Nacro>
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ANNUAL RÉfoRT
for the
d31

## Contents 

|Who we are|3|
|---|---|
|Our values|4|
|Why our work is needed|5|
|Message from the Chair|7|
|Message from the CEO|8|
|Council members and professional advisers|9|
|Strategic review of the year|11|
|Safeguarding|15|
|What our people say<br>|16|
|Good governance|17|
|Statement of internal control|21|
|Financial narrative|23|
|Value for money statement|24|
|Reserves and liquidity policy|27|
|Environmental impact statement|28|
|Thanks and acknowledgements|30|
|Independent auditor’s report|31|
|Financial statements|35|



**2 Nacro Annual Report** 2021/22 



## **Who we are** 

We are a national social justice charity with more than 50 years’ experience of changing lives, building stronger communities and reducing crime. 

We house, we educate, we support, we advise and we speak out for and with disadvantaged young people and adults. 

We are passionate about changing lives. 

We never give up. 

## **Our vision** 

A socially just country where people feel safe, are supported to reach their aspirations and communities are crime free. 

## **Our mission** 

We deliver social justice by positively changing lives, strengthening communities and preventing crime. 

**3 Nacro Annual Report** 2021/22 



## **Our values** 

## We focus on outcomes 

������������������������������������������������������������ people to achieve meaningful outcomes. 

## We are courageous 

We have bold aims which we are determined to achieve. We seize opportunities and deliver results. 

## We are inspiring 

We motivate and inspire people to reach their full potential ��������������������������������������������������������� 

## We are reliable 

We keep our promises. We provide consistent support and we stick with people. 

## We are proud 

We celebrate the collective strength that our diversity brings. We promote, celebrate and share the achievements of our team ahead of our own. 

**4 Nacro Annual Report** 2021/22 



## Why our work is needed 

It is clear that the long-term impact of the pandemic is likely to create a widening of social and economic inequalities, impacting hardest those who are already the most disadvantaged. Increased food costs and energy bills will inevitably push more individuals and families into poverty, which makes it that much harder for people to achieve their full potential. We already know that some of the most vulnerable members of our society do not get the help and support they need in order to thrive, and so our work is more vital than ever before. 

England and Wales has one of the highest rates of imprisonment in Western Europe, with 79,744������������������������������������������������������������������������������������ court backlogs are tackled and the impact of the legislative changes which will send more ������������������������������������������������������������������������������������������������ and is predicted to reach 98,700 by September 2026. And yet we know that imprisonment ��������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������� the extended periods of isolation and inactivity resulting from the ongoing restricted regimes in prisons will be felt for years to come. We know that imprisonment often strips away those things which are most likely to support people to move on with their lives and away from crime: a job, somewhere to live, and support from family and community. And yet successive governments �������������������������������������������������������������������������������������������� 

Homelessness continues to be high. According to Shelter, 273,000 people were living in temporary accommodation, sleeping rough or in a hostel in England in December 2021. That ���������������126,000 children. We know that a lot of homelessness goes undocumented, ��������������������������������������������������������������������������������������������� even higher. 

The Government’s ‘Everyone In’ scheme, the eviction ban, and the boost to Universal Credit played a vital role in reducing homelessness and keeping people in their homes during the pandemic. Now these protections have gone and living costs are spiralling, there is a risk that thousands of people will lose their homes. We need to move from constant crisis control and ensure that long-term and sustainable solutions are provided that prevent homelessness in the �������������������������������������������������������������� 

�������������������������������������������������������������������������������������� needs are not being met. Too many young people are being held back from achieving their potential, unable to gain the skills that they need to achieve what they want with their lives – a situation that the pandemic has further exposed and exacerbated. 

Much debate about education policy and post-COVID recovery has been focused on schoolage children. Less emphasis has been placed on the needs of 16–19 year olds and the ���������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������� ���������������������������� 

**5 Nacro Annual Report** 2021/22 



�������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������ 

We know that poor mental health, inadequate education, drug and alcohol addiction, a low ��������������������������������������������������������������������������������������������� sometimes, chaos that can be very hard to change. 

��������������������������������������������������������������������������������������������� to open doors that were previously closed to them. We know that most people who come to us for help have a range of issues, not just one. We also know that, with the right support and guidance, people can be empowered to turn their lives around and move on to a future of success and independence. 

**6 Nacro Annual Report** 2021/22 



## Message from the Chair 

This has been another year of change, of challenges and unprecedented social upheaval for many of the most vulnerable in our society. One of the vitally important sources of assistance has been regular and friendly contact with a Nacro support worker or tutor, who have been focused on ensuring that they did everything they could to nourish and encourage them through the dark times, and to focus on the opportunities that can arise as things ���������������������������������������������������������������������������������������������������������������������� and continue to do. They are the essence of Nacro and the reason for its continuing success. 

����������������������������������������������������������������������������������������������������������� and partners to develop and agree a new Three Year Strategy for the organisation, which will be launched in the summer of 2022. It is a strategy which makes a clear choice to prioritise those we help and those that work for us. It has a clear focus on building on our strengths, delivering better outcomes for our service users and learners, making the case for change in the wider world and building a truly diverse and inclusive organisation with its service users and learners at the heart of everything it does. 

������������������������������������������������������������������������������������������������������������ ������������������������������������������������������������������������������������������������������ Accommodation Service Tier-2 (CAS-2) contract from the Ministry of Justice in the face of strong competition. These are testament to the strong management and excellent outcomes that Nacro can deliver. 

We have also made a real impact with our campaigning work, winning an increase in the discharge grant for people leaving prison and putting forward a powerful case to remove the barriers to learning many young people ���������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������ ����������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������ 

After seven years, I have reached the end of my term as Chair of the Nacro Council of Trustees. It has been a real pleasure and an honour to serve some of the most disadvantaged people in our society through Nacro and ��������������������������������������������������������������������������������������������������������������� is a sign of a good and decent society when everyone can reach their potential, and an ambition never to be forgotten. The support of a talented and committed Board has also been invaluable and a personally enriching experience working with so many talents. 


I am delighted to welcome Professor Nick Hardwick as my replacement. We also welcome Amanda Dickens to the Council.   It has been a privilege to be part of the Nacro family since 2015 and I know that I am leaving it with a clear strategy, a diverse and strong governing Council, ��������������������������������������������������������������������������� ��������������������������������������������������������������������������� alongside those who really do deserve that second chance. 

Nigel Chapman CMG 

**7 Nacro Annual Report** 2021/22 



## Message from our CEO 

“If you are still breathing” says Oprah Winfrey, “you have a second chance”. I can’t think of a better way to ���������������������������������������������������������������������������������������������������������������� should not be judged, that corners can be turned, relationships repaired, homes and jobs found and kept, failed exams passed and that happiness should be available to all. Despite the ongoing turmoil caused by COVID, we have continued to deliver support and learning to some of the most vulnerable and excluded people in society and supported thousands of people to put their lives back on track. 

We don’t stop there though. We have taken what we learned from these experiences and campaigned for real change, from an increase to the discharge grant for prisoners, to a major campaign to close the education ������������������������������������������������������������������������������������������������������������ ������������������������������������������������������������������������������������������������������������� systems, putting equality and diversity at the heart of everything we do and putting environmental sustainability at the core of our thinking. We are proud that this work is being recognised by partners and commissioners ������������������������������������������������������������������������������������������������������������ work in the reformed probation service. 

��������������������������������������������������������������������������������������������������������������� Nigel Chapman. He has guided the Council and the organisation through some very challenging times with a focus, perspective and humour that leaves the organisation in a very much better place than when he joined. 



Campbell Robb 

**8 Nacro Annual Report** 2021/22 



## Council members and professional advisers 

## **Trustees** 

Nigel Chapman CMG, Chair Ron Crank MBE, Vice Chair Andrew Billany Jenni Douglas Todd (Resigned October 2021) Lynn Emslie Anne Frost David Hanson Tabitha Kasseem Farrah Malik Katie Martin Victor Olisa Neil Spence 

**Treasurer** 

Neil Spence 

**���������������������** Campbell Robb 

**Company Secretary** Rocco Zitola 

**���������������** 

Walkden House 16-17 Devonshire Square London EC2M 4SQ 

**Charity number** 226171 

**Regulator of Social Housing number** 4781 

**Company number** 00203583 

## **Auditors** 

Crowe U.K. LLP 2nd Floor 55 Ludgate Hill London EC4M 7JW 

## **Solicitors** 

Devonshires Solicitors LLP 30 Finsbury Circus London EC2M 7DT 

## **Pension consultants** 

XPS Pensions Group Phoenix House 1 Station Hill Reading RG1 1NB 

Information correct at 20th July 2022. 

## **Bankers** 

National Westminster Bank Plc Cavell House PO Box 113 2A Charing Cross Road London WC2H 0PD 

**9 Nacro Annual Report** 2021/22 



## **Trustee Attendance Record 2021/22** 

|**1**<br>**2**<br>**3**<br>**4**<br>Nigel Chapman CMG<br>**4**of**4**<br>**4**of**4**<br>**4**of**5**<br>**4**of**5**<br>Andrew Billany<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>Ron Crank MBE<br>**4**of**4**<br>**4**of**4**<br>**4**of**5**<br>**5**of**5**<br>Lynn Emslie<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>Anne Frost<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>David Hanson<br>**4**of**4**<br>-<br>**3**of**5**<br>-<br>Tabitha Kasseem<br>**4**of**4**<br>**4**of**4**<br>-<br>**5**of**5**<br>Farrah Malik<br>**3**of**4**<br>-<br>**4**of**5**<br>-<br>Katie Martin<br>**2**of**4**<br>-<br>**1**of**5**<br>**1**of**5**<br>Victor Olisa<br>**2**of**4**<br>**1**of**4**<br>-<br>-<br>Neil Spence<br>**4**of**4**<br>-<br>**5**of**5**<br>-<br>Amanda Dickens1<br>-<br>-<br>-<br>-<br>Jenni Douglas-Todd2<br>**1**of**2**<br>-<br>-<br>**1**of**3**<br>**1** Council<br>**2** Strategy & Performance<br>Committee<br>**3** Finance & Audit Committee<br>**4** People Committee<br>1. Appointed 18 March 2022<br>2. Resigned 1 October 2021|**1**<br>**2**<br>**3**<br>**4**<br>Nigel Chapman CMG<br>**4**of**4**<br>**4**of**4**<br>**4**of**5**<br>**4**of**5**<br>Andrew Billany<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>Ron Crank MBE<br>**4**of**4**<br>**4**of**4**<br>**4**of**5**<br>**5**of**5**<br>Lynn Emslie<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>Anne Frost<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>David Hanson<br>**4**of**4**<br>-<br>**3**of**5**<br>-<br>Tabitha Kasseem<br>**4**of**4**<br>**4**of**4**<br>-<br>**5**of**5**<br>Farrah Malik<br>**3**of**4**<br>-<br>**4**of**5**<br>-<br>Katie Martin<br>**2**of**4**<br>-<br>**1**of**5**<br>**1**of**5**<br>Victor Olisa<br>**2**of**4**<br>**1**of**4**<br>-<br>-<br>Neil Spence<br>**4**of**4**<br>-<br>**5**of**5**<br>-<br>Amanda Dickens1<br>-<br>-<br>-<br>-<br>Jenni Douglas-Todd2<br>**1**of**2**<br>-<br>-<br>**1**of**3**<br>**1** Council<br>**2** Strategy & Performance<br>Committee<br>**3** Finance & Audit Committee<br>**4** People Committee<br>1. Appointed 18 March 2022<br>2. Resigned 1 October 2021|**1**<br>**2**<br>**3**<br>**4**<br>Nigel Chapman CMG<br>**4**of**4**<br>**4**of**4**<br>**4**of**5**<br>**4**of**5**<br>Andrew Billany<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>Ron Crank MBE<br>**4**of**4**<br>**4**of**4**<br>**4**of**5**<br>**5**of**5**<br>Lynn Emslie<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>Anne Frost<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>David Hanson<br>**4**of**4**<br>-<br>**3**of**5**<br>-<br>Tabitha Kasseem<br>**4**of**4**<br>**4**of**4**<br>-<br>**5**of**5**<br>Farrah Malik<br>**3**of**4**<br>-<br>**4**of**5**<br>-<br>Katie Martin<br>**2**of**4**<br>-<br>**1**of**5**<br>**1**of**5**<br>Victor Olisa<br>**2**of**4**<br>**1**of**4**<br>-<br>-<br>Neil Spence<br>**4**of**4**<br>-<br>**5**of**5**<br>-<br>Amanda Dickens1<br>-<br>-<br>-<br>-<br>Jenni Douglas-Todd2<br>**1**of**2**<br>-<br>-<br>**1**of**3**<br>**1** Council<br>**2** Strategy & Performance<br>Committee<br>**3** Finance & Audit Committee<br>**4** People Committee<br>1. Appointed 18 March 2022<br>2. Resigned 1 October 2021|**1**<br>**2**<br>**3**<br>**4**<br>Nigel Chapman CMG<br>**4**of**4**<br>**4**of**4**<br>**4**of**5**<br>**4**of**5**<br>Andrew Billany<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>Ron Crank MBE<br>**4**of**4**<br>**4**of**4**<br>**4**of**5**<br>**5**of**5**<br>Lynn Emslie<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>Anne Frost<br>**4**of**4**<br>**4**of**4**<br>-<br>-<br>David Hanson<br>**4**of**4**<br>-<br>**3**of**5**<br>-<br>Tabitha Kasseem<br>**4**of**4**<br>**4**of**4**<br>-<br>**5**of**5**<br>Farrah Malik<br>**3**of**4**<br>-<br>**4**of**5**<br>-<br>Katie Martin<br>**2**of**4**<br>-<br>**1**of**5**<br>**1**of**5**<br>Victor Olisa<br>**2**of**4**<br>**1**of**4**<br>-<br>-<br>Neil Spence<br>**4**of**4**<br>-<br>**5**of**5**<br>-<br>Amanda Dickens1<br>-<br>-<br>-<br>-<br>Jenni Douglas-Todd2<br>**1**of**2**<br>-<br>-<br>**1**of**3**<br>**1** Council<br>**2** Strategy & Performance<br>Committee<br>**3** Finance & Audit Committee<br>**4** People Committee<br>1. Appointed 18 March 2022<br>2. Resigned 1 October 2021|
|---|---|---|---|
|Andrew Billany|**4**of**4**|**4**of**4**|-|
|Ron Crank MBE|**4**of**4**|**4**of**4**|**4**of**5**|
|Lynn Emslie|**4**of**4**|**4**of**4**|-|
|Anne Frost|**4**of**4**|**4**of**4**|-|
|David Hanson|**4**of**4**|-|**3**of**5**|
|Tabitha Kasseem|**4**of**4**|**4**of**4**|-|
|Farrah Malik|**3**of**4**|-|**4**of**5**|
|Katie Martin|**2**of**4**|-|**1**of**5**|
|Victor Olisa|**2**of**4**|**1**of**4**|-|
|Neil Spence|**4**of**4**|-|**5**of**5**|
|Amanda Dickens1|-|-|-|
|Jenni Douglas-Todd2|**1**of**2**|-|-|



**10 Nacro Annual Report** 2021/22 



## Strategic review of the year 

## **Year in review** 

Our key delivery milestones during 2021/22 are shown below: 

**1.  Grow Nacro’s outcome-focused delivery – deliver joined up, high outcome and expert services and products meeting their respective regulatory and funding standards.** 

In 2021/22, we: 

- �� ��������������������������������������������������������������������������������������������������������� which is the new name for the Bail Accommodation and Support Service (BASS) which we have been delivering since June 2018 on behalf of the Ministry of Justice. The CAS-2 service houses people on bail or released from prison under licence conditions and will include enhanced and tailored support for service ���������������������������������������������������������������������������������������� 

- Also successfully retained our Young People’s Housing and Support service in Essex providing support to 280 young people across Essex. 

- Successfully retained our matrix Standard accreditation - an international standard which demonstrates the quality of Information, Advice & Guidance services we provide across all services. 

- Continued to support high achievement rates across our education provision with 16 to 18-year-olds on Study Programmes achieving above national rates, despite the low starting points of many learners, the personal challenges they face and challenges brought on by COVID. Three quarters of learners progressed onto a positive destination and English and maths GCSE outcomes for adults and young people remained high and above national rates. 

**2. Make a strategic contribution in priority places and communities - support commissioners ������������������������������������������������������������������������������������������� �����������������������������������������������������������** 

In 2021/22, we: 

- Have continued to focus on increasing our delivery and impact in target areas. We mobilised our new Ministry of Justice Dynamic Framework contracts providing accommodation and wellbeing support to people as they leave prison in the East and West Midlands and South Yorkshire. These complement our existing delivery in these areas helping increase our impact, such as our Birmingham and Nottingham ��������������������������������������������������������������������������������������������������� services and wider housing and education services. 

- Have continued to bring our expertise to support the joining up of local services around individuals and their needs. In Doncaster where we deliver accommodation resettlement support we worked with Serco who run Doncaster prison to identify gaps in local resettlement services and solutions. As a result we now run the �������������������������������������������������������������������������������������������������������� and ensuring they can access the support they need immediately on release. 

**11 Nacro Annual Report** 2021/22 



- In Wolverhampton, where we deliver the Recovery Near You substance misuse service, we worked with commissioners to identify gaps between criminal justice and health systems and proposed solutions. This �������������������������������������������������������������������������������������������������������� and a Youth Participation Worker. Our joined up delivery in this area has also been strengthened by our new accommodation resettlement contracts across the West Midlands, where we are beginning to establish joint working to jointly case manage individuals who are on probation and needing accommodation alongside being in treatment. 

- **���������������������������������������������������������������������������������� disadvantaged young people and adults in communities, promoting our social justice voice ����������������������������������������������������������������������������������������������� people we help.** 

In 2021/22, we: 

- �� ���������������������������������������������������������������������������������������������� campaign, Learn without Limits, highlighting the attainment gap between young people aged 16-19 from ������������������������������������������������������������������������������������������������������� party conferences to take this message for action to the Government. 

- �� ����������������������������������������������������������������������������������������������������������� for Justice highlighting the barriers people face on release from prison through the experiences of our ��������������������������������� 

- �� ������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������� giving people leaving prison better immediate access to money to get them through the initial release. The Government also committed to rolling out their new Community Accommodation Service Tier 3 which will provide 12 weeks accommodation for people leaving prison at risk of homelessness. These changes are positive steps forward and a recognition of the need to support people on release to reduce the risk of ����������������������������������������������������������������������������������������������������� we are committed to continuing to raise our campaigning voice over the coming years. 

- Also saw some movement on our Friday release campaign with the Government’s Prisons Strategy White Paper recognising the additional challenges Friday prison releases bring and committing to explore releasing ������������������������� 

- Continue to be involved in policy discussions at a senior strategic level through our representation on ����������������������������������������������������������������������������������������������� Strategic Partnership Board and the cross-government Prison Leavers Project Strategy Steering Group. 

**12 Nacro Annual Report** 2021/22 



**4. Build a proud, expert and engaged workforce – build and sustain a high-performing professional workforce with the skills, knowledge and attitudes to deliver the best outcomes for service users.** 

In 2021/22, we: 

- �� �������������������������������������������������������������������������������������������������������� needing improvement, we have undertaken further work to better understand how we do this and this has informed priority focus areas for our People and organisational strategies. 

- �� ������������������������������������������������������������������������������������������������������������ learning and development opportunities and providing a space and platform for ideas and to advocate for positive and lasting change inside and outside Nacro. We have introduced a dedicated role to support our ambitions on equality, diversity and inclusion and we will be launching a new strategy in the coming year. 

- �� ����������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������� 

- �� ������������������������������������������������������������������������������������������������������������ 2022/23. 

- Have focused on strengthening our team culture and have been developing a new behaviours framework which will support our commitment to a values-led culture. 

- Started a whole scale review of our employee journey and recruitment processes. 

- Have increased and strengthened the role and  involvement of our Senior Leadership Group and have invested in leadership training to support their development. 

- **��������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������� targets as well as funding capital investment and discharging pensions obligations.** 

   - In 2021/22, we: 

- �� ���������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������ 

- Retained two of our largest contracts at retender during the year and mobilised a range of new contracts. 

- Continued to improve our internal processes as a result of recommendations agreed from a structured internal audit programme. 

- �� ��������������������������������������������������������������������������������������������������������� 

- Refreshed our ICT strategy and have been preparing to move our systems and applications to Microsoft �������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������� 

- Retained our ISO27001 information security accreditation. 

- Developed a new organisational Environmental Strategy driven through our Environmental Committee. 

**13 Nacro Annual Report** 2021/22 



## **Our Plans for 2022/23** 

We are excited to be launching a new three year strategy in 2022 following the 2021/22 foundation year. The ������������������������������������������������������������������������������������������������������������������� the strategy are two underpinning themes embedded throughout: how we can engage with our service users to ensure their voices are heard and acted upon by us and by those around them and how we make ourselves as inclusive and representative of those we work with as we can, and build a truly diverse organisation. 

## **Our Aims** 

1.  We will increase the positive impact we have on the people we support 

2.  We will campaign alongside our service users for solutions to the barriers and challenges they face 

- ���������������������������������������������������������������������������������������������������������������� advantages that digital technology can bring 

4.  We will build a sustainable future for Nacro 

5.  We will forge a values-led culture that supports a happy, productive, diverse workforce 

**14 Nacro Annual Report** 2021/22 



## Safeguarding 

This year, Nacro has further developed its safeguarding policy and practice across the organisation and embedded a strengthened culture of safeguarding at all levels. 

As we are emerging from the pandemic, we have continued to ensure that guidance and procedures support our ways of working to ensure that safeguarding arrangements, analysis and actions remain a priority. Our safeguarding governance, structures, roles and meeting arrangements at Directorate and national level remain ��������������������������������������������������������������������������������� 

��������������������������������������������������������������������������������������������������������� monitoring and review of trends and best practice. Our policies are reviewed annually, with our Young People and ������������������������������������������������������������������������������������������������������������������ 2021. Directorates each have recruited a Designated Safeguarding Lead, to provide resource supporting business requirements, and ensuring quality safeguarding interventions and outcomes are provided through local ������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������� and, on a role basis, enrolled onto Safeguarding Children and Young People, and/or Safeguarding Adults at ������������������������������������������������������������������������������������������������ 

A centralised management system is in place to record all Nacro related safeguarding incidents. The system is used to track and follow up actions required after an incident has been reported. The National Safeguarding Board maintains oversight of data held on the incident management system. The National Safeguarding Board is responsible for applying learning from incidents that have occurred to continually improve the Charity’s safeguarding training, procedures and practice. 

**15 Nacro Annual Report** 2021/22 



## What our people say 

- “ Throughout my journey with Nacro, my role has allowed me to persevere, learn and grow from each obstacle.” 

- “ I love that every day is different, every day has its challenge, and everyone is unique, which I relish and value.” 

- “ What drew me to Nacro was seeing the great work our organisation does to champion and ensure we are a strong presence for the people we represent.” 

- “ Nacro has been one of the best employer’s that I’ve worked for with regards to inclusivity. Because of our service users, the type of work we do and what we stand for, we all carry our understanding and empathy with pride.” 

- “ I was refreshed to find that Nacro was different than where else I had worked – people listened to me, no one judged me, I was nurtured and developed, my ideas were listened to like an equal.” 

- “ It’s a genuine privilege to work with so many colleagues who, like me, believe that the work we do is the key to changing someone’s life for the better.” 

**16 Nacro Annual Report** 2021/22 



## Good governance – Trustees’ report 

�������������������������������������������������������������������������������������������������������������� leadership and governance of the organisation while day-to-day management is delegated to the Executive Leadership Team (ELT). 

Nacro is a registered Charity and as a provider of social housing the Charity’s prime regulator is the Regulator ������������������������������������������������������������������������������������������������������������ ���������������������������������������������������������������������������������������������������� Governance for the reporting period. In this review, Council has determined that the NHF 2020 Code of ������������������������������������������������������������������������������������������������������������ ���������������������������������������������������������������������������������������������������������������� Council has therefore resolved to adopt the Charity Code of Governance from 01 April 2022 on the basis ������������������������������������������������������������������������������������������������������� breadth of activities. Council has used the code’s principles and recommended practice to assist in the setting of the strategic direction and culture of the organisation in order for the Charity to deliver on its charitable �������������������������������������������������������������������������������������������������������������� Tenant Involvement and Empowerment Standard 2017, for example further work is required to improve the consistency of published performance information for tenants in a way that is accessible and relevant to them. ������������������������������������������������������������������������������������������ 

Risk management continues to be a priority, with Council members regularly considering and discussing the Corporate Risk Register at Council meetings as well as its three primary reporting Committees, the Finance and Audit Committee, Strategy and Performance Committee and the People Committee. Nacro’s committee ������������������������������������������������������������������������������������������������������������� of assurance that charitable objectives are being met. Nacro have appointed BDO as internal auditors, the appointment of BDO has increased the Finance and Audit Committee’s focus on strategic risk issues and highlighted key areas where assurance improvements can be made. 

����������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������� provided internal audit services to Nacro in accordance with an annually agreed Internal Audit Charter and Internal Audit Plan. The internal control framework and risk management processes are subject to regular review by Internal Audit which is responsible for providing independent assurance to the Council via the Finance and Audit Committee. The Committee reviews the Internal Audit Plan at least annually and considers ���������������������������������������������������������������������������������������������������������������� it to discharge its responsibilities. The Committee is responsible for ensuring the scope of internal audit work ���������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������������� 

There are also a number of other regular meetings that Trustees either chair or attend, such as the Education Scrutiny Group and National Safeguarding Board. These areas of engagement improve the governance for ��������������������������������������������������������������������������������������������������������������� report into Nacro Council and sub-Committees, further strengthening our governance. 

In 2021/22 Nacro further embedded our service user involvement charter implementing recommendations from our involvement review carried out in 2020/21. Through this work we have increased our focus on supporting the capacity and skills of our service users and learners, standardising our models and practices, and formed a new user advisory group. 

**17 Nacro Annual Report** 2021/22 



A full list of Trustee appointments, resignations and attendance can be found on page 10. 

Nacro is opposed to all forms of modern slavery and is committed to acting ethically and with integrity in all its business relationships. We take steps to ensure that adequate processes and controls are in place to ensure ������������������������������������������������������������������������������������������������������ statement is published on our website and annual reviewed by People Committee. 

����������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������������� number of new learners recruited to our Education based activity has been lower than expected, however, service levels within Housing, Health and Justice have been maintained with adjustments to our previous �������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������� increasing risk. 

As part of management of risk, consideration has been given to the impact of the UK leaving the European ������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������ EU nationals make up a relatively low proportion of our workforce and we therefore do not anticipate risk in this area. Overall, the charity has a relatively low exposure to direct Brexit risk. 

Nacro joins with others in its condemnation of the invasion of Ukraine. Nacro does not have any known links to Russia or Belarus and does not have any direct suppliers with known links to Russia or Belarus. 

## **Section 172 Statement** 

����������������������������������������������������������������������������������������������������������������� of the organisation are captured in our vision, mission and values statements. 

When setting strategy and making decisions Trustees (Directors) will carefully consider the impact these ����������������������������������������������������� 

��������������������������������������������������������������������������������������������������������������� 

����������������������������������������������������������������������������������������������������������� relationships are key to facilitating the renewal of contracting arrangements as well as the innovation of service �������������������������������������������������������������������������������������������������� Nacro’s services. 

All of Nacro’s work is community facing and we work hard to ensure the impact of our activities have a positive impact on the communities we reach out to. Data on the environmental impact of our activities is captured on page 28 of this report. 

The activities of Nacro are regulated via the Regulator of Social Housing, OFSTED and indirectly via the 

**18 Nacro Annual Report** 2021/22 



Care Quality Commission. These regulatory bodies require the organisation to establish robust governance frameworks that can be subject to external assessment and publicly rated performance levels. 

Nacro has a wide range of suppliers, we have established contracts and clear contract management arrangements in place with our largest suppliers and all of our sub contractors to help ensure our main suppliers have appropriate governance and legal compliance measures in place. 

Nacro is aware of the impact of climate change and global warming and are committed to playing our part. We have developed a new environmental strategy and are starting a number of work streams over the next few years to use technology, design and innovation to make our business practices more sustainable, engaging with our stakeholders and commissioners of services. 

## **Trustees’ responsibilities** 

The Trustees (who are also the Directors of Nacro for the purposes of company law) are responsible for ����������������������������������������������������������������������������������������������������� Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards). 

������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������� required to: 

- select suitable accounting policies and then apply them consistently; 

- observe the methods and principles in the applicable SORP; 

- make judgments and estimates that are reasonable and prudent; 

- state whether applicable UK accounting standards have been followed, subject to any material departures ������������������������������������������������������� 

- ������������������������������������������������������������������������������������������������������������� charitable company will continue in business. 

����������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������ of Recommended Practice for Registered Social Housing Providers and comply with the Accounting Direction for Private Registered Providers of Social Housing 2019. They are also responsible for safeguarding the assets of Nacro and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 

**Going concern** – The Trustees consider that Nacro is well positioned to manage its business risks successfully. After careful consideration and enquiry, the Trustees have a reasonable expectation that Nacro has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Trustees continue to ���������������������������������������������������������������������� 

������������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������������� liquidity. Nacro does not have lenders covenants to comply with. These processes ensure Council has a 

**19 Nacro Annual Report** 2021/22 



���������������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������� 

**�������������** ������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������ 

**Disclosure of information to the auditor** �������������������������������������������������������������������� that as far as the Trustees are aware, there is no relevant audit information of which Nacro’s auditor is unaware. The Trustees have taken all necessary steps in order to make themselves aware of any relevant audit information and to establish that Nacro’s auditor is aware of that information. 

Approved by the Trustees on 20th July 2022 and signed on their behalf by: 


## Ron Crank 

Nigel Chapman (Aug 8, 2022, 9:54am) Ron Crank (Aug 8, 2022, 11:15am) N Chapman CMG R Crank MBE Chair Vice-Chair 

**20 Nacro Annual Report** 2021/22 



## Statement of internal control 

The Nacro Council has overall responsibility for establishing and maintaining the whole system of internal ������������������������������������������������������������������������������������������������������������������ approach to internal control, which is embedded within the normal management and governance processes �������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������� internal control comprises: 

- ��� ����������������������������������������� 

   - Nacro has a formal risk management process to assess business risks and implement risk-based strategies. ��������������������������������������������������������������������������������������������������������������� the organisation. This involves identifying the types of risks that Nacro faces, prioritising them in terms of potential impact and likelihood of occurrence, and identifying mitigating actions. This process is coordinated through a regular reporting framework by the Executive Leadership Team (ELT) and the Finance and Audit ��������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������ by Nacro. This process has been in place throughout the year and up to the signing of the annual report and is reviewed regularly by the Council. 

- ��� �������������������������������� 

   - The regular review of internal controls via line management channels and by way of the internal audit plan ����������������������������������������������������������������������������������������������������������� is maintained. Where corrective action is required, ELT provide progress reports to Finance and Audit ���������������������������������������������������������������������������������������������������������������� ������������������������ 

- ��� ������������������������������������������ 

   - �������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������� of duties, accounting and treasury management controls, health and safety, safeguarding, data and asset protection, and the prevention and detection of fraud. The Council, through the scheme of delegated responsibility, sets out a framework of control that applies to all Nacro employees. The scheme of delegated ������������������������������������������������������������������������������������������������������������������ employees, volunteers and suppliers must comply as required with these policies. 

- ��� ���������������������������� 

   - The internal control framework and risk management processes are subject to regular review by an internal audit function which is responsible for providing independent assurance to the Council. Nacro appointed BDO LLP to supply an independent and objective internal audit function. The Finance and Audit Committee ensures that the risk-based inspection/monitoring plan remains up-to-date. It reviews all internal audit reports. Council has received an annual review of the system of control from the Finance ������������������������������������������������������������������������������������������������������� management and control process. 

- ��� ����������������������� 

   - Fraud response procedures and policy statements are reviewed and approved by the Council, via the Finance and Audit Committee, as part of a comprehensive review of internal control systems. The ����������������������������������������������������������������������������������������������������������� fraud through a fraud and anti money laundering policy. 

**21 Nacro Annual Report** 2021/22 



## **Key risks** 


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Key risk Risk treatment<br>�������������������������������������� Strategic and business planning in place and monitoring<br>to meet day to day operating costs and /  of progress against key corporate objectives<br>or balance sheet liabilities leading to the<br>Regular communication with commissioners regarding<br>��������������������������������������������<br>security of current income streams<br>Building closer relationships with potential funders and<br>developing new funding models<br>Financial performance is monitored through monthly<br>management accounts by management and Trustees<br>A Value for Money programme is in place which includes<br>initiatives to reduce operating costs<br>Death or harm caused by failure to follow  Executive and Trustee oversight to ensure arrangements<br>internal processes and procedures,  for health and safety and safeguarding are monitored<br>particularly in relation to health and safety<br>An incident management system is embedded and<br>and safeguarding, leading to loss of life,<br>learning from incidents is cascaded<br>damaging publicity, criminal convictions,<br>�������������������������<br>Continued compliance and quality inspections take place<br>Failure to embed a leadership approach  The strategic plan has a clear focus on people and the<br>that encourages active engagement,  �����������������������<br>�����������������������������������������<br>���������������������������������������������������<br>and collective responsibility<br>underpins the Nacro Strategy. The performance of People<br>Strategy is overseen by the People Committee.<br>A values based leadership development programme is<br>running for key managers.<br>�������������������������������������������������������<br>diversity and inclusion have been implemented<br>������������������������������������������ Robust business continuity plans are in place, these plans<br>internal or external event leading to an  were actively tested during the Coronavirus pandemic<br>inability to provide services to service users<br>Data and systems can be accessed securely from multiple<br>locations<br>��������������������������������������������������������<br>delivery sites<br>**----- End of picture text -----**<br>


**22 Nacro Annual Report** 2021/22 



## Financial narrative 

������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������� these contracts win have resulted in turnover increasing. Operating expenditure increased at a slightly higher rate ��������������������������������������������������������������������������������������������������������������� net reduction in Nacro’s pension liability is the main reason why total comprehensive income has increased from �������������������������������� 

��������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������ 

���������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������� the year and the net impact of this is shown in the overall result for the division. Nacro is not expecting to see ������������������������������������������������������������������������������������������������������������ ������������������������������������������������������������������������������� 

�������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������� ����������������������� 

���������������������������������������������������������������������������������������������������������������� ������������������ 

�������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������������� arose from asset disposals. 

������������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������� 

����������������������������������������������������������������������� 

The full results for the year are shown in the Statement of Comprehensive Income and the Statement of Financial Position plus accompanying accounts and notes on pages 36 to 59. 

**23 Nacro Annual Report** 2021/22 



## Value for money statement 

To comply with the Regulator of Social Housing’s latest code of practice on value for money, as a registered provider we are required to publish our performance against a given set of key indicators which is shown below: 


**----- Start of picture text -----**<br>
Nacro   Nacro  Global Accounts  2021/22 Comment<br>2021/22 2020/21 21 – Supported<br>Housing Provider<br>Metrics*<br>����������������� 0.2% 0.2%  4.4% Less than 10% of Nacro’s housing<br>units are owned by the Charity,<br>therefore landlords bear the bulk of<br>the cost of making improvements<br>to existing stock. For the stock<br>Nacro does own a regular pattern of<br>maintenance is followed<br>�������������� 0.0% 0.0% 0.4% Nacro did not build or acquire any<br>����������� new housing units during the year<br>������������ 0.0% 0.0% 14.2% Nacro does not have any loan<br>��������������������������������������<br>point Nacro does not intend to<br>���������������������������������<br>arrangements<br>4. EBITDA MRI  406.8% 689.4%  259% ���������������������������������������<br>���������������� as a whole. The interest value recorded<br>��������������������������������������<br>relates to accounting disclosures<br>�����������������������������������<br>pension scheme<br>5. Headline social  £10.96 £10.53 £9.90 Nacro provides over 500 very short<br>housing cost per unit term, typically less than 8 weeks stay,<br>units to provide accommodation to<br>people on bail and to people who are<br>�������������������������������������<br>arrangements are in place and typically<br>more frequent repairs are carried out to<br>keep units in a lettable condition<br>6. Operating Margin  -3.1%  1.6%  10.4%  Most of Nacro’s social and non social<br>A) Social Housing  housing units are used to provide<br>��������� enhanced and contractual support<br>������������������������������������<br>year, a higher level of property voids<br>������������ 1.9% 2.8% 6.5% were experience and this is the reason<br>for negative operating margin within<br>the Charity’s social housing stock<br>7. Return on capital  2.8% 5.5% 3.1% ��������������������������������<br>���������� ���������������������������������<br>**----- End of picture text -----**<br>


������������������������������������������������������������������������������������������������������������������������������������������������������ providers who own or manage at least 1,000 homes. The comparative data used for Nacro was taken from the Supported Housing Provider dataset, this is because Nacro primarily provides supporting housing services. 

**24 Nacro Annual Report** 2021/22 



Nacro has fewer than 1,000 owned homes so we are classed as a “small provider”. Nacro provides homes with additional support for housing vulnerable people and people leaving the criminal justice system on assured shorthold tenancies or licences. Many of the above metrics are designed to enable comparisons between large social housing �������������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������� 

Nacro’s performance against its own expectations in relation to housing activities is slightly better than our initial ������������������������������������������������������������������������������������������������������������� we have won a number of new contracts and we have continued to realise savings from reduced travel and �������������������������� 

������������������������������������������������������������������������������������������������������������� with the Code issued by the Regulator of Social Housing in respect of Nacro’s housing related activities. The ����������������������������������������������������������������������������������������������������������������� delivered throughout the Charity, for example: 

- Governance. We are further embedding our person-centred approach by investing more resources in service user and learner engagement initiatives. A number of engagement initiatives are detailed in our strategic ����������������������������������������������������������������������������������������������������������� development of our governance arrangements, decision making and service design to help us to continue to deliver better quality services at a reasonable price, in line with regulatory and commissioner expectations. 

- Co-production. We actively engage with the people we support and our workforce, this enables us to capitalise on their ideas and innovations for business improvement through consideration of re-shaping of ��������������������������������������������������������������������������������������������������������� 

- ����������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������� During the year we have launched an Environmental Strategy and we have strengthened our support and ������������������������ 

- Business development. We have increased the range of partners we work with to enable us to deliver ������������������������������������������������������������������������������������������������� developments within the organisation. During the year we have successfully re-tendered some of our largest ���������������������������������������������������������������������������������������������������� with us. 

**25 Nacro Annual Report** 2021/22 



To address our ambition to raise our performance against regulatory indicators 6 and 7 above, our internal indicators for the year to improve value for money, were as follows: 

1.  We have won new contracts and successfully retendered some of our largest contracts. 

- ����������������������������������������������������������������������������������������������������������� �������������� 

- ����������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������ ������������������������������������������������������������������������������������� 

4.  We have invested in our housing management team to enable more resources to be dedicated to reducing rent debt and we have improved our systems for managing contractual income receipts to ensure work done is invoiced promptly and settled in line with expectations. 

## **Return on assets and investments and use of reserves** 

������������������������������������������������������������������������������������������������������������ ����������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������� deliver for the needs of those using our services. 

Our investment resources are allocated according to current corporate priorities, risks, most urgent need and best return. Users of our services are our main focus in evaluating our investment pipeline. 

Our physical asset base across the Charity remains fully unsecured and we continue to be able to internally ������������������������������������������������������������������������������������������������������������ so selected investments in our infrastructure and strategic projects give us a potential long-term yield that will ensure our business remains sustainable in the longer term. We assess each investment against our strategic ����������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������� 

����������������������������������������������������������������������������������������������������������������� 

We are able to procure ICT related equipment, stationery and furniture at scale to maximise economies of scale of operating single supplier contracts. 

**26 Nacro Annual Report** 2021/22 



## Reserves and liquidity policies 

���������������������������������������������������������������������������������������������������������� ����������������������������������������������������������� 

������������������������������������������������������������������������������������������������������������ policy. The previous reserves policy, which was based on retaining 3 months of operating costs, was not ��������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������������������������� reserves policy, Council has taken account of known and potential balance sheet liabilities arising from the ���������������������������������������������������������������������������������������������������������� short term working capital commitments and overhead commitments. These factors are now used to determine reserve and liquidity targets. Finance and Audit Committee have reviewed the workings in detail and ������������������������������������������������������������������������������������������������� 

��������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������������������������������������������������� ��������������������������������� 

�������������������������������������������������������������������������������������������������������������� free cash reserves in immediately available liquid assets. 

**27 Nacro Annual Report** 2021/22 



## Environmental impact statement 

## **Streamlined Energy & Carbon Report (SECR)** 


**----- Start of picture text -----**<br>
Financial Year 1 April 2021 to 31 March 2022<br>Client Name  Nacro<br>Company No 203583<br>��������������� Walkden House, 16–17 Devonshire Square<br>London EC2M 4SQ<br>Current Financial Year tCO2e 3,114.00<br>Current Financial Year kWh   16,235,851.28<br>Previous Financial Year tCO2e  3,083.31<br>Previous Financial Year kWh 15,240,398.70<br>Intensity Ratio (IR) used  ��������<br>Intensity Metric Current Financial Year 65.98<br>Intensity Metric Previous Financial Year 60.70<br>Emissions Factors Used  DEFRA 2021<br>Methodology Used GHG Protocol<br>Emissions Scope Scope 1 & 2<br>Emissions Included Electricity, Natural Gas, Direct Mileage<br>Exclusion Statement Some gas and electricity use has been estimated based on<br>previous years consumption and pro-rata methods where it<br>was not available through billing.<br>**----- End of picture text -----**<br>


**28 Nacro Annual Report** 2021/22 




**----- Start of picture text -----**<br>
�������������������������� Nacro provides Housing, Education, Health and Justice<br>��������������������������������������������������<br>Nacro leases the majority of its 1000 residential properties.<br>We ensure that any new properties added to our portfolio<br>has a minimum EPC rating of D and have plans to ensure<br>that our existing properties also reach that rating. We work<br>with landlords, agents and developers, during the leasing<br>and acquisition stages, to assess whether any improvements<br>can be made (such as to the heating systems, insulation)<br>����������������������������������������������������������<br>����������������������������������������������������������<br>COVID-19 has shown the resilience of Nacro rising to the<br>challenge caused by the pandemic and our ability to adapt<br>������������������������������������������������������<br>reduction in 2020/21, particular in travel, as a result of<br>lockdowns and restrictions and whilst travel has recovered<br>in 2021/22, it is nowhere near the pre-pandemic levels<br>experienced. This is encouraging and demonstrates that<br>behaviour change is possible and can attract support from our<br>������������������������������������������������������������<br>achieve its sustainability objectives, and we will seek suitable<br>engagement to make the step change needed to address the<br>climate crisis and play our part in delivering a better future.<br>Nacro’s Environmental Strategy sets out our environmental<br>vision and goals and enables action plans and various<br>workstreams that are delivering measurable environmental<br>improvements. We will continue to meet our legal obligations,<br>develop sustainable and environmentally friendly services, and<br>���������������������������������������������������<br>Report completed by Sophie Adams<br>Quality Audit completed by   20th July 2022<br>SECR Report completed by (EIC) Energy Intelligence Centre Limited<br>**----- End of picture text -----**<br>


**29 Nacro Annual Report** 2021/22 



## Thanks and acknowledgements 

With thanks to our funders and partners including: 

Assetz Exchange Barrow Cadbury Trust BeNCH CRC Berkshire NHS Foundation Trust Big Lottery Fund Birmingham City Council Cambridgeshire & Peterborough Combined Authority Carmarthenshire County Council/ Cyngor Sir Gaerfyrddin Capita E-Source Cleveland Police and Crime Commissioner Clinks Conwy County Borough Council/ Cyngor Bwrdeistref Sirol Conwy Delta E-Source Department of Health Denbighshire County Council/ Cyngor Sir Ddinbych Dudley Council Education and Skills Funding Agency East Riding of Yorkshire Council & Two Ridings Community Foundation Education & Skills Funding Agency Essex County Council Essex CRC European Social Fund �������������������������������������������� The Forward Trust Gwynedd Council/Cyngor Gwynedd GamCare James Teather and Teather property Investments Ltd LandAid Lincolnshire County Council Liverpool City Council 

London Borough of Lambeth London Borough of Wandsworth London Borough of Westminster Manchester City Council Ministry of Justice MTC Ltd NHS England Northamptonshire Police & Crime Commissioner Nottingham City Council Ormiston Families Oxleas NHS Trust People Plus PACT Peabody Resonance – Social Investment �������������������� Shelter Sodexo South Yorkshire CRC St Mungos ���������������������������������������� Stephen Lawrence Trust Stockport Alliance The Bridge (East Midlands) The Privy Purse Charitable Fund The Royal British Legion Transform Foundation Together for Mental Well-being Wandsworth Borough Council Welsh Assembly Wolverhampton City Council Wrexham County Council YMCA Liverpool YSS 

**30 Nacro Annual Report** 2021/22 



## Independent auditor’s report 

## **Opinion** 

����������������������������������������������������������������������������������������������������� Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Reserves, ��������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������� Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). 

��������������������������������������� 

- �� ����������������������������������������������������������������������������������������������������������� and application of resources, including its income and expenditure for the year then ended; 

- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and 

- have been prepared in accordance with the requirements of the Companies Act 200,6 the Housing  and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing. 

## **Basis for opinion** 

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

## **Conclusions relating to going concern** 

������������������������������������������������������������������������������������������������������������ ������������������������������������������������������������������������ 

������������������������������������������������������������������������������������������������������������ ������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������� 

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

**31 Nacro Annual Report** 2021/22 



## **Other information** 

The trustees are responsible for the other information contained within the annual report. The other information �������������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������� extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 

Our responsibility is to read the other information and, in doing so, consider whether the other information ������������������������������������������������������������������������������������������������������������ appears to be materially misstated. If we identify such material inconsistencies or apparent material ��������������������������������������������������������������������������������������������������������������� 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. 

## **Opinions on other matters prescribed by the Companies Act 2006** 

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

- the information given in the trustees’ report, which includes the directors’ report and the strategic report ������������������������������������������������������������������������������������������������������ �������������������������������������������������������� 

- the strategic report and the directors’ report included within the trustees’ report have been prepared in accordance with applicable legal requirements. 

## **�������������������������������������������������������** 

In light of the knowledge and understanding of Nacro and its environment obtained in the course of the audit, ������������������������������������������������������������������������������������������������������������������ trustees’ report. 

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

- Nacro has not kept adequate accounting records; or 

- �� �������������������������������������������������������������������������������������������� 

- �� ������������������������������������������������������������������������������ 

- we have not received all the information and explanations we require for our audit. 

**32 Nacro Annual Report** 2021/22 



## **Responsibilities of the Trustees** 

As explained more fully in the trustees’ responsibilities statement set out on page 19, the trustees (who are ����������������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������������ whether due to fraud or error. 

������������������������������������������������������������������������������������������������������������������ 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 Nacro or to cease operations, or have no realistic alternative but to do so. 

## **�������������������������������������������������������������������** 

������������������������������������������������������������������������������������������������������������ from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be ����������������������������������������������������������������������������������������������������� 

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

We obtained an understanding of the legal and regulatory frameworks within which Nacro operates, ��������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������������������ Companies Act 2006, the Charities Act 2011, the Housing and Regeneration Act 2008, together with the Housing SORP. We assessed the required compliance with these laws and regulations as part of our audit ��������������������������������������������������� 

����������������������������������������������������������������������������������������������������������� ��������������������������������������������������������������������������������������������������������������� material penalty. We also considered the opportunities and incentives that may exist within Nacro for fraud. The laws and regulations we considered in this context for the UK operations were requirements imposed by the Regulator of Social Housing, health and safety, taxation and employment legislation. 

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and other management and inspection of regulatory and legal correspondence, if any. 

���������������������������������������������������������������������������������������������������������������������� be within the timing of recognition of income and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management, internal audit and the Finance and Audit Committee �������������������������������������������������������������������������������������������������������������� journals, reviewing accounting estimates for biases, reviewing regulatory correspondence, designing audit procedures over the timing of income and reading minutes of meetings of those charged with governance. 

**33 Nacro Annual Report** 2021/22 



Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some ���������������������������������������������������������������������������������������������������������� audit in accordance with auditing standards. For example, the further removed non-compliance with laws and ���������������������������������������������������������������������������������������������������������������������� the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing noncompliance and cannot be expected to detect non-compliance with all laws and regulations. 

������������������������������������������������������������������������������������������������������������������� Reporting Council’s website at: ���������������������������������������. This description forms part of our auditor’s report. 

## **Use of our report** 

This report is made solely to Nacro’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 Nacro’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Nacro and Nacro’s members as a body, for our audit work, for this report, or for the opinions we have formed. 


Julia Poulter Senior Statutory Auditor For and on behalf of Crowe U.K. LLP Statutory Auditor 55 Ludgate Hill London EC4M 7JW 

Date: 5 August 2022 

**34 Nacro Annual Report** 2021/22 



## Financial statements 

**35 Nacro Annual Report** 2019/20 



## **Nacro - Statement of Comprehensive Income for the year ended 31 March 2022** 

|Note<br>**Turnover**<br>3<br>Operating expenditure<br>3<br>**Operating surplus**<br>Equalisation of guaranteed minimum pension<br>19<br>scheme (GMP)<br>Operating surplus (including GMP)<br>Loss on disposal of property, plant and equipment<br>4<br>Interest and similar receivables<br>6<br>Interest and financing costs<br>7<br>**Surplus before tax**<br>5<br>Taxation<br>10<br>**Surplus for the year**<br>Actuarial gain in respect of pension schemes<br>19<br>**Total comprehensive income for the year**|2022<br>��000<br>66,817<br>(65,762)<br>1,055<br>-<br>1,055<br>(216)<br>-<br>(322)<br>517<br>-<br>517<br>1,881<br>2,398|2021<br>��000<br>60,701<br>(58,990)<br>1,711<br>-<br>1,711<br>(10)<br>3<br>(396)<br>1,308<br>-<br>1,308<br>91<br>1,399|
|---|---|---|



All amounts relate to continuing activities. 

The notes on pages 4 � to 63 form part of these financial statements. 

**3� Nacro Annual Report** 2021/22 



## **Nacro Statement of Financial Position as at 31 March 2022** 

|Note<br>**Non Current Assets**<br>Intangible assets<br>11<br>Housing properties<br>12<br>Other property, plant and equipment<br>13<br>**Current Assets**<br>Debtors<br>14<br>Cash and cash equivalents<br>**Creditors: Amounts falling due within one**<br>**year**<br>15<br>**Net current assets**<br>**Total assets less current liabilities**<br>**Creditors: Amounts falling due after more**<br>**than one year**<br>16<br>**Provisions**<br>Defined benefit obligations<br>19<br>Other provisions<br>18<br>**Total net assets**<br>**Capital and reserves**<br>Revenue reserve<br>Restricted reserve<br>**Total reserves**|2022<br>£'000<br>449<br>7,196<br>14,803<br>22,448<br>6,859<br>11,515<br>18,374<br>10,606<br>7,768<br>30,216<br>3,951<br>14,499<br>684<br>11,082<br>10,878<br>204<br>11,082|2021<br>£'000<br>172<br>7,577<br>15,291<br>23,040<br>5,600<br>10,943<br>16,543<br>8,880<br>7,663<br>30,703<br>4,436<br>16,958<br>625<br>8,684<br>8,480<br>204<br>8,684|
|---|---|---|



The financial statements were approved by the Board on 20[th] July 2022 and were signed on its behalf by: 

Ron Crank Ron Crank (Aug 8, 2022, 11:15am) Nigel Chapman (Aug 8, 2022, 9:54am) Chair Trustee 

The notes on pages 4 � to 63 form part of these financial statements. 

Nacro Company number 00203583. 

**3� Nacro Annual Report** 2021/22 



## **Nacro - Statement of changes in reserves for the year ended 31 March 2022** 

|Balance as at 1 April 2021<br>Surplus for the year<br>Other comprehensive income for the year<br>Total comprehensive income for the year<br>Balance at 31 March 2022<br>Balance as at 1 April 2020<br>Surplus for the year<br>Other comprehensive income for the year<br>Total comprehensive income for the year<br>Balance at 31 March 2021|Revenue<br>Restricted<br>reserve<br>reserve<br>£'000<br>£'000<br>8,480<br>204<br>517<br>-<br>1,881<br>-<br>2,398<br>-<br>10,878<br>204<br>Revenue<br>Restricted<br>reserve<br>reserve<br>£'000<br>£'000<br>7,101<br>184<br>1,288<br>20<br>91<br>-<br>1,379<br>20<br>8,480<br>204|Total<br>£'000<br>8,684<br>517<br>1,881|
|---|---|---|
|||2,398|
|||11,082|
|||Total<br>£'000<br>7,285<br>1,308<br>91|
|||1,399|
|||8,684|



The notes on pages 4 � to 63 form part of these financial statements. 

**3� Nacro Annual Report** 2021/22 



## **Nacro - Statement of Cashflow for the year ended 31 March 2022** 

|Note<br>2022<br>��000<br>Net cash generated from operating activities<br>20<br>1,152<br>Cash flows from investing activities<br>Purchase of housing property components<br>(213)<br>Purchase of other property, plant and equipment<br>(198)<br>Purchase of intangible assets<br>(392)<br>Proceeds from sale of housing properties<br>223<br>Interest received<br>-<br>Total cash utilised in investing activities<br>(580)<br>572<br>10,943<br>11,515<br>Net change in cash and cash equivalents<br>Cash and cash equivalents at beginning of year<br>**Cash and cash equivalents at end of year**<br>The notes on pages 4�to 63 form part of these financial statements.|2021<br>��000<br>3,696<br>(24)<br>(32)<br>-<br>3<br>(53)<br>3,643<br>7,300<br>10,943|
|---|---|



**3� Nacro Annual Report** 2021/22 



**Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **1 Legal Status** 

Nacro is a private company limited by guarantee under the Companies Act 2006, incorporated in England and is a registered housing provider and a registered charity. The address of its registered office is as disclosed on page 9 of the annual report. 

## **2 Accounting policies** 

The principal accounting policies are summarised below. They have been applied consistently throughout the year and to the preceding year. 

## **Basis of accounting** 

The financial statements have been prepared under the historical cost convention on an accruals basis, modified to include certain items at fair value, in accordance with UK Generally Accepted Accounting Practice (UK GAAP) including Financial Reporting Standard 102 (FRS 102) and the Housing SORP 2018: Statement of Recommended Practice for Registered Social Housing Providers and comply with the Accounting Direction for Private Registered Providers of Social Housing. Nacro is a public benefit entity, as defined in FRS 102 and applies the relevant �a�a��a��� ��ef��ed �PBE� �� FRS 102. 

The financial statements are presented in Sterling (£). 

## **Going Concern** 

Nac���� b����e�� ac������e�, ��� c���e�� f��a�c�a� �������� a�d fac���� ���e�� �� affec� ��� f����e development are set out within the Annual Report. 

The Trustees have a reasonable expectation that Nacro has adequate resources to continue in operational existence for the foreseeable future, being a period of at least twelve months after the date on which the report and financial statements are signed. For this reason, it continues to adopt the going concern basis in the financial statements. 

## **Turnover** 

Turnover represents rent and service charges receivable (net of rent and service charge losses from voids), grants from local authorities and charitable fees and donations. 

Rental income is recognised on an accruals basis and recognised when the property is available for let, net of voids. Service charge income is recognised when expenditure is incurred as this is considered to be the point at which the service has been performed and the revenue recognition criteria met. 

Grant income is recognised in the financial statements when the conditions for receipt of the grants have been fulfilled and Nacro becomes entitled to payment. Where a grant is received relating to a future accounting period, the Statement of Comprehensive Income shows the gross amount receivable reduced by the movement in the amount deferred to future accounting periods. Deferred grant income at the year end is included in creditors. 

Charitable fees and donations are credited as income in the year in which they were receivable. 

## **Financial instruments** 

Financial instruments which meet the criteria of a basic financial instrument as defined in Section 11 of FRS 102 are accounted for under an amortised historic cost model. 

Basic financial instruments are recognised at amortised historical cost. 

**�� Nacro Annual Report** 2021/22 



**Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **Debtors** 

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

Where deferral of payment terms has been agreed at below market rate, and where material, the balance is shown at the present value, discounted at a market rate. 

## **Creditors** 

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

## **Employee Benefits** 

## Defined contribution scheme 

Nacro participates in a defined contribution stakeholder scheme. Employer contributions payable to the scheme are charged to the Statement of Comprehensive Income during the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the Statement of Financial Position. 

## Defined benefit scheme. 

The Nacro Staff Benefits Plan closed to new entrants from 1 December 1998 and for future accruals from 31 March 2006. The net interest cost on the net defined benefit liability is charged to revenue and included within finance costs. Re-measurement comprising actuarial gains and losses and the return on scheme assets (excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in other comprehensive income. 

Defined benefit schemes are funded, with the assets of the scheme held separately from those of the company, in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit credit method. The actuarial valuations are obtained triennially and are updated at each Statement of Financial Position date. 

## **Housing properties** 

Housing properties are properties held for the provision of social housing or to otherwise provide social benefit. Housing properties are principally properties available for rent and are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes the cost of acquiring land and buildings, directly attributable development costs and interest charges incurred during the development period. 

Depreciation is charged so as to write down the net book value of housing properties to their estimated residual value, on a straight line basis, over their useful economic lives. Depreciation is charged in the year of acquisition. Freehold land is not depreciated. 

Major components of housing properties, which have significantly different patterns of consumption of economic benefits, are treated as separate assets and depreciated over their expected useful economic lives at the following annual rates: 

|Structure|80 years|
|---|---|
|Roofs|50 years|
|Windows|25 years|
|Kitchens|20 years|
|Bathrooms|30 years|
|Boilers|15 years|
|Heating systems|30 years|
|Electrics|30 years|



**4� Nacro Annual Report** 2021/22 



**Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

Properties held on long leases are depreciated over their estimated useful economic lives or the lease duration if shorter. 

## Improvements 

Where there are improvements to housing properties that are expected to provide incremental future benefits, these are capitalised and added to the carrying amount of the property. Any works to housing properties which neither replace a component nor result in an incremental future benefit are charged as expenditure in the Statement of Comprehensive Income. 

## Leaseholders 

Where the rights and obligations for improving a housing property reside with the leaseholder or tenant, any works to improve such properties incurred by Nacro is recharged to the leaseholder and recognised in the Statement of Comprehensive Income along with the corresponding income from the leaseholder or tenant. 

## **Donation or acquisition of land or other asset at below market value** 

Where a donation of land and/or other assets is received or land and/or other assets are acquired at below market value from a government source, this is accounted for as a nonmonetary government grant. The difference between the fair value of the asset donated or acquired and the consideration paid for the asset is recognised as a government grant and included in the Statement of Financial Position as a liability. 

Where Nacro receives a donation of land and/or other assets or acquires such assets below their market value from a third party that does not meet the definition of a government source as set out in the Housing SORP, then the transaction is accounted for as a non-exchange transaction. The assets acquired are recognised in the statement of financial position at fair value. The income, equivalent to the difference between any amounts paid or payable for the assets and the fair value of the assets, is recognised in the statement of comprehensive income as a donation when future performance-related conditions are met. 

## **Assets held for sale** 

Assets held for sale consists of properties or other assets that are surplus to the requirement of the business and not held for use in the business. 

Property assets held for sale are subject to a charity valuation by a qualified and experienced external surveyor and held at this value, any change in valuation is recognised in the Statement of Comprehensive Income. 

## **Social Housing Grant and other Government grants** 

Government grants include grants receivable from government agencies such as Homes England, local authorities, devolved government agencies, health authorities and the European Commission. Government grants received for housing properties are recognised in income over the useful life of the housing property structure and, where applicable, its individual components (excluding land) under the accruals model. 

Grants relating to revenue are recognised in income on a systematic basis over the period in which related costs for which the grant is intended to compensate are recognised. Where a grant is receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support with no future related costs, it is recognised as revenue in the period in which it becomes receivable. 

Grants due from government organisations or received in advance are included as current assets or liabilities. 

**4� Nacro Annual Report** 2021/22 



**Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

Government grants received for housing properties are subordinated to the repayment of loans by agreement with Homes England. Government grants released on sale of a property may be repayable but are normally available to be recycled and are credited to a Recycled Capital Grant Fund and included in the statement of financial position in creditors. 

## **Other Grants** 

Grants received from non-government sources are recognised as revenue using the performance model. 

## **Recycling of grants** 

Where there is a requirement to either repay or recycle a grant received for an asset that has been disposed of, a provision is included in the Statement of Financial Position to recognise this obligation as a liability. When approval is received from the funding body to use the grant for a specific development, the amount previously recognised as a provision for the recycling of the grant is reclassified as a creditor in the Statement of Financial Position. 

On disposal of an asset for which government grant was received, if there is no obligation to repay the grant, any unamortised grant remaining within liabilities in the Statement of Financial Position related to this asset is derecognised as a liability and recognised as revenue in the Statement of Comprehensive Income. 

## **Impairment of social housing properties** 

An assessment is made at each reporting date as to whether an indicator of impairment exists. If such an indicator exists, an impairment assessment is carried out and an estimate of the recoverable amount of the asset is made. Where the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognised in the Statement of Comprehensive Income. The recoverable amount of an asset is the higher of its value in use and fair value less costs to sell. Where assets are held for their service potential, value in use is determined by the present value of ��e a��e��� �e�a����� �e���ce ���e���a� ���� ��e �e� a����� e��ec�ed �� be received from its disposal. Depreciated replacement cost is taken as a suitable measurement model. 

An impairment loss is reversed if the reasons for the impairment loss have ceased to apply and included in the Statement of Comprehensive Income. 

## **Other property, plant and equipment** 

Other property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. Depreciation is charged on all non-housing property, plant and equipment, other than investment properties and freehold land so as to write down the net book value to their residual value, on a straight line basis, over their useful economic lives, as follows: 

|Other Freehold premises|34 - 60 years|
|---|---|
|Freehold premises components|4�30 years|
|Leasehold land and buildings|5 years|
|Furniture, fixtures & fittings|4 years|
|Other equipment|4 years|
|Vehicles|4 - 10 years|
|Computer hardware|2 - 4 years|



Other freehold premises are treated as housing properties which have different patterns of consumption of economic benefit and treated as separate assets. The same asset lives are used as for housing properties. 

**�� Nacro Annual Report** 2021/22 



**Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **Intangible assets** 

Intangible assets are stated at historic cost or valuation, less accumulated amortisation and any provision for impairment. Amortisation is charged to operating expenditure in the Statement of Comprehensive Income. Amortisation is provided on all intangible assets at rates calculated to write off the cost or valuation of each asset on a straight-line basis over its expected useful life, as follows: 

Computer software 3 - 4 years 

## **Leases** 

An assessment is made at inception of an agreement that transfers the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement. 

## Operating leased assets 

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. 

Payments under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the period of the lease. 

## **Provisions for liabilities** 

Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event; it is probable the obligation will have to be settled; and a reliable estimate can be made of the amount of the obligation. 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. 

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognised as a finance cost in the Statement of Comprehensive Income in the period it arises. 

Financial provision is made for the cost of annual leave accrued by employees as a result of services rendered in the current period, and which employees are entitled to carry forward and use within the next 12 months. The provision is measured at the salary cost payable for the period of absence. 

## **Restricted reserves** 

Where reserves are subject to an external restriction they are separately recognised within reserves as a restricted reserve. Revenue and expenditure is included in the Statement of Comprehensive Income and a transfer is made from the general reserve to the restricted reserve. 

## **Significant management judgements and key sources of estimation uncertainty** 

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. 

**�� Nacro Annual Report** 2021/22 



**Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

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 and in any future periods affected. 

## **Significant management judgements** 

The following are management judgements in applying the accounting policies of Nacro that have the most significant effect on the amounts recognised in the financial statements. 

## Impairment of social housing properties 

The Trustees have to make an assessment as to whether an indicator of impairment in value of social housing properties exists. In making the judgement, management consider the detailed criteria set out in the SORP. The conclusion of the Trustees is that there are no indicators of impairment. 

## **Estimation uncertainty** 

Estimates and assumptions are made concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. 

## Provisions 

Provision is made for dilapidations. T�e�e ���������� �e����e �a�a�e�e���� be�� e���� ate of the costs that will be incurred based on legislative and contractual requirements. In addition, the timing of the cash flows and the discount rates used to establish net present value of the �b���a����� �e����e �a�a�e�e���� ��d�e�e��. 

## Recoverability of rent arrears 

Nacro makes an estimate of the recoverable value of rent arrears. When assessing impairment of rent arrears, management consider factors including the ageing profile of the rental debtors and historical experience. 

## Defined benefit pension scheme 

Nacro has obligations to pay pension benefits to certain employees and former employees. The cost of these benefits and the present value of the obligation depend on a number of factors, including; life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. Based on advice received from Actuaries, management estimates these factors in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends. 

## Useful lives of depreciable assets 

Management reviews its estimates of the useful lives of depreciable assets at each reporting date based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software and IT equipment and changes to decent homes standards which may require more frequent replacement of key components. 

**4� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **3A    Particulars of turnover, operating costs and operating surplus.** 

|**Social housing activity**<br>Social housing lettings (Note 3B)<br>Other social housing activities<br>Charges for support services<br>Sub-total<br>**Activities other than social housing**<br>Non-social housing and related support services<br>Education centre provision<br>Justice services<br>Health services<br>Sub-total<br>Total<br>**Social housing activity**<br>Social housing lettings (Note 3B)<br>Other social housing activities<br>Charges for support services<br>Sub-total<br>**Activities other than social housing**<br>Non-social housing and related support services<br>Education centre provision<br>Justice services<br>Health services<br>Sub-total<br>Total|2022<br>Turnover<br>Operating<br>costs<br>Operating<br>surplus/<br>(deficit)<br>��000<br>��000<br>��000<br>6,877<br>(7,092)<br>(215)<br>6,974<br>(5,624)<br>1,350<br>13,851<br>(12,716)<br>1,135<br>28,387<br>(28,003)<br>384<br>14,609<br>(16,221)<br>(1,612)<br>4,642<br>(3,701)<br>941<br>5,328<br>(5,121)<br>207<br>52,966<br>(53,046)<br>(80)<br>66,817<br>(65,762)<br>1,055<br>2021<br>Turnover<br>Operating<br>costs<br>Operating<br>surplus/<br>(deficit)<br>��000<br>��000<br>��000<br>7,128<br>(7,011)<br>117<br>7,482<br>(6,747)<br>735<br>14,610<br>(13,758)<br>852<br>26,489<br>(24,724)<br>1,765<br>12,699<br>(13,999)<br>(1,300)<br>2,224<br>(1,901)<br>323<br>4,679<br>(4,608)<br>71<br>46,091<br>(45,232)<br>859<br>60,701<br>(58,990)<br>1,711|
|---|---|



**4� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **3B    Social Housing Lettings** 

|**Income**<br>Rents receivable net of<br>identifiable service charges<br>Service charge income<br>Amortised government grants<br>**Turnover from social housing**<br>**lettings**<br>**Operating expenditure**<br>Management<br>Service charge costs<br>Rents payable and property<br>costs<br>Routine maintenance<br>Bad debts<br>Depreciation of housing<br>properties<br>**Expenditure from social**<br>**housing lettings**<br>**Operating surplus social**<br>**housing lettings**<br>Total void losses including<br>service charges|General<br>Needs<br>Housing<br>Supported<br>Housing<br>2022<br>Total<br>2021<br>Total<br>��000<br>��000<br>��000<br>��000<br>151<br>2,659<br>2,810<br>3,834<br>29<br>3,462<br>3,491<br>3,144<br>17<br>559<br>576<br>150<br>197<br>6,680<br>6,877<br>7,128<br>(7)<br>(2,855)<br>(2,862)<br>(2,166)<br>(13)<br>(1,407)<br>(1,420)<br>(1,092)<br>(17)<br>(2,477)<br>(2,494)<br>(3,262)<br>-<br>(32)<br>(32)<br>(27)<br>(8)<br>(120)<br>(128)<br>(289)<br>(20)<br>(136)<br>(156)<br>(175)<br>(65)<br>(7,027)<br>(7,092)<br>(7,011)<br>132<br>(347)<br>(215)<br>117<br>-<br>1,044<br>1,044<br>583|
|---|---|



**4� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **4    Loss on disposal of property and equipment** 

|2022<br>��000<br>Loss on disposal of property and equipment<br>(216)<br> (216)<br>**5   Surplus for the year before taxation**<br>Surplus for the year before taxation is stated after charging/(crediting):<br>2022<br>��000<br>Depreciation of housing properties<br>164<br>Depreciation of other property, plant and equipment<br>686<br>Amortisation of intangible assets<br>115<br>Amortisation of Government grants<br>(594)<br>Loss on disposal of fixed assets<br>216<br>Audit fees:<br>- statutory audit<br>42<br>- audit-related assurance services<br>48<br>Operating lease rentals<br>11,806<br>**6**<br>**Interest receivable**<br>2022<br>��000<br>Bank interest receivable<br>-<br>-<br>**7**<br>**Interest and financing costs**<br>2022<br>��000<br>Net interest payable on defined benefit pension liability<br>(322)|2021<br>��000<br>(10)<br> (10)<br>2021<br>��000<br>198<br>837<br>127<br>(149)<br>10<br>38<br>-<br>11,279<br>2021<br>��000<br>3<br> 3<br>2021<br>��000<br>(396)|
|---|---|



**4� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **8 Staff costs** 

|Wages and salaries<br>Social security costs<br>Other pension costs<br>Redundancy Costs<br>Agency Costs|2022<br>��000<br>21,874<br>1,971<br>748<br>206<br>2,978<br>27,777|2021<br>��000<br>19,900<br>1,789<br>591<br>224<br>2,642<br>25,146|
|---|---|---|



The number of staff who received emoluments, including pension contribution, in excess of £60,000 is as shown below: 

|Salary Band|2022|2021|
|---|---|---|
|60,000 - 69,999|10|9|
|70,000 - 79,999|6|0|
|80,000 - 89,999|1|2|
|90,000 - 99,999|1|0|
|100,000 - 109,999|0|1|
|110,000 - 119,999|1|1|
|120,000 - 129,999|0|0|
|130,000 - 139,999|0|0|
|140,000 - 149,999|0|0|
|150,000 - 159,999|0|1|
|160,000�169,999|1|0|



The average full time equivalent number of employees over the 12-month period was: 

|Service delivery<br>Management and administration|2022<br>707<br>94<br>801|2021<br>720<br>79<br>799|
|---|---|---|



Full Time equivalents are calculated on the basis of a 40-hour standard week. 

**4� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **9 Directors' remuneration and transactions** 

|Directors who are executive staff members<br>Wages and salaries (including social security costs)<br>Other pension costs<br>Compensation for loss of office|2022<br>��000<br>684<br>18<br>-<br>702|2021<br>��000<br>728<br>19<br>41<br>788|
|---|---|---|



Directors are defined as the members of the Board, the Chief Executive and any other person who is a member of the Executive Leadership Team. 

The number of directors in the defined contribution scheme as at the end of March 2022 was 6 (2021:6) 

Remuneration of the highest paid director 

|Remuneration of the highest paid director|||
|---|---|---|
||2022|2021|
||��000|��000|
|Emoluments|160|150|
|Pension contributions|5|5|



The Chief Executive is an ordinary member of the pension scheme. No enhanced or special terms apply. 

No Council member or person related or connected to them received any remuneration from Nacro during the year. During the year expenses relating to travel were reimbursed or paid on behalf of Council members amounting to £1,687 for 4 members (2021: £361 to 3 members). 

## **10 Taxation status** 

Nacro has charitable status and its sources of income are exempt from income and corporation tax provided that they are applied for charitable purposes. 

**�� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **11 Intangible fixed assets** 

|**Cost**<br>At 1 April 2021<br>Additions<br>Disposals<br>**As at 31 March 2022**<br> **Amortisation**<br>At 1 April 2021<br>Charge for the year<br>Eliminated on disposal<br>**As at 31 March 2022**<br>**Net book value**<br>As at 31 March 2022<br>As at 31 March 2021<br>**12**<br>**Housing properties**<br>**Cost**<br>At 1 April 2021<br>Additions<br>Disposals<br>**At 31 March 2022**<br>**Depreciation**<br>At 1 April 2021<br>Charge for the year<br>Eliminated on disposals<br>**At 31 March 2022**<br>**Net book value**<br>As at 31 March 2022<br>As at 31 March 2021|General Needs<br>Supported<br>Housing<br>��000<br>��000<br>281<br>11,419<br>-<br>213<br>(18)<br>(498)<br>263<br>11,134<br>(56)<br>(4,067)<br>(6)<br>(158)<br>2<br>84<br>(60)<br>(4,141)<br>203<br>6,993<br>225<br>7,352|Computer<br>software<br>��000<br>929<br>392<br> (470)<br>851<br>(757)<br>(115)<br>470<br>(402)<br>449<br>172<br>Total<br>��000<br>11,700<br>213<br>(516)<br>11,397<br>(4,123)<br>(164)<br>86<br> (4,201)<br>7,196<br>7,577|
|---|---|---|



**�� Nacro Annual Report** 2021/22 



## )) **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **13 Other property, plant and equipment** 

|**Cost or valuation**<br>At 1 April 2021<br>Additions<br>Disposals<br>As at 31 March 2022<br>**Depreciation**<br>At 1 April 2021<br>Charge for the year<br>Eliminated on disposal<br>As at 31 March 2022<br>**Net book value**<br>As at 31 March 2022<br>As at 31 March 2021|Freehold<br>Long/short<br>leasehold<br>Equipment<br>Motor<br>vehicles<br>£'000<br>£'000<br>£'000<br>£'000<br>16,796<br>904<br>4,774<br>178<br>-<br>165<br>33<br>-<br>-<br>(522)<br>(3,566)<br>-<br>16,796<br>547<br>1,241<br>178<br>(2,031)<br>(798)<br>(4,354)<br>(178)<br>(398)<br>(41)<br>(247)<br>-<br>-<br>522<br>3,566<br>-<br>(2,429)<br>(317)<br>(1,035)<br>(178)<br>14,367<br>230<br>206<br>-<br>14,765<br>106<br>420<br>-|Total<br>£'000<br>22,652<br>198<br>(4,088)<br>18,762<br>(7,361)<br>(686)<br>4,088<br>(3,959)<br>14,803<br>15,291|
|---|---|---|



**�� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

|**14**<br>**Debtors**<br>**Amounts falling due within one year:**<br>Rent arrears<br>Provision for bad debts<br>Net Rent Arrears<br>Trade debtors<br>Other Debtors<br>Prepayments and accrued income<br>**15**<br>**Creditors**<br>**Amounts falling due within one year:**<br>Trade creditors<br>Corporation tax<br>Other taxation and social security<br>Other creditors<br>Deferred income, grants and grants repayable<br>Accruals<br>SHG under 1 year deferred grant (note 17)<br>**16**<br>**Creditors**<br>**Amounts falling due after more than one year:**<br>Financial assistance - deferred grants (note 17)<br>Financial assistance - recycled capital grant fund|2022<br>��000<br>1,833<br>(407)<br>1,426<br>2,252<br>212<br>2,969<br>6,859<br>2022<br>��000<br>2,099<br>-<br>961<br>693<br>3,746<br>2,886<br>221<br>10,606<br>2022<br>��000<br>3,945<br>6<br>3,951|2021<br>��000<br>3,346<br>(1,932)<br>1,414<br>1,530<br>270<br>2,386<br>5,600<br>2021<br> ��000<br>2,134<br>-<br>723<br>743<br>2,336<br>2,795<br>149<br> 8,880<br>2021<br>��000<br>4,430<br>6<br>4,436|
|---|---|---|



**�� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS** 

## **for the year ended 31 MARCH 2022** 

## **17 Financial assistance and other government grants (Deferred income grant)** 

|**Deferred income - government grants**<br>2022<br>��000<br>As at 1 April<br>4,579<br>Amortisation to Statement of Comprehensive Income<br>(594)<br>Grant addition<br>181<br>As at 31 March<br>4,166<br>Amounts to be released within one year<br>221<br>Amounts due to be released in more than one year<br>3,945<br>4,166<br>The total value of grants received by Nacro is £8,795,258 (2021 £8,795,258).<br>**Recycled Capital Grant Fund**<br>2022<br>��000<br>As at 1 April<br>6<br>Recycling of grant<br>-<br>As at 31 March<br>6|2021<br>��000<br>4,728<br>(149)<br>-<br>4,579<br>149<br>4,430<br>4,579<br>2021<br>��000<br>6<br>-<br>6|
|---|---|



The recycled capital grant is in respect of 2 housing property disposals in 2017/18 and is shown in note 16. 

## **18 Provisions** 

|**18**<br>**Provisions**|||
|---|---|---|
|As at 1 April 2021<br>Released<br>Increase<br>As at 31 March 2022|Dilapidations<br>£'000<br>625<br>(102)<br>161<br>684|Total<br>£'000<br>625<br>(102)<br>161|
|||684|



**�4 Nacro Annual Report** 2021/22 



**Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **19 Retirement benefit schemes** 

## Defined contribution scheme 

Nacro operates defined contribution retirement benefit schemes for qualifying employees. The total expense charged to the Statement of Comprehensive Income in the period ended 31 March 2022 was £748,363 (2021: £590,880). 

## Defined benefit scheme 

## Characteristics and risks associated with the Plan 

Nacro operates the Nacro Staff Benefits Plan ("the Plan"). The Plan provides pensions in retirement a�d dea�� be�ef��� �� �e�be��. Pe����� be�ef��� a�e ����ed �� a �e�be��� f��a� �a�a�� a� �e���e�e�� and their length of service. Since 31 March 2006 the Plan has been closed to future accrual. 

The Plan is a registered scheme under UK legislation and was contracted out of the State Second Pension until its closure. 

The Plan is subject to the scheme funding requirements outlined in UK legislation. 

The Plan was e��ab����ed f��� 31 Ma� 1986 ��de� ����� a�d �� ���e��ed b� ��e P�a��� ����d definitive deed and rules dated 23 May 2011. The Trustees are responsible for the operation and ��e ���e��a�ce �f ��e P�a�, ��c��d��� �a���� dec������ �e�a�d��� ��e P�a��� f��d��� and investment strategy in conjunction with the Company. 

U�de� c�a��e 21 �f ��e P�a��� ����d def������e deed a�d ���e� da�ed 23 Ma� 2011, ��e C���a�� does not have an unconditional right to a refund of any surplus in the Plan if the Plan winds up. However, since the Plan is in deficit, and this deficit exceeds the value of future contributions due under the current recovery plan, there is no additional liability recognised on the balance sheet  as a �e���� �f ��e P�a��� �ec��e�� plan. 

The Plan exposes the Company to actuarial risks such as; market (investment) risk, interest rate risk, inflation risks, currency risk and longevity risk. 

The Plan does not expose the Company to any unusual Plan-specific or Company-specific risks. 

No allowance has been made for any curtailment or settlement during the accounting period. 

## Amount, timing and uncertainty of future cashflows. 

T�e T����ee� ���d a ���������� �f ��e P�a��� a��e�� �� ����� a�d ��de� -linked gilts to provide some de��ee �f �a�c���� ���� ��e P�a��� ��ab�����e� (���� ��e �a��e� �����d��� a de��ee �f ���ce inflation �a�c���� ���� ��e P�a��� ��ab�����e�). 

The Plan also holds annuity contracts in respect of the majority of pensions in payment which provide protection against future changes in respect of post retirement market risk, inflation risk and longevity risk in respect of these members. 

**�� Nacro Annual Report** 2021/22 



**Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **19 Retirement benefit schemes - cont** 

T�e P�a��� ���e���e�� ���a�e�� �� �� ���e�� b��ad�� 90% �f ��� -annuity investments in return seeking assets and the remaining 10% in matching assets (mainly government bonds). This ���a�e�� �ef�ec�� ��e P�a��� ��ab����� ���f��e a�d ��e T����ee�� a�d C���a���� a�����de �� ����. 

T�e P�a��� ��� -annuity investments include interest rate and inflation hedging. The Plan also holds a number of annuity policies which approximately match the majority of the pensions in payment. 

The last scheme funding valuation of the Plan was as at 31 Ma�c� 2017 (���e 2017 �a��a�����) a�d revealed a funding deficit of £16.0m. Under the current schedule of contributions, the Company has agreed to pay deficit reduction contributions of £300,000 per annum increasing to 

£543,000 per annum on 1 April 2022 and thereafter increasing each 1 April by £150,000 per annum. The expenses of running the Plan, as well as statutory levies, are to be met directly by the Company. The Company has paid £900,000 in contributions in respect of the current accounting period. 

The liabilities of the Plan are based on the current value of expected benefit payment cash-flows to members of the Plan over the next 50 years. The average duration of the liabilities is approximately 14 years. 

The value of the liabilities at the reporting date have been estimated by updating the results of the 2017 valuation to allow for the passage of time, benefits paid out of the Plan and changes in actuarial assumptions over the period from 31 March 2017 to 31 March 2022. Allowance has also been made for actual inflation experience and known transfers out and trivial commutations over the period. Such an approach is common for the purposes of accounting disclosures. It is not expected that these projections will be materially different from a summation of individual calculations at the accounting date, although there may be some discrepancy between the actual liabilities for the Plan at the accounting date and those included in the disclosures. 

## Principal Actuarial Assumptions 

A full actuarial valuation of the Plan was carried out as at 31 March 2017 and has been updated to 31 March 2022 by a qualified actuary. The major assumptions used by the actuary were (in nominal terms) as follows 

|terms) as follows|||
|---|---|---|
||2022|2021|
|Discount rate|2.65%|1.95%|
|Inflation assumption (RPI)|4.05%|3.45%|
|Inflation assumption (CPI)|3.15%|2.55%|
|Future revaluation of pensions in deferment|3.15%|2.55%|
|Pension increases in payment (liabilities) :|||
|CPI max 5%|3.05%|2.55%|
|CPI max 3%|2.45%|2.15%|
|CPI max 2.5%|2.15%|1.95%|
|Pension increases in payment (insured asset) :|||
|RPI max 5%|3.80%|3.30%|
|RPI max 3%|2.75%|2.60%|
|RPI max 2.5%|2.35%|2.25%|



**�� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **19 Retirement benefit schemes - cont** 

## **Assumed life expectancies on retirement at age 65** 

|Retiring today�Females<br>Retiring today�Males<br>Retiring in 20 years: Females<br>Retiring in 20 years: Males<br>**The assets in the plan were**<br>Equity, property and other<br>Gilts and other government debt<br>Annuities<br>Cash and net current assets<br>**Fair value of Plan assets**<br>The actual return on assets over the period was:<br>Present value of funded obligations<br>Fair value of Plan assets<br>**Deficit in funded scheme**<br>Present value of unfunded obligations<br>Unrecognised actuarial gains / (losses)<br>(Irrecoverable surplus)<br>**Net liability in Statement of Financial Position**|2022<br>22.9<br>20.4<br>24.1<br>21.3<br>2022<br>��000<br>21,211<br>14,206<br>8,148<br>2,714<br>46,279<br>(393)<br>(60,778)<br>46,279<br>(14,499)<br>-<br>-<br>-<br>(14,499)|2021<br>23.2<br>20.9<br>24.4<br>21.8<br>2021<br>��000<br>25,983<br>11,964<br>9,180<br>1,451|
|---|---|---|
|||48,578|
|||5,389<br>(65,536)<br>48,578|
|||(16,958)|
|||-<br>-<br>-|
|||(16,958)|



**�� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS** 

## **for the year ended 31 MARCH 2022** 

## **19 Retirement benefit schemes - cont** 

## **Reconciliation of opening and closing balances of the present value of the deferred benefit obligation** 

|**benefit obligation**|||
|---|---|---|
||2022|2021|
||��000|��000|
|Benefit obligation at beginning of year|65,536|62,584|
|Plan administration cost|-|-|
|Interest cost|1,251|1,439|
|Contributions by plan participants|-|-|
|Actuarial (gains) / losses|(3,203)|4,255|
|Benefits paid|(2,806)|(2,742)|
|Past service cost|-|-|
|**Benefit obligation at end of year**|60,778|65,536|
|**Reconciliation of opening and closing balances of the fair value of Plan assets**|||
||2022|2021|
||��000|��000|
|Fair value of Plan assets at beginning of year|48,578|45,631|
|Interest income on Plan assets|929|1,043|
|Return on assets, excluding interest income|(1,322)|4,346|
|Contributions by employer|900|300|
|Contributions by Plan participants|-|-|
|Benefits paid|(2,806)|(2,742)|
|Plan administration cost|-|-|
|**Fair value of Plan assets at end of year**|46,279|48,578|
|**The amounts recognised in Statement of Comprehensive**|||
|**Income**|||
||2022|2021|
||��000|��000|
|Service cost - including current and past service costs and|-|-|
|Settlements|||
|Plan administrative costs|-|-|
|Net interest on the net defined liability|322|396|
||322|396|



**�� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **19  Retirement benefit schemes - cont** 

## **Remeasurements of the net defined benefit liability (asset) shown in the Statement of Comprehensive Income** 

|**Comprehensive Income**|||
|---|---|---|
|Actuarial (gains) / losses on the liabilities<br>Return on assets, excluding interest income<br>**Total remeasurement of the net defined liability (asset)**<br>**Estimation of next period's profit or loss**<br>Service cost - including current and past service costs and<br>settlements<br>Plan administrative costs<br>Net interest on the net defined liability<br>**Total expense**|2022<br>��000<br>(3,203)<br>1,322<br>(1,881)<br>2023<br>��000<br>-<br>-<br>378<br>378|2021<br>��000<br>4,255<br> (4,346)|
|||(91)|
||||



**�� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **20 Cashflow from operating activities** 

|Surplus for the year<br>Adjustment for non-cash items:<br>Depreciation of housing properties<br>Depreciation of other property, plant and equipment<br>Amortisation of intangible assets<br>Loss on disposal of assets<br>(Increase) / Decrease in debtors<br>Increase / (Decrease) in creditors<br>Increase / (Decrease) in provisions<br>Pension costs less contributions payable<br>Accrued pension payment<br>Amortisation of SHG<br>Amortisation of SHG prior year reclassification<br>Interest payable<br>Interest received<br>**Net cash generated from operating activities**|2022<br>��000<br>517<br>164<br>686<br>115<br>216<br>(1,259)<br>1,726<br>59<br>(900)<br>100<br>(594)<br>-<br>322<br>-<br>1,152|2021<br>��000<br>1,308<br>198<br>837<br>127<br>10<br>2,530<br>(1,027)<br>(234)<br>(300)<br>-<br>(149)<br>3<br>396<br>(3)<br>3,696|
|---|---|---|



## **21 Capital commitments** 

Capital commitments amounted to £112k at the year-end (2021: £nil). 

## **22 Leasing Commitments** 

Total future minimum lease payments under non-cancellable operating leases are as follows: 

|Leases expiring:-<br>- within one year<br>- between one and five years<br>- after five years|2022<br>��000<br>1,369<br>1,605<br>3,823<br>6,797|2021<br>��000<br>2,780<br>632<br>-<br>3,412|
|---|---|---|



**�� Nacro Annual Report** 2021/22 



## **Nacro – NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 MARCH 2022** 

## **23 Financial assets and liabilities** 

## **Financial assets** 

|Financial assets measured at undiscounted amount receivable<br>Bank deposits<br>**Total**|2022<br>��000<br>3,890<br>11,515<br>15,405|2021<br>��000<br>3,214<br>10,943<br>14,157|
|---|---|---|



Financial Instruments on which no interest is earned include short-term debtors. No investments were held by the company during the year. No interest or gains are recognised on financial assets recognised at undiscounted amounts receivable. 

|**Financial liabilities**|2022|2021|
|---|---|---|
||��000|��000|
|Financial liabilities measured at undiscounted amount payable|2,792|2,877|



The company's financial liabilities are sterling denominated. There is no exposure to interest rate risk. 

## **24    Accommodation in management and development** 

|Owned units<br>Units under management<br>Total units|2022<br>225<br>2,145<br>2,370|2021<br>225<br>2,227<br>2,452|
|---|---|---|



Within the total units, 647 units met the regulated definition of social housing (2021 - 666) and 1,723 units were outside the regulated definition (2021 - 1,786). 

Owned units have remained unchanged from 2021 to 2022 at 225. 5 units lost through the disposal of Pinchbeck have been �e��aced b� 5 ����� ac����ed f��� ��e ���c�a�e �f S� Ma���� Wharf. 

**�� Nacro Annual Report** 2021/22 




Telephone 0300 123 1889 Email ���������������������� 

**nacro.org.uk** 

Nacro: Registered charity no. 226171; Registered company (London) 203583; Registered social housing provider no.4781; UK registered learning provider no. 100004486; Ofsted no. 50170 






