grow up healthy and happy’.

The United Kingdom is a signatory to the United Nations Convention on the Rights of the Child, which gives all children the right to health, education, safety, play, family life, protection from harm and support when things go wrong at each stage of growing up. Children North East targets services to those children and young people who do not enjoy all these rights.

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THE DIFFERENCE WE MAKE FOR CHILDREN AND YOUNG PEOPLE

Children North East was established in 1891, making 2021 our 130[th] anniversary. Throughout that time, the overall objective of the charity has been to make a positive difference to the lives of children and young people.

Children North East has worked tirelessly over the last year to ensure that we could continue to deliver our services to our beneficiaries. Because of the impact of the COVID-19 pandemic, this has invariably meant that we have delivered less of what we would normally do and has resulted in different ways of working.

COVID IMPACT

The financial year ended 31 March 2021, has proven to be a challenging year, one of the most challenging in our living memory due to the impact of COVID on our staff, volunteers, students and beneficiaries. In March 2020 the Government’s decision to instruct people to work from home (except essential workers) meant that in the space of 24 hours we had to change the way that we worked for the foreseeable future. Communication was key at this time, and all managers and staff pulled together and made sure that we could deliver what we could, but it meant a fundamental change to the way that we worked. Staff had to adapt to online working which resulted in chance that will allow so to work more dynamically going forward and we were fortunate to secure funding to purchase equipment to allow us to do this.

We furloughed some staff for a short period of time to protect jobs, and we had to establish new services to address the needs of disadvantaged babies, children, young people and families across the North East. This report will aim to highlight some of the adaptations that we have put in place to deliver our services, and it will look at the impact of some of the emergency type services that we put in place to alleviate the distress caused by the pandemic.

PUBLIC BENEFIT

We run four distinct services to reach our aims, including:

During the 2021 financial year, we delivered over 30 different services for babies, children, young people and families, under 8 different service categories:

As well as delivering our contracts and grant work, we further expanded our services, establishing emergency responses to issues exacerbated by the pandemic including:

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We also found new ways of delivering our services, much of which had to continue online or by phone, including our counselling and therapeutic services. As much of our crisis work is with extremely vulnerable families, it was felt that this was essential work, and as such, with the development of risk assessments and PPE, our social workers and family practitioners continued to work face-to-face with families. We developed a brand new online package of support for our youth link work, and delivered an online offer to schools for our Poverty Proofing work. All of this was possible through the hard work and dedication of our staff, volunteers and students, and it is clear that whilst everyone is looking forward to returning to face-to-face work, there is a place for online work and we will continue to explore this over the coming year as we gradually move out of lockdown.

What follows is a more in-depth look at our services and the work that they have done over the last year to ensure that the babies, children, young people and families we work with provide an opportunity to grow up happy and healthy.

Families and Parenting

We offer a 0-19 holistic service including crisis intervention, early intervention and preventative services for families. We strive to keep ‘families together in a safe and healthy way,’ our work is tailored to meet individual needs and we keep the child at the centre of all of our interventions. Newcastle and Sunderland Local Authorities mainly commission the work and grant funding is also received to run a range of other services to support families these include:

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a rehabilitation plan and is offered intensively over an agreed period of time. CNE keep detailed records of the intervention and the information is used to support decisions about the future care arrangements of the children.

The impact of COVID-19 on the service was immediate and caused disruption to services, in particular those were home visits took place. This raised concerns in respect of those vulnerable children now spending more time in the home and not being monitored by the usual services. Our staff managed to engage with most parents using IT platforms or telephone contact but unfortunately those families hardest to reach saw this as an excuse to disengage. Eight weeks after the first lockdown commenced, we were given authorisation to work directly with families where the children were subject to Child Protection Plans, court directed intervention or reunification plans. This allowed workers to undertake home visits following strict COVID-19 government guidance, which included a full risk assessment and workers supplied with PPE.

As lockdown progressed, we saw a surge in domestic abuse referrals and, in response, we developed a domestic abuse helpline, available 7 days a week, and an online chat service. The staff worked creatively with those deemed most at risk to ensure children were safe, this included door-step visits where food parcels and resource packs were dropped off. We also delivered home safety equipment as part of our WHOOPS Home Safety Project to families with children under the age of two.

The Cowgate Centre in Newcastle, where the service is based, became a food distribution centre for those families experiencing financial hardship or those who were classed as medically vulnerable and were shielding. We worked in partnership with other organisations, including Fareshare who delivered food to the Cowgate Centre several times a week.

The Contact Centre service was impacted due to the high risk in offering face-to-face contact, therefore online services were offered, however the initial take up was low. As a result, we observed some parents resolving some of the conflict difficulties between them and arranging contact with each other and some families choosing to pause contact until the Contact Centre was able to reopen

Young People

Our service aims to build young people’s resilience. It offers a range of activities and interventions to support young people, examples of this include:

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During the financial year, COVID-19 had a significant impact. Although we continued to meet all targets associated with contracts, we had to adapt our delivery very quickly. Within two weeks of the first lockdown, we had developed a brand new video-based counselling approach and implemented new policies and procedures that ensured young people were able to continue their therapeutic support throughout the pandemic in a safe way.

The impact on delivery for Youth Link was initially large and we took the difficult decision to furlough part of the team, whilst we looked to develop video mentoring. The process for this was slightly more complicated because we use young volunteers to deliver mentoring. This meant that we had to take time to ensure that the new approach was safe for all concerned.

Our delivery of the Sexual Health contract was severely impacted as we were unable to provide face-to-face drop in sessions for large periods. The youth work team adopted an online social media presence and ran weekly sessions for their youth groups. This included quizzes, sexual health advice and even wildlife challenges to make the best use of daily walks. The FAB group increased its meetings from monthly to weekly, as we quickly realised that COVID-19 was having an adverse impact on young people with SEND (Special Educational Needs and Disability).

NEWPIP

NEWPIP (Newcastle Parent Infant Partnership) is specialist parent-infant relationship team with expertise in supporting and strengthening the important early relationships between babies and their parents or carers.

It is an early intervention, preventative service for parents and their children from pregnancy to 2 years of age (the 1001 Critical Days where the baby’s brain is developing at an incredibly fast rate) who are dealing with issues which are likely to cause difficulties in the relationship between themselves and their baby.

The service is in its fifth and final year of commissioning through Newcastle City Council (via DCLG funding) which ends in June 2021. An additional three year financial contribution from PIP UK (now Parent Infant Foundation) ended in December 2020. From July 2021, a small amount of funding will be awarded through Newcastle City Council and the Clinical Commissioning Group. In order to ensure that the service can continue to run as previous, Children North East have committed to allocating an element of a one-off Extra Award, granted in the 2021 calendar year by the People’s Postcode Lottery, to the service too.

Funding secured from Northumbria Police & Crime Commissioner’s Extraordinary COVID funding and The National Lottery Community Fund during this year has enabled NEWPIP to develop an online parent infant therapy offer, Happy Parents, Happy Babies, in response to the COVID lockdown.

The service offers:

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Poverty Proofing and Participation

Poverty Proofing and Participation Service was previous referred to as the Schools Team but has been renamed as it has grown in its delivery reach. Poverty Proofing is an innovative programme that seeks to identify and overcome barriers for those in poverty in accessing key services. Currently this work is happening nationally through the Poverty Proofing the School Day initiative and we supported 13 delivery partners nationally. In response to COVID-19 the service created a Poverty Proofing Covid Response programme, which was a shorter online version of the delivery model. Other areas developing within the Poverty Proofing work include:

We continue, in partnership with the Child Poverty Action Group (CPAG), to quality assure a three year ‘Cost of the School Day’ project in England, Wales and Scotland. This project is funded via the National Lottery.

Poverty Proofing work is either a paid for service by individual organisations, or is commissioned through local authorities or Multi Academy Trusts (MATs).

Participation and Wellbeing work is also delivered by this service and includes the following programmes:

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REACH

Children North East provides direct services in Newcastle, Gateshead, Sunderland and South East Northumberland with smaller presences in North and South Tyneside. We received 844 referrals from organisations, including, schools, colleges, local authorities, the police, the health sector and the voluntary sector. We work in schools in every part of the North East region and in other parts of the United Kingdom.

Children North East provides opportunities for adults and young people to volunteer their time as mentors and offers practice placements for social work students. During the financial year, we worked with 44 (2020: 157) volunteers and 15 (2020: 16) students. Due to the pandemic, none of these went on to gain employment with CNE during the financial year, but a few have subsequently gained employment in the 2022 financial year.

As a charity we receive gifts of goods and food throughout the year which we distribute to children and young people in need, and we have been working closely with Fareshare to make more food available to our beneficiaries, something which has been critical throughout the COVID-19 pandemic.

During the 2021 financial year, Children North East provided services directly to 2,008 (2020: 3,921) contacts, furthermore, we had an additional indirect impact on the lives of 941 (2020: 1,521) children and young people; a total of 2,949 (2020: 5,442). The impact of COVID-19 is reflected in these figures and so they are not comparable with previous years. We also had impact on children at 55 schools where we delivered our Poverty Proofing Covid Response (PPCR) programme.

Direct services provided were as follows:

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----- Start of picture text -----
By age By gender
133 2.9% 0.7%
301
189
251 277 34.3%
638
62.1%
Babies: age 0-1 Pre-school: age 2-4
Primary school: age 5-11 Secondary school: age 12-18
Young people; age 18-25 Adults: age 25+ Boys Girls Not known Other
----- End of picture text -----

Although ethnicity is notrecorded for every CNE activity, we worked with 264 (2020: 400) individuals from 26 (2020:21) different BAME (Black and Minority Ethnic) groups.

Overall, we worked with 554 (2020: 1,094) families.

Our service users are asked to complete an end of service questionnaire. Of those completed, 96.8% would recommend Children North East to family and friends, 90.1% said they had achieved their goals and 92.6% percent of service users who took the survey rated us 4 or higher (4 is good – 5 is excellent).

During the financial year, our staff delivered the following amount of activities to help babies, children and young people:

----- Start of picture text -----
780,767
•Minutes of Activities
29,749
•Activities logged
13,013
•Activity hours
----- End of picture text -----

We have delivered the following to those who need it most, including:

These services were provided by:

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If the volunteers were paid at the Living Wage (Children North East is a Living Wage Foundation employer) their contribution would have been worth approximately £22,943 (2020: £59,220).

During the year, 23 staff members were placed onto the furlough scheme as we adapted to COVID-19. All furloughed staff have now returned to work and we were lucky to suffer no staff losses as a direct result of the pandemic.

IMPACT REPORT

Children North East demonstrate the impact of our work through our five outcomes – babies feel safe and loved; children feel ready and looking forward to school; children and young people feel confident in school; young people feel valued and confident; and young people feel they are given a chance.

Our CiviCRM system, established across all of our services, provides us with a mechanism to produce clear monitoring and evaluation information. But there is also the story which sits alongside facts and figures. These stories bring to life the impact and quality of our work. What follows is an example of the real impact of our work on babies, children, young people and families:

Families and Parenting

We receive referrals, mostly from Health Visitors, for our WHOOPS Home Safety service however this Mum referred herself recognising that she needed support to keep the children safe at home.

K is a single parent living in the Fenham area who now has guardianship of her two young grandchildren. K had expressed worries around keeping two very active youngsters out of the kitchen and free from danger.

We were able to carry out a home safety check, which entails the assessment of the family home to highlight areas of possible concern. We were able to discuss home safety in detail including all the current information from Royal Society for the Prevention of Accidents (RoSPA) and The Child Accident Prevention Trust (CAPT) around childhood accident prevention. K was especially worried about choking so we were able to discuss with her choking hazards and how to prevent this and also respond if her one of the children started to choke on something.

We also provided a first aid session using the dolls to demonstrate how to provide resuscitation, treat a burn and how to remove a choke. K actively participated in the first aid demonstrations and, as a result, feels much more confident in keeping her grandchildren safe. K stated “ The demonstrations and being able to practice with a worker present has given me confidence, even the children got involved.”

Finally, we arranged for our Safe at Home service to fit a safety gate and other equipment in the family home. We also gave information to the family on play sessions that they can access at the Cowgate centre in September as K was keen to access activities with the children as she feels very isolated.

Young People Services

Young Person (YP) was referred to us for counselling, due to concerns about their isolation and drug use. As his age would take him beyond the reach of the SPA we agreed to support this person because he had not yet reached his 19th

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birthday. He would also be unlikely to get appropriate support from adult mental health services without a long wait – YP required someone to attend the home initially and a flexible approach to how the appointments were offered. He had not left the family home except in his parent’s car for more than two years and these trips would only be to pick up cannabis. YP is aware that he uses drugs to self-medicate and cope with how he feels about his life. The family have engaged in systemic therapy in the past and YP had attended drug services but this could not continue during the pandemic. He had also engaged with SCARPA as his previous friendship groups are known to engage in low-level crime.

An initial assessment meeting was held at the young person’s home to allow for a safe, low-stress environment. Staff made a full risk assessment ahead of the visit so that COVID risks could be managed. It emerged that many of his fears about leaving the house were relating to the old friends he had and fears he would go back to that situation. It was clear that he had no real interests outside the home and, without a social group, there was no incentive for him to work towards this. We talked about his options beyond counselling and the other services he might be able to access in our centre to build some healthy reasons to do other things with his time. He said he had reduced his drug use already and was prepared to smoke less ahead of attending sessions.

We agreed times to meet for a session in our premises but assured the young person that he could stay in the car the first time if necessary as even getting in the car to come to us would be a big step. In preparation, we sent YP photos of our building, described what it would look like in the counselling room and who else would be there. This provided enough reassurance that he came into the building straight away on his first session.

YP attended five sessions during which he made steady progress. He found he was able to cope better on the days he put off smoking until the evening because he felt he had something to do. In the fifth session, he said a family friend would be visiting at the weekend and it was agreed that he should be invited to their lunch out so that he could choose if he was ready to do this. YP attended a meal at the pub with his family that weekend, for the first time in 3 years.

Next steps are on how to start engaging YP in activities in the service and working on getting him a mentor who may be able to do other low-level activities initially, such as visiting a shop or starting to explore what interests he has.

NEWPIP

NEWPIP receive referrals from across the health sector in Newcastle.

One Mum and her baby boy, were referred to the NEWPIP service by Talking Helps, following an initial assessment where Mum’s low mood and difficulties in bonding with her 6 month old son were noted.

During the therapy, Mum talked about various experiences of loss in her childhood and early adulthood; and how she had seen her pregnancy as a way of starting over with a relationship that would last. She talked about how she had the vision of them becoming a ‘perfect family’ when she found out that she was pregnant. In the weekly therapy session’s Mum talked about how her pregnancy hadn’t progressed as she had imagined, with several complications and how she hadn’t felt the love and connection she had expected and thought she would feel.

As the sessions progressed, Mum became visibly more relaxed as she was able to vocalise her feelings and fears and make the connection between the losses she had experienced in her life and her fear of allowing herself to have a relationship with her baby. She began to notice her baby’s attempts to communicate with her and to articulate back to him what she was observing. Gradually the serve and return pattern in their communication developed.

Mum’s progress during the therapy saw her HADS (Hospital Anxiety and Depression Scale) score decline from an initial 8 to 3 for anxiety and from 13 to 2 for depression.

In the final sessions, Mum and baby were often observed laughing together, making eye contact and enjoying cuddles. Mum said that she now feels like the Mum that she had hoped to be.

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Poverty Proofing & Participation

Playful Lives is an initiative that Children North East developed during the summer of 2020 in conjunction with the West End Schools’ Trust, the West End Children’s Community and Sussed and Able. The programme’s mission was to support families’ post-lockdown and to use play as a tool to ease stretched family relationships, promote wellbeing and offer relief to stressed and worried families.

CNE Playful Lives in the summer of 2020 was made possible due to funding from Streetgames Department for Education (DfE) which funded the Best Summer Ever programme. This allowed us to pilot a model of delivering playful activities with families who were isolated, struggling due to the lockdown and social distancing measures, and were seeking support. Bridgewater School in the West End of Newcastle, identified and referred families who would benefit from support in playful activities, and were happy to engage with the charity. Once a family was referred, they were contacted by us and agreed for a team of three play workers to go and visit them once or twice a week over the course of four weeks. The team visited families with resource packs and resources to facilitate playful engagement with the children, and encourage, support and provide new and different opportunities for parents and carers to interact and take part in child led and directed play. The programme saw great success with very positive family engagement and the outcomes described below.

Over the course of the Playful Lives pilot, our workers engaged with 11 families including 30 children and 15 parents. This amounted to a total of 124.6 hours of playful activities which had a really powerful impact on the wellbeing of all involved as demonstrated in the stories below. The Playful Lives team began to see the opportunity for play enhancing social development of individuals and the programme starting to foster stronger relationships between siblings and parents. In addition the focus of modelling child led play enabled parents to engage with their children using a fresh approach. To see a case study impact visit The Power of Child's Play - Children North East (children-ne.org.uk) and for a video visit https://youtu.be/z6Wy8hZtDkw

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FINANCIAL REVIEW

Financial position

At the balance sheet date, the group held funds of £276,085 (2020: deficit of £28,070) of which £422,500 (2020: £422,500) was designated in accordance with the reserves policy.

Main sources of income

The main sources of income are contracts and grants from the public sector and grant making bodies.

We are very grateful to People’s Postcode Lottery for £400,000 unrestricted income, plus an additional amount of £100,000 (for the period September 2020 to August 2021) which is restricted to the Poverty Proofing and Participation service.

Grants

Our thanks and appreciation go to the following for their grants during the financial year:

iwill

Action for Children Big Lottery, Awards for All Blyth Offshore Wind Farm Fund Buckland Charitable Trust Cafcass Carr Ellison Charitable Trust Catalyst Sector Challenge Programme Child Poverty Action Group Children in Need Community Family Hub West (PIP Praxis) Community Foundation - Durham & Darlington Community Foundation - Tyne & Wear Coop Foundation Coop Local Community Fund Craft Council Department for Digital, Culture, Media & Sport Department for Education Edward Gostling Foundation Guy Redman Foundation Hadrian Trust High Sheriff of Northumberland Joseph Strong Frazer Trust Leslie and Lilian Manning Trust National Foundation of Youth Music National Lottery Natural History Lantern Fund Ncle CC Arts Council England Culture Bridge Newcastle City Council Newcastle Fund Newcastle University

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NHS Charities Together NHS North Cumbria CCG-Grassroots Small Grants Fund NIHR Applied Research Collaboration North East & Cumbria North Tyneside Learning Trust Northumberland Children’s Trust Northumberland Village Homes Trust Northumbria Police and Crime Commissioner People’s Postcode Lottery Pilgrim trust PIP UK Port of Tyne RISE Ruby and Will George Charitable Trust Sir James Knott Trust Street Games Tesco Together for Children W A Handley Charitable Trust West Midlands Police and Crime Commissioner Your Homes Newcastle

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Donations

We are very grateful to all the businesses and individuals who support Children North East, there are too many to list. A special thank you goes to the following, who have made donations over £1,000 during the financial year:

Mr & Mrs Clark Andie Stokoe Barratt Homes North East Cooperative Childcare Newbiggin Dr Maggie Ireland Eversheds Grainger Engineering Ltd Lowes Mr Charles Bragg Mrs Helen McArdle Ms Ann Palmer Mr & Mrs Underwood Newcastle Building Society North of England P&I Association (NEPIA) Phillip Lee Robertsons Construction Ltd Sage Foundation Sone Products Stagecoach The Ardonagh Community Trust

Fundraising and events

The following individuals also raised over £1,000 for Children North East through fundraising events and sponsorship:

Coffee and Kin Dan Jackson - In Memory of Namia Jackson Durham Sixth Form Centre Jackson Hogg Mr Jim Farquhar Mr Tommy Wanless Mrs Sophie Stephenson Ms Helen Smith Newcastle Prep School Ruth Oldfield t/as Coffee and Kin Vistry

Unrestricted income

This chart shows the sources of unrestricted income other than the People’s Postcode Lottery:

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----- Start of picture text -----
2.1%
4.8%
5.1% Activities and donations, including
businesses
COVID Appeal
14.6%
Hope for Christmas Appeal
45.6%
Trusts
Regular Donors
27.8% CNE Events
----- End of picture text -----

Our approach to fundraising is to encourage supporters and local businesses to fundraise for Children North East, and to engage in our events. Businesses also provide pro bono support and their sponsorship of fundraising events organised by Children North East helps reduce costs and increases net income.

Due to the impact of COVID-19, the majority of the usual fundraising events organised by Children North East were unable to go ahead during the financial year. However, the following virtual events went ahead and a small number of teams managed to take part in a low-key golf day.

In addition, we had an overwhelming response to our COVID appeal, which brought in over £60,000 of unrestricted income.

Our beneficiaries are in great need of new clothing and food. We receive unsolicited gifts of new food, clothes and other goods throughout the year, which are distributed to individuals and families in need.

Children North East fundraising conforms to the requirements of the Fundraising Regulator. The Board of Trustees monitors fundraising activities carried out by Children North East. There were no complaints made to Children North East about our fundraising during the year.

Restricted income

We received income through contracts with the following commissioners:

Newcastle City Council Gateshead Metropolitan Borough Council Sunderland City Council Newcastle and Gateshead Clinical Commissioning Group Cumbria, Northumberland, Tyne & Wear NHS

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NHS Newcastle and Gateshead

Children North East competes for contracts that are consistent with our mission, skills and experience, sometimes in partnership with other organisations.

Total income was higher than the previous year and is reflected in the reported surplus for the year.

It is the policy of the Board to wind down and close activities where there is no prospect of securing adequate funding.

Reserves Policy and Going Concern

The Board reviewed the reserves policy during the year as follows:

The Board designates unrestricted reserves as:

The Board has decided that fluctuations in restricted income are always known in advance and that plans will always be made to manage expenditure against this income without calling on reserves. The majority of expenditure is always staff salaries.

The Board considers that sufficient reserves should be maintained to manage the charity in the event of sudden withdrawal of significant unrestricted income. The Board has examined the pattern of income and expenditure over recent years and decided that a realistic ‘comfortable’ level of General Funds (free reserves) should be between £250,000 and £300,000.

As noted in the prior year report, the Trustees had decided to sell the head office property at Denhill Park as it was deemed no longer required for operational reasons. However, following the success of a number of bids and new contracts being awarded, this decision was reviewed in early 2021. A growing staff force along with a willingness by staff to return, from home-working, to an office environment was assessed and the most financial viable option was to keep Denhill Park as an asset and as the head office.

Investment Policy

When investments are made the investment objective is to provide a balanced return between income and capital growth with a low to medium level of risk. Investments are made within an ethical framework set by the Board:

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There are currently no investments in place.

Funds in deficit

In accordance with FRS 102, the charity has recognised a provision in its financial statements for the present value of future additional contributions to its defined benefit pension scheme (as detailed in notes 19 and 22), amounting to £267,020 (2020: £316,383). As a result, there is a net deficiency in general, unrestricted funds of £146,415 (2020: £450,570).

FUTURE PLANS

Children North East have recently launched a Five Year Strategy which sets out how the charity will achieve its objectives, and how it will create and make the most of opportunities over the coming years, in line with Our Vision that babies, children and young people grow up to be healthy and happy.

Our ambition is that:

The strategy focuses on three key objectives, with each having a number of specific aims and an outline of what we plan to do to achieve these objectives. Our key objectives are:

Sustainability and growth

Reach

Impact

Further information is available on our website – www.children-ne.org.uk.

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CHILDREN NORTH EAST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2021

REFERENCE AND ADMINISTRATIVE DETAILS

Trustees Mr David W Bavaird, Chair
Mrs Debbie McCordall
Mr Ian Railton resigned July 2021
Mrs Lucy Kendall resigned July 2021
Mr Stephen Robinson
Ms Glenda Devlin resigned December 2020
Mrs Judith Hay OBE resigned December 2020
Prof Eileen Kaner
Mr Mark Stoddart
Mr Alex Coburn
Ms Philippa Hughes
Reverend Sarah Lunn
Ms Michele Harvey resigned August 2020
Chief Executive Officer Mrs Leigh Elliott appointed December 2020
(previously interim CEO)
Operations Director Ms Michele Deans
Head Office & Registered Office 89 Denhill Park
Newcastle upon Tyne,
NE15 6QE
Auditors Read, Milburn and Co
71 Howard Street
North Shields
NE30 1AF
Bankers Unity Trust Bank plc
Nine Brindley Place
Birmingham
B1 2HB
Investment Managers Speirs & Jeffrey Limited - currently no investments
36 Renfield Street
Glasgow
G21 NA

19 | P a g e

CHILDREN NORTH EAST

REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2021

STATEMENT OF TRUSTEES RESPONSIBILITIES

The trustees (who are also the directors of Children North East for the purposes of company law) are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires directors to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing those financial statements, the directors are required to:

The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustees are aware:

AUDITORS

The auditors, Read, Milburn & Co, will be proposed for re-appointment at the forthcoming Annual General Meeting.

Approved by order of the Board of trustees on 15 December 2021 and signed on its behalf by:

Mr David W Bavaird, Chair

20 | P a g e

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF CHILDREN NORTH EAST

Opinion

We have audited the financial statements of Children North East (the 'parent company') and its subsidiary (the ‘group’) for the year ended 31 March 2021 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Parent Company Balance Sheets, the Consolidated and Parent Company Cash Flow Statements and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (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 Auditors responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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 charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Report of the Independent Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated 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 this gives rise to a material misstatement in the consolidated financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Page 21

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF CHILDREN NORTH EAST

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Trustees.

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

Responsibilities of trustees

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

In preparing the consolidated financial statements, the trustees are responsible for assessing the charitable company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Page 22

REPORT OF THE INDEPENDENT AUDITORS TO THE ME-MBERS OF CHILDREN NORTH EAST

Our responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Independent Auditors 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 consolidated financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

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. In this regard, our procedures include the following:

A further description of our responsibilities for the audit of the consolidated financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.

Use of our report

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

Nicholas Liley FCA (Senior Statutory Auditor) for and on behalf of Read, Milburn & Co 71 Howard Street North Shields Tyne and Wear NE30 1AF

20 December 2021

Page 23

CHILDREN NORTH EAST

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 MARCH 2021

Unrestricted
Funds
Notes
£
INCOME AND ENDOWMENTS FROM
Donations and legacies
2
611,198
Charitable activities
5
General operations
38,872
Children and young people
453,443
Families and parenting
229,590
Parent infant partnership
233,584
Other trading activities
3
109,743
Investment income
4
-
Other income
18,516
Total
1,694,946
EXPENDITURE ON
Raising funds
6
47,836
Charitable activities
7
General operations
626,214
Children and young people
374,624
Families and parenting
228,853
Parent infant partnership
206,640
Total
1,484,167
Net gains on investments
-
NET INCOME/(EXPENDITURE)
210,779
Transfers between funds
93,376
Net movement in funds
304,155
RECONCILIATION OF FUNDS
Total funds brought forward
(28,070)
TOTAL FUNDS CARRIED FORWARD
276,085		 Restricted
Funds
£
-
-
237,093
211,191
60,147
-
-
98,975
607,406
-
98,975
193,592
169,410
52,053
514,030
-
93,376
(93,376)
-
-
-		 2021
Total
funds
£
611,198
38,872
690,536
440,781
293,731
109,743
-
117,491
2,302,352
47,836
725,189
568,216
398,263
258,693
1,998,197
-
304,155
-
304,155
(28,070)
276,085		 2020
Total
funds
£
466,398
28,797
578,610
405,548
300,805
302,441
651
23,852
2,107,102
46,441
617,644
694,255
624,881
318,782
2,302,003
483
(194,418)
-
(194,418)
166,348
(28,070)

CONTINUING OPERATIONS

All income and expenditure has arisen from continuing activities.

The notes form part of these financial statements

Page 24

CHILDREN NORTH EAST (REGISTERED NUMBER: 00090288)

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2021

Notes
FIXED ASSETS
Tangible assets
14
Investments
15
CURRENT ASSETS
Debtors
16
Cash at bank and in hand
CREDITORS
Amounts falling due within one year
17
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT
LIABILITIES
PROVISIONS FOR LIABILITIES
19
NET ASSETS/(LIABILITIES)
FUNDS
21
Unrestricted funds:
General fund
Designated fund
Restricted funds
TOTAL FUNDS		 Group
2021
£
463,150
-
463,150
354,061
368,364
722,425
(642,470)
79,955
543,105
(267,020)
276,085
(146,415)
422,500
276,085
-
276,085		 Group
2020
£
460,185
-
460,185
172,216
22,734
194,950
(366,822)
(171,872)
288,313
(316,383)
(28,070)
(450,570)
422,500
(28,070)
-
(28,070)		 Charity
2021
£
463,150
1
463,151
449,779
362,889
812,668
(639,264)
173,404
636,555
(267,020)
369,535
(52,965)
422,500
369,535
-
369,535		 Charity
2020
£
460,185
1
460,186
193,012
13,809
206,821
(284,129)
(77,308)
382,878
(316,383)
66,495
(356,005)
422,500
66,495
-
66,495

The notes form part of these financial statements

continued...

Page 25

CHILDREN NORTH EAST (REGISTERED NUMBER: 00090288)

CONSOLIDATED BALANCE SHEET - CONTINUED AS AT 31 MARCH 2021

The trustees have prepared group financial statements in accordance with section 398 of the Companies Act 2006 and section 138 of the Charities Act 2011. These financial statements have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to charitable small companies.

The financial statements were approved by the Board of Trustees on 15 December 2021 and were signed on its behalf by:

Mr David Bavaird, Chair

The notes form part of these financial statements

Page 26

CHILDREN NORTH EAST

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2021

Notes
Cash flows from operating activities:
Cash generated from/(used in) operations
24
Interest paid
Net cash provided by/(used in) operating
activities
Cash flows from investing activities:
Purchase of tangible fixed assets
Sale of fixed asset investments
Interest received
Net cash (used in)/provided by investing
activities
Change in cash and cash equivalents in the
reporting period
Cash and cash equivalents at the beginning of
the reporting period
Cash and cash equivalents at the end of the
reporting period		 Group
2021
£
360,109
(2,113)
357,996
(12,366)
-
-
(12,366)
345,630
22,734
368,364		 Group
2020
£
(178,671)
(3,851)
(182,522)
(39,650)
78,559
651
39,560
(142,962)
165,696
22,734		 Charity
2021
£
363,304
(1,858)
361,446
(12,366)
-
-
(12,366)
349,080
13,809
362,889		 Charity
2020
£
(182,379)
(3,663)
(186,042)
(39,650)
78,559
651
39,560
(146,482)
160,291
13,809

The notes form part of these financial statements

Page 27

CHILDREN NORTH EAST

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

1. ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the group and charitable company, which is a public benefit entity under FRS 102, have been prepared 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) (effective 1 January 2019)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention with the exception of investments which are included at market value, as modified by the revaluation of certain assets. The presentation currency of the financial statements is the Pound Sterling (£).

Going concern

As explained more fully in notes 19 and 22 to the financial statements the charity participates in a multiemployer defined benefit pension scheme which is in deficit and as such is required to pay additional contributions to the scheme in order to eliminate the funding shortfall.

In accordance with FRS102, the charity has recognised a provision in its financial statements for the present value of future additional contributions to the scheme, amounting to £267,020 (2020 - £316,383). As a result there is a net deficiency in general, unrestricted funds in the amount of £146,415 (2020 - £450,570).

Additional contributions to the scheme have been made under a fixed term agreement, expiring in January 2025, for a number of years and, prior to the application of FRS102, such contributions were charged directly to expenditure. As a result the trustees are of the opinion that the charity will be able to generate sufficient funds to cover future additional contributions as they fall due and therefore, irrespective of the reported deficit, continue as a going concern; the financial statements have therefore been drawn up on that basis.

Group financial statements

The financial statements consolidate the results of the charity and its wholly owned subsidiary CNE Trading Ltd on a line-by-line basis. A separate Statement of Financial Activities and Income and Expenditure Account for the charity has not been presented because the charity has taken advantage of the exemption afforded by section 408 of the Companies Act 2006.

Income

All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably.

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Page 28

CHILDREN NORTH EAST

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

1. ACCOUNTING POLICIES - continued

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property - not provided Motor vehicles - at 20% on cost Fixtures and fittings - at 20% on cost and 25% on cost

No depreciation is provided in respect of the freehold properties held, which is a departure from the Companies Act 2006 which requires all properties to be depreciated. The directors however consider that the adopted policy of non depreciation of freehold properties results in the accounts giving a true and fair view.

Related party exemption

The charitable company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Taxation

The charity is exempt from corporation tax on its charitable activities.

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Restricted funds can only be used for particular restricted purposes within the objects of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.

Further explanation of the nature and purpose of each fund is included in the notes to the financial statements.

Pension costs and other post-retirement benefits

The company contributes to a defined contribution pension scheme for its employees. Pension costs are charged to the income and expenditure account when paid which results in spreading the cost of pensions over the employees working lives with the charity.

Investments

Investments are stated at mid market value at the balance sheet date. Purchases and sales include transaction fees charged by investment managers. All other fees are charged to expenditure.

Debtors

Debtors and prepayments are recognised at the settlement amount due or amount prepaid.

Cash at bank and in hand

Cash at bank and cash in hand includes cash and short term highly liquid investments.

Page 29

CHILDREN NORTH EAST

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

1. ACCOUNTING POLICIES - continued

Creditors

Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount.

Financial instruments

Other than those mentioned above, the company only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

2. DONATIONS AND LEGACIES

Post Code Children Trust
Other donations and legacies		 2021
£
400,000
211,198
611,198		 2020
£
400,000
66,398
466,398

3. OTHER TRADING ACTIVITIES

Fundraising events
Charges for goods & services		 2021
£
7,966
101,777
109,743		 2020
£
55,096
247,345
302,441

4. INVESTMENT INCOME

2021 2020
£ £
Investment income - 651

Page 30

CHILDREN NORTH EAST

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

5. INCOME FROM CHARITABLE ACTIVITIES

General Children and Families and
Operations young people parenting
£ £ £
Grants 38,872 358,847 116,056
Contract income - 326,580 289,591
Spot purchase of services - 5,109 35,134
38,872 690,536 440,781
2021 2020
Parent infant Total Total
partnership activities activities
£ £ £
Grants 63,571 577,346 579,009
Contract income 229,910 846,081 674,122
Spot purchase of services 250 40,493 60,629
293,731 1,463,920 1,313,760
Grants received, included in the above, are as follows:
2021 2020
£ £
Health - 259,586
Trusts 32,243 76,228
Big Lottery - 14,599
Other 545,103 228,596
577,346 579,009
6. RAISING FUNDS
Raising donations and legacies
2021 2020
£ £
Staff costs 39,330 39,740
Other fundraising costs 8,506 6,701
47,836 46,441

Page 31

CHILDREN NORTH EAST

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

7. CHARITABLE ACTIVITIES COSTS

Direct costs Support Costs
(See note 8)
(See note 9)
£
£
General operations
599,736
125,453
Children and young people
511,467
56,749
Families and parenting
364,870
33,393
Parent infant partnership
233,872
24,821
1,709,945
240,416		 Totals
£
725,189
568,216
398,263
258,693
1,950,361

8. DIRECT COSTS OF CHARITABLE ACTIVITIES

Staff costs
Motor & travel expenses
Staff training & recruitment
Volunteer costs
Other client costs		 2021
£
1,626,706
20,809
6,567
4,102
51,761
1,709,945		 2020
£
1,858,163
59,132
15,931
20,425
59,288
2,012,939

9. SUPPORT COSTS

Management &
Governance
administration
costs
£
£
General operations
120,048
5,405
Children and young people
56,749
-
Families and parenting
33,393
-
Parent infant partnership
24,821
-
235,011
5,405		 Totals
£
125,453
56,749
33,393
24,821
240,416

Page 32

CHILDREN NORTH EAST

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

9. SUPPORT COSTS - continued

Support costs, included in the above, are as follows:

Management & administration

General Children and Families and
Operations young people parenting
£ £ £
Rent & rates 7,917 1,241 11,671
Insurance 7,816 - 100
Light & heat 2,358 3,921 6
Telephone 5,039 10,108 6,692
Printing, postage, stationery & advertising 7,905 7,473 3,103
Sundries 388 40 311
Repairs & maintenance 12,368 5,317 433
IT costs 43,292 21,969 6,583
Other costs 23,236 5,727 3,839
Depreciation of tangible fixed assets 6,484 953 655
Interest payable and similar charges 3,245 - -
120,048 56,749 33,393
2021 2020
Parent infant Total Total
partnership activities activities
£ £ £
Rent & rates 6,670 27,499 54,316
Insurance - 7,916 7,310
Light & heat - 6,285 7,673
Telephone 3,045 24,884 20,625
Printing, postage, stationery & advertising 2,511 20,992 23,161
Sundries - 739 4,153
Repairs & maintenance 208 18,326 17,446
IT costs 8,658 80,502 52,716
Other costs 3,074 35,876 43,982
Depreciation of tangible fixed assets 655 8,747 1,965
Interest payable and similar charges - 3,245 3,851
24,821 235,011 237,198

Page 33

CHILDREN NORTH EAST

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

9. SUPPORT COSTS - continued

Governance costs

Auditors' remuneration
NET INCOME/(EXPENDITURE)
Net income/(expenditure) is stated after charging:
Auditors' remuneration
Depreciation - owned assets		 2021
General
Operations
£
5,405
2021
£
5,405
9,401		 2020
Total
activities
£
5,425
2020
£
5,425
1,965

10. NET INCOME/(EXPENDITURE)

11. TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 March 2021 nor for the year ended 31 March 2020.

Trustees' expenses

There were no trustees' expenses paid for the year ended 31 March 2021 nor for the year ended 31 March 2020.

12. STAFF COSTS

Wages and salaries
Social security costs
Other pension costs		 2021
£
1,449,575
118,930
97,531
1,666,036		 2020
£
1,671,211
137,248
89,444
1,897,903

The key management personnel, including the trustees, are listed under Reference and Administrative Details. The total employee benefits of the key management personnel were £129,961 (2020 - £153,307).

The average monthly number of employees during the year was as follows:

All staff
No employees received emoluments in excess of £60,000.		 2021
66		 2020
74

Page 34

CHILDREN NORTH EAST

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

13. COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES

Unrestricted
Funds
£
INCOME AND ENDOWMENTS FROM
Donations and legacies
316,398
Charitable activities
General operations
28,797
Children and young people
385,163
Families and parenting
250,934
Parent infant partnership
300,805
Other trading activities
302,441
Investment income
651
Other income
23,452
Total
1,608,641
EXPENDITURE ON
Raising funds
46,441
Charitable activities
General operations
617,644
Children and young people
426,245
Families and parenting
438,758
Parent infant partnership
318,782
Total
1,847,870
Net gains on investments
483
NET (EXPENDITURE)/INCOME
(238,746)
Transfers between funds
44,328
Net movement in funds
(194,418)
RECONCILIATION OF FUNDS
Total funds brought forward
166,348
TOTAL FUNDS CARRIED FORWARD
(28,070)		 Restricted
Funds
£
150,000
-
193,447
154,614
-
-
-
400
498,461
-
-
268,010
186,123
-
454,133
-
44,328
(44,328)
-
-
-		 Total
funds
£
466,398
28,797
578,610
405,548
300,805
302,441
651
23,852
2,107,102
46,441
617,644
694,255
624,881
318,782
2,302,003
483
(194,418)
-
(194,418)
166,348
(28,070)

Page 35

CHILDREN NORTH EAST

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

14. TANGIBLE FIXED ASSETS - GROUP AND CHARITY

COST
At 1 April 2020
Additions
At 31 March 2021
DEPRECIATION
At 1 April 2020
Charge for year
At 31 March 2021
NET BOOK VALUE
At 31 March 2021
At 31 March 2020		 Freehold
Property
£
422,500
-
422,500
-
-
-
422,500
422,500		 Motor
Fixtures
Vehicles
and Fittings
£
£
39,650
-
-
12,366
39,650
12,366
1,965
-
7,930
1,471
9,895
1,471
29,755
10,895
37,685
-		 Totals
£
462,150
12,366
474,516
1,965
9,401
11,366
463,150
460,185

The property at 89 Denhill Park was revalued in 2019 by R.A. Jackson & Son at £247,500. The property at 4 Graingerville North was revalued in 2015 by Dunlop Haywood at £175,000 and the directors believe this remains appropriate. The historic cost of these properties is £407,734 and £593,382 respectively.

Page 36

CHILDREN NORTH EAST

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

15. FIXED ASSET INVESTMENTS

Charity

Charity
Shares in
group
undertakings
£
MARKET VALUE
At 1 April 2020 and 31 March 2021
1
NET BOOK VALUE
At 1 April 2020 and 31 March 2021
1		 Totals
£
1
1

There were no investment assets outside the UK.

The company's investments at the balance sheet date in the share capital of companies include the following:

CNE Trading Ltd

Registered office: 89 Denhill Park, Newcastle upon Tyne, NE15 6QE Nature of business: Delivery of services on behalf of the charity.

%
Class of share: holding
Ordinary 100
2021 2020
£ £
Aggregate capital and reserves (93,449) (94,564)
Profit/(loss) for the year 1,115 (22,837)

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NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

16. DEBTORS

Trade debtors
Amounts owed by group undertakings
Other debtors
Prepayments and accrued income		 Group
2021
£
268,882
-
7,521
77,658
354,061		 Group
2020
£
115,513
-
10,864
45,839
172,216		 Charity
2021
£
255,548
109,052
7,521
77,658
449,779		 Charity
2020
£
59,223
78,580
9,820
45,389
193,012

17. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Trade creditors
Social security and other taxes
Other creditors
Accruals and deferred income		 Group
2021
£
18,189
75,028
22,414
526,839
642,470		 Group
2020
£
55,078
121,407
22,819
167,518
366,822		 Charity
2021
£
18,117
74,387
21,976
524,784
639,264		 Charity
2020
£
50,541
94,187
21,020
118,381
284,129

Deferred income

Included within Accruals and Deferred Income are the following amounts comprising income received in advance of delivery of the related services or expenditure incurred.

Balance at 1 April 2020
Released to income from charitable activities
Amount deferred in year
Balance at 31 March 2021		 Group
£
96,854
(96,854)
497,441
497,441		 Charity
£
96,854
(96,854)
497,441
497,441

18. SECURED DEBTS

The charity's pension liabilities are secured by a fixed charge on the freehold property at 4 Graingerville North.

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19. PROVISIONS FOR LIABILITIES - GROUP AND CHARITY

Pension deficit provision
Present Values of Provision
Present value of provision
Reconciliation of Opening and Closing Provisions
Provision at start of period
Unwinding of the discount factor (interest expense)
Deficit contribution paid
Remeasurements - impact of any change in assumptions
Provision at end of period
Income and expenditure impact
Interest expense
Remeasurements - impact of any change in assumptions
Assumptions
%
Rate of discount		 2021
£
267,020
2021
per annum
%
0.66		 2021
£
267,020
2020
£
316,383
2021
£
316,383
7,109
(65,604)
9,132
267,020
2021
£
7,109
9,132
16,241
2020
per annum
%
2.53		 2020
£
316,383
2019
£
383,800
2020
£
383,800
4,856
(63,692)
(8,581)
316,383
2020
£
4,856
(8,581)
(3,725)
2019
per annum
1.39

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

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NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

20. ANALYSIS OF GROUP NET ASSETS BETWEEN FUNDS

Unrestricted
Funds
£
Fixed assets
463,150
Current assets
722,425
Current liabilites
(642,470)
Provision for liabilities
(267,020)
276,085		 Restricted
Funds
£
-
-
-
-
-		 2021
Total
funds
£
463,150
722,425
(642,470)
(267,020)
276,085		 2020
Total
funds
£
460,185
194,950
(366,822)
(316,383)
(28,070)

21. MOVEMENT IN GROUP FUNDS

Unrestricted funds
General fund
Designated fund
Families and Parenting
Young People
Parent Infant Partnership
Restricted funds
Families and Parenting
Children and Young People
Parent Infant Partnership
TOTAL FUNDS		 Net movement
Transfers
At 1/4/20
in funds between funds
£
£
£
(450,570)
104,279
199,876
422,500
-
-
-
737
(737)
-
78,819
(78,819)
-
26,944
(26,944)
(28,070)
210,779
93,376
-
41,781
(41,781)
-
43,501
(43,501)
-
8,094
(8,094)
-
93,376
(93,376)
(28,070)
304,155
-		 At 31/3/21
£
(146,415)
422,500
-
-
-
276,085
-
-
-
-
276,085

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NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

21. MOVEMENT IN GROUP FUNDS - continued

Net movement in funds, included in the above are as follows:

Unrestricted funds
General fund
Families and Parenting
Young People
Parent Infant Partnership
Restricted funds
Families and Parenting
Children and Young People
Parent Infant Partnership
Coronavirus Job Retention Scheme
TOTAL FUNDS		 Incoming
resources
£
778,329
229,590
453,443
233,584
1,694,946
211,191
237,093
60,147
98,975
607,406
2,302,352		 Resources
expended
£
(674,050)
(228,853)
(374,624)
(206,640)
(1,484,167)
(169,410)
(193,592)
(52,053)
(98,975)
(514,030)
(1,998,197)		 Gains and
Movement in
losses
funds
£
£
-
104,279
-
737
-
78,819
-
26,944
-
210,779
-
41,781
-
43,501
-
8,094
-
-
-
93,376
-
304,155		 Gains and
Movement in
losses
funds
£
£
-
104,279
-
737
-
78,819
-
26,944
-
210,779
-
41,781
-
43,501
-
8,094
-
-
-
93,376
-
304,155
210,779
41,781
43,501
8,094
-
93,376
304,155

Comparatives for movement in funds

Unrestricted funds
General fund
Designated fund
Families and Parenting
Young People
Parent Infant Partnership
Restricted funds
Families and Parenting
Children and Young People
TOTAL FUNDS		 Net movement
Transfers
At 1/4/19
in funds between funds
£
£
£
(256,152)
(34,849)
(159,569)
422,500
-
-
-
(148,516)
148,516
-
(37,471)
37,471
-
(17,910)
17,910
166,348
(238,746)
44,328
-
18,891
(18,891)
-
25,437
(25,437)
-
44,328
(44,328)
166,348
(194,418)
-		 At 31/3/20
£
(450,570)
422,500
-
-
-
(28,070)
-
-
-
(28,070)

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NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

21. MOVEMENT IN GROUP FUNDS - continued

Comparative net movement in funds, included in the above are as follows:

Unrestricted funds
General fund
Families and Parenting
Young People
Parent Infant Partnership
Restricted funds
Families and Parenting
Children and Young People
TOTAL FUNDS		 Incoming
resources
£
628,753
290,242
388,774
300,872
1,608,641
205,014
293,447
498,461
2,107,102		 Resources
expended
£
(664,085)
(438,758)
(426,245)
(318,782)
(1,847,870)
(186,123)
(268,010)
(454,133)
(2,302,003)		 Gains and
Movement in
losses
funds
£
£
483
(34,849)
-
(148,516)
-
(37,471)
-
(17,910)
483
(238,746)
-
18,891
-
25,437
-
44,328
483
(194,418)

Designated fund

The designated fund represents the net book value of the properties at Denhill Park and Graingerville North.

Restricted funds

Families & Parenting

The Families & Parenting fund was set up to support children, young people and parents in challenging circumstances such as living in temporary homeless accommodation, parent mental health, parental substance misuse, domestic violence and non school attendance. It also provides training in parenting with particular emphasis on fathers.

Children & Young People

The Children & Young People fund provides services in a drop in advice centre for young people including outreach sexual health advice and also provides training in schools for young people about health, wellbeing and mental health. Five Youth Link projects train and support young people as volunteers to support young people in need. The service also supports Newcastle Youth Council.

22. PENSION COMMITMENTS

TPT Retirement Solutions - The Growth Plan

The company participates in the scheme, a multi-employer scheme which provides benefits to some 1,300 nonassociated participating employers. The scheme is a defined benefit scheme in the UK. It is not possible for the Company to obtain sufficient information to enable it to account for the scheme as a defined benefit scheme. Therefore it accounts for the scheme as a defined contribution scheme.

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22. PENSION COMMITMENTS - continued

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 the company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme.

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

From 1 April 2019 to 31 January 2025: £54,560 per annum (payable monthly and increasing by 3% each on 1 April).

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

Where the scheme is in deficit and where the Company has agreed to a deficit funding arrangement the Company 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 rates detailed in note 19 to the financial statements. The unwinding of the discount rate is recognised as a finance cost.

Pension Trust Flexible Pension Plan

From December 2006 the group has also offered the Flexible Pension Plan (the new scheme) to all staff. The new scheme is a money purchase plan and is not contracted out of the state scheme. The Charity paid contributions at the rate of 7.25% during the accounting period and members paid minimum contributions at the rate of 5% but could make additional voluntary contributions if they wished. The employer's contribution payable during the year was £81,291 (2020: £91,284) and the outstanding contributions (employer plus employee) owed at the balance sheet date was £19,418 (2020: £17,932).

The group continues to offer membership of the new scheme to all of its employees.

23. RELATED PARTY DISCLOSURES

The charitable company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

There were no related party transactions requiring disclosure for the year ended 31 March 2021.

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24. POST BALANCE SHEET EVENTS

Pension Commitments: TPT Retirement Solutions - The Growth Plan

Subsequent to the year-end, the results of the full actuarial valuation as at 30 September 2020 were announced and the deficit has reduced to £33.3m.

A reduction in additional deficit contributions will apply from 1 April 2022. The new contribution is £20,190.23 per annum and is fixed. In addition, plan expenses will now be paid separate to the deficit contributions. This will apply from 1 April 2022 at £22,568 (payable monthly and increasing by 3% each 1 April).

25. RECONCILIATION OF NET INCOME TO NET CASH FLOW FROM OPERATING ACTIVITIES

Net income/(expenditure) for the reporting
period (as per the statement of financial
activities)
Adjustments for:
Depreciation charges
Gains on investments
Interest received
Interest paid
(Increase)/decrease in debtors
Increase in creditors
Difference between pension charge and cash
contributions
Net cash provided by/(used in) operating
activities
26.
ANALYSIS OF CHANGES IN NET FUNDS
Group
Cash at bank and in hand
Charity
Cash at bank and in hand		 Group
2021
£
304,155
9,401
-
-
2,113
(181,845)
275,648
(49,363)
360,109		 Group
2020
£
(194,418)
1,965
(483)
(651)
3,851
23,925
54,557
(67,417)
(178,671)
At 1/4/20
£
22,734
At 1/4/20
£
13,809		 Charity
2021
£
303,040
9,401
-
-
1,858
(256,767)
355,135
(49,363)
363,304
Cash flow
£
345,630
Cash flow
£
349,080		 Charity
2020
£
(171,581)
1,965
(483)
(651)
3,663
32,263
19,862
(67,417)
(182,379)
At 31/3/21
£
368,364
At 31/3/21
£
362,889

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NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 31 MARCH 2021

27. LEGAL STATUS

The charity is incorporated under the Companies Act as a company limited by guarantee, with the liability of each member not exceeding 50p on winding up, and is registered in England and Wales. The company's registered number and registered office address can be found within Reference and Administrative Details.

Page 45