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2021-03-31-accounts

me cap ANNUAL REPORT 2020-21 Royal Mencap Society

Financial statements

Consolidated statement of Financial Activities for the year ended 31 March 2021 (incorporating the income and expenditure account)

https://www.nice.org.uk/news/article/nice-publishes-first-rapid-covid-19-guidelines https://www.mencap.org.uk/press-release/mencap-responds-deeply-troubling-new-nice-covid-19guidance

https://www.mencap.org.uk/press-release/mencap-responds-concerning-gp-letters-about-covidmedical-treatment

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https://www.cqc.org.uk/news/stories/cqc-publishes-data-deaths-people-learning-disability

https://www.england.nhs.uk/publication/covid-19-deaths-of-patients-with-a-learning-disabilitynotified-to-leder/

https://www.gov.uk/government/publications/covid-19-deaths-of-people-with-learning-disabilities

https://www.nice.org.uk/news/article/nice-publishes-first-rapid-covid-19-guidelines

https://www.mencap.org.uk/press-release/mencap-responds-deeply-troubling-new-nice-covid19-guidance https://www.mencap.org.uk/press-release/mencap-responds-concerning-gp-letters-about-covidmedical-treatment

https://www.england.nhs.uk/covid/wp-content/uploads/sites/52/2020/04/C0166-LetterDNACPR.pdf

https://www.bbc.co.uk/news/uk-56139393

https://www.gov.uk/government/news/jcvi-advises-inviting-people-on-learning-disabilityregister-for-vaccine

https://www.mencap.org.uk/about-us/our-projects/all-move

32 Strategic report [infographics to be designedl Royal Mencap Society

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9 August 2021

Financial statements

Consolidated statement of Financial Activities for the year ended 31 March 2021 (incorporating the income and expenditure account)

Notes Unrestricted
funds		 Restricted
funds		 Total 2021
Funds		 Unrestricted
funds		 Restricted
funds		 Total 2020
Funds
Income from: £’000 £’000 £’000 £’000 £’000 £’000
Donations and
Legacies		 2,29 10,971 7,367 18,338 9,055 3,902 12,957
Charitable
activities		 3,29 185,783 6,329 192,112 174,562 5,190 179,752
Other trading
activities		 4 1,722 - 1,722 3,254 - 3,254
Investments 5 103 91 194 193 142 335
Property income 6 22,802 2,164 24,966 20,969 2,132 23,101
Gain on disposal of
fixed assets		 917 - 917 841 - 841
Total 222,298 15,951 238,249 208,874 11,366 220,240
Expenditure on:
Raisingfunds 7 6,004 114 6,118 6,394 292 6,686
Charitable
activities		 7 209,595 9,594 219,189 200,158 5,976 206,134
Total 215,599 9,708 225,307 206,552 6,268 212,820
Net gains/(losses)
on investments		 14 665 958 1,623 (236) (403) (639)
Net income/
(expenditure)		 7,364 7,201 14,565 2,086 4,695 6,781
Transfers between
funds		 23 1,091 (1,091) - 252 (252) -
Other recognised
gains/(losses)		 - - - - - -
Actuarial gains/
(losses) on defined
benefit pension
schemes		 24 (3,368) - (3,368) 7,581 - 7,581
Net movement in
funds		 5,087 6,110 11,197 9,919 4,443 14,362
Reconciliation of
funds
Total funds
brought forward		 63,991 32,828 96,819 54,072 28,385 82,457
Total funds
carried forward		 69,078 38,938 108,016 63,991 32,828 96,819

Royal Mencap Society

Consolidated balance sheet as at 31 March 2021

nsolidated balance sheet as at 31 March 2021
Notes 2021
£’000		 2020
£’000
Fixed assets
Intangible assets 12 184 301
Tangible assets 13 124,994 120,944
Investments 14 25,322 13,965
Total fixed assets 150,500 135,210
Current assets
Debtors 17 29,046 26,742
Stock 49 47
Cash at bank and in hand 21,250 15,850
Total current assets 50,345 42,639
Liabilities
Creditors: Amounts fallingwithin oneyear 18 (42,183) (23,442)
Net current assets or liabilities 8,162 19,197
Total assets less current liabilities 158,662 154,407
Creditors: Amounts fallingdue after more than oneyear 19 (42,815) (51,048)
Provisions for liabilities 21 (5,259) (5,199)
Net assets or liabilities excluding pension asset or liability 110,588 98,160
Defined benefitpension scheme liability 24 (2,572) (1,341)
Total net assets or liabilities 108,016 96,819
The funds of thegroup:
Restricted income funds 23 38,938 32,828
Unrestricted funds 56,079 58,800
Designated funds 15,571 6,532
Pension reserve (2,572) (1,341)
Total unrestricted funds 23 69,078 63,991
Totalgroup funds 108,016 96,819

These financial statements were approved and authorised for issue by the trustees on 28[th] July 2021 and signed on their behalf by:

Derek Lewis: Chair Kathryn Cearns: trustee

The notes on pages 68 to 108 form part of these financial statements.

Royal Mencap Society

Charity balance sheet as at 31 March 2021

harity balance sheet as at 31 March 2021
Notes 2021
£’000		 2020
£’000
Fixed assets
Intangible assets 12 184 298
Tangible assets 13 17,398 17,649
Investments 14 25,322 13,965
Total fixed assets 42,904 31,912
Current assets
Debtors 17 30,400 27,890
Cash at bank and in hand 8,289 7,096
Total current assets 38,689 34,986
Liabilities
Creditors: Amounts fallingwithin oneyear 18 (25,852) (18,044)
Net current assets or liabilities 12,837 16,942
Total assets less current liabilities 55,741 48,854
Creditors: Amounts fallingdue after more than oneyear 19 (674) (749)
Provisions for liabilities 21 (4,847) (4,839)
Net assets or liabilities excluding pension asset or liability 50,220 43,266
Defined benefitpension scheme liability 24 (2,572) (1,341)
Total net assets or liabilities 47,648 41,925
The funds of the charity:
Restricted income funds 23 14,137 10,017
Unrestricted funds 27,083 33,249
Designated funds
9,000
-
Pension reserve
(2,572)
(1,341)
Total unrestricted funds 23 33,511 31,908
Total charity funds 47,648 41,925

The charity has taken exemption from presenting its unconsolidated profit and loss account under section 408 of the Companies Act 2006. The net income of the charity in 2021 was £9.1m (2020: Net income £2.5m).

These financial statements were approved and authorised for issue by the trustees on by the trustees on 28[th] July 2021 and signed on their behalf by:

Derek Lewis: Chair

Kathryn Cearns: trustee

The notes on pages 68 to 108 form part of these financial statements.

Royal Mencap Society

Consolidated statement of cash flows for the year ended 31 March 2021

2021
£’000		 2020
£’000
Cash flows from operating activities
Net cashprovided by operating activities(see below) 17,493 9,524
Cash flows from investing activities
Dividends,interest and rents from investments 194 335
Proceeds from the sale ofproperty, plant and equipment 2,175 2,896
Purchase ofproperty,plant and equipment (7,678) (11,346)
Proceeds from the sale of investments 12,879 9,200
Purchase of investments (22,613) (8,146)
Shared investment contribution 124 (327)
Net cashprovided by/ (used in) investment activities (14,919) (7,388)
Cash flows from financing activities
Repayments of borrowing (1,174) (1,149)
Cash inflows from new borrowing 4,000 4,000
Net cashprovided by/ (used in) financing activities 2,826 2,851
Change in cash and cash equivalents in the reporting period 5,400 4,987
Cash and cash equivalents at the beginning of the reporting period 15,850 10,863
Cash and cash equivalents at the end of the reporting period 21,250 15,850

Reconciliation of net income / (expenditure) to net cash flow from operating activities

2021
£’000		 2020
£’000
Net income for the reporting period (as per the statement of
financial activities)		 14,565 6,781
Adjustments for:
Depreciation and amortisation charges 2,363 2,105
Loss/(gain)on investments (1,623) 639
Dividends,interest and rents from investments (194) (335)
Defined benefitpension expense 10 396
Loss/(profit)on the sale of fixed assets (917) (841)
Decrease/ (Increase)in stocks (2) 15
Decease/(Increase)in debtors (2,304) 3,027
Increase/(decrease)in creditors(excludingloans) 7,682 2,293
(Decrease)/Increase inprovisions 60 (2,412)
Defined benefitpension deficit(reduction) (2,147) (2,144)
Net cashprovided by operating activities 17,493 9,524

Royal Mencap Society

Analysis of cash and cash equivalents 2021
£’000		 2020
£’000
Cash at bank and in hand 12,233 9,859
Notice deposits(less than 3 months) 9,017 5,991
Overdraft facilities repayable on demand - -
Total cash and cash equivalents 21,250 15,850

1. Accounting policies

(a) Company information

Royal Mencap Society is a public benefit entity registered as charity in England and Wales and a company limited by guarantee. It was incorporated on 9 June 1955 (company number: 550457) and registered as a charity on 23 July 1964 (charity number: 222377). It is also registered with the Office of the Scottish Charity Regulator on 11 December 2009 (charity number: SC041079).

The company was established under a Memorandum of Association which established the objects and powers of the charitable company and is governed under its Articles of Association (last amended 15 October 2014).

In the event of the company being wound up members are required to contribute an amount not exceeding £1 each.

The registered office of Royal Mencap Society is: 123 Golden Lane, London EC1Y 0RT.

(b) Basis of preparation and going concern

The consolidated financial statements have been prepared under the historical cost convention in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Companies Act 2006 and the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) - effective 1 January 2015.

The financial statements have been prepared consolidating the results of the charity and its subsidiary Golden Lane Housing Limited, a charitable company of which the charity is the sole member (company number: 03597323). Both charities within the Mencap group are separately registered and governed by their own Memoranda and Articles of Association.

Additionally, the charity’s other trading subsidiaries as disclosed in the accounts are fully consolidated, as in all cases the charity is the sole member.

Mencap is well placed to manage the business risks we face. This position is supported by a sufficient level of liquid reserves to cover business continuity and development plans, a good relationship with our key funders and proven ability to retain and secure new services.

The Budget for financial year 21/22 was approved by the RMS Board in March 2021 and was prepared against a backdrop of continuing uncertainty caused by Covid, but with the benefit of the sleep-in case being resolved in favour of RMS. The latter was heard by the Supreme Court in February 2020, and we received a favourable verdict on March 19th, 2021.

Royal Mencap Society

With the sleep-in contingent liability now removed, RMS are in a position to invest behind the Big Plan, reducing reserves to target levels over the course of the next 2-3 years. As detailed in our reserves policy. We hold free reserves to provide cover for unexpected changes in income and expenditure, allowing us to continue activities whilst we adjust our cost base as required. We will continue to monitor the situation and manage our finances accordingly.

At the year-end RMS was holding marketable investments of £25.3m, in addition to £8.3m of operational cash.

Our planning processes, including financial projections, take into consideration the current economic climate and its potential impact on the various sources of income and planned expenditure. We acknowledge our pension fund obligations and have a clear strategy to manage the deficit, which includes a deficit reduction plan that is designed to get the scheme to self-sufficiency by 2028, subject to continued discussion and agreement with the pension scheme trustee board.

The trustees therefore have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future being at least twelve months from the date of approval of these financial statements. Accordingly, the financial statements continue to be prepared on the going concern basis.

(c) Critical accounting judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, which are described in this note, trustees are required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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

Significant areas of estimate and judgement include provisions, assumptions used to value the defined benefit pension scheme, and the remaining useful life of assets. Related accounting policies for these items are noted below.

The principle accounting policies adopted, judgements and key sources of estimation uncertainty in the presentation of the financial statements are as follows:

(d)Income

All income is accounted for when Mencap has entitlement, there is probability of receipt and the amount is measurable.

Charitable activities (see note 3)

Income in respect of contracts for the provision of services is recognised when Mencap is entitled based on services provided. Amounts received in advance of service provision are deferred until the relevant part of the contracted service is complete.

Royal Mencap Society

Legacies (see note 2)

Legacies are accounted for when notified, providing the amount can be reliably measured and that ultimate receipt is probable. Legacies which include a life interest held by another party are recognised on notification of probate.

Gifts in kind (see note 2)

Donated goods and services are included as income within the statement of financial activities (with an equivalent amount in expenditure) at their fair value, where Mencap is entitled to the donation, it is probable that it will be received, and the fair value can be measured reliably.

Assets given for use by Golden Lane Housing Limited have been recognised as incoming resources when they become receivable and included either in fixed assets when they are received or in other debtors if they have not yet been received. The basis for valuation is the market value at the time of purchase.

Property Income (see note 6)

Rental and Service charge income is recognised on an accruals basis and recognised when the property is available for let, net of voids. Golden Lane Housing operates a fixed service charge scheme. Where periodic expenditure is required this will be treated as deferred income and held on the Statement of Financial Position until the costs are incurred.

Investments (see note 14)

Listed investments are stated at market value at the balance sheet date. The SOFA includes the net gains and losses arising on revaluations and disposals throughout the year.

Grants (see note 3 and 6)

Grant income is recognised in the statement of financial activities when received or when the charity becomes entitled to receipt. Grants that have been received will be treated as deferred income where there are specific requirements in the terms of the grant that the income recognition is dependent on certain activities being completed in a future accounting period.

(e)Expenditure

i) Activity related expenditure (see note 7)

The charity’s cost of operating includes staff costs, rent and other related costs. Costs are allocated between raising funds, which includes key priority costs of raising funds, investment management costs and the trading costs of subsidiaries. Charitable activities includes key priority costs of reducing stigma and discrimination; social care; supporting friendships and relationships; improving health; early intervention; employment; governance. All costs are accounted for on an accruals basis.

ii) Basis of allocation of support costs (see note 7)

Support costs include management, finance, information technology, human resources, and some elements of fundraising. They are apportioned across the key priorities within charitable activities and raising funds based on use.

Governance costs other than those disclosed specifically in the notes to these accounts are included within support costs and allocated on the same basis.

Royal Mencap Society

iii) Pension costs (see note 24)

Mencap pension scheme (defined benefit)

The Mencap defined benefit scheme was closed to new entrants on 1 October 2001 and closed to future service benefit accrual with effect from 31 March 2009.

Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the scheme liabilities. The actuarial assumptions are reviewed every three years.

The valuation is updated at each balance sheet date and the resulting defined benefit asset or liability is shown separately after other net assets on the face of the balance sheet. This defined benefit asset or liability is also disclosed separately within unrestricted funds.

The amounts charged to the statement of financial activities are the current service costs, which are included within staff costs, and gains and losses on settlements and curtailments. Past service costs are recognised immediately if the benefits have vested. Defined actuarial gains and losses are recognised under other recognised gains and losses.

The defined benefit schemes are funded, with the assets of the scheme held separately from those of the group in separate trustee administered funds.

If members of the defined benefit pension schemes have not yet retired, their costs are recognised over the period leading to retirement. Further details of the nature of these costs are given in note 24: Pension scheme.

Other defined benefit schemes

Mencap also participates in a number of local government pension schemes in relation to a small number of staff who have transferred over to Mencap. Mencap participates in these schemes by way of admission agreements. Full provision has been made according to FRS 102 in the financial statements in relation to one of the schemes. However, as the liability is not material, disclosure has been limited so as not to distort or overstate the importance of this scheme.

Defined contribution scheme

The charity also contributes to a defined contribution scheme, which was opened on 1 April 2002. This is currently operated by AEGON (Formerly Blackrock). A workplace pension scheme is operated by NEST.

For the defined contribution scheme, the amount charged to the statement of financial activities in respect of pension costs and other post-retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

The cost of the charity's contributions to the defined contribution scheme is allocated between restricted and unrestricted funds in accordance with the functions of the individual employees to whom the contributions relate.

iv) Redundancy and termination costs

Employee benefits paid on redundancy or termination include accrued amounts where Mencap is demonstrably committed to make these payments but they had not yet been made at 31 March 2020. All accrued amounts are fully funded and expected to be settled within 12 months of the balance sheet date.

Royal Mencap Society

(f) Tangible and intangible fixed assets

Tangible fixed assets (see note 13)

Tangible fixed assets costing more than £2,000 are capitalised; all tangible assets costing less than this amount are expensed immediately.

Depreciation is provided so as to write off the cost of the assets (net of any shared investment contributions where applicable) in equal instalments over the estimated useful lives of the assets.

The depreciation rates used to achieve this, are as follows

Freehold and leasehold land and buildings: 1% - 10% per annum Fixtures,

fittings and equipment: 10% - 33% per annum

Motor vehicles: 25% per annum

Assets under construction is a category holding assets pending completion and transfer into the relevant fixed asset category. These assets are capitalised at cost and not subject to depreciation or impairment unless extraordinary circumstances have occurred which would require provision to be made.

Office properties are held at cost.

Residential property is held at cost, less contributions from individuals and their families where applicable. Shared investment contributions are accounted in this way where individuals or families have a right to an equity share of the property on disposal, including any resulting profit or loss.

All other tangible fixed assets are subject to review for impairment/accelerated depreciation where there is an indication of a reduction in their carrying value. Any impairment/accelerated depreciation is recognised in the statement of financial activities in the year in which it occurs.

Intangible fixed assets (see note 12)

Intangible fixed assets costing more than £2,000 are capitalised; all intangible assets costing less than this amount are expensed immediately.

Amortisation is provided so as to write off the cost of the assets in equal instalments over the estimated useful lives of the assets. The amortisation rates used to achieve this are as follows:

Component accounting - Golden Lane

Housing

In accordance with FRS 102, Golden Lane Housing Limited recognises and depreciates tangible and intangible fixed assets using component accounting. As a result, it uses a separate and more detailed set of depreciation rates as follows:

Royal Mencap Society

Finance leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the leased asset to the group. All other leases are classified as operating leases.

Assets held under finance leases are recognised initially at the fair value of the leased asset (or, if lower, the present value of minimum lease payments) at the inception of the lease.

The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease obligation using the effective interest method so as to achieve a constant rate of interest on the remaining balance of the liability.

Operating leases (see note 11)

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are spread on a straight-line basis over the lease term which runs to the date of the first relevant break clause.

(g)Current assets and liabilities

Stock

Stock, which comprises stationery and goods for resale, is stated at the lower of cost and net realisable value. Donated stock is carried at nil value as it is considered impractical to obtain a reliable valuation. The value of goods is instead recognised at their retail price when sold.

Provisions – general (see note 21)

Provision is made for present obligations where it is probable settlement will be required in the future and the amount can be estimated reliably, but the amount or timing is not certain. Amounts provided for, other than for Mencap Visiting Service, are expected to be settled within 12 months and are therefore recognised at the estimated settlement amount.

Provisions –Mencap Visiting Service

Royal Mencap Society

Provision is made to cover the estimated all future costs of providing the Mencap Visiting Service over its remaining life. In estimating the provision, account is taken of the estimated number of years that the service will be provided to individuals as well as estimated future inflation rates and rates of return on investments associated with the scheme. The discount rates used in calculating this liability are consistent with rates used in determining our defined benefit pension liability. Investments held by Mencap to cover the liability of providing the Mencap Visiting Service are held in trust for this purpose.

Deferred income

Grants that have been received will be treated as deferred income where there is a specific requirement in the terms of the grant that the income recognition is dependent on certain activities being completed in a future accounting period(s).

(h)Basic financial instruments (see note 20)

Financial assets (including cash and debtors) and financial liabilities are recognised when the group becomes a party to the contractual provisions of the instrument. Additionally, all financial assets and liabilities are classified according to the substance of the contractual arrangements entered into.

Financial assets and liabilities are initially measured at transaction price (including transaction costs) and are subsequently remeasured where applicable at amortised cost, except for investments which are measured at fair value with gains and losses recognised in the statement of financial activities.

Financial assets include cash, trade debtors, intercompany debtors, other debtors and accrued

income. Financial assets held at fair value include investments.

Financial liabilities include trade creditors, other creditors, finance leases, bonds, loans and accruals.

(i) Funds (see note23)

The charitable companies within the group maintain various types of fund as follows:

Royal Mencap Society

2. Donations and legacies

Donations and legacies
Unrestricted
funds		 Restricted
funds		 Total 2021 Total
2020
£’000 £’000 £’000 £’000
Donations 2,491 281 2,772 3,475
Legacies 7,288 639 7,927 6,828
Trust Fund 394 1,367 1,761 823
Community/ BigLotteryFund 145 207 352 246
Organisations raisingfunds 604 2,969 3,573 325
Gifts in Kind 49 1,904 1,953 1,260
Total donations and legacies 10,971 7,367 18,338 12,957

3. Income from charitable activities

Income from charitable activities
**Group2021 ** Group2020
£'000 £'000
Personal support 182,723 172,046
Other 9,389 7,706
Total income from charitable activities 192,112 179,752

Other income from charitable activities primarily consists of receipts for a range services: the provision of support, employment, youth services. Some of these are separately named in note 29(e).Included in income from charitable activities is £4.4m received from the Coronavirus Job Retention Scheme during the year (2020: Nil).

4. Income from trading activities

Group
2021		 Group
2020
£'000 £'000
DBS checks 267 352
Retail trading element 912 2,425
Trust management services 543 477
1,722 3,254

5. Investment income

Investment income
Group
2021		 Group
2020
£'000 £'000
Income from listed investments 184 303
Bank interest 10 32
194 335

Royal Mencap Society

6. Property Income

Property Income
Group
2021		 Group
2020
£'000 £'000
Rental income 22,809 20,575
Governmentgrant income 2,157 2,340
Consultancyincome - 186
24,966 23,101

Government grants included within property income are all made to Golden Lane Housing for works to adapt existing properties and to purchase new properties. There are no remaining unfulfilled conditions at 31 March 2021. All grants are repayable if Golden Lane Housing ceases business activity or the related scheme comes to an end.

7a. Total expenditure

Staff costs Depreciation Other direct
costs		 Reallocated
support
costs		 Total
2021		 Total
2020
£’000 £’000 £’000 £’000 £’000 £’000
Costs of raising funds 1,208 - 1,234 243 2,685 3,134
Investment management
costs		 - - 63 - 63 67
Trading costs of subsidiaries 1,695 305 1,370 - 3,370 3,485
2,903 305 2,667 243 6,118 6,686
Charitable activities:
Reducing stigma and
discrimination		 706 - 230 92 1,028 1,252
Social Care 156,800 1,320 31,778 18,862 208,760 194,562
Supporting friendships and
relationships		 974 - 875 184 2,033 1,509
Improving health 346 49 44 44 483 404
Early intervention 551 81 211 84 927 903
Employment 4,283 3 826 507 5,619 7,037
Defined benefit pension
scheme finance costs		 - - 30 - 30 230
Governance 164 - 117 28 309 237
163,824 1,453 34,111 19,801 219,189 206,134
Support costs 12,891 605 6,548 (20,044) - -
179,618 2,363 43,326 - 225,307 212,820

Royal Mencap Society

7b. Support costs allocated

Management Finance
and IT		 HR Fundraising Other Total
2021

 Total
2020
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Costs of raising funds 55 132 32 10 14 243 295
Reducing stigma and
discrimination		 21 51 12 4 4 92 116
Social care 4,285 10,276 2,517 767 1,017 18,862 18,227
Supporting friendships
and relationships		 42 100 25 7 10 184 143
Improving health 10 24 6 2 2 44 38
Early intervention 19 46 11 3 5 84 85
Employment 115 277 68 21 26 507 660
Governance 6 15 4 1 2 28 22
4,553 10,921 2,675 815 1,080 **20,044 ** 19,586

8. Information regarding employees

The estimated average full-time equivalent number of employees by function was:

2021 2020
Employees
(FTE)		 Employees
(FTE)
Reducingstigma and discrimination 25 27
Social care 4,973 4,958
Supportingfriendships and relationships 30 32
Improvinghealth 95 90
Earlyintervention 20 18
Trading 63 56
Raisingfunds 26 30
Support costs 261 261
Governance 17 14
Employment 149 201
5,659 5,687

Royal Mencap Society

The estimated average number of employees by function was:

2021 2020
Employees Employees
Reducingstigma and discrimination 25 27
Social care 7,722 7,864
Supportingfriendships and relationships 30 32
Improvinghealth 95 90
Earlyintervention 20 18
Trading 63 56
Raisingfunds 26 30
Support costs 261 261
Governance 17 14
Employment 149 201
8,408 8,593

Royal Mencap Society

Employee costs in the year:

2021 2020
£'000 £'000
Wages and salaries 163,159 154,357
Social security costs 12,873 12,265
Pension costs 3,586 3,474
Total staff costs as per note 7a 179,618 170,096
Benefits in kind 120 120
Total employee costs 179,738 170,216

Included in the above are amounts paid to temporary staff during the year totalling £4.9m (2020: £6.3m).

At the end of the financial year the Trustees agreed to make a one-off gift of £300 to each support worker who worked in Mencap’s social care services for a considerable period during the pandemic. The sum of £2.3m for this was accrued at the year end

Redundancy and termination payments:

Expenditure totalling £248,988 (2020: £417,205) was recognised in the year in respect of redundancy and termination payments for employees.

Number of employees with salaries over £60,000

Total Total
2021 2020
£60,000 - £69,999 25 20
£70,000 - £79,999 7 11
£80,000 - £89,999 7 3
£90,000 - £99,999 3 5
£100,000 - £109,999 3 3
£110,000 - £119,999 2 -
£140,000 - £149,999 1 2
£150,000 - £159,999 1 -
£170,000 - £179,999 1 1

Of the 50 employees above, 46 are members of the defined contribution scheme. Payments made to the defined contribution scheme on behalf of these individuals amounted to £165,323 (2020: £151,623) for the year.

Trustees and senior management

The senior management of Mencap consists of the executive team. The total compensation received by members of the executive team during the year amounted to £903,677 (2020: £1,095,321). More details of executive remuneration can be found in the Trustees' report. Members of the board of trustees are not remunerated.

Royal Mencap Society

9. Expenses of the trustees

During the year, 1 trustee (2020: 12) was reimbursed for out of pocket expenses in relation to accommodation, travel and subsistence, or such expenses paid on their behalf. The total amount of these expenses was £274 (2020: £12,122). Members of the board of trustees are not remunerated.

10. Net income/(expenditure)

10. Net income/(expenditure)
**Group2021 ** Group2020
£'000 £'000
Net incoming/(outgoing) resources for the year are stated after
charging:
Depreciation and amortisation
Own assets 2,321 2,016
Leased assets 42 91
Rentals under operating leases
Land and buildings 7,751 6,833
Interest payable
Interest element of finance leases 3 6
Bank interest 2,180 2,209
Defined benefit pension expenditure movement for the year 10 396
Auditors remuneration
Audit of the group 76 72
Other non-audit work:
•
- Tax		 21 18

Included in the audit fee charged for the group was £63k (2020: £60k) for the audit of the parent charity.

Royal Mencap Society

11. Operating lease commitments

At 31 March 2021 the group has the following annual commitments under noncancellable operating leases:

Landand
buildings		 Landand
buildings
2021 2020
£'000 £'000
Within oneyear 7,816 7,751
Within two to five years 12,202 13,136
After five years 15,793 15,479
35,811 36,366

Royal Mencap Society

12. Intangible fixed assets

(a) Group

(a) Group
Software Total
£'000 £'000
Cost or valuation
Balance at 1 April 2020 2,985 2,985
Additions - -
Transfers between classes - -
Balance at 31 March 2021 2,985 2,985
Accumulated depreciation
Balance at 1 April 2020 2,684 2,684
Charge for the year 117 117
Balance at 31 March 2021 2,801 2,801
Net book value at 31 March 2021 184 184
Net book value at 31 March 2020 301 301
(b) Charity
Software Total
£'000 £'000
Cost or valuation
Balance at 1 April 2020 2,732 2,732
Additions - -
Transfers between classes - -
Balance at 31 March 2021 2,732 2,732
Accumulated depreciation
Balance at 1 April 2020 2,434 2,434
Charge for theyear 114 114
Balance at 31 March 2021 2,548 2,548
Net book value at 31 March 2021 184 184
Net book value at 31 March 2020 298 298

Royal Mencap Society

13. Tangible fixed assets

(a) Group

(a) Group
Freehold
land and
buildings		 Assetsunder
construction		 Leasehold
land
and
buildings		 Fixtures,
fittings
and
equipment		 Motor
vehicles		 Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
Balance at 1 April 2020 122,033 4,676 7,121 6,239 1,627 141,696
Additions 180 6,551 13 934 - 7,678
Disposals (1,094) - (272) (200) (158) (1,724)
Transfers between
classes		 5,140 (7,768) 2,614 14 - -
Balance at 31 March
2021		 126,259 3,459 9,476 6,987 **1,469 ** 147,650
Accumulated
depreciation
Balance at 1 April 2020 10,916 - 1,190 4,056 1,558 17,720
Charge for the year 1,084 - 357 763 42 2,246
Disposals (120) - (52) (136) (158) (466)
Balance at 31 March
2021		 11,880 - 1,495 4,683 1,442 19,500
Net book value at 31
March 2021		 114,379 3,459 7,981 2,304 27 128,150
Less shared investment
contribution		 (2,006) - (1,150) - - (3,156)
112,373 3,459 6,831 2,304 **27 ** 124,994
Net book value at 31
March 2020
111,117
4,676		 5,931 2,183 69 123,976
Less shared investment
contribution
(2,156) - (876) - - (3,032)
108,961 4,676 5,055 2,183 69 120,944

(b) Charity

(b) Charity
Freehold
land and
buildings		 Assetsunder
construction		 Leasehold
land
and
buildings		 Fixtures,
fittings
and
equipment		 Motor
vehicles		 Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
Balance at 1 April 2020 17,087 14 24 6,079 1,627 24,831
Additions - 194 - 865 - 1,059
Disposals (225) - - (200) (158) (583)
Transfer between classes - (14) - 14 - -
Balance at 31 March 2021 16,862 194 24 6,758 1,469 25,307
Accumulated depreciation
Balance at 1 April 2020 1,597 - 24 4,003 1,558 7,182
Charge for the year 256 - - 732 42 1,030
Disposals (9) - - (136) (158) (303)
Balance at 31 March 2021 1,844 - 24 4,599 1,442 7,909
Net book value at 31
March 2021		 15,018 194 - 2,159 27 17,398
Net book value at 31
March 2020		 15,490 14 - 2,076 69 17,649

14. Fixed asset investments

14. Fixed asset investments
**Group and Charity ** Group and Charity
2021 2020
£'000 £'000
Equities and multi-asset funds
Market value at 1 April 2020 5,653 6,296
Acquisitions 2,930 -
Disposals (3,585) (23)
Net investment (losses)/gains 1,544 (620)
Market value at 31 March 2021 6,542 5,653
Bonds, cash and alternatives
Market value at 1 April 2020 8,312 9,361
Acquisitions 19,683 8,146
Disposals (9,294) (9,176)
Net investment (losses)/gains 79 (19)
Market value at 31 March 2021 18,780 8,312
Total value at 31 March 2021 25,322 13,965
Cost at 31 March 2021 24,501 14,556

Included in market value of investments is an amount for the Mencap Visitors scheme of £5.9m (2020: £5.3m). This amount is held in a separate investment fund for the purpose of funding the scheme in future years. The liability of the scheme is shown in note 21.

Equities and
multi-asset
funds		 Bonds,cash
and
alternatives		 Total
2021 2021 2021
£'000 £'000 £'000
Group and Charity:
Equities 5,463 - 5,463
Multi-asset funds 1,079 - 1,079
Bonds - 2,403 2,403
Alternatives - 1,978 1,978
Cash - 14,399 14,399
Market value at 31 March 2021 6,542 18,780 25,322
Market value at 31 March 2020 5,653 8,312 13,965

15. Subsidiaries

The charity owns 100% of the issued capital of the following companies. Golden Lane Housing Limited is also a registered charity in its own right:

Subsidiary undertaking Company
registration
number		 Charity
registration
number		 Principal activity Net assets/
(liabilities)
£'000
Blue Sky Housing
Limited		 4412276 - Property development -
Golden Lane Housing
Limited		 3597323 1071097 Property management and
development		 60,806
Mencap Limited 889191 - Trading activities -
Mencap Promotions
Limited		 1016345 - Promotional and other special
events		 -
Mencap Trust Company
Limited		 1233201 - Discretionary trust
management		 114

All the above are registered in England and Wales. The governance of Golden Lane Housing, of which Royal Mencap Society is the sole member, is maintained by their board of trustees, who act to deliver the objectives of the charity.

The above undertakings form part of the group consolidation. Mencap has no automatic right to the gross assets or reserves of Golden Lane Housing Limited.

Blue Sky Housing Limited and Mencap Promotions Limited remained dormant throughout the year.

16. Net income of group companies including consolidation entries

Blue Sky
Housing
Limited		 Mencap
Trust
Company
Limited		 Mencap
Limited		 Mencap
Promotions		 Total
2021		 Total 2020
£'000 £'000 £'000 £'000 £'000 £'000
Trading subsidiaries
Turnover - 543 299 - 842 982
Cost of sales - - (212) - (212) (345)
Gross profit/(loss) - 543 87 - 630 637
Administration costs (504) (61) (565) (567)
Net profit/(loss) - 39 26 - 65 70
Paid to Royal Mencap Society
undergift aid		 - - (26) - (26) (75)
Provision for tax - - - - - -
Retained in subsidiaries - 39 - - 39 (5)

The costs of the above subsidiaries are included in the consolidated statement of financial activities under expenditure on raising funds, less any transactions between companies with the Mencap group.

Royal
Mencap
Society		 Golden
Lane
Housing		 Total 2021 Total 2020
£'000 £'000 £'000 £'000
Charitable companies:
Incoming resources 212,279 25,504 237,783 219,210
Resources expended (189,569) (15,469) (205,038) (194,496)
Income/(expenditure) before
administration costs		 22,710 10,035 32,745 24,714
Administration costs (15,215) (4,631) (19,846) (17,337)
7,495 5,404 12,899 7,377
Net gains/(losses) on investments 1,623 - 1,623 (639)
Net income/(expenditure) 9,118 5,404 14,522 6,738

17. Debtors

17. Debtors
Group Group Charity Charity
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Trade debtors 13,729 15,047 12,843 14,285
Amount due from group undertakings - - 3,472 3,479
Other debtors 792 870 752 805
Prepayments 1,672 1,836 1,041 941
Accrued income 12,853 8,989 12,292 8,380
29,046 26,742 30,400 27,890

Included in the net amounts due from group undertakings is a loan from the charity to Golden Lane Housing Limited for £2.42m (2020: £2.78m) of which £0.32m is due within one year. The loan is to be repaid in full over a period of 25 years from initial drawdown; capital paid quarterly, interest paid monthly and charged at an interest rate of 0.5% below Bank of England base rate.

18. Creditors: amounts falling due within one year

18. Creditors: amounts falling due within one year
Group Group Charity Charity
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Obligations under finance leases 26 38 26 38
Trade creditors 5,190 2,965 4,725 1,830
Taxation and social security costs 2,915 2,549 2,915 2,549
Other creditors 3,439 1,880 3,436 1,880
Accruals 9,418 6,081 7,619 4,721
Deferred income 8,977 8,755 7,071 6,966
Current portion of long term loans 12,218 1,174 60 60
42,183 23,442 25,852 18,044

Deferred income movement

ferred income movement
Group Charity
£'000 £'000
Balance at 1 April 2020 8,755 6,966
Amount released in the year (8,755) (6,966)
Amount deferred in the year 8,977 7,071
Balance at 31 March 2021 8,977 7,071

Grants that have been received are treated as deferred income where there is a specific requirement in the terms of the grant that the income recognition is dependent on certain activities being completed in a future accounting period(s).

At 31 March 2021, the charity holds £4,234,846 (2020: £2,147,132) on behalf of people we support. This balance has not been included within these financial statements.

19. Creditors: amounts falling due after more than one year

Group Group Charity Charity
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Obligations under finance leases, two to five years 14 29 14 29
Debenture loan 23,000 30,000 - -
Bank loan 19,801 21,019 660 720
42,815 51,048 674 749

Mencap

In 2007, Mencap obtained a loan for £1.5m, repayable in equal instalments over 25 years, at an interest rate of LIBOR plus 0.95%. As at 31 March 2021, the value of the loan stood at £0.72m. The loan agreement is secured by an unlimited guarantee between Royal Mencap Society, Mencap Limited, Mencap Promotions Limited and Mencap Trust Company Limited. It is further secured by a first legal charge over our property in Peterborough.

Golden Lane Housing

During 2014 the company issued through the intermediary of Retail Charity Bond a new bond totalling £11m paying a yield of 4.375%. The bond issue was fully subscribed and the full £11m was duly received, the purpose being to purchase properties to rent to people with a learning disability. The funds have been fully utilised in this purpose. The bond is repayable on 30 September 2021.

In the year ended 31 March 2018, the company signed an £18m Bond facility with RCB (paying a yield of 3.9% for 10 years) of which £10m were issued to refinance the £10M 2013 Bond and £8m were retained bonds. In 2019 £4M from the 2017 retained bonds were issued and the final £4m were issued in January 2021

A £5m loan is held with RBS. This matures in 2027 and interest is payable at 2.5%.

Loans

In August 2014 two loans held with Nationwide were refinanced, leaving Golden Lane Housing with a fixed term loan of £452k secured on freehold land and buildings. The interest rate is fixed until June 2025.

The remaining loans are provided by Triodos and are secured on freehold land and buildings. £19.85m of the total is subject to fixed interest rates at 31 March 2021 with the remaining balance subject to variable interest rates.

Loan End Date
Balance in
£m		 Interest
Rate(%)		 Fixed/
Variable
Triodos LOAN 4 Oct 2031
0.5		 0.850% Variable
Triodos LOAN 26 June 2025
0.2		 0.850% Variable
Triodos LOAN 17 May 2037
2.3		 3.500% Variable
Triodos LOAN 30 June 2036
5.7		 3.500% Variable
Triodos LOAN 4 Oct 2031
2.6		 3.340% Fixed
Triodos LOAN 26 July 2032
1.7		 3.340% Fixed
Triodos LOAN 17 May 2037
1.2		 5.240% Fixed
Triodos LOAN 17 May 2037
5.7		 5.410% Fixed

The group loans are repayable as follows:

2021 2020
£'000 £'000
Under 1 year 12,218 1,174
Between 1-2 years 1,266 12,218
Between 2-5 years 4,010 3,948
Over 5 years 37,525 34,852
55,019 52,192

20. Financial Instruments

Group Group Charity Charity
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Financial assets measured at amortised cost (a) 48,624 40,756 37,648 34,045
Financial assets measured at fair value (b) 25,322 13,965 25,322 13,965
Financial liabilities measured at amortised cost (c) (73,106) (63,186) (16,540) (9,278)

The group's income, expense, gains and losses in respect of financial instruments are summarised below:

**Income ** **Expense ** Gains/
(losses)		 Income Expense
(		 Gains/
losses)
2021 2021 2021 2020 2020 2020
£'000 £'000 £'000 £'000 £'000 £'000
Financial assets measured at
amortised cost		 10 - - 32 - -
Financial assets measured at fair
value		 184 - (1,623) 303 - (639)
Financial liabilities measured at
amortised cost		 - (2,183) - - (2,214) -

21. Provision for liabilities and charges

(a) Group

(a) Group
Mencap
Visiting
Service		 Dilapidations Employee
benefits		 Other Total
£'000 £'000 £'000 £'000 £'000
Balance at 31 March 2020 2,627 1,562 726 284 5,199
Amount utilised in the year (287) - (726) (25) (1,038)
Amount released in the year (206) (120) - (213) (539)
Amount provided in the year - 112 1,403 122 1,637
Balance at 31 March 2021 2,134 1,554 1,403 168 5,259

(b) Charity

(b) Charity
Mencap
Visiting
Service		 Dilapidations Employee
benefits		 Other Total
£'000 £'000 £'000 £'000 £'000
Balance at 31 March 2020 2,627 1,253 726 233 4,839
Amount utilised in the year (287) - (726) (25) (1,038)
Amount released in the year (206) (78) - (212) (496)
Amount provided in the year - 17 1,403 122 1,542
Balance at 31 March 2021 2,134 1,192 1,403 118 4,847

The provision for the Mencap Visiting Service is the accumulated costs of providing the visiting service for all of its beneficiaries for the remaining expected need of the service. The costs charged against this provision represent the annual costs of running the service which will run for the length of the life of the beneficiaries. This scheme is closed to new members'.

22. Analysis of assets and liabilities between funds

Unrestricted
funds		 Restricted
funds		 Total 2021 Unrestricted
funds		 Restricted
funds		 Total 2020
Group £'000 £'000 £'000 £'000 £'000 £'000
Fixed assets 116,495 34,005 150,500 103,697 31,513 135,210
Current assets 42,189 8,156 50,345 38,336 4,303 42,639
Liabilities (89,606) (3,223) (92,829) (78,042) (2,988) (81,030)
Total 69,078 38,938 108,016 63,991 32,828 96,819

23. Group funds

Balance 1
April
2019		 Incoming
resources		 Outgoing
resources		 Transfers Gains
and
losses		 Balance at
31 March
2020
£'000 £'000 £'000 £'000 £'000 £'000
Restricted
Homes 262 118 (56) 7 - 331
Learning and Development
restricted training		 1 - (6) 5 - -
Mencap Visiting Service 451 189 1,944 - (403) 2,181
NewBe project 3,518 - (85) - - 3,433
Northern Ireland Housing
Executive - SupportingPeople		 - 690 (672) 10 - 28
Research Fund 19 - - (19) - -
Rothenberg Fellowship 110 - - (69) - 41
Rothenberg Memorial Trust 28 - - (28) - -
Service provision -
Communities & Programmes		 904 807 (942) 55 - 824
Service provision - Lifestyles &
Work		 272 3,291 (2,456) 5 - 1,112
Service provision - Personal
Support		 393 1,747 (1,737) (205) - 198
Service provision - Strategy &
Influence		 350 913 (926) 32 - 369
Service provision - other 1,290 1,550 (1,311) (56) - 1,473
Service provision - Golden
Lane Housing		 20,719 2,061 - 31 - 22,811
Young Ambassadors 48 - (21) - - 27
Special contingency 20 - - (20) - -
28,385 11,366 (6,268) (252) (403) 32,828
Unrestricted
General 58,989 208,548 (206,108) (2,393) (236) 58,800
Designated reserves:
- Seed capital 75 - - - - 75
- Non repayable grants 5,344 - - (83) - 5,261
- Tenants support fund 296 - - 584 - 880
- House to Home funds 38 278 - - - 316
Pension deficit (10,670) - (444) 2,144 7,629 (1,341)
54,072 208,826 (206,552) 252 7,393 63,991
Total funds 82,457 220,192 (212,820) - 6,990 96,819
Balance 1
April
2020		 Incoming
resources		 Outgoing
resources		 Transfers Gains
and
losses		 Balance at
31 March
2021
£'000 £'000 £'000 £'000 £'000 £'000
Restricted
Homes 331 14 (15) 33 - 363
Mencap Visiting Service 2,181 119 181 - 958 3,439
NewBe project 3,433 - (81) (5) - 3,347
Northern Ireland Housing
Executive - SupportingPeople		 28 663 (671) 19 - 39
Rothenberg Fellowship 41 - - (8) - 33
Service provision -
Communities & Programmes		 824 3,116 (814) 29 - 3,155
Service provision - Lifestyles &
Work		 1,112 3,092 (2,211) (628) - 1,365
Service provision - Personal
Support		 198 3,803 (3,868) 41 - 174
Service provision - Strategy &
Influence		 369 716 (773) 36 - 348
Service provision - other 1,473 2,363 (1,456) (506) - 1,874
Service provision - Golden
Lane Housing		 22,811 2,065 - (75) - 24,801
Young Ambassadors 27 - - (27) - -
32,828 15,951 (9,708) (1,091) 958 38,938
Unrestricted
General 58,800 222,206 (215,589) (10,003) 665 56,079
Designated reserves:
- Strategic Investment - - - 9,000 - 9,000
- Seed capital 75 - - - - 75
- Non repayable grants 5,261 74 - (53) - 5,282
- Tenants support fund 880 - - - - 880
- House to Home funds 316 18 - - - 334
Pension deficit (1,341) - (10) 2,147 (3,368) (2,572)
63,991 222,298 (215,599) **1,091 ** (2,703) 69,078
Total funds 96,819 238,249 (225,307) **- ** (1,745) 108,016

Restricted funds

Restricted funds include the following unexpended balances of donations and grants held in trust to be applied for specific purposes. Mencap holds sufficient resources in an appropriate form to enable each fund to be applied in accordance with its restrictions:

Designated funds accounts adjustment to include new designated funds

£9m unrestricted funds have been specifically designated by Mencap, with £4m due to be spent in the next year. The remaining £5m to be spent over the next 5 years.

Unrestricted funds have been specifically designated by Golden Lane Housing for the following purposes:

Transfers

In addition to the transfers related to restricted and designated funds detailed above, £2,100,000 was transferred from general unrestricted reserves to the pension deficit during the year. This corresponds with the actual cash payments made by the group to reduce the pension deficit.

24. Pension Scheme

Mencap operates a number of pension schemes for the benefit of its employees. At 31 March 2009, Mencap's defined benefit scheme was closed to future accruals. This means that Mencap will fund the benefits that staff have earned to that date but does not offer the same benefit moving forward due to the inherent risk involved in running this type of scheme.

Staff are, however, able to save for their retirement through a defined contribution scheme to which Mencap contributes. All contributions are expensed in the year that they are made.

In addition to the above, Mencap participates in the Nottinghamshire County Council Pension Fund in respect of a small number of staff who have transferred over to Mencap. Mencap participates in this scheme by way of an admission agreement. In relation to this scheme Mencap currently has 19 active employees. Full provision has been made in the financial statements for this scheme. However, as the liability is not material, detailed disclosure has been limited so as not to distort or overstate the importance of this scheme within Mencap's overall finances.

At 31 March 2016, Mencap was also participating in the Staffordshire County pension fund in respect of a single active member of staff. This employee has now left Mencap, but a management estimate of the scheme liability is included pending the final liability being settled.

Mencap pension scheme

This scheme is valued annually for the purposes of the annual report and accounts. This valuation, which is carried out under specific accounting rules and detailed in full below, is made so that Mencap can account for the pension liability on its balance sheet.

The Trustees of the pension scheme undertake their own formal valuation once every three years. This valuation provides the basis for agreeing the amounts that Mencap will pay each year to fund the scheme. The last valuation for this purpose was undertaken in March 2020 and Mencap agreed to continue with a schedule of contributions to settle the pension deficit over a period of 14 years.

From the year ended March 2016 and going forward Mencap agreed to make the following cash payments to the scheme:

For the period 1 April 2015 to 31 March 2016 £ 4 million

For the periods 1 April 2016 to 31 March 2028 £ 2.1m per annum

In 2021 the following amendment was made:

For the periods 1 April 2021 to 31 March 2028 £1.8m per annum

At the end of March 2021, in the annual Scheme valuation, the total scheme liabilities were valued at £149.7 million and the assets at £152.1 million. The net surplus is therefore £2.4 million. However, the triennial valuation still shows a sizeable deficit. The annual accounts will typically show a stronger

position than the triennial valuation. This is because the accounting standards require that a fair view of the position (broadly, neither overstating, nor understating the funding level). Whereas triennial valuations, which are used to determine contributions to the Plan, are overseen by the Pensions Regulator which requires a prudent view of the position (i.e. understating the funding level) to ensure schemes are not underfunded This surplus in the annual valuation cannot be withdrawn from the Scheme until the end of the pension, therefore the valuation in the Balance Sheet is recorded at a no-surplus, no-deficit position. The valuation at 31/3/20 was a net surplus of £5.0m. Again, it was recorded as a no surplus no deficit position

The main reasons for the change are as follows:

The following assumptions have been used to place a value on the retirement benefit obligations of the charity:

Financial Assumptions

ancial Assumptions
31 March 2021 31 March 2020
% per annum % per annum
Retail price inflation (% p.a.) 3.30% 2.70%
Consumer price inflation (% p.a.) 2.55% 1.80%
Discount rate 2.00% 2.30%

The Demographic assumptions used are:

Longevity assumptions as at 31 March 2021

Male and Female
Base table 2019 VITA tables
Future improvements CMI 2019 core model with a long-term rate of improvement of 1.5%, A
parameter of 0.25% and a smoothing parameter of Sκ =7.0

Life expectancies as at:

e expectancies as at:
31 March 2021 31 March 2020
Males (M) or Females (F) M F M F
Average future life expectancy (in years) for a pensioner aged
65 at 31 March 2020		 21.8 24.4 22.0 25.1
Average future life expectancy (in years) at age 65 for a non-
pensioner aged 45 at 31 March 2020		 23.0 25.7 24.0 26.8

Based on these assumptions the balance sheet position is as follows:

Assets

sets
Fund value Fund value
31 March 2021 31 March 2020
£'000 £'000
Liability driven investment 39,259 23,238
Investment grade credit (corporate bonds) 83,692 86,522
Diversified growth fund - 9,927
Infrastructure 13,676 15,040
Property 9,665 -
Insurance contracts 2,836 2,670
Cash and cash equivalents 2,980 4,144
Total value of assets 152,108 141,541
Actuarial (value) of liabilities (149,690) (136,493)
Surplus/(deficit) of funded Plan liabilities 2,418 5,048
Irrecoverable (surplus) (2,418) (5,048)
Surplus/(deficit) recognised in balance sheet - -
Net pension asset/(liability) - -

Reconciliation of Plan benefit obligation

conciliation of Plan benefit obligation
**31 March 2021 ** 31 March 2020
£'000 £'000
Opening defined benefit obligation 136,493 147,735
Interest cost 3,088 3,494
Actuarial (gains)/losses 14,386 (10,399)
Past service cost 11 -
Benefits (paid) (4,288) (4,337)
Closing defined benefit obligation 149,690 136,493

Reconciliation of fair value of Plan assets

conciliation of fair value of Plan assets
**31 March 2021 ** 31 March 2020
£'000 £'000
Opening fair value of Plan assets 141,541 138,828
Interest income 3,228 3,305
Contributions by Royal Mencap Society 2,100 2,100
Actual return on assets excluding amounts included in net interest 9,527 1,645
Benefits (paid) (4,288) (4,337)
Closing fair value of Plan assets 152,108 141,541

Analysis of amount charged to operating profit

alysis of amount charged to operating profit
**31 March 2021 ** 31 March 2020
£'000 £'000
Past service (cost) (11) -
Total operating charge (11) -

Analysis of amount credited to other finance income

alysis of amount credited to other finance income
**31 March 2021 ** 31 March 2020
£'000 £'000
Interest income on Plan assets 3,228 3,305
(Interest) on Plan liabilities (3,088) (3,494)
Net interest on defined benefit liability 140 (189)
Total amount charged to profit & loss (total operating charge
less net interest)		 129 (189)

Analysis of amount recognised in Other Comprehensive Income (OCI)

**31 March 2021 ** 31 March 2020
£'000 £'000
Actual return on assets excluding amounts included in net
interest		 9,527 1,645
Actuarial gains/(losses) on Plan obligations (14,386) 10,399
Remeasurement gain/(loss) in Plan (4,859) 12,044
Decrease/(increase) in irrecoverable surplus from membership fall
and other factors		 2,630 (5,048)
Remeasurement gain/(loss) recognised in OCI (2,229) 6,996

Sensitivity analysis

Change in assumptions compared with 31 March 2021 actuarial assumptions:

Actuarial value of liabilities on
31 March 2021
£'000
Base case 149,690
-0.5% decrease in discount rate 163,536
1-year increase in member life expectation 155,678
+0.5% change in inflation 158,770

Local authority pension schemes

Nottinghamshire County Council Pension Scheme

The Nottinghamshire County Council Pension Fund is a defined benefit scheme with 18 members at 31 March 2021. The assets of the scheme are held separately from those of the charity in an independently administered fund.

The agreed employer's contribution rate for the year to March 2021 was 14.4% and this was expensed during the year. Contributions have been set at 14.4% for 2021/22.

The estimated asset allocation at 31 March 2021 revealed that Mencap's share of liabilities of the scheme exceeded the value of Mencap's share of the scheme's assets by £2.52m (2020: £1.29 million). This change in deficit has been treated as an expense during the year and the deficit is included in the balance sheet.

Staffordshire County pension fund

The Staffordshire County pension fund is a defined benefit scheme. The assets of the scheme are held separately from those of the charity in an independently administered fund.

The pension scheme valuation at 31 March 2014 indicated that Mencap's share of liabilities of the scheme exceed the value of Mencap's share of the scheme's assets by £48,000. As any movements in the deficit would not be material to the accounts, a new valuation has not been obtained for the year to 31 March 2021.

Mencap had no active members in the pension scheme in the year to 31 March 2021 and did not expense employer contributions during the year.

Other local government pension schemes

Mencap also participates in four other local government pension schemes. However, as there are no remaining active members, and in view of the cost of obtaining disclosures and the likely liability being immaterial in the context of overall Mencap results, no account or disclosures are made for these four schemes.

Dyfed Pension Fund No active members
Clwyd Pension Fund (Flintshire) No active members
Powys Pension fund No active members
Shropshire County Pension Fund No active members

An actuarial valuation was obtained for the Nottinghamshire County Council Pension Scheme the following assumptions have been used in its valuation:

Financial Assumptions

31 March 2021 31 March 2020
% p.a. % p.a.
RPI increases 3.15% 2.60%
CPI increases 2.85% 1.80%
Salary increases 3.85% 2.80%
Pension increases 2.85% 1.80%
Discount rate 2.05% 2.35%

The demographic assumptions used are:

Life expectancy from age 65

e expectancy from age 65
31 March 2021 31 March 2020
Retiring today:
Males 21.6 21.8
Females 24.3 24.4
Retiring in 20 years:
Males 22.9 23.2
Females 25.7 25.8

Based on these assumptions, the balance sheet position is as follows:

31 March 2021 31 March 2020
£'000 £'000
Present value of the defined benefit obligation (5,497) (3,700)
Fair value of Fund assets (bid value) 2,973 2,407
Deficit (2,524) (1,293)

Reconciliation of present value of the defined benefit obligation

31 March 2021 31 March 2020
£'000 £'000
Opening defined benefit obligation 3,700 4,349
Current service cost 108 123
Interest cost 87 106
Change in financial assumptions 1,654 (529)
Change in demographic assumptions (39) (105)
Experience loss/(gain) on defined benefit obligation - (262)
Estimated benefits paid net of transfers in (33) (43)
Past service costs, including curtailments - 42
Contributions by Scheme participants 20 19
Closing defined benefit obligation 5,497 3,700

Reconciliation of the fair value of Fund assets

conciliation of the fair value of Fund assets
31 March 2021 31 March 2020
£'000 £'000
Opening fair value of Fund assets 2,407 2,634
Interest on assets 57 65
Return on assets less interest 476 (305)
Other actuarial gains/(losses) - (6)
Administration expenses (1) (1)
Contributions by employer including unfunded 47 44
Contributions by Fund participants 20 19
Estimated benefits paid plus unfunded net of transfers in (33) (43)
Settlement prices received/(paid) - -
Closing fair value of Fund assets 2,973 2,407
alysis of amount charged to operating profit
31 March 2021 31 March 2020
£'000 £'000
Current service (cost) (108) (165)
Administration costs (1) (1)
Total operating charge (109) (166)

Analysis of amount charged to operating profit

Analysis of amount credited to other finance income
31 March 2021
£'000
Interest income on Plan assets
-
(Interest) on Plan liabilities
(30)
Net interest on net define benefit liability
(30)
Total amount charged to profit & loss (total operating charge
less net interest)
(139)
Analysis of amount recognised in Other Comprehensive Income (OCI)
31 March 2021
£'000
Return on Plan assets in excess of interest
476
Other actuarial gains/(losses) on assets
-
Change in financial assumptions
(1,654)
Change in demographic assumptions
39
Experience gain/(loss) on defined benefit obligation
-
Remeasurement of the net assets/ (defined liability)
(1,139)		 Analysis of amount credited to other finance income
31 March 2021
£'000
Interest income on Plan assets
-
(Interest) on Plan liabilities
(30)
Net interest on net define benefit liability
(30)
Total amount charged to profit & loss (total operating charge
less net interest)
(139)
Analysis of amount recognised in Other Comprehensive Income (OCI)
31 March 2021
£'000
Return on Plan assets in excess of interest
476
Other actuarial gains/(losses) on assets
-
Change in financial assumptions
(1,654)
Change in demographic assumptions
39
Experience gain/(loss) on defined benefit obligation
-
Remeasurement of the net assets/ (defined liability)
(1,139)
**31 March 2021 ** 31 March 2020
£'000 £'000
Interest income on Plan assets - -
(Interest) on Plan liabilities (30) (41)
Net interest on net define benefit liability (30) (41)
Total amount charged to profit & loss (total operating charge
less net interest)		 (139) (207)
**31 March 2021 ** 31 March 2020
£'000 £'000
Return on Plan assets in excess of interest 476 (305)
Other actuarial gains/(losses) on assets - (6)
Change in financial assumptions (1,654) 529
Change in demographic assumptions 39 105
Experience gain/(loss) on defined benefit obligation - 262
Remeasurement of the net assets/ (defined liability) (1,139) 585
Summary of amounts disclosed in the accounts
Amount recognised in operating profit/(loss)
Mencap pension scheme
Nottinghamshire County Council Pension Fund
Amount recognised in finance income
Mencap pension scheme
Nottinghamshire County Council Pension Fund
Amount recognise in other recognised gains/(losses)
Mencap pension scheme
Nottinghamshire County Council Pension Fund		 Summary of amounts disclosed in the accounts
Amount recognised in operating profit/(loss)
Mencap pension scheme
Nottinghamshire County Council Pension Fund
Amount recognised in finance income
Mencap pension scheme
Nottinghamshire County Council Pension Fund
Amount recognise in other recognised gains/(losses)
Mencap pension scheme
Nottinghamshire County Council Pension Fund
2021 2020
£'000 £'000
Mencap pension scheme (11) -
Nottinghamshire County Council Pension Fund (109) (166)
(120) (166)
2021 2020
£'000 £'000
Mencap pension scheme 140 (189)
Nottinghamshire County Council Pension Fund (30) (41)
110 (230)
2021 2020
£'000 £'000
Mencap pension scheme (2,229) 6,996
Nottinghamshire County Council Pension Fund (1,139) 585
(3,368) 7,581

Defined benefit pension liability

fined benefit pension liability
2021 2020
£'000 £'000
Mencap pension scheme - -
Nottinghamshire County Council Pension Fund (2,524) (1,293)
Staffordshire County Pension Fund (48) (48)
(2,572) (1,341)

25. Related Parties

Donations totalling £7,392 were received from related parties during the year without conditions.

Group companies

During the year, the following transactions took place between Royal Mencap Society and its subsidiaries:

At 31 March 2021, the following intercompany balances were outstanding between the charity and its subsidiaries:

2021 2020
£'000 £'000
Golden Lane Housing Limited - loan 2,416 2,776
Golden Lane Housing Limited - other 593 236
Mencap Limited 20 33
Mencap Promotions Limited - -
Mencap Trust Company 443 432
3,472 3,477

26. Volunteers

During the year, Mencap received the generous donation of time from a great many volunteers. They provided contributions to a number of activities, as follows:

2021
Number of volunteers
Raising funds:
Raising funds -
Trading 469
Total raising funds 469
Charitable activities:
Reducing stigma and discrimination -
Social care 88
Supporting friendships and relationships 210
Improving health -
Early intervention 17
Employment 58
Other 22
Total charitable activities 395
864

27. Capital commitments

At 31 March 2021, the group has the following capital commitments. All are commitments of Golden Lane Housing Ltd:

2021 2020
£'000 £'000
Capital expenditure contracted but not provided for in the
financial statements		 197 236
Capital expenditure authorised by the board but not contracted for 10,000 10,000
10,197 10,236

These commitments are expected to be financed with:

2021 2020
£'000 £'000
Cash reserves 197 1,236
Proceeds from the sale of properties - 5,000
Committed loan facilities 10,000 4,000
10,197 10,236

The above amounts include the full cost of shared ownership properties contracted for.

28. Contingent liabilities

At the 31[st] March 2021 there were no contingent liabilities.

29. Income

(a)Included in Trust income is income from:

Total 2021
£’000
TheBay Tree Charitable Trust 30
BBC Children in Need 6
Bridgewater Charitable Trust 26
The CityBridget Trust 70
CommunityFoundation for Wales 5
Co-op Foundation 35
Department of Health and Social Care 495
Haworth Holt Bell Solicitors 10
Heritage LotteryFund 6
Hillingdon Community Trust 13
Miss Joan Tanner Charitable Settlement 12
John James Bristol Foundation 13
The Legal Education Foundation 7
Marlene Gabriel Charitable Trust 5
NationalLottery Community Fund 100
National LotteryCommunityFunding 10
Office National Statistics 17
Oliver Ford Trust 15
The Pears Foundation 100
PearsDCMS Community Match Challenge 448
Miss S M G Ross Charitable Trust 38
The Westfield Health Charitable Trust 10
The Wolfson Foundation 180
The Zochonis Charitable Trust. 50
Included in Community/ Big Lottery Fund is income from:
Total 2021
£’000
City ofBradford MDC **32 **
HealthEducationEngland 122
HeritageLottery Fund 53
National LotteryCommunityFund 140

(c)Included in Organisations raising funds is income from:

Included in Organisations raising funds is income from:
Total 2021
£’000
Advent International 403
Association ofBritish Insurers **2,581 **
BarclaysBank 100
BGC Brokers LP 79
Cambridgeshire Community Foundation 13
The G A Y Foundation 22
Payden & Rygel 100
St John's Wood Business Association 12
Sweet CausesLtd 13
Virgin Money 232

(d)Included in Gifts in Kind is income from:

Group
2021
£’000
Adesse 16
Mailforce 1,820
Masks for NHS Heroes 41
Safeaid 36
Victoria Square 7

(e)Included in Income from Charitable activities is income from:

Group2021
£’000
Infectious Control Grants 2730
Sport England 435
Belfast Health and Social Care Trusts for Children and adults’ services in NI 267
Dept of Health(NI) 83
Northern Health and Social Care Trusts for advocacy, children, adults’ services
in NI 23
Special EU Programmes Body **362 **
Education Authority for Youth Services in NI 47
Early Years for Children’s Services in NI 55
Disability Action for Employment Support in NI 7
Barnardos- DFC Seasonal Appeal Re: Covid 10
Health & Social Care Board -Summer Scheme Covid Grant 7

30. Events after the end of the reporting period

There are no adjusting events up to the date of signing of the accounts. There is one non-adjusting post balance sheet events relating to our subsidiary Golden Lane Housing:

  1. On the 1[st] July 2021 Golden Lane Housing issued a £15million of 3.25% social bonds due 2031, from special purpose issuer Retail Charity Bonds PLC (“RCB”) managed by Allia C&C. £11 million of the bonds have been sold to investors with a further £4 million will be retained and may be sold at a later date to raise additional funding for the Charity as required. The proceeds of the issue will be used by the Charity to further its charitable objectives, including the re-financing of a previous loan from RCB and the acquisition and/or adaptation of housing for people with one or more learning disabilities.