REGISTERED COMPANY NUMBER: 00931547 (England and Wales) REGISTERED CHARITY NUMBER: 258390
REPORT OF THE TRUSTEES AND
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021
FOR
INSTITUTE FOR EMPLOYMENT STUDIES (A COMPANY LIMITED BY GUARANTEE)
Chariot House Limited Chartered Accountants 44 Grand Parade Brighton East Sussex BN2 9QA
INSTITUTE FOR EMPLOYMENT STUDIES
CONTENTS OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021
| Page | |||
|---|---|---|---|
| Report of the Trustees | 1 | to | 8 |
| Report of the Independent Auditors | 9 | to | 12 |
| Statement of Financial Activities | 13 | ||
| Balance Sheet | 14 | ||
| Cash Flow Statement | 15 | ||
| Notes to the Cash Flow Statement | 16 | ||
| Notes to the Financial Statements | 17 | to | 25 |
| Detailed Statement of Financial Activities | 26 | to | 27 |
INSTITUTE FOR EMPLOYMENT STUDIES
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2021
The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 March 2021. The trustees have adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).
OBJECTIVES AND ACTIVITIES
Objectives and aims
The trustees confirm that they have had due regard to the Charity Commission's general guidance on public benefit when reviewing the Institute's aims and objectives and in planning future activities.
The Institute for Employment Studies, established in 1969, is an independent, apolitical, international centre of research and advice in employment, labour market and human resource issues. The Institute's principal objective is to help bring about sustainable improvement in employment policy and human resource management.
The choice of topics and themes on which the Institute works is directly influenced by current and emerging needs of policy-makers and employing organisations. The Institute aims to disseminate the results of its work widely, in line with its charitable objectives.
The work of the Institute benefits the general public, and the wider economy and society, by helping a) to increase understanding and improve decision-making by public bodies on employment (and unemployment) issues, and b) to improve human resource management in employing organisations. The Institute is committed to ensuring that its work is both useful (and used), and accessible to a wide audience.
The Institute's medium-term strategy is reviewed every five years, and following its latest review, the key strategic priorities which influenced business planning during 2019-20 are:
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To maintain IES's position as a leading provider of UK public policy research and evaluation on employment and labour market policy topics.
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To continue to undertake European/international research and evaluation projects in our specialist public policy areas while UK institutions remain eligible for these, while monitoring the changing landscape in this area and preparing to take steps if appropriate to position the Institute to maintain eligibility in the post-Brexit environment.
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To further build the Institute's stream of work on HR management and related topics for employers and employer bodies, following the successful growth in this area in the recent years, and the building up of staff resources to support this.
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Reinforce the initial steps taken to build up a portfolio of proactive consortium-funded projects on key employment and HR issues of topical interest.
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Improve internal efficiency through improved project management and financial systems, as a response to the increasingly tight funding environment for research, especially publicly commissioned research.
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Explore the scope for strategic investment from the Institute reserves in diversifying into new streams of work.
A detailed business plan for the year ahead (2021/22) was prepared, building on these broad strategic objectives, and taking account of recent developments. The business plan was approved by the Board of trustees on the approach taken last year, and also reflect our new Three-Year Strategy.
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INSTITUTE FOR EMPLOYMENT STUDIES
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2021
OBJECTIVES AND ACTIVITIES Achievements and Activities
This has been a year like no other in IES' 50-year history. We began the year amid a novel coronavirus outbreak and national lockdown, and we ended it a year later still working from home (and locked down) but with the hope that we are on the path to recovery. We undoubtedly end the year in a stronger position than we started, and are well positioned to grow our impact, influence, and income in the years ahead.
Over the last year we have grown our impact across public policy and HR practice. Our research and analysis on the impacts of the pandemic on the labour market, and our recommendations for measures to address these, have had a significant impact on government policy - particularly in the summer 'Plan for Jobs' announcements. Our work on education and skills has grown in importance, particularly with the needs to reskill in response to changing labour demand. Meanwhile our research and consulting on HR and workplace practice has had a clear influence on how employers have responded - notably in our work on the impacts of homeworking, our support to the NHS on virtual coaching, and our work with HR Network members throughout the year.
We were guided this year by the five priority areas in our three-year strategy before the pandemic, and which are set out below.
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Quality of work: Making work better; progression; security; regulation
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Inclusive work: Employment opportunity for all; diversity and inclusion; inequality
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Healthy work: Ensuring good work supports good health; and those with health needs can access it
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Education and life chances: Cradle to grave, via early years, careers, HE technical reform, adult learning
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Organisational capability: Leadership, management, change, the HR function
The priority areas were adapted as the impacts of the pandemic became clear, with in particular our work on 'Quality of work' having less prominence than we had anticipated a year ago, and inevitably more focus on labour market inclusion and the links between health and work. With hopefully more stability in the year ahead, we will look to revisit and build on many of the specific priority actions that we identified a year ago, alongside new ones that have emerged with the pandemic.
In the last year we have forged stronger links with a range of organisations in the 'What Works' network, and in particular the Education Endowment Foundation, What Growth, the Centre for Ageing Better, the Youth Endowment Foundation and the Youth Futures Foundation. Our impact on practice has also grown - across local government employment and skills programmes, central government programme evaluations, work with industry bodies, and with employers like the NHS and our HR Network.
Our public policy research and analysis has inevitably been dominated by the pandemic and its impacts. This has included a series of reports and analyses early on in the crisis of 'real-time' vacancy data provided by Adzuna and funded by the Joseph Rowntree Foundation; a number of research papers published under our own auspices including on the emerging labour market impacts of the crisis, on forecasting future redundancies, and on what works in public policy during recessions; collaborative work with other research and policy organisations, in particular as founder members of the Youth Employment Group; and a range of funded projects looking at specific aspects of labour market participation and inclusion.
This funded work has included projects for the International Labour Organisation on the early impacts of the crisis on wages across the developed world; work on the crisis for low paid workers funded by the Standard Life Foundation; research on the impacts on young people, in partnership with the Institute for Public Policy Research and funded by the Blagrave Trust and Youth Futures Foundation; and a number of major reports on supporting older workers (on workforce management for the OECD and on recruitment practices for the Centre for Ageing Better). We have also been coinvestigators on a multi-year, ESRC-funded project looking at the impacts of home and hybrid working on public administration and professional services.
Beyond the pandemic, in November we published the first output from a major new research programme on obesity and employment called PURPOSE (Promoting Understanding and Research into Productivity, Obesity Stigma and Employment), funded by Novo Nordisk. This first report focused on reviewing the evidence around obesity stigma at work, and quantifying the wage penalty for men and women. And in August, we published important research exploring the links between labour market migration, disadvantage and social mobility, for the Social Mobility Commission - which showed that while internal migration appears to improve labour market outcomes for those from more disadvantaged backgrounds, other factors like housing, social connections and the quality of public services could often have a more significant bearing on people's qualities of life. T Levels
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INSTITUTE FOR EMPLOYMENT STUDIES
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2021
OBJECTIVES AND ACTIVITIES
Ovo; Toolbox
On education and skills, the last year has seen us continue to grow our work on early years education and learning, particularly with evaluation work for the Education Endowment Foundation and the Ovo Foundation. We have also led and published large-scale research for the Department for Education on industry placements for the new T-Level programme, and are continuing to work with them on a number of further research projects linked to the pandemic response and vocational reform.
Finally, in our employer-facing work, we have been proud to have been able to work with the NHS over the last year to support on the research and evaluation of the #LookingAfterYouToo coaching service for front line primary care staff, to provide support on the design and implementation of a team coaching intervention to build the capability of primary care teams to deliver the Covid-19 vaccine programme, and to have supported on training and development around managing change within NHS Trusts. This work has been delivered alongside our wider research and consulting work on HR and workforce practice, which this year has included a major programme of work for the Defence Science and Technology Laboratory on understanding the future world of work (in partnership with BAe Systems); research support for the Cabinet Office on the National Leadership Centre (working with Ipsos Mori) and a wide range of events, projects and support for our HR Network members - inevitably focused on managing through the pandemic. Looking ahead, the next year will be dominated by the ongoing impacts of the pandemic and our recovery from it - on the economy and labour market, employment participation, workforces, education and on how and where we work. All these things mean that IES and the work conducted by the Institute will be more important in the year ahead than it has been at any point in at least a decade. Our expertise in 'what works' in active labour market and skills policy; in issues related to health and work; in labour market regulation, job quality and security; in evaluating interventions in education; and in applied HR research in health and wellbeing, workforce planning, change management, pay, and diversity and inclusion will all be in high demand.
However, the pandemic will not be the only issue that we grapple with in the year ahead. The impacts of Brexit, the transition to Net Zero, the need to address racial inequalities, and the impacts of technology on how we work, are all areas where we can and must play a role.
STRATEGIC REPORT
Achievement and performance
Plans for future periods
The overall business strategy underlying the next year's business plan, and that of the medium-term, remains in place, having been set by the Board's recent strategic review. Within that strategy, the business plan itself is a relatively focused one, with the emphasis on continued measures to respond to the challenges in the external business environment.
Specific priorities include:
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Re-establishing a position of sustainable financial surplus, through a focus on internal improvements to project management, line management and systems;
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Further growth of existing successful work programmes (including, in particular, those focusing on HR work for employers) and the maintenance of others (especially public policy work for UK public agencies, in IES's traditional areas of strength), and the development of new work programmes (in areas identified in the strategic review, including education and health at work), with a view to offsetting the inevitable decline in the Institute's European work programmes in the run-up to and following Brexit.
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Diversification of funding sources, with a particular emphasis on identifying and securing new sources of research funding (including from charitable trusts and foundations, corporate sources with a public/social focus, and consortia of organisations with common interests), and developing pro-active bids for funding from such sources.
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Refreshing the Institute's communications and dissemination activities, with a particular emphasis on securing greater and more cost-effective impact of the Institute\s research through new media and channels of communications.
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Minimising the impact of the Covid19 pandemic. The pandemic has not impacted on the financial year 2019/20, however it will have an impact on 20/21 as both staff and clients have been affected by some work stalling and the need to furlough some staff to enable them to shield, homeschool, and deal with client delays to our work.
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INSTITUTE FOR EMPLOYMENT STUDIES
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2021
STRATEGIC REPORT
Financial review
Financial position
The year ended 31st March 2021 recorded net income over expenditure of £2,640. Total reserves now stand at £1,388,946 (See reserves policy below).
Total income for the year ended 31st March 2021 amounted to £3,052,287 compared to £3,825,198 in the previous period.
Total expenditure for the year ended 31st March 2021 amounted to £3,049,647 compared to £3,822,406 in the previous period.
Investment policy and objectives
The overriding principle guiding the investment of surplus cash balances is the preservation of the capital value of the Institute's resources.
The objective for investment purposes is to achieve a good return whilst minimising risk. This has been achieved by investing cash in high interest deposit accounts. The average return on investments in the year ended 31 March 2021 was 0% (2020, 0.89%)
Reserves policy
The Institute maintains reserves, all of which are unrestricted funds (i.e. are expendable at the discretion of the Board Members and used in the furtherance of the Institute's objectives).
The Board have earmarked certain funds for the specific purpose of funding long term research and development. These are described as the designated element of the fund.
The Board consider the reserves sufficient to provide for the Institute's future requirements. It is the policy of the Institute to generate sufficient reserves to maintain six months' operating costs. The reserves as at the end of the year are considered adequate to meet current operating needs, in line with this policy.
Future plans
Looking ahead, the next year will be dominated by the ongoing impacts of the pandemic and our recovery from it - on the economy and labour market, employment participation, workforces, education and on how and where we work. All these things mean that IES and the work conducted by the Institute will be more important in the year ahead than it has been at any point in at least a decade. Our expertise in 'what works' in active labour market and skills policy; in issues related to health and work; in labour market regulation, job quality and security; in evaluating interventions in education; and in applied HR research in health and wellbeing, workforce planning, change management, pay, and diversity and inclusion will all be in high demand.
However, the pandemic will not be the only issue that we grapple with in the year ahead. The impacts of Brexit, the transition to Net Zero, the need to address racial inequalities, and the impacts of technology on how we work, are all areas where we can and must play a role.
STRUCTURE, GOVERNANCE AND MANAGEMENT
Governing document
The Institute for Employment Studies (IES) is a registered Charity and company limited by guarantee governed by its Articles of Association dated October 2013.
The Articles of Association were amended in October 2013 to provide for a single tier of governance, the Board of Trustees. Members, each of whom agree to contribute £10 in the event of the Charity winding up, are the Trustees of the Institute and shall admit to membership in accordance with the provisions of the Articles.
A Trustee shall hold office for a period of three years but is eligible for re-election provided that no Trustee may serve for more than nine consecutive years of office.
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INSTITUTE FOR EMPLOYMENT STUDIES
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2021
STRUCTURE, GOVERNANCE AND MANAGEMENT
Recruitment and appointment of new trustees
As set out in the Articles of Association, the Board of Trustees may from time to time and at any time appoint any person as a Trustee either to fill a casual vacancy or by way of addition to the Board.
On appointment each Trustee is provided with the Memorandum and Articles, and a copy of Charity Commission publication The Essential Trustee. New Trustees meet with the Chair and Director and are invited to the Institute's offices.
Organisation
The Board of Trustees manages the business of the Institute and may exercise all such powers of the Institute as are not, by the Act or by the Articles, required to be exercised by the members, subject nevertheless to the provisions of the Act or the Articles.
The Board, which can have between 6 and 15 members, meets 3 times a year. A Director is appointed by the Trustees to manage the day to day operations of the Charity. To facilitate operations the Director has delegated authority for operational matters.
The Board advises the Institute Director and management team, and approves the annual business plan, budget and key items of strategy. The detailed roles of the Members, Trustees, the Board and the Institute Director are set out in the Articles of Association. Written records are kept of all decisions made at Board and management meetings.
The Board of Trustees met 3 times during the year and supported the Institute's management team in developing its annual business plan and strategic priorities, as well as advising on ongoing operational issues.
Board members
The members of the Board are as listed under the Reference and Administrative details on page 8.
For the purposes of Company Law, all the Members of the Board are deemed to be directors of the Company.
Key management remuneration
The Board is responsible for setting the pay and remuneration of the Institute's key management personnel, the level of which is reviewed annually. In coming to its decisions the Board may seek advice from external independent experts and will arrive at its decisions after taking into account the purpose aims and values of the Institute, the strategic plan and the ability to pay, individual competencies and performance, remuneration levels at similar charities, and retention. These factors are not exclusive and any decision will inevitably include an element of discretion by the Board.
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INSTITUTE FOR EMPLOYMENT STUDIES
REPORT OF THE TRUSTEES
FOR THE YEAR ENDED 31 MARCH 2021
STRUCTURE, GOVERNANCE AND MANAGEMENT
Risk management
The Members of the Board have identified the major risks to which the Institute is exposed and which might impact on the Institute's ability to achieve its objectives. As in recent years, these include:
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Political uncertainties associated with Brexit
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Maintaining a flow of work from private and public sector employers in the face of intense competition at a time of increasing economic turbulence
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Retaining and attracting key staff
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The need for effective systems for business continuity planning and data security
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The need to ensure that the consequences of the Covid 19 pandemic are the subject of detailed planning and monitoring
These risks are monitored on an ongoing basis by the management team and reviewed by the Board at its regular meetings.
The Board has established policies, procedures and systems to mitigate those risks. These internal controls are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. The Institute has established an on-going process for identifying, evaluating and managing the Institute's key risks. In particular there are clear procedures for:
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financial reporting, within a comprehensive financial planning and accounting framework; and
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monitoring of business risks, with key risks identified and reported to the Members of the Board.
Financial risk management
The charitable company uses financial instruments, other than derivatives, comprising cash and other liquid resources and various other items such as trade debtors and creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the charitable company's operations. The main risks arising from the charitable company's financial instruments are interest rate risk, liquidity risk and currency risk. The Trustees review and agree policies for managing each of these risks and they are summarised below.
Interest rate risk
The charitable company finances its operations through a mixture of retained reserves and retained cash surpluses. The charitable company's exposure to interest rate fluctuations on its borrowings is managed by the use of both fixed and floating facilities.
Liquidity risk
The charitable company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest any cash assets safely and profitably. The charitable company's policy throughout the year has been to ensure continuity of funding through retained cash surpluses.
Currency risk
The charitable company is exposed to transaction and translation foreign exchange risk. The charitable company's exposure to these risks is managed through the use of bank accounts in the same currency. Members of the Board monitor on a regular basis the risks and the effectiveness of the system of internal control operated by the Institute.
REFERENCE AND ADMINISTRATIVE DETAILS
Registered Company number
00931547 (England and Wales)
Registered Charity number
258390
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INSTITUTE FOR EMPLOYMENT STUDIES
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2021
Registered office
3rd Floor City Gate 185 Dyke Road Brighton East Sussex BN3 1TL
Trustees
D Guest Ms R K Kular G J F Podger J R Greatrex Ms K Poole Ms S Cook Dame C Black Ms E Stewart
Company Secretaries Ms J Smith Ms S L Anderson
Auditors
John Thacker DChA Institute of Chartered Accountants in England and Wales Chariot House Limited Chartered Accountants 44 Grand Parade Brighton East Sussex BN2 9QA
Bankers
Barclays Bank PLC The Old Bank High Street Lewes BN7 2JP
Solicitors
Stone King Boundary House 91 Charterhouse Street London EC1M 6HR
Institute director Anthony Wilson
STATEMENT OF TRUSTEES' RESPONSIBILITIES
The trustees (who are also the directors of Institute for Employment Studies for the purposes of company law) are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
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INSTITUTE FOR EMPLOYMENT STUDIES
REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 MARCH 2021
STATEMENT OF TRUSTEES' RESPONSIBILITIES - continued
Company law requires the trustees to prepare financial statements for each financial year which 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 those financial statements, the trustees are required to
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select suitable accounting policies and then apply them consistently;
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observe the methods and principles in the Charity SORP;
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make judgements and estimates that are reasonable and prudent;
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state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.
The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
In so far as the trustees are aware:
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there is no relevant audit information of which the charitable company's auditors are unaware; and
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the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
AUDITORS
The auditors, Chariot House Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.
Report of the trustees, incorporating a strategic report, approved by order of the board of trustees, as the company directors, on 27 September 2021 and signed on the board's behalf by:
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Ms K Poole - Trustee
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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF INSTITUTE FOR EMPLOYMENT STUDIES
Opinion
We have audited the financial statements of Institute for Employment Studies (the 'charitable company') for the year ended 31 March 2021 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
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In our opinion the financial statements:
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give a true and fair view of the state of the charitable company's affairs as at 31 March 2021 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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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 Auditors' 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 trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Report of the Independent Auditors thereon.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Report of the Trustees for the financial year for which the financial statements are prepared is consistent with the financial statements; and
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the Report of the Trustees has been prepared in accordance with applicable legal requirements.
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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF INSTITUTE FOR EMPLOYMENT STUDIES
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 Report of the Trustees.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
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adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or
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the financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of trustees' remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit.
Responsibilities of trustees
As explained more fully in the Statement of Trustees' Responsibilities, 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.
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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF INSTITUTE FOR EMPLOYMENT STUDIES
Our 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 a Report of the Independent Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 industry in which it operates, and considered the risk of acts by the charitable company that were contrary to applicable laws and regulations, including fraud. We identified that the following laws and regulations are central to the charitable company:
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Companies Act 20006
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Charities Act 2011
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Charities SORP 2019
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Health & safety regulations
We did not find any instances of non-compliance or breaches of the legislation framework applicable to the charitable company.
We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We identified that the following areas were of high risk:
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Completeness of income. We performed various audit tests to ensure that income was not materially understated in the financial statements.
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Management override of controls. We performed various audit tests to ensure there was no material management override of controls
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006, UK tax legislation, Charities Act 2011 and Charities SORP 2019. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries of legal counsel when considered necessary. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of management bias by the directors that represented a risk of material misstatement due to fraud.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.
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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF INSTITUTE FOR EMPLOYMENT STUDIES
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 auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the 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.
John Thacker FCA DChA (Senior Statutory Auditor) for and on behalf of Chariot House Limited Chartered Accountants 44 Grand Parade Brighton East Sussex BN2 9QA
Date: 30 September 2021
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INSTITUTE FOR EMPLOYMENT STUDIES
STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 MARCH 2021
| Notes INCOME AND ENDOWMENTS FROM Charitable activities 3 Projects Corporate membership Publications Investment income 2 Other income Total EXPENDITURE ON Charitable activities 4 Projects Management & Administration Total NET INCOME RECONCILIATION OF FUNDS Total funds brought forward TOTAL FUNDS CARRIED FORWARD |
2021 Unrestricted funds £ 2,852,942 103,870 258 34 95,182 3,052,286 2,457,850 591,796 3,049,646 2,640 1,386,306 1,388,946 |
2020 Unrestricted funds £ 3,716,490 103,570 881 4,257 - 3,825,198 3,275,782 546,624 3,822,406 2,792 1,383,514 1,386,306 |
|---|---|---|
The notes form part of these financial statements
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INSTITUTE FOR EMPLOYMENT STUDIES (REGISTERED NUMBER: 00931547)
BALANCE SHEET 31 MARCH 2021
| Notes FIXED ASSETS Tangible assets 9 CURRENT ASSETS Debtors 10 Cash at bank and in hand CREDITORS Amounts falling due within one year 11 NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES PROVISIONS FOR LIABILITIES 13 NET ASSETS/(LIABILITIES) FUNDS 14 Unrestricted funds: General fund TOTAL FUNDS |
2021 Unrestricted funds £ 41,809 1,047,089 1,712,470 2,759,559 (1,402,422) 1,357,137 1,398,946 (10,000) 1,388,946 1,388,946 1,388,946 |
2020 Unrestricted funds £ 10,556 1,480,348 983,674 2,464,022 (1,078,272) 1,385,750 1,396,306 (10,000) 1,386,306 1,386,306 1,386,306 |
|---|---|---|
The financial statements were approved by the Board of Trustees and authorised for issue on 27 September 2021 and were signed on its behalf by:
K Poole - Trustee
The notes form part of these financial statements
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INSTITUTE FOR EMPLOYMENT STUDIES
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2021
| Notes Cash flows from operating activities Cash generated from operations 1 Net cash provided by operating activities Cash flows from investing activities Purchase of tangible fixed assets Sale of tangible fixed assets Interest received Net cash used in investing activities Change in cash and cash equivalents in the reporting period Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period |
2021 £ 778,836 778,836 (51,123) 1,049 34 (50,040) 728,796 983,674 1,712,470 |
2020 £ 65,189 65,189 (4,813) - 4,257 (556) 64,633 919,041 983,674 |
|---|---|---|
The notes form part of these financial statements
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INSTITUTE FOR EMPLOYMENT STUDIES
NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2021
1. RECONCILIATION OF NET INCOME TO NET CASH FLOW FROM OPERATING ACTIVITIES
| Net income for the reporting period (as per the Statement of Financial Activities) Adjustments for: Depreciation charges Interest received Decrease in debtors Increase/(decrease) in creditors Net cash provided by operations |
2021 £ 2,640 18,821 (34) 433,259 324,150 778,836 |
2020 £ 2,792 7,914 (4,257) 339,881 (281,141) 65,189 |
|---|---|---|
2. ANALYSIS OF CHANGES IN NET FUNDS
| Net cash Cash at bank and in hand Total |
At 1/4/20 £ 983,674 983,674 983,674 |
Cash flow £ 728,796 728,796 728,796 |
At 31/3/21 £ 1,712,470 1,712,470 1,712,470 |
|---|---|---|---|
The notes form part of these financial statements
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INSTITUTE FOR EMPLOYMENT STUDIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021
1. ACCOUNTING POLICIES
Basis of preparing the financial statements
The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) 'Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.
At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future, which includes taking into account any potential impact of the COVID-19 pandemic, and on that basis the charity is considered to be a going concern.
Income
Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the income have been met, it is probable that the income will be received and that the amount can be measured reliably.
Project income, which represents amounts receivable by the company in the ordinary course of operations for services provided, is accounted for in the year to which it relates. Any income that relates to work to be carried out in future periods is therefore deferred. Contract losses are fully recognised in the period in which they are foreseen.
For transactions where the Institute is deemed to act as an agent, both the income and expenditure have been excluded from the Institute's results, other than where they relate to the Institute's role as an agent.
Corporate membership
Contributions are received by the company to be used on a programme of work agreed with participants.
This income is accounted for in the period to which it relates in the same way as other income received in the ordinary course of operations for services provided.
Conferences and events
Surpluses or deficits on conferences and events are accounted for in the year in which they are held.
Expenditure
Expenditure, which is charged on the accruals basis, is allocated between:
- expenditure incurred directly to the fulfilment of the Charity's objectives including that incurred in providing and maintaining premises and equipment required to carry out the Charity's work; - expenditure incurred in the management and administration of the Charity; and - governance costs.
Direct charitable expenditure on research and commissioned studies comprises expenditure attributable directly to those activities.
Depreciation and rent payable have been apportioned based on the area of the rooms used for the Institute's activities and staff costs are allocated according to the employees' work. All other costs are apportioned on a consistent basis appropriate to the Institute's circumstances.
continued...
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INSTITUTE FOR EMPLOYMENT STUDIES
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2021
1. ACCOUNTING POLICIES - continued
Tangible fixed assets
Recognition and measurement
Fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.
Assets with a cost in excess of £500 intended to be of ongoing use are capitalised as fixed assets.
Depreciation is calculated to write down the cost of furniture, fittings and equipment by equal annual instalments over their expected useful lives. These are 3 years for computer hardware, software and office equipment; 5 years for office furniture and the telephone system; and 10 years for office fit-out costs, or over the period of the lease where this is shorter.
Taxation
The Charity is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK Corporation Tax purposes. Accordingly the Charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.
Fund accounting
Unrestricted funds are incoming resources received for expenditure on the general objectives of the Charity.
Designated funds are unrestricted funds which have been designated for the specific purpose of funding long term research, programme development and the development of services and dissemination. Expenditure against these funds is agreed and authorised only by the Institute director and costs are recorded to a distinct project code. Plans for such investment are included in the annual business plan which is approved by the Board. In recent years investment plans have been put on hold due to the uncertain economic environment and the fund has not been called upon, but it is considered important to retain this facility for the future.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.
Operating lease payments
Total payments under operating leases are charged to the statement of financial activities on a straight line basis over the lease term.
Contributions to pension funds
The company participates in two types of pension scheme:
The IES Stakeholder Retirement Benefits Scheme
This is a defined contributions scheme and contributions are charged to the statement of financial activities in the year in which they fall due.
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INSTITUTE FOR EMPLOYMENT STUDIES
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2021
1. ACCOUNTING POLICIES - continued
The Universities Superannuation Scheme
This is a defined benefit scheme which is externally funded and contracted out of the State Second Pension (S2P). The Fund is valued every three years by a professionally qualified independent actuary using the projected unit method, the rates of contribution payable being determined by the Trustees on the advice of the actuary. In the intervening years, the actuary reviews the progress of the scheme. Pension costs are assessed in accordance with the advice of the actuary based on the latest actuarial valuation of the scheme and are accounted for on the basis of charging the cost of providing pensions over the year during which the company benefits from the employees' services.
The Institute is unable to identify its share of the underlying assets and liabilities of the Universities Superannuation Scheme. Consequently, the disclosures relating to this scheme follow the guidance set out in the transitional provisions allowed under FRS17 Retirement Benefits, for multi-employer schemes. The Institute has accounted for the contributions as if they were defined contribution schemes. Further details are provided in note 17.
Going Concern
The directors consider that there are no material uncertainties about the company's ability to continue as a going concern. The directors have taken advantage of the various sources of Government support during the COVID-19 pandemic. The directors consider that COVID-19 will not have a significant impact on the company's ability to continue trading. Income from trading activities is expected to reduce due to the lockdown conditions and steps are being taken to make cost savings. The directors regard any impact to be short term rather than affecting the company's ability to continue as a going concern. There are no material uncertainties affecting the current year's accounts.
2. INVESTMENT INCOME
| Deposit account interest 3. INCOME FROM CHARITABLE ACTIVITIES Activity Projects Projects Corporate membership Corporate membership Publications Publications |
2021 Unrestricted funds £ 34 2021 £ 2,852,942 103,870 258 2,957,070 |
2020 Total funds £ 4,257 2020 £ 3,716,490 103,570 881 3,820,941 |
|---|---|---|
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INSTITUTE FOR EMPLOYMENT STUDIES
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2021
4. CHARITABLE ACTIVITIES COSTS
| Projects Management & Administration 5. SUPPORT COSTS Management & Administration |
Direct Costs £ 2,457,850 - 2,457,850 |
Support costs (see note 5) £ - 591,796 591,796 |
Totals £ 2,457,850 591,796 3,049,646 Management £ 591,796 |
|---|---|---|---|
6. NET INCOME/(EXPENDITURE)
Net income/(expenditure) is stated after charging/(crediting):
| Depreciation - owned assets Auditors' remuneration - Audit services Auditors' remuneration - non audit services |
2021 £ 18,821 4,600 2,250 |
2020 £ 7,914 4,600 2,250 |
|---|---|---|
7. TRUSTEES' REMUNERATION AND BENEFITS
No Trustee received any remuneration during the year to 31 March 2021 nor 31 March 2020. Except for reimbursement of expenses shown below, there were no other related party transactions with Trustees.
Trustees' expenses
There were no reimbursements to trustees (2020: 3 trustees amounting to £552) for travel expenses during the year.
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INSTITUTE FOR EMPLOYMENT STUDIES
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2021
8. STAFF COSTS
| Wages and Salaries Social Security costs Pension costs The average monthly number of employees during the year was as follows: Total |
2021 £ 1,392,010 127,245 273,758 1,793,013 2021 42 |
2020 £ 1,510,935 125,518 279,990 |
||
|---|---|---|---|---|
1,916,443 |
||||
| 2020 42 |
The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:
| £60,001 - £70,000 £70,001 - £80,000 £80,001 - £90,000 |
2021 - 1 - 1 |
2020 2 2 1 |
|---|---|---|
| 5 |
Pension contributions of £25,669 (2020: £77,008) were made by the company during the year on behalf of higher paid employees.
During the year 4 (2020:4) higher paid staff were accruing benefits under the defined benefits scheme, and no employees (2020: none) were accruing benefits under the company's defined contribution schemes.
Key Management Personnel remuneration amounted to £421,566 (2020: £352,888).
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Page 21
INSTITUTE FOR EMPLOYMENT STUDIES
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2021
9. TANGIBLE FIXED ASSETS
| COST At 1 April 2020 Additions Disposals At 31 March 2021 DEPRECIATION At 1 April 2020 Charge for year Eliminated on disposal At 31 March 2021 NET BOOK VALUE At 31 March 2021 At 31 March 2020 10. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Trade debtors Other debtors Prepayments and accrued income 11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Trade creditors Social security and other taxes Payments received in advance Pension contributions Accruals and deferred income Accrued expenses |
2021 £ 754,451 - 292,638 1,047,089 2021 £ 239,480 350,828 692,632 - 30,338 89,144 1,402,422 |
Fixtures and fittings £ 242,319 51,123 (153,675) 139,767 231,763 18,821 (152,626) 97,958 41,809 10,556 2020 £ 1,242,584 43,824 193,940 1,480,348 2020 £ 249,228 295,394 394,208 33,716 36,208 69,518 1,078,272 |
|---|---|---|
continued...
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INSTITUTE FOR EMPLOYMENT STUDIES
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2021
12. LEASING AGREEMENTS
Minimum lease payments under non-cancellable operating leases fall due as follows:
| Within one year Between one and five years 13. PROVISIONS FOR LIABILITIES Provisions Repairs and Restatement Provision Balance at 1 April 2020 and 31 March 2021 14. MOVEMENT IN FUNDS Unrestricted funds General fund TOTAL FUNDS Net movement in funds, included in the above are as follows: Unrestricted funds General fund TOTAL FUNDS |
At 1/4/20 £ 1,386,306 1,386,306 Incoming resources £ 3,052,286 3,052,286 |
|
|---|---|---|
continued...
Page 23
INSTITUTE FOR EMPLOYMENT STUDIES
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2021
14. MOVEMENT IN FUNDS - continued
Comparatives for movement in funds
| Unrestricted funds General fund TOTAL FUNDS |
At 1/4/19 £ 1,383,514 1,383,514 |
Net movement in funds £ 2,792 2,792 |
At 31/3/20 £ 1,386,306 |
|---|---|---|---|
| 1,386,306 |
Comparative net movement in funds, included in the above are as follows:
| Unrestricted funds General fund TOTAL FUNDS |
Incoming resources £ 3,825,198 3,825,198 |
Resources expended £ (3,822,406) (3,822,406) |
Movement in funds £ 2,792 2,792 |
|---|---|---|---|
15. RELATED PARTY DISCLOSURES
Except for the disclosures in Note 7, there were no related party transactions.
16. LIABILITY OF MEMBERS
During the year 8 members (2020:8) have each undertaken to contribute an amount not exceeding £10 in the event of the company being wound up.
17. PENSION SCHEMES
The Institute participated in two pension schemes during the year.
The first scheme is a stakeholder defined contribution direct benefit schemes. The total pension cost to the company for this scheme for the year ended 31 March 2021 was £10,484 (2020: £10,484).
The second scheme provides benefits based on a Career Average Salary. The contribution rates from April 2018 are 18% of pensionable salaries for the employer and 8% for the employee. The total pension cost for the company for this Career Average scheme for the year ended 31 March 2021 was £265,373 (2020 £269,506). The Institute has 36 (2020:33) employees in Universities Superannuation Schemes (USS).
Historically there was also a final pensionable salary scheme but this was closed entirely on 31st March 2016. The members have transferred to the Career Average scheme above.
continued...
Page 24
INSTITUTE FOR EMPLOYMENT STUDIES
NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 MARCH 2021
17. PENSION SCHEMES - continued
The Institute participates in the Universities Superannuation Schemes (final salary and career average), both are defined benefit schemes which are contracted out of the State Second Pension (S2P). The assets of the schemes are held in a separate Trustee-administered fund. It is not possible to identify each institution's share of the underlying assets and liabilities of the schemes and hence contributions to the schemes are accounted for as if they were defined contribution schemes. The amount charged to the income and expenditure account represents the contributions payable to the schemes in respect of the accounting period.
The latest triennial valuation took place as at 31 March 2017, calculating that the scheme deficit was now £12.6 billion. This represents a deficit increase of £0.9 billion over the three years since the previous valuation.
The Occupational Pensions Schemes (Employer Debt) Regulations 2005 and the Occupational Pensions Schemes (Employer Debt etc) (Amendment) Regulations 2005 (the "Employer Debt Regs") creates a debt (known as a "Section 75 debt") upon an "employment-cessation event (when an employer ceases to employ at least one person who is an active member of a pension scheme and at least one other employer continues to employ active members). A section 75 debt is based on the cost of securing members' benefits by purchasing an annuity policy from an insurance company and may be significant.
Page 25