## **LUTHERAN COUNCIL OF GREAT BRITAIN**
_(Council of Lutheran Churches)_
## **ANNUAL REPORT AND ACCOUNTS**
YEAR ENDED 31 DECEMBER 2023
Company registration number 557552 Charity registration number 232042
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## **Contents**
|**Contents**||
|---|---|
|LETTER FROM THE CHAIR…………………………………………………………|3|
|TRUSTEES’ REPORT………………………………………………………………...|5|
|ACHIEVEMENTS AND PERFORMANCE…………………..................................|8|
|FUTURE PLANS AND STRATEGY…………………………………………………|12|
|FINANCIAL REVIEW………………………………………….................................|14|
|PUBLIC BENEFIT…………………………………………......................................|16|
|PRINCIPAL ADVISORS………………………………………………………………|17|
|STATEMENT OF TRUSTEES’ RESPONSIBILTIES………………………………|18|
|INDEPENDENT AUDITORS’ REPORT………………….....................................|19|
|FINANCIAL STATEMENTS||
|STATEMENT OF FINANCIAL ACTIVITIES……………….………………………..|22|
|BALANCE SHEET…………………………………………………………………….|23|
|STATEMENT OF CASHFLOWS………………………...…………………………..|24|
|NOTES TO THE FINANCIAL STATEMENTS………….......................................|25|
Company registration number 557552 Charity registration number 232042
Registered Address: 46-48, Ground Floor, Webber Street, London SE1 8QW
The Lutheran Council of Great Britain has adopted the working name 'Council of Lutheran Churches' (CLC).
_This report has been prepared in accordance with the special provisions of the Companies Act 2006 relating to small entities._
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## **LETTER FROM THE CHAIR**
## **A year of stabilization and new visions**
2023 became CLC’s first full year in the new office in Trident House in Webber Street not far from Waterloo station. The office has established itself as a beneficial location and identity for the “Lutheran Presence” in the UK under the leadership of the General Secretary, Dr Anna Krauss. It has also given The Lutheran Church in Great Britain (LCiGB) a new base in London, both for the bishop and for the administration of the church in addition to being a meeting place for its board and committee meetings.
## **Student-work and Outreach**
Among the activities, I will stress the importance of the media facilities, where Revd Meelis Süld has been able to produce regular podcasts and video transmissions. And, likewise, Trident House is the basis for the work of the student chaplain, the Revd Rebecca Daniel, who was ordained by LCiGB on the 23[rd] September. The ordination has given her many new opportunities to serve the student community, and re-establishing of the work of the ILSC. I am personally happy for her focus on the campus of SOAS, University of London, connecting our history with trying to help students coming from abroad. The co-operation with St Mary’s Church in Sandwich Street is confirming this connection. It is also important to notice that our Council has been able to establish a network for LGBTQ+, called Lutherans Inclusive.
## **Remembering our history**
The modern thrust of Lutherans coming to the UK, was mostly based on refugees arriving from the war-torn Europe during the 2[nd] World War and the aftermath with the Communist
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controlled Eastern Europe. The postwar international Lutheran World Federation (LWF) had support of refugees as one of the main purposes for the organisation established in 1947. European Lutherans in the UK faced many challenges, and LWF worked actively to help them. For the co-ordination of this work, the Council of Lutheran Churches was established in 1948, and we celebrated the 75[th] anniversary on the Reformation Day, 31[st] of October. The main service was held in the Norwegian Church, fairly close to our office in London.
## **Ecumenical and International profile**
The CLC has shown itself as a good force for church co-operation and international fellowship. The Lutheran fellowship with the Church of England is of special interest, and since the office is located in the Diocese of Southwark, the relationship with the Bishop and the Cathedral is of great importance. A sign of this relationship is expressed by a member of the bishop’s staff being a trustee in CLC.
Internationally CLC, is also an accredited member of the LWF, whereas the LCiGB is a full member. Last year LWF had a General Assembly, meeting in Krakow, Poland, in October with a UK-Lutheran delegation of four. As a forerunner to this meeting, LCiGB in co-operation with CLC was asked to arrange an important pre-assembly meeting for Lutheran churches in Central Europe. That meeting took place in Mansfield College, Oxford, in March last year.
The historical relationship with this college is interesting in itself, as it was a non-conformist college and from the mid-1950s to 1990s Lutheran Pastors were trained there through a tutorship established by LWF in co-operation with CLC. More recently, CLC has also been supporting the college’s Sanctury Scholarship for a post-graduate student.
Our General Secretary has also been able to make our presence known on the ecumenical and international scene, being involved with Churches Together in England, as well as being elected a member of the Council of the LWF.
## **Future prospects**
The newly transformed CLC is now established, and we can look forward on this basis, but 2024 will also be a year of change and challenges. Both a new Chair and Vice-Chair will have to be elected at the coming General Meeting in June. We also just started the process of recruiting a new General Secretary, since Anna Krauss was chosen to take up a position at the important, internationally and academically renown Lutheran Centre in Wittenberg in the coming summer. We wholeheartedly support her accepting this new role in the Lutheran World, nevertheless the CLC, as well as the wider Lutheran fellowship and through her other ecumenical role in the UK, will miss her.
To me it has been a privilege to serve CLC as the Chair since January 2020, through a most challenging and developing period in the aftermath of selling of the lease in Thanet Street and the following period with covid-restrictions; and also rewarding to be part of the change and evolution of CLC’s student chaplaincy, outreach and ecumenical work.
+ Tor B Jørgensen Bishop emeritus
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## **TRUSTEES' REPORT**
The Trustees have pleasure in presenting their report and the audited financial statements of the Lutheran Council of Great Britain, which trades as the Council of Lutheran Churches or ‘the Council’, for the year ending 31 December 2023.
## **Who we are:**
The Council is a body of churches that have come together to express their shared Lutheran heritage and identity through common work in Britain, enriched by their cultural and linguistic diversity. Each church has its own administrative structure, which may be closely linked to the church in its country of origin, or to one of its synods or dioceses. They all offer particular ministries and programmes in Britain for the language groups they serve. The Council was established in 1948 to represent and co-ordinate the common work of Lutheran churches and parishes which have congregations or chaplaincies in Great Britain from a wide range of national and linguistic backgrounds.
- **Members**
The ordinary members of the Council are nominated by the member churches or parishes and approved by the Directors. The following churches nominated members to the Council in 2023:
Danish Estonian Finnish
Synod of German-Speaking Lutheran, Reformed and United Congregations in Great Britain
Icelandic
Latvian
Lutheran Church in Great Britain (including Chinese, English, Polish, Swahili speaking congregations)
Norwegian Swedish
## • **Trustees and Directors**
- Chair: Right Revd. Tor Berger Jørgensen
- Deputy Chair: Mr. Jan-Eric Österlund
- Revd Therese Bazard (resigned May 2023)
- Revd Dag Magnus Havgar
- Ms Salla Korteniemi (resigned December 2023)
- Mrs Madelaine Mason (resigned May 2023)
- Mr Paul Renken
- Revd Silke Halfmann
- The Revd. Dr Alun Ford (appointed February 2023, elected June 2023)
- Mr Per Jonsson (elected June 2023)
- Bishop Paulina Hlawiczka-Trotman (appointed March 2024)
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## • **Administrative and professional staff during 2023**
General Secretary: Dr Anna Krauss Chaplain: Revd Rebecca Daniel Outreach Coordinator: Revd Meelis Süld Administration Manager: Emily Weller Finance Manager: Judith Edward
## • **Committees**
The Council had the following committees in 2023:
_The Finance Committee:_ Responsible for monitoring the Council's financial position, compliance with regulatory and financial requirements and risk management on behalf of the Trustees. This is achieved by considering regular management accounts in relation to budgets, reports on financial controls and reviewing the risk register.
Members
Mr Michael Rickard (Chair of the committee, resigned November 2023) Mr Per Jonsson (appointed February 2023, appointed Chair of the committee December 2023)
Mr Jan-Eric Österlund Mr Rakesh Patel (appointed March 2024) Mr Chris Stephens (appointed March 2024) Dr Anna Krauss Miss Judith Edward
_The Investment Committee_ : Responsible for monitoring the Council’s investment performance on behalf of the Trustees, by receiving investment reports and with meetings with investment managers.
Members Mr Jan-Eric Österlund (Chair of the committee) Mrs Eva Sheppard Mr Paul Renken Dr Anna Krauss Miss Judith Edward
_The Nominations Committee_ : Responsible for recommendations for Trustee appointments, by identifying current or future gaps in trustee skills and seeking suitable applicants.
Members
Mr Paul Renken (Chair of the committee) Revd Lagle Heinla Right Revd. Tor Berger Jørgensen
_The Grants Committee_ : Responsible for proposing grant policies and strategic direction of grant awards, to oversee the grant process and to review all grants applications. The Grants Committee is responsible for the management of the two large grant agreements with the Latvian Church and the Lutheran Church in Great Britain.
Members Revd Dag Magnus Havgar (Chair of the committee) Mr Jan-Eric Österlund Mrs Anne Trinklein (resigned December 2023) Dr Anna Krauss Miss Judith Edward
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## **Legal structure, governance and management**
The organisation is a company limited by guarantee and registered as a charity in England and Wales. The Council’s governing document is the Articles of Association. The Board of Trustees comprises the directors of the company.
Trustees are elected for an initial three-year period and are eligible for a further two terms of three years. The Board of Trustees can appoint a trustee to fill a casual vacancy until the next General Meeting. The Nominations Committee supports the process by seeking suitable applicants and providing recommendations. Newly elected trustees are given induction training on their duties and responsibilities as members of the Board of Trustees. Training needs are reviewed regularly and specific training is given to trustees as required.
The Board of Trustees approves the remuneration of the General Secretary and the annual pay award given to all staff. Salaries are benchmarked against comparable roles in the charity and faith sectors.
## **Relationships with other bodies and external networks**
The Council is a ‘recognised council’ of the Lutheran World Federation (LWF), a global communion of Lutheran churches, and is entitled to attend but not vote at assemblies of the LWF. Founded in 1947 in Lund, Sweden, the LWF represents about 95% of all Lutherans and acts in ecumenical and inter-faith relations, theology, humanitarian assistance, human rights, communication and mission and development work. There are 148 member churches spanning 99 countries in Africa, Asia, the Pacific, Europe, Latin America and North America.
The Council has been actively involved in Churches Together in Britain and Ireland (CTBI), Churches Together in England (CTE), the national ecumenical bodies, as well as Faith in Europe, and the Anglican Lutheran Society. These organisations convene meetings covering a broad range of topics related to the unity of the Church, which are attended by various Council Members and trustees.
The Council is a member of Bethphage (charity no 1046225). Bethphage was founded by a US based Lutheran charity supporting adults with learning disabilities. Now an entirely secular organisation, the Council remains one of the two members of Bethphage. A representative of the Council attends the Annual General Meeting and the Council’s General Secretary is a trustee of Bethphage. The connection with Bethphage enables the Council to support a minority group of vulnerable people who are often overlooked by society.
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## **ACHIEVEMENTS AND PERFORMANCE**
## **Objectives**
The Council's main charitable object is stated in its Articles of Association: _'The advancement of the Christian religion by bearing united witness before the World to the Gospel of Jesus Christ as the power of God for salvation.'_
In meeting this objective, the Council supports chaplaincy to young people and empowers its member churches through grant giving, material support in providing office space, administrative assistance, expertise over policy development and regulatory compliance. The Council also creates outreach activities with our member churches to establish a shared sense of Lutheran identity in our churches and works together with its ecumenical partners to raise awareness about Lutherans in the UK. This increases the stability of our member churches and Lutheranism in the UK in general. Thus, CLC is engaged in serving the wider community underpinned by its Christian values and seeking to strengthen the witness to Christ’s Gospel of salvation.
CLC is increasingly active in the global Lutheran communion and especially the Central/West European Region of the Lutheran World Federation.
We regularly review the uptake of grants and participation in our student chaplaincy as well as outreach activities.
## **Background**
2023 saw the Council engaged in several major events. In March, CLC co-hosted the Lutheran World Federation’s Pre-Assembly in Oxford. Ca. 150 delegates from all over Europe prepared their concerns for the global Assembly in September 2023. At this Assembly, General Secretary Dr Anna Krauss was an observer for CLC and, as a member of the Lutheran Church in Great Britain, was elected to the Council of the Lutheran World Federation as well as its Executive Committee. This lends our member church The Lutheran Church in Great Britain as well as CLC, a stronger voice in issues such as climate justice and gender equality. We can also strengthen our position as a voice for the minority and mainly immigrant Lutheran churches in the UK, both locally and globally.
In October 2023, CLC celebrated its 75[th] anniversary with a formal celebration on the morning of 31[st] October, followed by an ecumenical Reformation Day service at the Norwegian church in the evening. Many ecumenical partners took part in the events, showing the increasingly strong bonds established in the last years. This increased engagement also resulted in the commission of Dr Anna Krauss as one of the Presidents of Churches Together in England in May 2023. It took a concerted effort of all members of staff and trustees to organise and navigate these major events.
The anniversary enabled us to assess our position and think about our path forward. The period of transition has come to an end. We are in a stable financial position and able to increase the hours of some of our part-time staff. We also see an increased uptake of the space at Trident House. The ecumenical links are flourishing, but we need to strengthen the links with and among our member churches and better promote our grants.
The continuing war in Ukraine, the abhorrent attack on Israel by the terror organisation Hamas and Israels subsequent military retaliation in Gaza coupled with increasing violence in the West Bank, the violence in other zones of conflict, the climate catastrophe and the general feel of a more volatile global situation affect our member churches as well as CLC itself in various ways – financially and pastorally.
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## **Investment and Investment Income**
At the start of 2023 we had around £16.9 million in investments. After the investment losses in 2022, there was a recovery in investment values towards the end of 2023. The economic indicators reported economic growth and falling inflation rates and this helped market confidence, as investment values increased across a broad range of stock. In 2023 our investments increased by £1.0 million or 8.2%.
The Council’s long term investment objective is an average total return of 3.5% + inflation, so that the portfolio maintains its value over the longer term and provides a sufficient return to fund operations. In 2023 we exceeded the benchmark, with a return of 8.2% compared to the benchmark of 7.5%. We have exceeded the benchmark for three out the last four years. However due to the investment losses and high inflation in 2022, cumulatively we are behind the benchmark. But it is anticipated, as the investments are held for the longer term, that we will meet our target.
At the end of 2023 we had investments of £17.8 million. These investments were managed by two different Investment Managers and spread over a substantial number of different investment funds and individual shares and bonds diversified over different industries and countries with the majority denominated in sterling.
## **Organisation and staff**
The Council did not see any changes in staff and its operations followed the strategy established in 2021.
## **Committees**
All committees are meeting regularly and report back to the board. The Grants Committee continues to oversee the major agreements with two of our member churches.
## **Property**
The sale of the residential property in Sandwich Street could not go ahead as planned in 2023. While trying to sell the property, some issues pertaining to historic planning permissions were flagged and the sale had to be delayed until 2024 in order to bring these matters to a satisfactory conclusion.
This meant that the proceeds from the sale could not be incorporated into our investments in 2023. While this does not currently impact our operations, the sale of this property is a priority for the first half of 2024.
We are delighted with our office at Trident House and very happy to see that the running costs are lower than first assumed.
## **Grant Giving**
In 2023 we paid just over £122,000 (2022: £118,000) in grants to our member churches and a further £4,000 (2022: £2,000) to others not affiliated with the Lutheran Council. The majority of the grants were to support operational costs, but a few grants were for one-off events that engaged with a wider community.
Included in the grants is the second-year funding of the three-year grant agreements that we have in place for two of our churches. These agreements were in established to support the respective churches find a sustainable long-term strategy and are in place until 2025.
The Sanctuary Scholarship which was set up for Mansfield College, Oxford, is in its third year and the Council is looking into the possibility of funding a second three-year term starting in September 2024. However, the financial implications are not fully clear yet and the Council is in contact with Mansfield College to receive full details.
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As an expression of gratitude for the funds which the Council received in its early years and for the establishment of the International Lutheran Student Centre (ILSC), the board decided to set aside £100,000 and donate this amount over a 10-year period towards charitable purposes at the discretion of the trustees. This means a donation of £10,000 in total will be made each year. The donation in 2023 was given to Bethphage, a charity that supports adults with disabilities. The donation is to support an Assistive Technology project to help improve the quality of life and independence for people with learning disabilities.
## **Student Chaplaincy**
Continuing and expanding with the work begun in 2022, the student chaplain offered devotional and social activities for students and maintained a network of Lutheran student chaplains across the country. The Council continues to collaborate with St Mary’s German church and is connecting both students and student chaplains from other Lutheran churches to join services and activities.
The student chaplaincy remains involved in the network of chaplains in higher education and champions diversity and integration of students of all faiths and none, as well as inclusion of people from LGBTQ+ and ethnic minority backgrounds. While the international student population in the UK remains high, chaplaincy work specifically dedicated to this group of students remains an important niche not otherwise supported by many chaplaincies. The student chaplaincy currently supports mainly graduate students from the global south and supports their transition into working life.
The student chaplain has formed strong links with the Indian YMCA and has become the Lutheran chaplain at SOAS, thus extending the outreach of CLC’s chaplaincy work to other organisations with a large international student body.
The student chaplain is also a leading figure in CLC worship services such as the World Day of Prayer and Reformation Day.
We were able to offer the student chaplain more hours. From 2024, the student chaplain will thus increase their hours from 0.5 FTE to 0.75 FTE.
## **Outreach**
The Council’s regular outreach activities continue. We have discontinued the weekly devotional series and replaced it with a weekly prayer or eucharistic service at Trident House which is live streamed. Our following on Facebook has increased significantly since we created the role of Outreach Coordinator and we are setting up further social media channels, starting with Instagram in early 2024. The podcast continues to be produced.
We continue to see an increased uptake of our meeting and recording facilities which helps us to foster links with new and existing partners.
The major events of 2023 described above took up much time in terms of outreach. The Outreach Coordinator produced daily updates with a variety of guests at both the LWF PreAssembly in Oxford and the Global Assembly in Krakow.
CLC also assisted the Lutheran Church in Great Britain with the consecration of the church’s new bishop in early 2024. For this major event which saw the first ever Polish woman consecrated as bishop, thus attracting major attention in the wider Lutheran and ecumenical world, CLC produced the orders of service and managed the live stream of the consecration service.
The Outreach Coordinator also visited various member churches and is involved in the exchange of the Diocese of Rochester (Church of England) with the Estonian Evangelical
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Lutheran Church.
We especially realised over the past year that strengthening the relationships with our member churches and amongst the churches needs more attention. The focus on residential student ministry for many years meant that the relations with member churches were not on the forefront of CLC’s activities. Recent changes of pastors in our member churches mean that some links have to be re-established and we need to work on promoting our grants more effectively.
The Outreach Coordinator, too, was offered the option of increasing his hours and we are very happy that he will do so from February 2024. The increase is from 0.5 FTE to 0.8 FTE.
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## **FUTURE PLANS AND STRATEGY**
While we saw a positive return on investments, we are aware of the challenging global situation and need to maintain a strong financial position. The period of transition over the last three years has almost come to an end and our focus in 2024 will be to grow from the stable basis we have been able to establish. The relationship with our member churches has been marked as an area of priority.
We are also aware that 2024 will see a major change in the board of trustees and the appointment of a new Chair of Trustees with a balanced and well-working board will be a priority. Our General Secretary, Anna Krauss will also be leaving in 2024, and the recruitment of her successor to continue the Council’s work is a further priority.
## **a) Property**
The sale of our residential property continues to be a major priority and we are working urgently on the resolution of the administrative issues to prepare a sale in 2024. This will also have an effect on our investments.
The running costs of Trident House have been much lower than anticipated, despite the inflation of energy prices. This has helped us to refine the budget for 2024.
## **b) Stability and Growth**
2023 was the first full year in which the Covid pandemic did not play an important role and Trident House was occupied over the full year. Both of these factors gave a sense of more organisational stability after a period of transition, even though the year was influenced by a number of major events.
The sale of the residential property in Sandwich Street should see the transitional phase come to its full conclusion and enable the organisation to shift the focus from major business decisions to content and relationship building with member churches and ecumenical partners. With two members of staff increasing their hours, we have an opportunity to grow our outreach and student chaplaincy. Both should help us with facilitating the exchange with member churches, which we would like to increase.
We also need to grow the awareness of our grant giving abilities and are currently in touch with Mansfield College/Oxford to determine whether funding the Sanctuary Scholarship for a further three years could be possible.
Overall, we see 2024 as a chance to further strengthen our work from a stable financial and organisational basis.
## c) **Development of Global Links with the Lutheran World Federation**
Through the two LWF events in March and September and the election of Dr Anna Krauss as a member of LWF’s Council, both the Lutheran Church in Great Britain and CLC have the possibility to increase their collaboration with LWF. This will place the work of both the member church and CLC itself in a wider global context. The multinational and multicultural Lutheran community in the UK has strong links to various Lutheran churches abroad, and the increasing links with LWF can help to build a stronger network and establish new connections. This includes reaching out to Lutheran communities and churches that are not currently in touch with either LCiGB or CLC.
## **d) Support of member churches**
The major focus of the strategy meeting in 2024 will be member church relations. With some changes in personnel in the churches and CLC’s focus to re-establish external links, this area
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needs much attention. Not least because the churches often seem unaware of the abilities that CLC has to support their work. While we have generally a well-established link with every member church, we need to increase the uptake of grants and find a way of increasing CLC’s relevance for the churches as a platform for support, exchange and cooperation.
## **Going Concern**
The Council is confident that it will continue to be a going concern. The Council has a very strong balance sheet and resources that will see it through the foreseeable future. The Council’s strategy is to ensure that it is sustainable over the longer-term and the annual budget is set accordingly ensuring that both short-term and long-term goals can be met.
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## **FINANCIAL REVIEW**
## **Review of financial position**
Incoming and outgoing resources for the year are detailed in the Statement of Financial Activities (SoFA), together with the net gains and losses on investments and fixed assets. These are shown separately for the Council’s unrestricted funds, which may be used at discretion of the Board of Trustees and the Council’s restricted funds which must be spent in accordance with the donors’ wishes.
## **Overview of 2023**
Following the purchase and fit-out of Trident House in the previous year, it was financially a very stable year, with resources directed on operational activity. Operations expenditure increased slightly to £0.7 million (2022: £0.6 million). The area of greatest increase was in Outreach, which increased by 20% as more activities were undertaken, including our 75[th] Anniversary and co-hosting the Lutheran World Federation pre-assembly at Mansfield College, Oxford. After a loss in investment value in the previous year, our investments had a total return 8.2% (2022: loss 7.5%), this was just ahead our target of 7.5%. Overall our expenditure and income is in line with our strategy and we are in a healthy financial position.
Net expenditure after investment gains for the year amounted to £0.8 million (2022: net expenditure £1.9 million).
Total funds carried forward at 31 December amounted to £21.4 million (2022 £20.7 million).
## **Income**
Total income was £0.4 million (2022: £0.4 million). The majority of income was from investments.
## **Expenditure**
Total resources expended was £0.7 million in the year (2022: £0.6 million).
- The Costs of Generating Funds was steady at £95,000 (2022: £95,000) and the majority is for investment management fees.
- Overall Charitable Expenditure was £0.6 million (20221: £0.5 million).
- Expenditure on outreach increased by 21%, as we co-hosted the LWF preassembly, and celebrated our 75[th] anniversary. We also undertook social media activities, podcasts and training events for members.
- Expenditure on chaplaincy was similar to the previous year, as we provide a range of student services and events.
- Expenditure on grants and other support for churches was £156,000 (2022: £147,000), this included the second year the 3-year agreements with LCiGB for £100,000 and the Latvian Church for £15.000.
- Support costs increased by £24,000 to £251,000 as, the depreciation cost was higher as it was the first full year in new premises.
## **Investment Gains**
There was a net gain on investments of £1.0 million (2022: net loss £1.7 million). The investment markets recovered after the losses in 2022. Specifically in the latter part of 2023, there was an upturn in economic growth and inflation rates were falling that led to investment values increasing.
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## **The Balance Sheet**
## **Tangible Fixed Assets**
The Council holds various tangible fixed assets to support its activities.
The Council owns the leasehold for the ground floor of Trident House, 46-48 Webber Street, which is used to provide office and meeting spaces. The purchase cost including fit-out was £2.4 million.
The Council also owns 4 Sandwich Street, which comprises four self-contained flats that are used by staff or visiting clergy.
The trading subsidiary, LCGB Trading Ltd, was closed in 2023, it had been dormant for several years and was no longer required.
## **Investment policy**
The performance of the financial investments is measured on a total return basis (combining income and capital growth). In 2023, the total return was a gain of 8.2%. This was better than our target return of 3.5% + CPI = 7.5%, and better than the benchmark of comparable funds, which had a gain of 7.3%
At 31 December 2023, the total investments (apart from property) were £17.8 million (2022: £16.9 million).
Investments are made according to ethical principles; investments are only made in companies that have sustainable business practices and manage their environmental, social and governance responsibilities well. Both fund managers have mechanisms in place to ensure our investments meet these criteria.
## **Reserves Policy**
The policy states the minimum level of working capital that is to be held in the General Fund to ensure the Council can meet its operational and grant giving activities and maintain sufficient capital to be sustainable over the medium to longer term. The level is subject to annual review. The Board of Trustees has determined that the minimum level of the General Fund should be £16.8 million and a target level of £18.7 million. At the end of 2023 the General Fund was £17.8 million, which was at the minimum level.
## **Designated Funds**
The Council has the following designated funds:
- Fixed Asset fund which represents the funds tied up in functional fixed assets used for charitable purpose.
- Donation fund, in recognition that the ILSC was funded by donations. When it was sold it was agreed to set up this fund to make an annual donation to causes that aligned with the Council’s mission.
- Student fund. This fund is to provide support to students.
- Property Purchase fund for the purchase of a new Lutheran Centre. This fund was closed in 2023 as the purchase of Trident House had completed.
Further details are given in note 17 to the financial statements.
## **Restricted Funds**
The Council has no restricted funds. The Student Hardship fund was closed in 2022, and the funds were transferred to the designated Student fund.
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## **Risk Management**
The Trustees have reviewed the major risks, financial and non-financial, to which the Council is exposed in the course of its current activities. The Finance Committee reviews risks at its meetings, ensures that the risk register is current and reports regularly to the Trustees in order to ensure that the risk management is kept up to date. Trustees have assessed these risks and have ensured that appropriate systems and controls exist to minimise internal risks and that effective response mechanisms exist to respond to and minimise the impact of external risks. The Council’s principal risks and mitigation strategies includes risks to safeguarding in its member churches, reputation, health and safety, governance and finance.
After mitigation and considering the impact and likelihood, the Council’s top risks and the Council’s strategy for mitigating them at year end were as follows:
|**Risk**|**Mitigation**|
|---|---|
|•
Poor investment performance,
impacting ability to give grants and
deliver outreach programme.|•
Investment committee with
investment expertise to guide
decision making; funds invested
with 2 investment managers; regular
reports from managers to monitor
performance.|
|•
Reputational risk arising from a
safeguarding incident|•
Provide safeguarding training and
support to member churches|
|•
Loss of IT systems or breach of
security due to malware or virus
attack|•
IT security including virus software
and passwords; backups stored off-
site; cyber-crime awareness training
for staff.|
|•
Reduction in beneficiaries due to
impact of Brexit and aging
population reduces the Lutheran
Community|•
The Council can continue its work
and provide grants to support its
member churches.|
## **PUBLIC BENEFIT**
The Trustees confirm that they have complied with the duty in section 17 of the Charities Act 2011 and have taken due regard of the Charity Commission's guidance on public benefit and are satisfied that the various activities of the Council provide a public benefit. All Trustees give their time voluntarily and receive no private benefit from the Council.
The Council has not performed any direct fundraising activities during the current or prior year. In 2023 it received no donations (2022: nil). No complaints have been referred to the Fundraising Regulator during this period.
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## **PRINCIPAL ADVISERS**
**Auditors** Price Bailey, 3[rd] Floor, 24 Old Bond Street, Mayfair London W1S 4AP
## **Solicitors**
BDB Pitmans LLP, One Bartholomew Close, London EC1A 7BL
## **Investment Managers and Advisers**
Cazenove Capital Management, 1 London Wall Place, London, EC2Y 5AU
Rothschild & Co Wealth Management UK Limited New Court, St Swithin's Lane, London EC4N 8AL United Kingdom
## **Bankers**
CAF Bank Ltd, 25 Kings Hill Avenue, Kings Hill, West Malling, Kent, ME19 4JQ
## **STATEMENT OF TRUSTEES' RESPONSIBILITIES**
The Trustees (who are also directors of The Lutheran Council of Great Britain for the purposes of company law) are responsible for preparing the Trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the directors are required to:
1. select suitable accounting policies and then apply them consistently;
2. observe the methods and principles in the Charities SORP FRS102 (2019);
3. make judgments and accounting estimates that are reasonable and prudent;
4. state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
5. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.
The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company's transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
## **Auditors**
The Council's auditors, Price Bailey LLP, a limited liability partnership, were reappointed by written resolution following the June 2023 General Meeting. The Trustees (as directors for company purposes) who held office at the date of approval of the Annual Report and Accounts confirm that, so far as they are aware, there is no relevant audit information of which the company's auditors are unaware, and each Trustee has taken all the steps that he or she ought to have taken as a Director to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. This report has been prepared taking advantage of the small companies’ exemption of section 415A of the Companies Act 2006.
## **SIGNED ON BEHALF OF THE BOARD**
Tor B Jørgensen Tor B Jorgensen (May 14, 2024, 8:32am) Tor B Jørgensen Chair
Jan-Eric Osterlund Jan-Eric Osterlund (May 9, 2024, 7:28pm) Jan-Eric Ӧsterlund Deputy Chair
**Date:** 9th May 2024
18
## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE LUTHERAN COUNCIL OF GREAT BRITAIN**
## **Opinion**
We have audited the financial statements of The Lutheran Council of Great Britain (the ‘charitable company’) for the year ended 31 December 2023 which comprise the Statement of Financial Activities incorporating the Income and Expenditure account, the Charitable Company Balance Sheet, the Statement of Cash Flows and the related notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
- give a true and fair view of the state of the charitable company’s affairs as at 31 December 2023, and of its incoming resources 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 2006.
## **Basis for opinion**
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## **Conclusions relating to going concern**
In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
## **Other information**
The other information comprises the information included in the trustees’ annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
19
## **Opinions on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the trustees’ report (incorporating the directors’ report) for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the directors’ report included within the trustees’ report has been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors’ 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:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors’ remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit
- the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies exemptions in preparing the trustees’ report and from the requirements to prepare a strategic report.
## **Responsibilities of trustees**
As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
## **Auditor’s responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the Charitable Company and the sector in which it operates, and considered the risk of the Charitable Company not complying with the applicable laws and regulations including fraud in particular those regulations directly related to the financial statements, including financial reporting, and tax legislation. In relation to the operations of the Charitable Company this included compliance with the Companies Act 2006, Charities Act 2011 and SORP 2019.
The risks were discussed with the audit team and we remained alert to any indications of non-
20
compliance throughout the audit. We carried out specific procedures to address the risks identified. These included the following:
Reviewing minutes of Board meetings, reviewing any correspondence with the Charity Commission, agreeing the financial statement disclosures to underlying supporting documentation, and made enquiries of management and officers of the Charitable Company. We enquired about procedures in place for the reporting of any incidents to the Trustee Board including serious incident reporting of these matters as necessary with the Charity Commission and a review of legal fees during the period.
Management override: To address the risk of management override of controls, we carried out testing of journal entries and other adjustments for appropriateness. We also assessed management bias in relation to the accounting policies adopted and in determining significant accounting estimates.
Because of the inherent limitations of an audit, there is the risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-andguidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-foraudit.aspx.
This description forms part of our auditor’s report.
## **Use of our report**
This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’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 the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
**Michael Cooper-Davis FCCA ACA (Senior Statutory Auditor)** for and on behalf of **Price Bailey LLP** Chartered Accountants Statutory Auditors
24 Old Bond Street London W1S 4AP
Date: 17 May 2024
21
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552**
## **STATEMENT OF FINANCIAL ACTIVITIES**
**(incorporating an Income & Expenditure Account) for the year ended 31 December 2023**
|**Notes**
**Income**
**Donations and legacies**
Grants, donations and contributions
3
**Income from charitable activities**
Rental income from 4 Sandwich Street let
to clergy and temporary staff
**Income from investments**
4
**Other income**
Sundry income
**Total income**
**Expenditure**
**Expenditure on raising funds**
5
**Expenditure on charitable activities**
Outreach ( Ecumenical relations and communications)
Student chaplaincy
External Grants and Donations
6
Grants and other support for churches
7
Accommodation at 4 Sandwich St
Governance costs
Total charitable activities
8
**Total expenditure**
Net gains/(losses) on investments
13
**Net (expenditure) / income**
Transfer between funds
**Net movement in funds**
Funds at 1 January
Funds at 31 December
16 / 17|**Unrestricted**
**funds 2023**
**£**
**2,000**
**50**
**435,667**
**-**|**Restricted**
**funds 2023**
**£**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**
**-**|**Total**
**2023**
**£**
**2,000**
**50**
**435,667**
**-**
**437,717**
**95,337**
**165,655**
**79,056**
**18,172**
**155,580**
**68,442**
**108,279**
**595,184**
**690,521**
**1,015,589**
**762,785**
**-**
**762,785**
**20,672,286**
**21,435,071**|Unrestricted
funds 2022
£
2,000
125
423,553
-
425,678
94,643
137,216
71,050
15,032
147,262
56,367
96,952
523,879
618,522
(1,682,859)
(1,875,703)
7,627
(1,868,076)
22,540,362
20,672,286|Restricted
funds 2022
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(7,627)
(7,627)
7,627
-|Total
2022
£
2,000
125
423,553
-|
|---|---|---|---|---|---|---|
||**437,717**|||||425,678|
||**95,337**|||||94,643|
||**165,655**
**79,056**
**18,172**
**155,580**
**68,442**
**108,279**|**-**
**-**
**-**
**-**
**-**
**-**||||137,216
71,050
15,032
147,262
56,367
96,952|
||**595,184**|||||523,879|
||**690,521**|||||618,522|
||**1,015,589**|||||(1,682,859)|
||**762,785**|||||(1,875,703)|
||**-**|||||-|
||**762,785**
**20,672,286**|||||(1,875,703)
22,547,989|
||**21,435,071**|||||20,672,286|
22
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552**
## **BALANCE SHEET at 31 December 2023**
|**Notes**
**FIXED ASSETS**
Tangible assets
12
LCGB Trading Ltd (dormant subsidiary)
13
Investments
13
**CURRENT ASSETS**
Debtors
14
Cash at bank and in hand
**CREDITORS**
Amounts falling due within one year
15
**NET CURRENT ASSETS**
Pension liability
15
**NET ASSETS**
**FUNDS**
**Restricted funds**
16
**Unrestricted funds**
17
Designated funds
General funds
**TOTAL FUNDS**
18|**2023**
**£**
**3,606,604**
**-**
**17,753,859**
**21,360,463**
**9,519**
**108,701**
**118,220**
**(43,585)**
**74,635**
**(27)**
**21,435,071**
**-**
**3,681,509**
**17,753,562**
**21,435,071**|2022
**£**
3,699,732
100
16,895,364|
|---|---|---|
|||20,595,196
7,396
137,343|
|||144,739
(67,313)|
|||77,426
(336)|
|||20,672,286|
|||-
3,834,695
16,837,591|
|||20,672,286|
The financial statements have been prepared in accordance with the small companies provision of the Companies Act 2006, and were approved and authorised for issue by the Council on 9th May 2024 and were signed on its behalf by
Tor B Jørgensen Tor B Jorgensen (May 14, 2024, 8:32am) Tor B Jørgensen Chair
Jan-Eric Osterlund ~~Jan-Eric Österlund~~ Jan-Eric Osterlund (May 9, 2024, 7:28pm) Deputy Chair
23
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552**
## **Statement of Cash Flows**
## **for the year ended 31 December 2023**
|**Cash flows from operating activities**
Net income/(expenditure)
Depreciation charges
(Gains)/Losses on investment assets
Investment income
Trade and other receivables: (increase)/decrease in debtors
Trade and other payables: (decrease)/ increase in creditors
(Decrease) in pension liability provision
**Net cash (used in) operating activities**
**Cash flows from investing activities**
Purchase of fixed assets
Purchase of investments
Proceeds on disposal of investments
Net cash movement in investments
Investment income
**Net cash generated from investing activities**
**(Decrease)/Increase in cash in the period**
**Cash and cash equivalents at 1 January**
**Cash and cash equivalents at 31 December**
**Net Debt Reconciliation**
**Analysis of changes in net debt:**
Cash and cash equivalents as at 1 January 2023
Cash flows
**Cash and cash equavalents as at 31 December 2023**|**2023**
**£**
**762,785**
**94,577**
**(1,015,589)**
**(435,667)**
**(2,123)**
**(23,728)**
**(309)**
**(620,054)**
**(1,449)**
**(1,290,459)**
**963,676**
**483,977**
**435,667**
**591,412**
**(28,642)**
**137,343**
**108,701**
**2023**
**£**
**137,343**
**(28,642)**
**108,701**|2022
£
(1,875,703)
59,332
1,682,859
(423,553)
7,851
22,356
(345)|
|---|---|---|
|||(527,203)|
|||(2,674,840)
(2,620,369)
2,518,350
2,883,053
423,553|
|||529,747|
||||
|||2,544|
|||134,799|
|||137,343|
||||
24
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2023**
## **1 BASIS OF ACCOUNTING**
The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019) - (Charities SORP (FRS 102)) and the Companies Act 2006.
The Lutheran Council of Great Britain meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s).
The Lutheran Council of Great Britain is a charitable company limited by guarantee incorporated in England and Wales, the charitable company address is listed on the company information page. The financial statements are rounded to the nearest £.
## **2 ACCOUNTING POLICIES**
The principal accounting policies applied in the preparation of the financial statements are:
## **(a) Fixed assets**
Properties in the ownership of the Council are stated at the cost of additions and improvements less grants received. Office equipment, fixtures and fittings are stated at cost.
## **(b) Depreciation**
Assets costing over £1,000 are capitalised. Depreciation is provided on a straight line basis by reference to the expected useful lives of the assets. Their useful lives are estimated as follows:
Freehold land not depreciated Freehold and leasehold properties 50 years Leasehold improvements 20 years Kitchens and bathrooms 10 years Plant and equipment 10 years Furniture and fittings 5 years Computers and office equipment 3 years
## **(c) Income**
All income is accounted for when the Council has entitlement, there is probability of receipt and the amount is measurable.
## **(d) Fund accounting**
Restricted funds are the unexpended balances of donations and grants held on trust to be applied for specific purposes.
Designated funds are unrestricted funds that have been set aside at the discretion of the trustees for specific purposes. The purpose and use of designated funds are described in the notes to the financial statements.
General funds are the accumulated surplus of income over expenditure. They are available for use at the discretion of the trustees in furtherance of the general objectives of the charity.
## **(e) Grants payable**
Grants payable include all grants commitments that have been approved during the year and recipients have been notified.
**(f) Investments** Fixed asset investments are stated at market value in accordance with SORP 2019. The Statement of Financial Activities includes gains and losses arising from the revaluation of investments. Cash and cash funds held by investment managers is recognised as part of investments.
## **(g) Pension cost**
The Council contributes to a group staff pension scheme. All pension schemes are defined contributions schemes. The pension cost represents contributions payable by the charity during the year.
## **(h) Expenditure**
Costs of charitable activities comprise expenditure directly attributable to the Council's charitable objectives plus support costs.
Grant costs include all grant commitments that have been approved during the year and the recipients have been notified. The Grants Committee can approve grants under £2,000; all other grants are approved by the Board of Trustees.
Support costs comprise the costs of central management and administration insofar as these are not directly attributable to other activities. They are allocated to the costs of generating funds, charitable activities and governance according to staff time spent on each activity.
## **(i) Irrecoverable VAT**
Irrecoverable VAT is charged back to the original cost category where the cost was incurred.
## **(j) Debtors**
Trade and other debtors are recognised at the settlement amount due after any trade discounts offered. Prepayments are valued at the amount prepaid net of any trade discounts due.
## **(k) Cash at bank and in hand**
Cash at bank and cash in hand includes cash and short term deposits that are held at the bank. It excludes cash and cash funds held by Investment Managers.
25
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2023**
## **(l) Creditors**
Amounts due to creditors are measured at their settlement amount. Deferred income is recognised as the amount receivable as an advanced payment for goods or services that must be provided.
## **(m) Financial Instruments**
The Charity only has financial assets and liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value, except for investments which are measured at fair value.
## **(n) LCGB TRADING LIMITED**
On 21 October 2008 the Lutheran Council of Great Britain acquired the entire share capital of 100 ordinary shares of £1 in a newly established company, LCGB Trading Limited, incorporated in England under the Companies Act 2006 (CA2006) as a private limited company. LCGB Trading Ltd was dormant during this year and was dissolved on 29th August 2023. With no income, no expenses, and so £NIL surplus in 2023 (2022: £NIL) and the accounts were not consolidated with the Lutheran Council of Great Britain.
## **(o) Critical accounting judgements and estimation uncertainty**
In preparing the financial statements it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial statements. The judgements and estimates considered by the trustees to have the most significant effect on amounts recognised in the financial statements relate to the fair value of financial investments, which is made on the basis of advice from our investment managers and would be consistent with redeemed value if the asset were to be sold. The trustees do not consider there are any further critical judgements or key sources of estimation uncertainty requiring disclosure.
## **(p) Going concern**
The trustees have reviewed detailed cash flow projections to December 2025 and have agreed detailed budgets for the year ended December 2024. Both sources of income and types of expenditure have been reviewed. Whilst one of the main charitable purposes is to provide grants to support Lutheran Churches, the level of expenditure is at the discretion of the trustees and can be adjusted during the year. The trustees have also considered the Council's working capital and capital expenditure requirements. As a result of the foregoing the trustees are satisfied that it is appropriate to prepare the accounts on a going concern basis.
|**3**
**DONATIONS AND GRANTS**
Unrestricted
Funds
2023
£
Subscriptions from Members
2,000
Private donations
-
2,000
**4**
**INVESTMENT INCOME**
Interest receivable
Dividends receivable
**5**
**RAISING FUNDS**
Expenses relating to:
Investment managers' fees
Support costs for managing Sandwich Street and Investments
In 2022 and 2021 all investment income was unrestricted, there|Unrestricted
Funds
2023
£
2,000
-|Restricted
Funds
2023
£
-
-|**Total**
**Funds**
**2023**
**£**
**2,000**
**-**
**2,000**
**2023**
**£**
**22,253**
**413,414**
**435,667**
**2023**
**£**
**91,627**
**3,710**
**95,337**
d investment inco|Unrestricted
Funds
2022
£
2,000
-|Restricted
Funds
2022
£
-
-|Total
Funds
2022
**£**
2,000
-|
|---|---|---|---|---|---|---|
||2,000|-||2,000|-|2,000|
|||was no restricte||me.||2022
£
8,821
414,732|
|||||||423,553|
|||||||2022
£
91,169
3,474|
|||||||94,643|
|**6**
**EXTERNAL GRANTS AND DONATIONS**
**Support for third parties includes the following grants during th**
Unrestricted
Funds
2023
Bethphage
10,000
The Akeman Benefice
1,000
Student support grants
3,360
Lutheran World Federation for Ukraine crisis
-
14,360
Support costs
3,812
**External grants and donations**
18,172|**6**
**EXTERNAL GRANTS AND DONATIONS**
**Support for third parties includes the following grants during th**
Unrestricted
Funds
2023
Bethphage
10,000
The Akeman Benefice
1,000
Student support grants
3,360
Lutheran World Federation for Ukraine crisis
-
14,360
Support costs
3,812
**External grants and donations**
18,172|**e year.**
Restricted
Funds
2023
-
-
-|**Total**
**2023**
**£**
**10,000**
**1,000**
**3,360**
**-**
14,360
**3,812**
**18,172**|Unrestricted
Funds
2022
-
-
1,703
10,000|Restricted
Funds
2022
-
-
-
-|Total
**2022**
£
-
-
1,703
10,000|
|---|---|---|---|---|---|---|
||14,360
3,812|-
-||11,703
3,329|-
-|11,703
3,329|
||18,172|-||15,032|-|**15,032**|
26
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2023**
## **7 GRANTS AND OTHER SUPPORT FOR CHURCHES**
**Other support for Members includes the following grants during the year.**
|Lutheran Church in Great Britain
- Bishop, Dean and Bishop's Assistant
- Support for pastors
- Chaplaincy Nottingham and Leeds
- Capacity building / administration support
- Racial justice project
Latvian Evangelical Lutheran Church in GB
- Pastor salary support
- Travel and premises for services
Swedish Church - Hosting seminar
Icelandic Church - Rent, travel and family event
German Church in Liverpool - Utility costs
Icelandic Church - Covid support
**Grants Disbursed to Members**
Support costs
**Total Costs for Other support for churches**|Unrestricted
Funds
2023
30,600
18,550
15,200
30,237
5,000|Restricted
Funds
2023
-
-
-
-
-|**Total**
**2023**
**£**
**30,600**
**18,550**
**15,200**
**30,237**
**5,000**
**99,587**
**11,000**
**4,000**
**15,000**
**850**
**6,222**
**1,094**
**-**
**122,753**
**32,827**
**155,580**|Unrestricted
Funds
2022
32,700
18,011
14,800
26,843
5,000|Restricted
Funds
2022
-
-
-
-
-|Total
**2022**
£
32,700
18,011
14,800
26,843
5,000|
|---|---|---|---|---|---|---|
||99,587
11,000
4,000|-
-
-||97,354
14,000
4,000|-
-
-|**97,354**
14,000
4,000|
||15,000
850
6,222
1,094
-|-
-
-
-
-||18,000
-
-
-
2,730|-
-
-
-
-|**18,000**
-
-
-
2,730|
||122,753
32,827|-
-||118,084
29,178|-
-|**118,084**
29,178|
||155,580|-||147,262|-|**147,262**|
There is a three year grant agreement with the Lutheran Church in Great Britain commencing May 2022. Due to the terms of the grant agreement only the second year commitment is accounted for in the 2023 results for £75,800. A further gift-in-kind of administration support is provided on an annual basis for £23,787 (2022: £23,154).
## **8 TOTAL EXPENDITURE - UNRESTRICTED FUNDS**
|Costs of raising funds
Outreach
Student chaplaincy
External grants and donations
Grants and other support for churches
Accommodation at 4 Sandwich St
Governance costs
Total charitable activities
**Prior year expenditure - unrestricted funds**
Costs of raising funds
Outreach
Student chaplaincy
External grants and donations
Grants and other support for churches
Accommodation at 4 Sandwich St
Governance costs
Total charitable activities|**Support**
**costs**
**£**
3,710|**Direct Staff**
**costs**
**£**
-|**Establishment**
**and office**
**costs**
**£**
-
367
2,453
-
-
48,138
-
50,958
**50,958**
Establishment
and office
costs
£
-
848
1,231
-
-
39,264
-
41,343
41,343|**Other**
**costs and**
**grants**
**£**
91,627|**Total**
**2023**
**£**
**95,337**|Total
2022
£
94,643|
|---|---|---|---|---|---|---|
||74,722
38,014
3,812
32,827
11,128
86,522|62,324
33,270
-
23,787
9,176
-|367
2,453
-
-
48,138
-|28,242
5,319
14,360
98,966
-
21,757|**165,655**
**79,056**
**18,172**
**155,580**
**68,442**
**108,279**|137,216
71,050
15,032
147,262
56,367
96,952|
||247,025|128,557||168,644|**595,184**|523,879|
||**250,735**|**128,557**||**260,271**|**690,521**|618,522|
||Support
costs
£
3,474|Direct Staff
costs
£
-||Other
costs and
grants
£
91,169|Total
2022
£
94,643||
||60,055
34,489
3,329
29,178
15,085
81,022|57,154
31,841
-
23,154
2,018
-|848
1,231
-
-
39,264
-|19,159
3,489
11,703
94,930
-
15,930|137,216
71,050
15,032
147,262
56,367
96,952||
||223,158|114,167||145,211|523,879||
||226,632|114,167||236,380|618,522||
A further breakdown of 'Support costs' is given in note 9.
Included in total charitable expenditure under "Other costs and grants" are fees of £13,672 (2022: £7,822) payable to the auditors for audit fees. Depreciation costs included were £94,577 (2022: £59,332) for the year (see note 12).
There was no restricted expenditure in 2022 (2021: nil). There are no restricted funds (see note 16).
27
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2023**
|**9**
**SUPPORT COSTS**
Costs of raising funds
Outreach
Student chaplaincy
External grants and donations
Grants and other support for churches
Accommodation at 4 Sandwich St
Governance costs
Total charitable activities|**Staff**
**costs**
**£**
2,388|**Office and IT**
**costs**
**£**
1,322|**Total**
**2023**
**£**
**3,710**
**74,722**
**38,014**
**3,812**
**32,827**
**11,128**
**86,522**
**247,025**
**250,735**|Staff
costs
£
2,320|Office and IT
costs
£
1,154|Total
2022
£
3,474|
|---|---|---|---|---|---|---|
||26,267
13,133
1,194
13,133
7,164
56,113|48,455
24,881
2,618
19,694
3,964
30,409|**74,722**
**38,014**
**3,812**
**32,827**
**11,128**
**86,522**|22,032
12,756
1,159
12,756
10,436
54,502|38,023
21,733
2,170
16,422
4,649
26,520|60,055
34,489
3,329
29,178
15,085
81,022|
||117,004|130,021||113,641|109,517|223,158|
||**119,392**|**131,343**||**115,961**|**110,671**|226,632|
Costs are apportioned between activities according to time spent by staff on each activity. Staff costs includes costs of employees and training.
## **10 RELATED PARTY TRANSACTIONS**
The Council is one of two corporate members of Bethphage Great Britain, a registered charity with international Lutheran links, providing high quality residential care and assisted living support to about 60 people in the Midlands of England. The General Secretary is a trustee of Bethphage Great Britain. There was one related party transactions, a donation of £10,000 was made to Bethphage (2022: none).
The Trustees received no remuneration (2022: no remuneration) in connection with their duties as trustees. In 2023 four (2022: five) Trustees received reimbursement for their travel expenses to meetings held during the year. These expenses, together with liaison/entertainment expenses and costs of meetings (such as catering), were £4,548 (2022: £4,055). No other payments were made directly to, or for benefit of, Trustees (2022: none).
As part of its work to support Lutheran churches, the Trustees made grants during the year to two member churches (LCiGB and Swedish Church) who had a serving Trustee of the Council amongst its leaders and is detailed below. The relevant Trustee had no part in the decision regarding this grant.
|Grants to member churches including a trustee amongst their pastors were:
Lutheran Church in Great Britain
Swedish Church in London
There are no further related party transactions (2022: none).
**11**
**STAFF COSTS**
Staff costs comprised:
Wages and salaries
Social security costs
Other pension costs
Other staff costs|**2023**
**£**
99,587
850
**100,437**
**TOTAL**
**2023**
**£**
**202,193**
**18,530**
**20,343**
**1,090**
**242,156**|2022
£
97,394
-|
|---|---|---|
|||97,394|
|||TOTAL
2022
£
191,624
17,883
19,148
1,137|
|||229,792|
One employee had a salary higher than £60,000 during the year (2022: one). With the addition of employer's pension contributions, the General Secretary earned £72,059 in total (2022: £67,980). (This comprised salary plus employer's pension contributions before tax.) The key management personnel is considered to be the General Secretary.
|The average number of persons employed during the year, most of whom were part-time employees,
**FTE**
**2023**
Central, Outreach and Chaplaincy
3.7
**3.7**|was:
**Headcount**
**2023**
6.5|FTE
2022
3.7|Headcount
2022
7.3|
|---|---|---|---|
||**6.5**|3.7|7.3|
28
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2023**
## **12 TANGIBLE FIXED ASSETS**
|**Cost**
At 1 January 2023
Additions
Transfers
At 31 December 2023
**Depreciation**
At 1 January 2023
Charge for the year
At 31 December 2023
**Net book value**
At 31 December 2022
At 31 December 2023|**Freehold**
**property**
**£**|**Leasehold**
**property**
**£**
2,506,664
-
2,506,664
33,333
54,399
87,732
2,473,331
**2,418,932**|**Plant**
**& machinery**
**£**|**Fixtures,**
**fittings and**
**equipment**
**£**|**Total**
**£**|
|---|---|---|---|---|---|
||1,363,589
-||94,463
-|97,743
1,449
-|**4,062,459**
**1,449**
**-**|
||1,363,589||94,463|99,192|**4,063,908**|
|||||||
||287,184
20,172||3,149
9,446|39,061
10,560|**362,727**
**94,577**|
||307,356||12,595|49,621|**457,304**|
||1,076,405||91,314|58,682|**3,699,732**|
||**1,056,233**||**81,868**|**49,571**|**3,606,604**|
Capital commitments at 31 December 2023 were £nil (2022: £5,500).
The freehold property of four flats at 4 Sandwich Street is classed as a functional fixed asset as the flats were for the use of clergy and staff to fulfil the Council's charitable purpose.
The leasehold property is for Trident House which is used for the Council's activities.
## **13 INVESTMENTS**
||||
|---|---|---|
|**INVESTMENTS**
**Investment in LCGB Trading Ltd (dormant)**
**Portfolio of Invested Funds**
Market value at 1 January
Additions
Less: disposals
Net movement on cash accounts
Net gains on valuation
Market value at 31 December
Listed investments
Cash on call
Market value at 31 December
**Total value at 31 December**
Details of investments:
_UK Equities_
_Global Equities_
_Bonds_
_Properties_
_Multi Asset Funds_
_Other Assets_
_Cash_
Market value at 31 December
Historical cost
Unrealised gain
Holdings greater than 5%
SUTL Cazenove Charity Responsible Multi Asset|**2023**
**£**
**-**|2022
£
100|
||**16,895,364**
**1,290,459**
**(963,576)**
**(483,977)**
**1,015,589**|21,359,257
2,620,369
(2,518,350)
(2,883,053)
(1,682,859)|
||**17,753,859**|16,895,364|
||**17,039,107**
**714,752**|16,415,964
479,400|
||**17,753,859**|16,895,364|
||**17,753,859**|16,895,464|
||**964,393**
**4,579,157**
**1,596,226**
**-**
**8,403,793**
**1,495,538**
**714,752**|841,658
3,936,764
1,474,106
-
8,197,356
1,444,980
1,000,500|
||**17,753,859**|16,895,364|
||15,995,600|15,764,457|
||**1,758,259**
£
8,403,793|1,130,907
%
47.3%|
The Lutheran Council had held 100 shares in LCGB Trading Limited. In 2023 LCGB Trading Limited was closed as was not required and it had been dormant for several years. For 2023 its surplus was £nil (2022: nil), net assets were £nil (2022: £100).
29
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2023**
## **14 DEBTORS**
|**14**
**DEBTORS**
**Due within one year:**
Trade debtors
Other debtors
Prepayments and accrued income
**15**
**CREDITORS**
**Due within one year:**
Taxation and social security
Trade creditors
Grant liabilities
Accruals
**Due after one year:**
Pension accrual
**16**
**RESTRICTED FUNDS**
Balance 1 January
Transfer
Expenditure
Balance at 31 December
See note 20 for further details of the pension liability|Student
hardship
fund
£
-
-
-|**2023**
**£**
**250**
**-**
**9,269**|2022
£
550
1,300
5,546|
|---|---|---|---|
|||**9,519**|7,396|
|||**2023**
**£**
**-**
**5,605**
**18,950**
**19,030**|2022
£
-
15,632
18,550
33,131|
|||**43,585**|67,313|
|||||
|||**27**|336|
|||**Total**
**2023**
**£**
**-**
**-**
**-**|Total
2022
£
7,627
(7,627)
-|
||-|**-**|-|
The Student Hardship fund was closed in 2022, as it had been incorrectly classified as a restricted fund. The balance of the fund was moved to the unrestricted Student Fund.
|**17**
**UNRESTRICTED FUNDS**
**Designated funds**
Fixed assets fund
Student Fund
Donation Fund
Property purchase Fund
**General funds**
**Prior year unrestricted funds**
Designated funds
Fixed assets fund
Student Fund
Donation Fund
Property purchase fund
General funds|**Balance**
**1 January**
**2023**
**£**
3,699,732
8,265
80,000
46,698|**Income**
**& investment**
**gains**
**£**
-
-
-
-
-
1,453,306
**1,453,306**
Income
& investment
gains
£
-
-
-
-
-
(1,257,181)
(1,257,181)|**Expenditure**
**£**
(94,577)
(3,360)
(10,000)
-|**Transfers**
**£**
1,449
-
(46,698)|**Balance**
**31 December**
**2023**
**£**
**3,606,604**
**4,905**
**70,000**
**-**|
|---|---|---|---|---|---|
||3,834,695
16,837,591||(107,937)
(582,584)|(45,249)
45,249|**3,681,509**
**17,753,562**|
||**20,672,286**||**(690,521)**|**-**|**21,435,071**|
||Balance
1 January
2022
£
1,084,224
2,341
90,000
2,700,000||Expenditure
£
(59,332)
(1,703)
(10,000)
-|Transfers
£
2,674,840
7,627
-
(2,653,302)|Balance
31 December
2022
£
3,699,732
8,265
80,000
46,698|
||3,876,565
18,663,797||(71,035)
(547,487)|29,165
(21,538)|3,834,695
16,837,591|
||22,540,362||(618,522)|7,627|20,672,286|
_Fixed assets fund:_ this fund represents the net amount tied up in tangible fixed assets and so not available to spend.
_Student fund:_ is available to support students and student related projects. In 2022 the restricted Student Hardship fund was transferred to this fund as the restriction was removed. See note 16.
_Donation fund: After the sale of the ILSC in 2020, this fund was set up i_ n recognition that the ILSC was purchased with donations. The fund will make an annual donation of £10,000 to a charity/charities that aligns with the Council's mission.
_Property purchase fund:_ the Council purchased a new property to carry out its activities in 2022, this fund is for the purchase and fitting out of the new premises. With only minor projects remaining the funds was closed in 2023, and these projects will be financed from the General fund.
_General fund:_ this fund represents the net amount held for general expenditure. The policy is to have a minimum fund of £16.8 million in General Funds as this will provide the investment returns to finance the organisations operations. At December 2023 the General Fund was £17.8 million.
30
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2023**
## **18 ANALYSIS OF NET ASSETS BETWEEN FUNDS**
The net assets are held for the various funds as follows:
|Tangible fixed assets
Investments
Net current assets
Long term (liabilities)|**Unrestricted**
**funds**
**2023**
**£**
**3,606,604**
**17,753,859**
**74,635**
**(27)**|**Restricted**
**funds**
**2023**
**£**
**-**
**-**
**-**
**-**|**Total**
**funds**
**2023**
**£**
**3,606,604**
**17,753,859**
**74,635**
**(27)**
**21,435,071**|Unrestricted
funds
2022
£
3,699,732
16,895,464
77,426
(336)|Restricted
funds
2022
£
-
-
-
-|Total
funds
2022
£
3,699,732
16,895,464
77,426
(336)|
|---|---|---|---|---|---|---|
||**21,435,071**|**-**||20,672,286|-|20,672,286|
## **19 PENSION COSTS**
The assets of the pension schemes, all of which are defined contribution schemes, are held separately from those of the Council in independently administered funds. Contributions made by the Council to the schemes during the year are shown in note 11. Contributions of £NIL were due to the schemes at the year end (2022: £NIL).
## **20 PENSION SCHEME OBLIGATIONS**
Six members of staff of the Council participate in TPT Retirement Solutions' Growth Plan series 4, which is a defined contribution scheme open to all staff and in which the higher earners are automatically enrolled, in accordance with legislation.
Two former employees are members of a multi-employer scheme (now closed) which provides benefits to some 638 non-associated participating employers. The scheme is a defined benefit scheme in the UK. It is not possible for the company to obtain sufficient information to enable it to account for the scheme as a defined benefit scheme. Therefore it accounts for the scheme as a defined contribution scheme. The scheme is in deficit and the Council's current liability is £327 (2022: £327 ) and long-term liability is £27 (2022: £354). Due to the reduced scheme liability and deficit payments made in 2023 the amount recognised in the SOFA was a net loss of £374 (2022: net loss £274).
The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK.
The scheme is classified as a 'last-man standing arrangement'. Therefore the company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme.
A full actuarial valuation for the scheme was carried out at 30 September 2020. This valuation showed assets of £800.3m, liabilities of £831.94m and a deficit of £31.6m. To eliminate this funding shortfall, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows:
## **Deficit Contributions**
From 1 April 2022 to 31 January 2025: £3,312,000 per annum (payable monthly)
Unless a concession has been agreed with the Trustee the term to 31 January 2025 applies
Note that the scheme's previous valuation was carried out with an effective date of 30 September 2017. This valuation showed assets of £794.4m, liabilities of £926.4m and a deficit of £131.5m. To eliminate this funding shortfall, the Trustee asked the participating employers to pay additional contributions to the scheme as follows:
## **Deficit Contributions**
From 1 April 2019 to 30 September 2025: £11,243,000 per annum (payable monthly and increasing 3% each year on 1st April)
The recovery plan contributions are allocated to each participating employer in line with their estimated share of the Series 1 and Series 2 scheme liabilities. Where the scheme is in deficit and where the company has agreed to a deficit funding arrangement the company recognises a liability for this obligation. The amount recognised is the net present value of the deficit reduction contributions payable under the agreement that relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures. The unwinding of the discount rate is recognised as a finance cost.
31
**THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2023**
## **20 PENSION SCHEME OBLIGATIONS (continued)**
|**Present values of provision**
Present value of provision
**Reconciliation of opening and closing provisions**
Provision at start of period
Deficit contribution paid
Unwinding of the discount factor (interest expense)
Remeasurements - impact of any change in assumptions
Remeasurements - amendments to the contribution schedule
Provision at end of period
**Assumptions**
Rate of Discount (per cent per annum)
`|**31 December**
**2023**
**£**
**345**
**31 December**
**2023**
**£**
649
(327)
24
(1)
-
**Period ending**|31 December
2022
£
649
Period ending
31 December
2022
£
1,190
(527)
10
(24)
-|
|---|---|---|
||345|649|
||**2023**
**5.31%**|2022
4.96%|
The discount rates shown above are the equivalent single discount rates which, when used to discount the future recovery plan contributions due, would give the same results as using a full AA corporate bond yield curve to discount the same recovery plan contributions.
The Council has been notified by the Pensions Trust of the estimated Employer Debt on Withdrawal from the Plan based on the financial position of the Plan as at 30 September 2016. They estimated that, after taking into account the debt due from other employers, the Council's Employer Debt on Withdrawal is estimated as £13,295 plus costs and fees of apportioning the debt among other employers. There is no current intention to leave the Plan and trigger this contingent liability.
32