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2023-12-31-accounts

Engineering Council

Registered Charity No 286142

Annual Report and Financial Accounts 2023

Annual Report and Financial Accounts 2023

Contents

Foreword................................................................................................................................................ 3 Foreword................................................................................................................................................ 3
Statement from the Chair and CEO .................................................................................................... 4
1. Registration statistics as of 31 December 2023 ......................................................................... 5
2. Strategy and performance in 2023 ............................................................................................ 7
3. 2023 Activities and Achievements ............................................................................................. 8
4. Risk and compliance ................................................................................................................ 10
5. Financial review ....................................................................................................................... 13
6. Public benefit report ................................................................................................................ 15
7. How we operate....................................................................................................................... 19
8. Statement of Trustees' responsibilities ................................................................................... 23
9. Independent auditor’s report to the Trustees of The Engineering Council ............................. 24
10. Statement of financial activities for year ended 31 December2023……………………………..27

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Annual Report and Financial Accounts 2023

Foreword

Operating under a Royal Charter, the Engineering Council is charged with regulating the UK engineering profession on behalf of society. We hold the national Register of those who have satisfied their peers of their competence and commitment as Engineering Technicians, Incorporated Engineers, Chartered Engineers and ICT Technicians. We set the education standards for engineering programmes that provide the underpinning knowledge and understanding required to practise engineering, as well as setting standards for professional development. We can only achieve this through the commitment of the entire professional engineering community, supported by academics and employers.

Professional registration provides the benchmark which allows the public to have confidence and trust that the engineers and technicians on our Register have met globally recognised professional standards.

Nearly a quarter of a million men and women are currently listed on our Register. The UK has an ageing population, and with the number of registrants aged over 60 representing over a third of those on the Register, we must continue to work hard to maintain a talent pipeline to meet future skills requirements. We therefore welcome the joint initiatives that are underway to ensure that more people enter professional engineering careers and that those who are already professionally registered remain so throughout their working life. This is a strategic imperative for the nation if we are to meet the engineering and technological needs of the future.

Vision:

That society continues to have confidence and trust in the engineering profession.

Mission:

To maintain internationally recognised standards of competence and commitment for the engineering profession and to license competent institutions to champion the standards for the deliverance of public benefit.

What we do, how we do it and why:

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Annual Report and Financial Accounts 2023

Statement from the Chair and CEO

The Engineering Council (EngC) has seen a year of changes in 2023, with a new Chief Executive Officer, Paul Bailey, appointed in May followed by a new Chair, Professor John Chudley, at the organisation’s June AGM. As our previous Deputy CEO and Vice-Chair respectively, we believe this level of continuity has enabled the organisation to maintain its organisational and strategic focus.

Our current 2025 Strategy: Advancing Regulation, informs and structures our strategic outcomes, against which this Annual Review reports. As we reach the halfway stage of our current strategic cycle, we will reflect on our key achievements during 2023 in support of the EngC’s overriding goal to ‘maintain the public’s confidence in the engineering profession through wider promotion of the Engineering Council’s regulatory work, its leadership role within the engineering community and a greater, more diverse and engaged registrant population’.

This year saw some key projects begin to ramp up, most particularly our work on delivering a new Contextualised Standard in support of regulating those individuals working on Higher-Risk Buildings (HRBs). As a result of the Grenfell Tower tragedy, this is very much a high-profile project and we have been pleased by how the professional engineering community, and the staff at the EngC, have pulled together. We were also very pleased to have received our first licence applications to award HRB registration in 2023.

The next stage of our Registration Review started towards the end of the year, an important activity in ensuring our products and services remain relevant to an increasingly diverse workforce of engineers and technicians. As we enter the next phase of development, we look forward to seeing how the proposals evolve as we begin to consult our key stakeholders.

Our support to the profession in important key areas such as ethics, sustainability and equality, diversity and inclusion (EDI) continues, both through our UK Standard for Professional Engineering Competence and Commitment (UK-SPEC) which requires ethical and sustainable behaviour from professionally registered engineers and technicians, and through the publication of guidance for the whole engineering community. The recent launch of our neurodiversity guidance to Licensees was a real highlight of the year and we will continue to look at how we can inform the debate on EDI, particularly through understanding the registration data we hold. We will also continue our work on mentoring refugees and look ahead to updating our guidance on whistleblowing.

The maintenance of the Standards for public benefit continues to be at the core of the EngC’s purpose as we move forward. To help support that primary aim, we need to ensure our policies and procedures remain relevant and robust and we are proud of our continuing certification to the ISO 9001:2015 standard which pays testament to the quality of our core regulatory functions, particularly in support of our registration and licensing activities which are crucial to maintaining the integrity of our Register.

Looking ahead, 2024 presents an exciting and positive time for the organisation as we begin to formulate our post-2025 strategy. Our new organisational values - fairness, integrity and transparency – will continue to inform all aspects of our attitudes and behaviours going forward as we continue to work with the professional engineering community and encourage EngC registration as a crucial means of maintaining society’s trust in the engineering profession.

Chairman

Professor John Chudley BSc PhD CEng FIMarEST

Chief Executive Officer

Paul Bailey BSc (Hons) FRAeS MInstP

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Annual Report and Financial Accounts 2023

1. Registration statistics as of 31 December 2023

FIGURE 1: NEW TITLES ADDED TO THE REGISTER IN 2023 COMPARED TO 2022

EngTech
IEng
CEng
ICTTech		 Interim Final Total
2022
2023
Change
6
-100.0%
67
50
-25.4%
196
217
10.7%
 2022
2023
Change		 2022
2023
Change
2,453
2,859
16.6%		 2,459
2,859
16.3%
1,086
1,304
20.1%		 1,153
1,354
17.4%
5,222
5,488
5.1%		 5,418
5,705
5.3%
185
207
11.9%		 185
207
11.9%
Total 269
267
-0.7%		 8,946
9,858
10.2%		 9,215
10,125
9.9%

FIGURE 2: TOTAL NUMBER OF REGISTRANTS ON THE REGISTER IN 2023 COMPARED TO 2022

FIGU RE2: TOTAL NUMBER OFREG ISTRANTS ON THEREGISTE R IN2023 COMPARED TO202
EngTech
IEng
CEng
ICTTech		 Interim Final Total
2022
2023
Change
120
113
-5.8%
1,118
1,035
-7.4%
5,058
4,829
-4.5%
-
 2022
2023
Change		 2022
2023
Change
23,215
23,457
1.0%		 23,335
23,570
1.0%
23,882
23,243
-2.7%		 25,000
24,278
-2.9%
170,691
169,401
-0.8%		 175,749
174,230
-0.9%
780
836
7.2%		 780
836
7.2%
Total 6,296
5,977
-5.1%		 218,568
216,937
-0.7%		 224,864
222,914
-0.9%

FIGURE 3: LOSS OF TITLES ON THE REGISTER IN 2023 COMPARED TO 2022

EngTech
IEng
CEng
ICTTech		 Interim Final Total
2022
2023
Change
-14
-8
-42.9%
-124
-148
19.4%
-492
-462
-6.1%
-
 2022
2023
Change		 2022
2023
Change
-2,746
-2,819
2.7%		 -2,760
-2,827
2.4%
-2,077
-2,107
1.4%		 -2,201
-2,255
2.5%
-8,434
-7,600
-9.9%		 -8,926
-8,062
-9.7%
-256
-162
-36.7%		 -256
-162
-36.7%
Total -630
-618
-1.9%		 -13,513
-12,688
-6.1%		 -14,143
-13,306
-5.9%

An individual registrant can hold more than one designation or title (for example, such as Chartered Engineer (CEng) and Incorporated Engineer (IEng), or holding CEng with more than one institution), consequently there are more titles recorded on the Register than there are individual registrants. To ensure that any individual is only represented once in Figure 2 only their highest title is counted.

Reinstatements in 2023

In 2023, there were 991 reinstatements to the Register. Reinstatements are registrations that have previously been suspended but have returned to the Register within the last three years.

New final titles by gender

For new final stage titles added to the Register over the last three years, the percentage of these titles held by women has broadly remained the same since 2021.

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Annual Report and Financial Accounts 2023

Looking at individual registration titles, the percentage of new final stage EngTech titles held by women has increased from 6.2% in 2022 to 10.2% in 2023. IEng has shown a marginal increase in the number of titles from 90 in 2022 to 105 in 2023 but the percentage of new final stage titles held by women, has decreased marginally from 8.3% in 2022 to 8.1% in 2023. The number of new final stage CEng titles held by women has increased from 820 in 2022 to 848 in 2023 but the percentage has decreased marginally from 15.7% to 15.5% (see Figure 4).

FIGURE 4: NEW FINAL STAGE TITLES BY YEAR, BY REGISTRATION TITLE, BY GENDER, 2021-2023

EngTech IEng CEng ICTTech Total % of total
new titles
2021
Male		 2,710 1,147 5,566 193 9,616 87.5%
Female 237 97 1,007 15 1,356 12.3%
Gender not specified 2 19 1 22 0.2%
2022
Male		 2,294 995 4,387 170 7,846 87.7%
Female 158 90 820 14 1,082 12.1%
Gender not specified 1 1 15 1 18 0.2%
2023
Male		 2,564 1,199 4,619 198 8,580 87.0%
Female 293 105 848 9 1,255 12.7%
Gender not specified 2 21 23 0.2%

International registrations

FIGURE 5: FINAL STAGE TITLES HELD BY NON-UK DOMICILED REGISTRANTS

----- Start of picture text -----
2022 2023
EngTech 1,274 1,212
IEng 2,525 2,370
CEng 41,689 41,916
ICT Tech 17 21
Total 45,505 45,519
----- End of picture text -----

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Annual Report and Financial Accounts 2023

2. Strategy and performance in 2023

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Annual Report and Financial Accounts 2023

3. 2023 Activities and Achievements

Diversity & Inclusion

In 2023 the ‘Guidance Note on supporting neurodivergent applicants for registration’ was launched at an event held at the Royal Academy of Engineering. This new guidance outlines appropriate adjustments that can be made to the registration process where required. It was developed by an Engineering Council working group composed of practising engineers with lived experience of neurodivergent traits and conditions, and Licensee staff working on Equality, Diversity and Inclusion and related topics.

Work has begun on a new website and Partner Portal for the EngC, which will be compliant to accessibility guidelines WCAG 2.1 AA. This will mean increased ease of use for all stakeholders. We are expanding our digital-first strategy to include all our publications, by offering them both in PDF as well as in HTML format, which will make them more accessible.

Digital Innovation

An Artificial Intelligence Working Group has been established to look at AI in relation to education, skills and registration. It is anticipated that some work in this area will be completed in partnership with the Society for the Environment and the Science Council to ensure a consistent response.

The new Document and Information Management System (DIMS) has now been selected. This new system will enable a more effective method of managing information and workflows using modern functionality that will support the organisation’s operating model, aligning it with the 2025 strategic enabler – operational excellence.

Work is in progress building a new-look website which will have better functionality, a more modern design, be more accessible and provide a better user experience.

International

Consulting with the Government on a range of issues, including trade agreements, mutual recognition of professional qualifications and the scope and implementation of the Professional Qualifications Act, we have reaffirmed the Engineering Council’s role as the UK competent authority, representing the UK profession internationally.

We are actively engaged with colleagues across the world through the European Network for the Accreditation of Engineering Education (ENAEE), ENGINEERS EUROPE (formerly FEANI) and the ENGINET alliance. We represent the UK in the International Engineering Alliance (IEA), which oversees six international agreements on the establishment of standards for engineering education and professional engineering competence.

An Admissions Pathway Agreement has been signed with the Royal Netherlands Society of Engineers, which will facilitate the mobility and recognition of engineering professionals between the UK and The Netherlands; further international agreements are in progress.

Engineering & Society

Supporting the new Building Safety regime being established post-Grenfell, we have published the UK Standard for Professional Engineering Competence and Commitment Contextualised for HigherRisk Buildings (UK-SPEC HRB). This is a competence framework for engineers working in this safetycritical area, including a series of discipline-specific annexes for specialisms such as fire, structural and building services.

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Annual Report and Financial Accounts 2023

We endorsed the Engineers Without Borders (EWB) Global Responsibility Compass as a tool to support engineering professionals to act sustainably, equitably and ethically. We have also contributed to the Royal Academy of Engineering (RAEng) Sustainability in Higher Education Working Group and the RAEng/EWB Systems Change Labs looking at how engineering higher education could be improved.

Following the implementation of AHEP (Accreditation of Higher Education Programmes) version 4, feedback has shown that it has encouraged higher education institutions to put more of an emphasis on sustainability in their engineering degree curricula. Our Education and Skills team has been working throughout the year to encourage professional engineering institutions to support the implementation of Approval and Accreditation of Qualifications and Apprenticeships (AAQA) with the aim of encouraging providers of further education and apprenticeships to also address sustainability, ethics and security.

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Annual Report and Financial Accounts 2023

4. Risk and compliance

How the Engineering Council manages risk

The Engineering Council maintains a risk management policy which forms part of the EngC’s internal control and governance arrangements. The policy explains the EngC’s underlying approach to risk management including how the organisation views, identifies, assesses, and manages risk. It also describes the process the Board uses to manage the Engineering Council's risk management process and evaluate the effectiveness of the internal control procedures.

Engineering Council maintains a Trustee Risk Register which identifies risks that could have an impact on the organisation’s ability to deliver its strategic objectives, including all legal and financial mandates, assess the probability and impact of those risks occurring and details the measures in place to manage and mitigate them.

The Trustee Risk Register is supported by several Functional Risk Registers, each covering the main activities of the Board’s Committees and Panels, and which identify risks that could have an impact on the organisation’s ability to deliver its strategic objectives in those areas. These registers are reviewed at each of the Committee/Panel meetings with the Management Panel undertaking a holistic review every quarter.

Role of the Executive Team and Management Panel

Day to day management of individual risks is the responsibility of the appropriate staff member where decisions are delegated to them as recorded in the Risk Register. The Management Panel reviews the Risk Register at each meeting and reports any concerns about risk and their management to the Board. The Risk Register is reviewed at each Board meeting. Should any other risk emerge during the year that is assessed to fall into one of the categories described above or which may result in the levels of tolerable risk set out in the EngC's risk appetite statement being exceeded then this should be referred to the Board for review.

As part of the business planning process, the Executive Team scans the horizon to identify changes in the external environment that may have an impact on the Engineering Council’s operations. Both PESTLE and SWOT analysis frameworks are utilised to do this, which then instructs the ‘opportunity and risk’ identification process.

As part of the business planning process, all key tasks will record risks, opportunities and issues that may affect the achievement of expected outputs in either Functional Risk Registers or the Projects Risk & Opportunities Register and Issues Register .

Based on the horizon scan and organisational SWOT analysis, the emergent opportunities are identified and captured in the Risk and Opportunities Register. The Executive Team reviews the Opportunity Register in the autumn of each year and prepares and prioritises projects that may exploit the opportunities, subject to resources being available. This will also inform any options analysis, which then drives the budgeting forecast the following year.

This process involves assessing the most significant individual risks on the basis of the likelihood of it occurring, and what the impact to the organisation would be should the risk occur and considering ways of avoiding the risk(s) or mitigating its effect. Each area of risk has been assessed by providing a score to both the impact and the probability of each risk and using these to calculate the overall severity, and therefore, Gross Risk. With the identification and definition of suitable controls and monitoring actions, a judgement is then made as to what extent the impact of the Gross Risk is reduced, thereby reflecting what the Net Risk is.

Role of the Board

The Trustees assessed the major risks to which the Engineering Council was exposed in accordance with Charity Commission guidance and were satisfied that systems were in place to mitigate the Engineering Council's exposure to major risks.

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Annual Report and Financial Accounts 2023

The organisation’s Risk Policy & Procedure (October 2023) contains the following key principles that outline the Engineering Council's approach to risk management:

a. As the EngC’s principal body, the Board is responsible for risk management; b. The Board is responsible for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives while safeguarding the public and other funds and assets for which it is responsible in accordance with its Charter and By-laws;

g. The CEO and Executive Team, with input from the volunteer committees and panels where relevant, are responsible for encouraging and implementing good risk management practice across the organisation, in particular the identification, evaluation and management of risk.

h. Early warning mechanisms will be put in place and monitored to alert the Board so that remedial action can be taken to manage any potential hazards.

This policy includes consideration of the organisation’s Risk Appetite i.e., the level of risk that EngC is prepared to accept in pursuit of its strategic objectives. This Statement informs the EngC’s strategy and business planning processes and is reviewed annually by the Board. It sets the context for managing risk and forms an integral part of this policy. The Risk Appetite Statement will also form the basis of delegated levels of authority for decisions including at subordinate panels and committees.

In terms of its willingness to accept certain types of risk, the EngC’s approach is to minimise exposure to reputational, compliance and financial risk, whilst accepting that a certain level of risk must be taken to achieve its strategic objectives. Acceptance of risk is subject to ensuring that risks and potential benefits are fully considered and understood before activities are undertaken and that sensible measures are in place to mitigate risk.

As of 31 December 2023, there were three MEDIUM and two LOW Net Risks on the Trustees Risk Register. The MEDIUM Net Risks are as follows:

1. Risk that reviews of the profession or competing regulatory drivers will result in the EngC’s regulatory function and its registers being removed or developed by an alternative body.

MITIGATION

EngC represented on Professional Engineering Committee (PEC) and contributing to consultations.

2. Risk that EngC does not comply with the requirements of the new General Data Protection Regulation (GDPR).

MITIGATION:

3. Risk of attack by virus or hacker, or systems failure, or staff/volunteer unintentional breach resulting in corruption or deletion of electronic data.

MITIGATION:

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Annual Report and Financial Accounts 2023

Internal and external auditing

The Quality Management System (QMS) is now embedded within the Engineering Council’s Operational Framework and a robust internal audit schedule is in place. This plan is created and revised by the internal Quality Management Team (QMT), which also manages the internal audit team. In addition, QMT monitors the internal audit process, reviews internal audit reports and follows up on both ISO9001 and internal audit non-conformances and root cause analysis. All findings are recorded in the Internal Audit Log as requested by the Executive Team. The Engineering Council was successfully recertified against the ISO 9001:2015 quality management standard in January 2024.

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Annual Report and Financial Accounts 2023

5. Financial review

The areas of activity funded during 2023 are set out in section 3 - 2023 Activities and Achievements . A detailed breakdown of expenditure for the year appears in notes 7-13 to the Financial Statements. FARP regularly scrutinises the organisation’s expenditure to ensure that the work of the Engineering Council remains cost-effective.

The inclusion of the Engineering Council Pension Scheme under FRS102 has reduced staff costs by £122,000 (2022 - £112,000), increased direct costs by £229,000 (2022 - £185,000) and resulted in an actuarial loss on the scheme of £254,000 (2022 – loss of £966,000). The overall effect of applying FRS102 is thus to increase income for the year by £107,000 (2022 – decrease of £73,000) and to decrease the net movement in funds by £254,000 (2021 – decrease of £966,000).

Engineering Council Pension Scheme

The Trustees of the Engineering Council Pension Scheme met three times during 2023. The Engineering Council, as the Principal Employer, made contribution towards scheme running costs of £122,000, as opposed to £112,000 made in 2022. This change resulted from the triennial valuation, at 31 December 2018, showed a past service surplus of £327K compared to the deficit disclosed by the 2015 valuation of £1.2M. The principal factors affecting the change in the deficit were the deficit reduction contributions made by the Employer and the value placed on the liabilities, which was lower than in the previous year due mainly to the increase in the corporate bond yield.

Following the recent triennial valuation at 31 December 2021, when the Scheme reported a surplus on a technical provisions’ basis of £988K, the Trustees and the Employer have agreed that an annual contribution towards the Scheme running costs will continue to be made until the next triennial valuation which is due at 31 December 2024.

Reserves

In 2023 the Engineering Council held funds of £3,341,403 (£3,163,483 – 2022) as follows:

Disregarding the tangible fixed assets for reserves policy purposes, the charity’s general fund was £3,258,150 (2022 - £3,031,652); a figure not materially different from twelve months' expenditure.

At its October 2023 meeting FARP agreed the principle of utilising reserves in excess of six months’ operating costs to fund projects that supported the organisation’s strategic plan, but only on condition that a minimum of six months’ operating costs be retained at all times.

Restricted funds

The pension reserve was £nil at the year end with the pension grant received in year again being equivalent to the current year recovery plan contributions of £122k (£112k – 2022).

The general fund, as shown in the financial statements, includes an unrecognised surplus of £0.811M (2022 surplus - £1.065M), due to an excess of assets over liabilities in the scheme this year. The figure as calculated under FRS102 is in respect of the defined benefit scheme.

This amount is not recognised within the Engineering Council’s financial statements as the organisation has no rights over the Scheme’s assets. The Trustees believe that this notional funding calculation, which can vary considerably according to the assumptions made at each year-end, has no material effect on the organisation’s cash flow in the short term, and that in the long term its effects can be sustained from future income.

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Annual Report and Financial Accounts 2023

The majority of the reserves are held in investments, with the remainder held in cash.

Investment Policy and Returns

The Engineering Council’s reserves have been held in the Cazenove Charity Responsible Multi-Asset Fund since May 2022 (previously held in the Barings Targeted Return Fund which was closed in 2021.

FARP reviews the fund performance at each of its meetings and the fund manager attends FARP at least once a year to discuss fund performance. Cazenove fund managers attended FARP in October 2023 to report on its performance, positioning and outlook for the remainder of 2023 and beyond.

Expenditure on charitable activities

The following graph sets out the amounts spent on key areas of activity in 2023 and 2023.

FIGURE 7: 2023 & 2022 EXPENDITURE

----- Start of picture text -----
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
Projects Board Business Data & Comms Licensing & International Policy & Total
Support Governance Standards
2023 2022
----- End of picture text -----

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Annual Report and Financial Accounts 2023

6. Public benefit report

One of the key elements of the organisation’s core business is to ensure that the professional engineering community continues to provide public benefit through appropriate structures and professional behaviours.

This section provides a review of the significant or main activities undertaken by the Engineering Council to further its charitable purposes for the public benefit.

The Trustees confirm they have referred to the Charity Commission’s general guidance on Public Benefit when reviewing the Engineering Council’s aims and objectives and in planning future activities that will contribute to delivering the strategy OR vision and mission.

What is the Engineering Council there to achieve?

The purposes of the Engineering Council are set out as follows:

Objective

To advance education in, and promote the science and practice of, engineering (including relevant technology) for the public benefit and thereby to promote industry and commerce in Our United Kingdom and elsewhere.

Mission:

To maintain internationally recognised standards of competence and commitment for the engineering profession and to licence competent institutions to champion the standards, for the deliverance of public benefit.

Vision:

That society continues to have confidence and trust in the engineering profession.

What has the Engineering Council done during 2023 to carry out those purposes for the public benefit?

Against the principles of public benefit

Against each of the principles of public benefit and their key factors, as set out in the Charity Commission guidance, the Engineering Council is able to assess whether each factor has been met.

Table 1

ble 1
Serial Principle or factor Assessment
1 There must be an identifiable benefit
or benefits		 Engineering underpins provision and/or distribution of the
basic necessities of civilised life: buildings, energy, water and
sanitation, food, transport, healthcare, communications,
defence. The major public benefit is the professional
regulation that the Engineering Council and its Licensed
Member institutions exercise over their registrants and
members when serving the general public.
1a It must be clear what the benefits are See specific public benefits in Table 2, serials 1-11.
1b The benefits must be related to the aims
(i.e., objects)		 The object is pursued in conjunction with the Engineering
Council’s Licensed Member institutions through the core
functions of registration and accreditation to consistent
standards. The end result is that public benefits (1 above)
are generated by qualified registrants and institution

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Annual Report and Financial Accounts 2023

----- Start of picture text -----
members working in private and public sector industries and
services.
1c Benefits must be balanced against any While some engineering products or activities are potentially
detriment or harm harmful, the professional code of conduct and professional
education and training all emphasise safety, sustainability
and concern for the environment. Benefits vastly outweigh
detriment. Downside would be greater without professional
ethical commitment. See Table 2, serial 2.
2 Benefit must be to the public, or to a Benefits of sound engineering are to the public generally,
section of the public and, in varying degrees, to all mankind.
2a The beneficiaries must be appropriate to Confirmed.
the aims
2b Where benefit is to a section of the Individual registrants, totalling more than 220,000, receive
public, the opportunity to benefit must particular benefits in addition to the general public benefits at
not be unreasonably restricted by: 2 above. Discussed at 2d below.
Geographical or other restrictions Registration is conditional on meeting academic and other
standards of competence – an integral part of achieving the
overall public benefit. Moreover, registration is voluntary, not
a statutory ‘licence to practise’.
Annual registration fees range from £21.34 for Engineering
Ability to pay any fees charged
Technician to £43.85 for Chartered Engineer, reducible to
£9.46 and £19.83 respectively for individual cases of
hardship. See also Table 2, serial 11.
In conclusion, members of the public wishing to become
registrants are not unreasonably restricted on either count.
2c People in poverty must not be excluded Covered in 2 and 2b above.
from the opportunity to benefit
2d Any private benefits must be incidental The private benefits of registration directly contribute towards
achieving the Engineering Council's aims and are a
necessary result of carrying out those aims. The CC’s legal
analysis underpinning its guidance quotes at para 3.84 a
case – IRC v Forrest – relating to membership of one of the
Engineering Council’s Licensed Member institutions, which
applies equally to registration.
----- End of picture text -----

As per specific activities and benefits:

Table 2

able 2
Serial Engineering Council activity Institution activity Effect Public benefit
1 Set and maintain standards of
professional competence in four
categories: Engineering
Technician, Incorporated
Engineer, Chartered Engineer,
ICT Technician		 Contribute to
defining standards,
in conjunction with
industry and
academia; promote
standards		 Identifies competence
to practice in the
applicable category		 Defined learning
progression for existing and
prospective engineers,
technicians and
craftspersons; benefit to
industry and commerce and
thus to national economy
2 Define generic standards of
professional conduct and ethics		 Tailor standards to
own field; require all
members to
observe standards		 Registrants observe
standards		 Positive contribution to
safety, sustainability, the
environment, industrial

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Annual Report and Financial Accounts 2023

----- Start of picture text -----
in institution code of effectiveness and public
conduct. May confidence
provide advice
facility to members
3 Require institutions to have Produce and Reported breaches of Public confidence in
complaints and disciplinary operate complaints standards by members profession; a degree of
procedures; appellate body in and disciplinary dealt with fairly and redress for complainants
defined circumstances procedures in transparently
support of (2)
4 License institutions to register Promote registration Evidence of the Assists employers and
qualified individuals through and institution professional clients in recruiting or
defined procedures membership; competence and engaging individuals; public
assess and register commitment of confidence
qualified individuals individual engineers
and technicians
5 License institutions to accredit Accredit and Identifies courses Raises and maintains the
academic courses and approve approve courses leading to exemplifying quality of engineering
professional development courses (often jointly) qualifications for education; helps to inform
for engineers individual registration. curriculum design and
promote innovative
Coherent, relevant methods of teaching;
national standards, assists students in
adopted by Quality selecting courses and
Assurance Agency career options; encourages
(QAA) education in economically
important fields; attracts
foreign students to UK
universities, enhancing the
universities’ reputation and
financial position; supports
industry in developing high
quality programmes that
support professional
registration
6 License institutions to approve Approve Vocational Links existing VQs and Informs awarding
vocational qualifications and Qualifications (VQs) apprenticeship organisations and
programmes for technicians; host and apprenticeship programmes to apprenticeship developers
a technician working group to programmes Engineering Technician of suitability of VQs and
develop initiatives and share good standard apprenticeship
practice programmes for
registration; allows
individuals with approved
VQs and apprenticeships to
register as Engineering
Technicians via a
streamlined route
7 State requirement for individual Facilitate and Members maintain Contributes to (2), (4) and
CPD (part of (2)) monitor members’ competence (5)
CPD
8 Conduct periodic review of Operate internal Licence requirements Underpins (2-6)
licensed institutions quality assurance and standards
procedures maintained and applied
consistently
9 Represent UK in negotiating Advise and support Increased employment UK firms can compete and
international agreements for members; admit and working mobility of operate more effectively
mutual recognition of and register engineers and overseas, to the benefit of
qualifications; advise government qualified individuals technicians UK economy; overseas
departments educated overseas; recognition of and demand
form alliances with for UK professional
recognition enhances
----- End of picture text -----

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Annual Report and Financial Accounts 2023

overseas
institutions		 reputation of UK; increased
recognition of UK
engineering qualifications
provides greater
encouragement for
individuals to seek the
knowledge and
competence to achieve
them
10 Train institution volunteers in
registration and accreditation
procedures (e.g., interviewing,
mentoring, assessment)		 Identify volunteers
from among
members; cascade
training to further
volunteers		 Contributes to (4, 5, 8) Contributes to (4, 5, 8)
11 Charge individual registration fees Charge individual
membership fees		 Financial viability of
bodies		 All bodies charge reduced
fees for some of student
members, young members,
technician members, non-
corporate (unqualified)
members, members
temporarily not working,
retired members

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Annual Report and Financial Accounts 2023

7. How we operate

How we are governed

The Engineering Council, whose registered office is 5[th] Floor, 10 Lower Thames St, London EC3R 6EN was incorporated by Royal Charter on 27 November 1981 and is a registered charity, No. 286142, whose objects are:

To advance education in, and to promote the science and practice of, engineering (including relevant technology) for the public benefit and thereby to promote industry and commerce in Our United Kingdom and elsewhere .

However, as a result of changes made to the profession under the direction of Lord Sainsbury, Minister for Science and Innovation (1998 to 2006), the scope and responsibility was narrowed down to operate the national Register.

How we are funded

The Engineering Council’s principal source of funding is the annual registration fees of individual registered engineers and technicians. The fees are collected by the professional engineering institutions and remitted to EngineeringUK, from which a grant is made to the Engineering Council.

This operating grant is used to cover the cost of carrying out regulatory activities, which include maintenance of standards; licensing of professional engineering institutions as Licensees and Professional Affiliates; international representation in Engineers Europe (previously FEANI) and the International Engineering Alliance; operation of the engineering profession’s national Register; and support for the promotion of registration by professional engineering institutions.

The annual registration fees from Engineering Technicians, Incorporated Engineers, Chartered Engineers and ICT Technicians support the work of the Engineering Council and EngineeringUK.

The Engineering Council does not engage any external fundraisers nor raises funds from the general public and as such no complaints have been received in this respect.

The Board of Trustees

The Engineering Council is governed by a 22-member Board of Trustees, which is appointed in accordance with the Engineering Council’s Bye-laws. Twelve of the members are appointed by the major professional engineering institutions, three by the smaller institutions and the remaining seven by EngineeringUK. The composition of the Board provides stakeholder representation through institution-nominated members, and the involvement of the wider profession through EngineeringUK nominees.

The Board met on three occasions in 2023 (March, June and November) with the meetings chaired by Prof Chris Atkin CEng FRAeS FREng and then, upon his appointment as Chair at the June 2023 AGM, by Professor John Chudley BSc PhD CEng FIMarEST..

The Board appoints the Chief Executive Officer, who is in turn responsible for staffing within parameters established by the Board.

The constitution and membership of the Board is published on the Engineering Council website (www.engc.org.uk). An extranet requiring a password (from October 2017, the Partner Portal, at https://partner.engc.org.uk) is available to stakeholders, primarily Licensees, Professional Affiliates, Engineering Council Trustees, and volunteer members of the Engineering Council’s Committee and Panels, as well as Engineering Council staff. The Charter and Bye-laws, Regulations and Terms of Reference of the Board’s Committees and Panels are published on the Partner Portal together with other information including agendas, minutes and papers and proceedings of the Board, Committees and Panels.

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Annual Report and Financial Accounts 2023

Within three months of joining the Board, Trustees are given an induction by the Executive Team, which is based on the Institute of Chartered Secretaries and Administrators Best Practice Guide to the Appointment and Induction of Charity Trustees. Further trustee training, including GDPR training, is undertaken as appropriate.

The following table presents changes to Board members during 2023.

----- Start of picture text -----
Term of Term of
Nominated by Board Member Office Office
ended started
EURING Alastair Revell BSC(Hons) CEng
1 BCS, The Chartered Institute for IT
CITPFBCS FRSA FIAP
Mr Andrew Rowe BEng (Hons) CEng
Chartered Institution of Building
2 MCIBSE MSLL MIWFM
Services Engineers
Dr Rob Best CEng FIChemE
3 Institution of Chemical Engineers
Mrs Emer Murnaghan OBE BEng CEng
4 Institution of Civil Engineers
MICE CEnv MIW FIEI
Institution of Engineering & Mr James Baker CEng FIET
5
Technology
Institution of Engineering & Ms Michelle Richmond CEng FIET
6 June 2023
Technology
Institution of Engineering & Ms Margaret Graham CEng Hon FIET
6 June 2023
Technology
Institute of Marine Engineering, John Chudley BSc PhD CEng FIMarEST-
7
Science & Technology Chair
Mr Jim Shields CEng CSci FIMMM CGeol
Institute of Materials, Minerals and
8 FGS FICE FIQ
Mining
Institution of Mechanical Mr Mike McLoughlin CEng FIMechE FIET
9
Engineers
Prof Chris Atkin CEng FRAeS FREng
10 Royal Aeronautical Society June 2023
10 Royal Aeronautical Society Mr Martin Penn CEng FRAeS June 2023
Prof. Steve Burnage CEng CEnv FIMechE
11 Society of Operations Engineers FSOE IMAAEES
Mr Phil Nelson CEng FIStructE
12 Institution of Structural Engineers
Terry Fuller CEng MICE MCIWEM
13 Group B Institutions June 2023
EURING Simon Vaitkevicius CEng FIED November
13 Group B Institutions
2023
14 Group B Institutions Mr Neil Phelps IEng MIED
Mr Tony Gibson CEng MNucI MIET MAPM
15 Group C Institutions MINCOSE
16 EngineeringUK Mr David Short CEng FRAeS FIET
Ms Ann Watson October
17 EngineeringUK
2023
Mr Matt Gantley
18 EngineeringUK
19 EngineeringUK Ms Estelle Clark CQP FCQI
Mrs Josephine Parker MBE CEng FCIWEM
20 EngineeringUK
FICE F!Water
21 EngineeringUK Capt Mike Rose RN CEng MIMarEST June 2023
Ms Emma Crichton MEng CEng MICE
21 EngineeringUK June 2023
22 EngineeringUK Ms Ann Francke OBE CMgr CCMI
----- End of picture text -----

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Annual Report and Financial Accounts 2023

Committees and Panels

The Board operates through the two principal committees and five panels listed below. All committee and panel Chairs are members of the Board. Other committee and panel members are nominated by the professional engineering institutions.

----- Start of picture text -----
Board
Registration Standards Committee(RSC) Quality Assurance Committee(QAC) International Advisory Panel(IAP) Management Panel(MP) Remuneration PanelFinance, Audit and (FARP) Privy Council and Governance (PCGP)Panel Group B and C Panel
----- End of picture text -----

The Registration Standards Committee (RSC) has oversight of matters to do with the education, training and professional development of professional engineers and technicians. It is responsible for maintaining the standards of competence and commitment and maintaining the underpinning knowledge and understanding requirements for professional registration. This includes publishing, and keeping under review, the Registration Code of Practice that aligns with the requirements set out in the UK Standard for Professional Engineering Competence (UK-SPEC), the ICT Technician Standard, and the standards for the accreditation of HE programmes and approved apprenticeships. RSC comprises nominees from professional engineering institutions, including from academia and industry, which ensures that the Engineering Council is kept abreast of developments in education and professional development that relate to professional engineers and technicians. The committee met three times in 2023.

The Quality Assurance Committee (QAC) is responsible for licensing professional engineering institutions that are considered competent to assess candidates for professional registration, accredit academic programmes, and approve professional development schemes. This involves a periodic review of the institutions’ registration process, reviewing and making appropriate changes to licensing policies and processes, and encouraging information exchange between institutions, while maintaining an overview of licence related issues. It also approves suitable bodies as Professional Affiliates. QAC comprises members nominated by the licensed institutions who are registrants and of suitable standing and experience. The committee met four times in 2023.

The International Advisory Panel (IAP) is responsible for advising on matters that have an impact on the global recognition of Engineering Council standards and the international mobility of engineering professionals. This involves advising on the international promotion of the national Register, updating the Board on relevant international developments, guiding the Engineering Council’s international activity and identifying suitable representatives of the UK engineering profession to join international committees. IAP acts as the National Monitoring Committee for Engineers Europe (previously FEANI) registration purposes and as the responsible Committee for the UK section of International Registers. IAP also promotes the flow of communications between the Engineering Council and the institutions on international matters. IAP comprises nominees from professional engineering institutions, including from academia and industry, with international experience and expert knowledge of mobility issues affecting professional engineers and technicians. The Panel met three times in 2023.

The Finance, Audit and Remuneration Panel (FARP) has responsibility for keeping the financial management of the Engineering Council under review. Through the delegated authority of the Board, it approves variations to expenditure and investment policy within established limits. The Panel advises the Board and CEO on financial services; monthly management accounts; remuneration; staff pensions; subscription and fees policies; the annual budget, report and accounts; risk assessment policy; audit reports and delegated financial authorities. In addition to the Chair, FARP comprises two current trustees and three other members with relevant knowledge and experience. The Panel met three times in 2023.

The Privy Council and Governance Panel (PCGP) is responsible for the periodic review of the Charter, Bye-laws and Regulations of the Engineering Council, and making proposals for change to the Board. The Panel also advises the Board on its response to requests for advice from the Privy Council Office and other government departments on matters concerning the constitution of relevant institutions. PCGP provides advice to professional engineering institutions on constitution, governance and

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Annual Report and Financial Accounts 2023

disciplinary procedures. This involves publishing and reviewing guidance on disciplinary procedures and consulting with Licensees on significant proposed changes to policies or procedures. PCGP also considers representations from professional engineering institutions, registrants or members of the public concerning the conduct of institutions or registrants and determines whether, and if so how, appeal proceedings should take place. PCGP comprises suitable nominees from the Board, together with advisors to assist in this work of the Panel. The PCGP met four times in 2023.

The Management Panel (MP) is responsible for day-to-day operational decision making and management of the organisation. The Panel is chaired by the CEO and comprises of the CEO, the Deputy CEO/Head of Policy & Standards, the Head of Business Support and the Head of Licensing & Governance and meets approximately every four to six weeks. Its standing agenda includes IT and Management Information Systems, project management/project reporting, risk management, business planning, HR, finance, quality management and business continuity.

The Group B and C Panel provides a forum for the exchange of information and good practice with respect to membership and registration matters concerning small (Group C) and medium-sized (Group B) institutions. It also discusses pan-engineering issues of joint concern and, where appropriate, provides focus for campaigns or lobbying and the dissemination of a collective view. The Panel provides a platform for organisations and individuals to present topics of common interest, including identifying and implementing opportunities for co-operation between institutions for mutual benefit and the public good.

Volunteer Effort

Volunteer effort, through its Board, committees, panels and working groups, continues to be crucial to the work of the Engineering Council. A conservative estimate gives the total days given freely to the Engineering Council throughout the year as approximately 1,200. Given the standing of those involved the financial equivalent would be in the order of £620,000 per annum. These figures have not significantly changed in the last year with our volunteers continuing to provide a similar level of support post the pandemic.

Two remote volunteers’ seminars were held in 2023. One held face to face in May and one held remotely in November, both were well attended.

Remuneration Policy

The Engineering Council is committed to ensuring that it pays staff fairly and at an appropriate level in order to attract and retain people with the right skills and experience to ensure that the organisation delivers its charitable objectives and strategic plan.

FARP has delegated authority from the Board of Trustees to determine all matters relating to staff pay and reward. In determining staff remuneration, FARP considers factors such as the increase in cost of living and the general rate of salary increases in the market during the preceding 12 months. Bonus payments are awarded on a discretionary basis to provide staff with appropriate incentives to encourage enhanced performance and to reward them in a fair and responsible manner for their individual contributions to the success of the organisation.

KEY MANAGEMENT PERSONNEL

Chief Executive Officer

Paul Bailey BSc (Hons) FRAeS MInstP

Head of Policy & Standards and Deputy CEO Katy Turff BA (Hons) CMgr MCMI

Head of Business Support

Wanda Proctor BA (Hons) ACMA

Head of Licensing & Governance Stuart Ingram BA (Hons)

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Annual Report and Financial Accounts 2023

Professional Advisors

----- Start of picture text -----
Service Organisation Address
Actuaries & Pension Cartwright Benefit Consultants Marlborough House, Victoria Road,
Administrators Ltd. Chelmsford, Essex, CM1 1LN
Auditors Haysmacintyre LLP 10 Queen Street Place, London
EC4R 1AG
Bankers HSBC Bank plc 165 Fleet Street, London, EC4A 2DY
Financial Accountants Kreston Reeves LLP 37 St Margaret’s Street, Canterbury, CT1
2TU
Investment Managers Cazenove Capital 1 London Wall Place, London, EC2Y 5AU
Lawyers Veale Wasbrough Vizards LLP Narrow Quay House, Narrow Quay,
Bristol BS1 4QA
----- End of picture text -----

8. Statement of Trustees' responsibilities

The Trustees 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).

The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each financial year, which provides a true and fair view of the state of affairs and the incoming resources and application of resources, of the charity for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the applicable Charity (Accounts and Reports) Regulations and the provisions of the Trust Deed. They are also responsible for safeguarding the assets of the charity and 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 charity and financial information included on the charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The above Trustees’ Report on pages 1-24 was approved by the Trustees on 20 June 2024 and signed on their behalf by the Chairman of the Board:

Professor John Chudley BSc PhD CEng FIMarEST

Page 23

  1. Independent auditor’s report to the Trustees of The Engineering Council

Opinion

We have audited the financial statements of The Engineering Council for the year ended 31 December 2023 which comprise the Statement of Financial Activities, the Balance Sheet and 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, 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:

Basis for opinion

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder. 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 charity 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 charity'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 Trustees’ 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.

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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:

Responsibilities of trustees for the financial statements

As explained more fully in the trustees’ responsibilities statement [set out on page 23], the trustees 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 charity’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 charity 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:

Based on our understanding of the charity and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to Charities Act 2011 and its Royal Charter, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Charities Act 2011 and the application of FRS102, income tax and payroll tax.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to application of controls around authorisation of expenditure and payments. Audit procedures performed by the engagement team included:

Because of the inherent limitations of an audit, there is a 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 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 auditor’s report.

Page 25

Use of our report

This report is made solely to the charity’s trustees, as a body, in accordance with section 144 of the Charities Act 2011 and regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the charity's trustees 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 charity’s trustees as a body for our audit work, for this report, or for the opinions we have formed.

Haysmacintyre LLP Statutory Auditors

26 June 2024

10 Queen Street Place London EC4R 1AG

Haysmacintyre LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

Page 26

The Engineering Council

Statement of financial activities for the year ended 31 December 2023

Note
Income from:
Charitable activities
4
Other trading activities
5
Investments
6
Total income
Expenditure on:
Raising funds
Charitable activities
7
Total expenditure
Net (expenditure)/income before net
gains/(losses) on investments
Net gains/(losses) on investments
Net movement in funds before other
recognised gains/(losses)
Other recognised gains/(losses):
Actuarial losses on defined benefit
pension schemes
Derecognition of pension surplus
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward		 Restricted
funds
2023
£
121,802
-
-
121,802
-
121,802
121,802
-
-
-
-
-
-
-
-
-		 Unrestricted
funds
2023
£
2,955,537
7,210
28,053
2,990,800
2,523
3,046,141
3,048,664
(57,864)
128,784
70,920
(147,000)
254,000
177,920
3,163,483
177,920
3,341,403		 Total
funds
2023
£
3,077,339
7,210
28,053
3,112,602
2,523
3,167,943
3,170,466
(57,864)
128,784
70,920
(147,000)
254,000
177,920
3,163,483
177,920
3,341,403		 Total
funds
2022
£
2,928,606
9,626
33,108
2,971,340
1,604
2,898,377
2,899,981
71,359
(11,762)
59,597
(893,000)
966,000
132,597
3,030,886
132,597
3,163,483

The Statement of financial activities includes all gains and losses recognised in the year.

The notes on pages 30 to 52 form part of these financial statements.

Page 27

The Engineering Council

Balance sheet as at 31 December 2023

Note
Fixed assets
Tangible assets
14
Investments
15
Current assets
Debtors
16
Cash at bank and in hand
Creditors: amounts falling due within one
year
17
Net current assets
Net assets including pension scheme
liabilities
Charity funds
Restricted funds
18
Unrestricted funds
18
Total funds		 164,170
1,259,957
1,424,127
(408,979)		 2023
£
83,253
2,243,002
2,326,255
1,015,148
3,341,403
-
3,341,403
3,341,403		 86,923
1,188,156
1,275,079
(347,341)		 2022
£
131,831
2,103,914
2,235,745
927,738
3,163,483
-
3,163,483
3,163,483

The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by:

Professor John Chudley BSc PhD CEng FIMarEST

Chair of Trustees Date: 20 June 2024

The notes on pages 30 to 52 form part of these financial statements.

Page 28

The Engineering Council

Statement of cash flows for the year ended 31 December 2023

Cash flows from operating activities
Net cash used in operating activities
Cash flows from investing activities
Dividends, interests and rents from investments
Purchase of tangible fixed assets
Proceeds from sale of investments
Purchase of investments
Gains on sale of investments
Net cash used in investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The notes on pages 30 to 52 form part of these financial statements		 2023
£
214,284
5,574
(8,969)
1,492
(11,796)
(128,784)
(142,483)
71,801
1,188,156
1,259,957		 2022
£
257,964
1,539
(746)
1,331,407
(3,447,083)
11,762
(2,103,121)
(1,845,157)
3,033,313
1,188,156

Page 29

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

1. General information

The Engineering Council is an unincorporated charity registered with the Charity Commission. The registered office is 10 Lower Thames Street, London, EC3R 6EN.

2. Accounting policies

2.1 Basis of preparation of financial statements

The financial statements 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), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011.

The Engineering Council 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.

2.2 Going concern

The Trustees consider that there are no material uncertainties about the charity's ability to continue as a going concern.

2.3 Income

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

Income tax recoverable in relation to investment income is recognised at the time the investment income is receivable.

2.4 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.

Charitable activities are costs incurred on the charity's operations, including support costs and costs relating to the governance of the charity, all incurred in achieving the charity's objectives.

All expenditure is inclusive of irrecoverable VAT.

Page 30

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

2. Accounting policies (continued)

2.5 Tangible fixed assets and depreciation

Tangible fixed assets costing £1,000 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.

Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, .

Depreciation is provided on the following bases:

Fixtures and fittings - 20% straight line
Office equipment - 25% straight line
Computer equipment - 33% straight line

Assets of nil book value are removed from the asset register after 10 years, irrespective of whether they exist or not. These are in included in "Disposals during the year" as appropriate.

2.6 Investments

Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the Balance sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the Statement of financial activities.

2.7 Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited.

2.8 Operating leases

Rentals paid under operating leases are charged to the Statement of financial activities on a straight line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the period until the date the rent is expected to be adjusted to the prevailing market rate.

2.9 Debtors

Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

2.10 Cash at bank and in hand

Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

Page 31

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

2. Accounting policies (continued)

2.11 Liabilities and provisions

Liabilities are recognised when there is an obligation at the Balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the charity anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Statement of financial activities as a finance cost.

2.12 Financial instruments

The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

2.13 Foreign currencies

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the reporting date.

Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction.

Exchange gains and losses are recognised in the Statement of financial activities.

2.14 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

Page 32

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

2. Accounting policies (continued)

2.15 Pensions

The Engineering Council contributes to a contracted-out defined benefit pension scheme, the Engineering Council Pension Scheme. This scheme was closed to new entrants on 3 July 2002. The Scheme closed to future accrual with effect from 30 April 2012.

The Engineering Council fully adopts Financial Reporting Standard 102 (FRS102) and the impact of this standard has been reflected throughout the financial statements.

In accordance with FRS102, the Statement of Financial Activities includes: the cost of benefits accruing during the year in respect of current service costs (charged against staff costs within charitable activities); the interest cost and the expected return on assets (shown as direct costs); and actuarial gains and losses (disclosed within other recognised gains and losses).

In accordance with FRS102, the balance sheet includes the surplus or deficit in the scheme. This has been estimated for the purposes of FRS102 based on the results of the funding Actuarial Valuation, adjusted for the different assumptions and taking into consideration subsequent cash flows.

Further details regarding the scheme are disclosed in note 24.

The Engineering Council also contributes to a defined contribution stakeholder pension scheme operated by Scottish Widows. Contributions are charged to the Statement of Financial Activities as they fall due.

2.16 Taxation

The charity is considered to pass the tests set out in Paragraph 1 Schedule 6 of the 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 of the 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.

2.17 Value Added Tax

Due to the nature of the Engineering Council's income sources, almost all VAT incurred on purchases is irrecoverable. Irrecoverable VAT input charges have therefore been included in the expenditure areas to which they relate.

Page 33

The Engineering Council

Notes to the financial statements

for the year ended 31 December 2023

3. Critical accounting estimates and areas of judgment

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions:

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

Defined benefit pension scheme

In the application of the accounting policies, Trustees are required to make judgement, estimates, and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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

The charity also contributes to the Engineering Council Pension Scheme. The scheme is a defined benefit scheme in accordance with section 28 of FRS 102. Service costs, curtailments, settlement gains and losses, net financial returns and remeasurement gains and losses are included in the Statement of Financial Activities in the year to which they relate.

Changes in the assets and liabilities of the scheme in the year are disclosed and allocated as follows:

• Changes relating to current or past service costs and gains and losses on settlements and curtailments and pension finance costs arising from changes in the net of the interest costs and expected return on assets, are allocated to the relevant activity heading based on staff costs of employees within the scheme.

• Pension finance charges arising from similar changes are recognised as expenditure.

The assets, liabilities and movements in the surplus or deficit of the scheme are calculated by qualified independent actuaries as an update to the latest full actuarial valuation.

Details of the scheme assets and liabilities and major assumptions are shown in note 24.

Tangible fixed assets

The useful economic lives of tangible fixed assets are based on management's judgement and experience. When management identifies that accrual useful economic lives differ materially from the estimates used to calculate depreciation, that charge is adjusted retrospectively. Although tangible fixed assists are significant, variances between actual and estimated useful economic lives will not have a material impact on the operating results. Historically, no changes have been required.

In the view of the trustees, no assumptions concerning the future or estimation uncertainty affecting assets or liabilities at the balance sheet date are likely to result in a material adjustment to their carrying amounts in the next financial year.

Page 34

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

4. Income from charitable activities

Grants
FEANI income
Admin fee from EngineeringUK
Professional services
MCP license fees
Prior year - 2022
Grants
FEANI income
Miscellaneous income
Admin fee from EngineeringUK
Professional services
MCP license fees		 Restricted
funds
2023
Unrestricted
funds
2023
£
£
121,802
2,811,859
-
85,388
-
14,290
-
13,000
-
31,000
121,802
2,955,537
Restricted
funds
2022
Unrestricted
funds
2022
£
£
112,261
2,703,711
-
69,581
-
3
-
16,500
-
8,500
-
18,500
112,261
2,816,795		 Total
funds
2023
£
2,933,661
85,388
14,290
13,000
31,000
3,077,339
Total
funds
2022
£
2,815,972
69,581
3
16,500
8,500
18,500
2,929,056

Page 35

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

5. Other trading activities

Unrestricted
funds
2023
£
Trading income
7,210
Stamp purchases
(2,523)
4,687
Prior year - 2022
Unrestricted
funds
2022
£
Trading income
9,626
Stamp purchases
(1,604)
8,022		 Total
funds
2023
£
7,210
(2,523)
4,687
Total
funds
2022
£
9,626
(1,604)
8,022

Trading income comprises professional stamps and replacement registration certificates.

6. Investment income

Unrestricted
funds
2023
£
Interest from fixed asset investments
22,734
Bank interest receivable
5,319
28,053		 Total
funds
2023
£
22,734
5,319
28,053

Page 36

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

Prior year - 2022

Interest from fixed asset investments
Bank interest receivable
Analysis of expenditure by activities
Charitable activities
Prior year - 2022
Charitable activities		 Activities
undertaken
directly
2023
£
2,849,385
Activities
undertaken
directly
2022
£
2,615,940		 Unrestricted
funds
2022
£
32,184
924
33,108
Support
costs
2023
£
318,558
Support
costs
2022
£
282,437		 Total
funds
2022
£
32,184
924
33,108
Total
funds
2023
£
3,167,943
Total
funds
2022
£
2,898,377

7. Analysis of expenditure by activities

Page 37

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

8. Direct costs

Pension expense (note 12)
Project spend
Recruitment and temporary staff
Training
Computer and information systems costs
Marketing
Travel and subsistence
Subscriptions and meetings
Accomodation costs
Wages and salaries (note 11)
Prior year - 2022
Pension expense (note 12)
Project spend
Recruitment and temporary staff
Training
Computer and information systems costs
Marketing
Travel and subsistence
Subscriptions and meetings
Accomodation costs
Wages and salaries (note 11)		 Restricted
funds
2023
Unrestricted
funds
2023
£
£
-
229,000
-
31,536
-
83,528
-
27,471
-
249,328
-
1,926
-
50,881
-
101,391
-
275,686
121,802
1,676,836
121,802
2,727,583
Restricted
funds
2022
Unrestricted
funds
2022
£
£
-
185,000
-
34,160
-
47,339
-
14,812
-
189,078
-
7,307
-
21,017
-
92,311
-
252,271
112,261
1,654,138
112,261
2,497,433		 Total
funds
2023
£
229,000
31,536
83,528
27,471
249,328
1,926
50,881
101,391
275,686
1,798,638
2,849,385
Total
funds
2022
£
185,000
34,160
47,339
14,812
189,078
7,307
21,017
92,311
252,271
1,766,399
2,609,694

Page 38

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

9. Support costs

Unrestricted
funds
2023
£
General support
Telephone
10,674
Printing, stationery and office supplies
46,658
Maintenance of equipment
31,902
Sundries
6,786
Rental of office equipment
8,309
Bank charges
9,010
Accountancy
4,200
Legal and professional
22,049
Insurance
52,913
Application fees
21,680
Bad debts
1,224
Depreciation
57,548
Exchange rate variance
23
Governance
272,976
Accountancy
26,673
Auditors' remuneration
18,909
318,558		 Total
funds
2023
£
10,674
46,658
31,902
6,786
8,309
9,010
4,200
22,049
52,913
21,680
1,224
57,548
23
272,976
26,673
18,909
318,558

Support costs are allocated in full to the only charitable activity of the charity.

Page 39

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

Prior year - 2022

General support
Telephone
Printing, stationery and office supplies
Maintenance of equipment
Sundries
Rental of office equipment
Bank charges
Accountancy
Legal and professional fees
Insurance
Application fees
Office move costs
Depreciation
Governance
Accountancy
Auditors' remuneration
10.
Auditor's remuneration
Fees payable to the charity's auditor for the audit of the charity's annual
accounts - excluding VAT		 Unrestricted
funds
2022
£
10,907
43,903
25,670
5,386
7,859
5,208
3,300
11,725
42,955
11,027
6,392
60,118
234,450
26,019
13,819
274,288
2023
£
18,909		 Total
funds
2022
£
10,907
43,903
25,670
5,386
7,859
5,208
3,300
11,725
42,955
11,027
6,392
60,118
234,450
26,019
13,819
274,288
2022
£
13,819

Page 40

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

11. Staff costs

Wages and salaries
Social security costs
Contribution to defined contribution pension schemes		 2023
£
1,464,791
161,796
401,051
2,027,638		 2022
£
1,424,471
166,365
360,563
1,951,399

There were no ex-gratia termination payments included within wages and salaries during the year. (2022: £12,943).

The average number of persons employed by the charity during the year was as follows:

2023 2022
No. No.
30 30

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

2023 2022
No. No.
In the band £60,001 - £70,000 1 -
In the band £80,001 - £90,000 1 1
In the band £100,001 - £110,000 1 1
In the band £150,001 - £160,000 1 -
In the band £160,001 - £170,000 - 1

Employers pension contributions totalling £62,808 (2022: £58,999) were paid to higher paid employees.

The total employment benefits of the key management personnel were £531,747 including employer's national insurance contributions of £48,529 (2022 - £463,658 including employer's national insurance contributions of £42,857).

12. Pension expense

Interest on pension scheme liabilities
Interest on scheme assets
Administrative expenses		 2023
£
449,000
(449,000)
229,000
229,000		 2022
£
261,000
(261,000)
185,000
185,000

Page 41

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

13. Trustees' remuneration and expenses

During the year, no Trustees received any remuneration or other benefits (2022 - £NIL) .

During the year ended 31 December 2023, expenses totalling £ 10,909 were reimbursed or paid directly to 15 Trustees (2022 - £2,809 to 9 Trustees) for travel expenses incurred.

14. Tangible fixed assets

Cost or valuation
At 1 January 2023
Additions
At 31 December 2023
Depreciation
At 1 January 2023
Charge for the year
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022		 Fixtures and
fittings
£
444,399
-
444,399
320,707
49,623
370,330
74,069
123,692		 Office
equipment
£
33,341
-
33,341
32,059
1,042
33,101
240
1,282		 Computer
equipment
£
314,588
8,969
323,557
307,731
6,882
314,613
8,944
6,857		 Total
£
792,328
8,969
801,297
660,497
57,547
718,044
83,253
131,831

Page 42

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

15. Fixed asset investments

Cost or valuation
At 1 January 2023
Additions
Disposals
Revaluations
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
Debtors
Due within one year
Trade debtors
Other debtors
Prepayments and accrued income
Creditors: Amounts falling due within one year
Trade creditors
Amounts owed to group undertakings
Other taxation and social security
Other creditors
Accruals and deferred income		 2023
£
7,712
-
156,458
164,170
2023
£
54,374
98,965
68,639
-
187,001
408,979		 Listed
investments
£
2,103,914
11,796
(1,492)
128,784
2,243,002
2,243,002
2,103,914
2022
£
13,616
5,170
68,137
86,923
2022
£
17,289
63,377
63,377
13,832
189,466
347,341

16. Debtors

17. Creditors: Amounts falling due within one year

Page 43

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

18. Statement of funds

Statement of funds - current year

Unrestricted funds
General Funds
Restricted funds
Pension fund grant
Total of funds		 Balance at 1
January
2023
£
3,163,483
-
3,163,483		 Income
£
2,990,800
121,802
3,112,602		 Expenditure
£
(3,048,664)
(121,802)
(3,170,466)		 Gains/
(Losses)
£
235,784
-
235,784		 Balance at
31
December
2023
£
3,341,403
-
3,341,403

Pension reserve

This represents the movement on the defined benefit pension scheme. At the end of the year the scheme was in surplus, this was de-recognised since it is deemed non-recoverable.

Pension fund grant

This represents the grant from EngineeringUK which was paid into the defined benefit pension scheme as a lump-sum contribution following consultation with the actuaries.

Page 44

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

18. Statement of funds (continued) Statement of funds - prior year

Unrestricted funds
General Funds
Restricted funds
Pension fund grant
Total of funds		 Balance at
1 January
2022
£
3,030,886
-
3,030,886		 Income
£
2,859,079
112,261
2,971,340		 Expenditure
£
(2,787,720)
(112,261)
(2,899,981)		 Gains/
(Losses)
£
61,238
-
61,238		 Balance at
31
December
2022
£
3,163,483
-
3,163,483

19. Summary of funds

Summary of funds - current year

General funds
Restricted funds		 Balance at 1
January
2023
£
3,163,483
-
3,163,483
Balance at
1 January
2022
£
3,030,886
-
3,030,886		 Income
£
2,990,800
121,802
3,112,602
Income
£
2,859,079
112,261
2,971,340		 Expenditure
£
(3,048,664)
(121,802)
(3,170,466)
Expenditure
£
(2,787,720)
(112,261)
(2,899,981)		 Gains/
(Losses)
£
235,784
-
235,784
Gains/
(Losses)
£
61,238
-
61,238		 Balance at
31
December
2023
£
3,341,403
-
3,341,403
Balance at
31
December
2022
£
3,163,483
-
Summary of funds - prior year
General funds
Restricted funds
3,163,483

Page 45

The Engineering Council

Notes to the financial statements

for the year ended 31 December 2023

20. Analysis of net assets between funds

Analysis of net assets between funds - current year

Unrestricted
funds
2023
£
Tangible fixed assets
83,253
Fixed asset investments
2,243,002
Current assets
1,424,127
Creditors due within one year
(408,979)
Total
3,341,403		 Total
funds
2023
£
83,253
2,243,002
1,424,127
(408,979)
3,341,403

Analysis of net assets between funds - prior year

Tangible fixed assets
Fixed asset investments
Current assets
Creditors due within one year
Total		 Unrestricted
funds
2022
£
131,831
2,103,914
1,275,079
(347,341)
3,163,483		 Total
funds
2022
£
131,831
2,103,914
1,275,079
(347,341)
3,163,483

21. Reconciliation of net movement in funds to net cash flow from operating activities

Net income for the year (as per Statement of Financial Activities)
Adjustments for:
Depreciation charges
Dividends, interests and rents from investments
Decrease/(increase) in debtors
Increase in creditors
Pension adjustments
Net cash provided by operating activities		 2023
£
70,920
57,547
(5,574)
(78,471)
66,888
107,000
218,310		 2022
£
59,597
60,118
(1,539)
1,938
64,850
73,000
257,964

Page 46

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

22. Analysis of cash and cash equivalents

Cash in hand
Total cash and cash equivalents		 2023
£
1,259,957
1,259,957		 2022
£
1,188,156
1,188,156

23. Analysis of changes in net debt

Cash at bank and in hand At 1
January
2023
£
1,188,156
1,188,156		 Cash flows
£
71,801
71,801		 At 31
December
2023
£
1,259,957
1,259,957

Page 47

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

24. Pension commitments

The charity operates a defined benefit pension scheme.

The Engineering Council contributes to a contracted-out defined benefit pension scheme, The Engineering Council Pension Scheme. This scheme was closed to new entrants on 3 July 2002.

The full actuarial valuation as at 31 December 2018 was updated to the Scheme's accounting date by an independent qualified actuary in accordance with FRS102. As required by FRS102, the actuarial method adopted to calculate the present value of member's expected benefits is the projected unit method.

Following consultation with the actuaries, The Engineering Council made a lump-sum contribution of £105,000 in March 2019.

The present value of the liability to meet future pension obligations of members is arrived at by applying a discount rate equivalent to the return expected to be derived from a class AA corporate bond. At 31 December 2022 this was 4.50% (2022 - 4.80%).

The assets of the scheme are valued at their market value at the balance sheet date. This value will therefore fluctuate materially from year to year in response to market conditions.

The Engineering Council is the principal employer and Engineering UK is a participating employer under this scheme. The proportion of the total scheme fund attributable to Engineering Council staff and exEngineering Council staff is 100% (2022 - 100%). On withdrawal from the Scheme by Engineering Council or closure, assets would be segregated in a similar proportion.

The Scheme closed to future accrual with effect from 30 April 2012.

Principal actuarial assumptions at the Balance sheet date (expressed as weighted averages):

2023 2022
Discount rate 4.50% 4.80%
Retail price inflation 3.40% 3.60%
Future salary increases 3.30% 3.50%

The assets in the scheme and the expected rates of return were:

Equities
Bonds
Cash		 2023
£
1,777,690
8,574,740
104,570
10,457,000		 2022
£
2,368,740
8,290,590
107,670
10,767,000

The actual return on scheme assets was £506,000 (2022 - £(4,650,000).

Page 48

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

The amounts recognised in the Balance sheet are as follows:

Present value of funded obligations
Unrecognised past service cost
Surplus in scheme
Adjustment for non-recoverable surplus
Net assets		 2023
£
(9,646,000)
10,457,000
811,000
(811,000)
-		 2022
£
(9,702,000)
10,767,000
1,065,000
(1,065,000)
-

Net assets

The charity has an unrecognised surplus of £811,000 (2022 - £1,065,000) in respect of its defined benefit pension scheme as it does not expect to recover the plan surplus either through reduced contributions in the future of through refunds from the plan.

The amounts recognised in the Statement of financial activities are as follows:

Interest on obligation
Expected return on scheme assets
Administrative expenses
Total amount recognised in the Statement of financial activities		 2023
£
(449,000)
449,000
(229,000)
(229,000)		 2022
£
(261,000)
261,000
(185,000)
(185,000)

The actuarial loss on the scheme at year end was £147,000 (2022 - loss £893,000) .

Movements in the present value of the defined benefit obligation were as follows:

Opening defined benefit obligation
Interest cost
Actuarial losses/(gains)
Benefits paid
Closing defined benefit obligation		 2023
£
9,702,000
449,000
204,000
(709,000)
9,646,000		 2022
£
14,052,000
261,000
(4,018,000)
(593,000)
9,702,000

Page 49

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

Changes in the fair value of scheme assets were as follows:

Opening fair value of scheme assets
Expected return on assets
Actuarial gains/(losses)
Contributions by employer
Benefits paid
Administrative expenses		 2023
£
10,767,000
449,000
57,000
122,000
(709,000)
(229,000)
10,457,000		 2022
£
16,083,000
261,000
(4,911,000)
112,000
(593,000)
(185,000)
10,767,000

The charity contributed £122,000 to its Defined benefit pension scheme in 2023 expecting to increase annually on 1 January at 3.4% per annum

The major categories of scheme assets as a percentage of total scheme assets are as follows:

2023 2022 Equities and property 17% 22% Bonds 82% 77% Cash 1% 1%

Stakeholder and other pension schemes

The board at a meeting on 3 July 2002 decided to no longer offer entry to The Engineering Council Pension Scheme to new staff and nominated a stakeholder pension scheme instead. This is a defined contribution scheme operated by Scottish Widows and is not contracted out for the earnings related part of the State Pension Scheme. The employer contributes 10% of pensionable salary and the employee 5%.

The Engineering Council employer contributions during 2023 were £172,249 (2022 - £175, 302).

25. Operating lease commitments

At 31 December 2023 the charity had commitments to make future minimum lease payments under noncancellable operating leases as follows:

Not later than 1 year
Later than 1 year and not later than 5 years		 2023
£
148,136
14,673
162,809		 2022
£
148,264
162,809
311,073

Page 50

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

26. Related party transactions

EngineeringUK is a related party to the Engineering Council. Under the Engineering Council supplemental charter which came into effect on 22 March 2002, EngineeringUK may nominate 7 of its 22 Board members. By its Regulations, the Engineering Council has assigned all income from its registration fees to EngineeringUK. Changes to this regulation cannot be made without EngineeringUK's approval. The level of fee is determined by EngineeringUK.

During the year ended 31 December 2023, the following transactions took place between the parties arising from the above:

EngineeringUK provided a grant to the Engineering Council of £2,811,859 (2022 - £2,703,711) to fund its operation plus £121,802 (2022: £112,261) for the pension scheme.

To cover administration costs, The Engineering Council charged EngineeringUK £14,290 (2022 - £16,500) in the year.

On 31 December 2023, Engineering Council owed EngineeringUK the sum of £98,965 (2022 - £63,377). This amount is disclosed within creditors falling due within one year.

There were no other related party transactions in the current or the prior year.

Page 51

The Engineering Council

Notes to the financial statements for the year ended 31 December 2023

27. Comparative statement of financial activities

Restricted
funds		 Unrestricted
funds		 Total
funds
2022 2022 2022
£ £ £
Income from:
Charitable activities 112,261 2,816,345 2,928,606
Other trading activities - 9,626 9,626
Investments - 33,108 33,108
Total income 112,261 2,859,079 2,971,340
Expenditure on:
Raising funds - (1,604) (1,604)
Charitable activities (112,261) (2,786,116) (2,898,377)
Total expenditure (112,261) (2,787,720) (2,899,981)
Net income before investment gains/(losses) - 71,359 71,359
Net gains/(losses) on investments - (11,762) (11,762)
Net income before other recognised gains and losses - 59,597 59,597
Derecognition of pension surplus - (893,000) (893,000)
Actuarial gains on defined benefit pension scheme - 966,000 966,000
Net movement in funds - 132,597 132,597
Reconciliation of funds:
Total funds brought forward - 3,030,886 3,030,886
Total funds carried forward - 3,163,483 3,163,483

Page 52