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2021-07-31-accounts

London Skills for Growth Limited Annual Report and Financial Statements 31 July 2021

Company Limited by Guarantee Registration Number 01747251 (England and Wales)

Charity Registration Number 288465

Contents

Reports
Reference and administrative information 1
Trustees’ report 2
Independent auditor’s report 11
Financial Statements
Statement of financial activities 15
Balance sheet 16
Statement of cash flows 17
Principal accounting policies 18
Notes to the financial statements 20

London Skills for Growth Limited

Reference and administrative information

Trustees David Eastgate Allan Carey Lucy Butler Lucie Allen Dr Sam Parrett CBE John Hunt Registered office Greenwich Park Centre King George Street London SE10 8QB Principal Officers Chief Executive Officer John Hunt Operations Director Angela Beaton Deputy Operations Director Suzel Braz Company registration number 01747251 (England and Wales) Charity registration number 288465 Auditor Buzzacott LLP 130 Wood Street London EC2V 6DL Bankers Barclays Bank Plc Level 27, Churchill Place London EC2V 6DL Solicitors Brachers LLP Somerfield House 59 London Road Maidstone Kent ME16 8JH

1

Trustees’ Report - Year to 31 July 2021

The trustees present their report with the financial statements of London Skills for Growth Limited (LSfG) for the year ended 31 July 2021.

This report, prepared in accordance with the Charities Act 2011, serves as the report of the directors for the purposes of company legislation.

The financial statements have been prepared in accordance with the accounting policies set out on pages 18 to 20 of the attached financial statements and comply with the charitable company’s memorandum and articles of association, applicable laws and 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 United Kingdom and Republic of Ireland (FRS 102).

GOVERNANCE, STRUCTURE AND MANAGEMENT

Constitution

London Skills for Growth is a registered charity (Charity Registration No 288465) and also a company limited by guarantee not having a share capital (Company Registration No. 01747251). The company’s memorandum of association dated 4 August 2006 and articles of association dated 20 June 2017 are its primary governing documents.

The Charity works closely with its ultimate parent entity, London South East Colleges (LSEC), and in April 2018 following a decision by the independent Boards of each entity, the London & South East Education Group (LSEEG) was formed. LSEEG is the umbrella organisation to coordinate the strategy of the organisations and to optimise and strengthen both governance and collaboration between Group entities, (subject to their non-delegable primary governance responsibilities and authority; their regulatory obligations; and potential conflict of interest). LSEEG also includes London South East Academies Trust (LSEAT) a Multi Academy Trust. The Group is not a legal entity and organisations as members of the Group are not subsidiary companies which are controlled or owned by LSEEG.

The Group rationale is borne from a shared mission vision and values and seeks to optimise governance alignment through a Group Strategy and provide efficiencies across the organisations for the benefit of the Learners and by extension for the public benefit. The Group ethos is founded upon high quality teaching and learning, the development of curriculum models fitting each entity.

Governors and Trustees have been appointed to the Group Board, Independent Legal Boards and the Joint Group Co-ordinating Committees, ensuring that a balanced combination of Governors and Trustees are represented in each of these, as defined by the relevant Articles of Association and the Group Organisation Scheme of Delegation. Details of the group governance arrangements are shown below:-

2

Trustees’ Report - Year to 31 July 2021

Constitution (continued)

Details of the Trustees who served on the Charity’s board during the year are included below. Business is conducted through full Board meetings, a Group Finance Committee and a Group Audit and Risk Committee. The membership of these Committees must include representation from LSfG, but may also include Group Governors or those from other legal entities within the group where this will improve governance through the provision of greater expertise and challenge. Minutes of meetings are maintained and a register of interests published on the College’s website.

Going Concern

Following a number of significant annual operating losses, which were exacerbated by the Coronavirus pandemic, the future viability for the Charity and it’s ability to trade as a going concern has been in some doubt. Therefore, the Board commissioned a review and feasibility of the business of the charity to determine current and future policy landscape in relation to Apprenticeship and market conditions. Following this, and in order to protect the charitable aims and resources of the company, the board have taken the difficult decision to transfer the operations together with the assets and liabilities of the charity to its parent entity, and for the entity to remain dormant in the short term. This transfer took place on 1 January 2021.

Member’s liability

The Corporation of Bromley College of Further and Higher Education, trading as London South East Colleges is the sole member of the charity. The liability of the member in the event of winding up is limited to £1.

Trustees

The trustees of the charity are also directors for the purposes of company legislation. The trustees in office during the year, and since the year end, were as follows:

3

Trustees’ Report - Year to 31 July 2021

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Trustees (continued)

London Skills for Growth London Skills for Growth London Skills for Growth
Name Appointed Tenure Role Meetings Attended % Resigned
David Eastgate 01/08/17 4 years Chair 1 1 100%
Allan Carey 01/08/17 4 years Vice Chair 1 1 100%
Lucy Butler 01/08/17 4 years Trustee 1 1 100% 31/12/20
Lucie Allen 01/11/18 4 years Trustee 1 1 100% 31/12/20
Sam Parrett 05/10/17 4 years Trustee 1 0 0%
John Hunt 05/10/17 4 years Trustee 1 1 100%
Total 6 5 83%
Jennifer Pharo 01/04/19 n/a Co
Secretary		 1 1 100%

Trustee induction and training

The training and induction provided for new trustees will depend upon their existing experience. Where necessary the induction process will provide training on charity, educational, legal and financial matters. All trustees are provided with copies of procedures, minutes, accounts, budgets, plans and other documents that they will need to undertake their role as trustees. Induction tends to be done informally and is tailored specifically to the individual trustees.

Key management personnel

In addition to the trustees, the key management personnel are considered to be the CEO, the Operations Director and Deputy Operations Director. The pay of the Operations Director is reviewed annually by the CEO and any changes approved by the Chair. The pay of the CEO is reviewed and approved by the trustees. The trustees receive no remuneration other than reasonable expenses for attending meetings.

Key managementpersonnel
Chief Executive Officer John Hunt
Operations Director Angela Beaton
DeputyOperations Director Suzel Braz

4

Trustees’ Report - Year to 31 July 2021

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Trustees’ responsibilities statement

The trustees also act as the directors for the purposes of company law and are responsible for preparing the trustees’ report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the trustees, as directors, to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the income and expenditure of the charitable company for that year. 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 charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each of the trustees confirms that:

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

The trustees are responsible for the maintenance and integrity of corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

5

Trustees’ Report - Year to 31 July 2021

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Trustees’ responsibilities statement (continued)

Organisation

Authority for the day-to-day running of the charity has been delegated to the CEO, as has the day-to-day financial management. Income and expenditure are monitored monthly and an annual budget is set and agreed with the Board in advance of each financial year.

Risk management

London Skills for Growth’s risk management framework ensures that risk management is embedded throughout the organisation and is performed by the management and staff of the charity as part of their day-to-day activity. The Board of Trustees has overall responsibility for risk management oversight, for setting the direction of the charity and for assessing its risk appetite. The Board ensures that charitable funds are afforded maximum protection, regularly reviews the charity’s identified risks and mitigating actions and it ensures that the Board’s risk policy is followed.

The Charities system of internal financial control is based on a framework of regular management information and administrative procedures including the segregation of duties and a system of delegation and accountability. In particular it includes:

The Board of Trustees has considered the need for a specific internal audit function and appointed Scrutton Bland as internal auditor for the year as part of the group internal audit arrangements. Such internal audit service to be carried out in accordance with internal Auditing Standards and in compliance with the FRC Ethical Standard for Auditors. The internal auditor's role includes giving advice on financial matters and performing a range of checks on the control systems.

The auditor reports to the Board of Trustees through the Group Audit Committee on the operation of the systems of control and on how the Board of Trustees' has discharged its financial responsibilities.

The trustees identified a number of principal risks and uncertainties for the year and the two key risks are explained below:

6

Trustees’ Report - Year to 31 July 2021

GOVERNANCE, STRUCTURE AND MANAGEMENT (continued)

Risk management (continued)

Going Concern and Solvency

Following a number of significant annual operating losses, which were exacerbated by the ongoing Coronavirus pandemic, the future viability for the Charity and it’s ability to trade as a going concern has remained a significant risk. Although the financial performance of the charity had improved over the last couple of years, with an ongoing annual operating deficit the solvency remained a key risk for the future and this has been compounded by Covid-19. As a consequence of this, and in order to protect the charitable aims and resources of the company, the board have taken the difficult decision to transfer the operations of the charity to its parent entity and for the entity to remain dormant. This transfer took place on 1 January 2021.

Coronavirus

The ongoing impact of the Coronavirus pandemic is expected to continue to have an adverse impact on recruitment of learners onto traineeships and apprenticeship programmes which will have a direct impact on income. In particular, the pandemic has had a material adverse impact on recruitment to those key apprenticeship frameworks offered by Skills for Growth such as Business Administration, Customer Service, and Hairdressing. Although the financial aspects of this have been partly mitigated through appropriate cost reductions, the board has taken the decision to transfer the ongoing operations to the parent entity and to leave the legal entity dormant in the short term.

OBJECTIVES AND ACTIVITIES

Principal aims and objectives

The charity’s purpose, largely unchanged since its founding, was stated in its Strategic Plan in October 2015 as:

“The advancement of education and employability of 14-24 year olds, who through social or economic circumstance are in need and require support to improve their prospects of workplace or educational progression.”

On 1 August 2017, Bromley College of Further and Higher Education an exempt charity which trades as London South East Colleges (LSEC), became the charity’s sole member. The objectives of LSfG have remained unchanged since that time. The charity was in a challenging financial position, which was exacerbated by the impact of the Covid-19 pandemic. As a consequence of this, the charity ceased trading on 31 December 2020, and the operations, assets and liabilities transferred to its parent entity on 1 January 2021 at fair value.

7

Trustees’ Report - Year to 31 July 2021

PERFORMANCE REVIEW

Strategy

During the year, the Board of Trustees continued its tight focus on its core business of:

In addition, the strategy of the charity was to continue to try to safeguard its future by making additional progress in reducing its annual operating losses, and to implement further business integration strategies within the wider group.

Unfortunately, the ongoing impact of the coronavirus pandemic on the business has been significant and this resulted in increased operating losses for 2019/20, and further material reductions to income for 2020/21.

In light of the above, and with the expected ongoing impact of Covid-19 and the related going concern and future solvency challenges, at its meeting in July 2020, the board of trustees took the difficult decision to close the charity. This step was taken in order to ensure the business does not trade on an insolvent basis, and in order to protect the charitable aims and assets by transferring them to its parent entity.

This transfer took place on 1 January 2021, and all employees, learners, assets and liabilities were transferred to Bromley College of Further and Higher Education under a legal transfer agreement dated 9 December 2020. The company will continue to operate as a brand within the College and the net charitable assets of £588k transferred to LSEC will be applied in furtherance of the LSfG charitable aims.

Financial

After the transfer of the assets and liabilities to LSEC, the net assets of the charity at 31 July 2021 were £Nil.

Business:

8

Trustees’ Report - Year to 31 July 2021

PERFORMANCE REVIEW (continued)

Objectives for 2021/22

In light of the decision of the charity that as a consequence of the Covid-19 pandemic it must cease trading and transfer its operations, assets and liabilities to its ultimate parent entity, there are no specific objectives for 2021/22. The brand of LSfG will continue within the College in the furtherance of the charitable aims of LSfG.

Public benefit statement

In planning the year’s activities and setting objectives, the trustees have considered the Charity Commission’s guidance on public benefit. London Skills for Growth specialises in providing government funded apprenticeship programmes to young people in the London Boroughs of Bromley, Bexley, Greenwich and Newham. The objective of the charity is to offer young people, who are disadvantaged and excluded from employment, the skills and knowledge needed to pursue careers which are fulfilling and in turn lead to prosperity in later lives. It also benefits young adults who are already in employment and are interested in furthering their skills and knowledge in life through short skills courses.

FINANCIAL REVIEW

Financial report for the year

During the year ended 31 July 2021, the deficit for the year before asset transfers equated to £88,392 (2020 – £417,029), which relates to 5 months of trading in the current year. This is represented by total income prior to asset transfers of £528,163 (2020 – £1,681,557) against expenditure of £616,555 (2020 – £2,098,586).

The total income for the 5 months of trading to 31 December 2020 of £528,163 (2020 – £1,760,112) includes income of £497,986 (2020 – £1,432,763) received from the ESFA.

Reserves policy

Prior to the transfer of the assets and liabilities to LSEC, the charity aimed to accumulate reserves in order to provide sufficient cash flows to support the maintenance and improvement of its estate and equipment. The charity aimed to accumulate reserves to provide a degree of protection against adverse changes in the number and/or profile of enrolments and/or in-year reductions to funding allocations.

In the context of these principles, Trust policy is to hold sufficient reserves to:

The reserves of the charity were in line with this policy prior to the decision to cease trading.

9

Trustees’ Report - Year to 31 July 2021

FINANCIAL REVIEW (continued)

Financial report for the year (continued)

Financial position

The balance sheet shows total reserves of £Nil (2020 – £676,877).

At 31 July 2021 and 31 July 2020, all of the charity’s reserves were represented by unrestricted funds. These unrestricted funds are represented by tangible assets with a net book value of £Nil (2020 – £43,836) and ‘free reserves’ of £Nil (2020 – £633,050).

The charity has net current assets of £Nil as at 31 July 2021 (2020 – £676,876).

The above report has been prepared in accordance with special provisions within Part 15 of the Companies Act 2006 relating to small companies.

Signed on behalf of the trustees by:

David Eastgate

Trustee

Approved by the Board on 8 December 2021

Registered Company Number 01747251 (England and Wales)

10

Independent Auditor’s Report - Year to 31 July 2021

Independent auditor’s report to the member of London Skills for Growth Limited

Opinion

We have audited the financial statements of London Skills for Growth Limited (the ‘charitable company’) for the year ended 31 July 2021 which comprise the statement of financial activities, the balance sheet, and statement of cash flows, the principal accounting policies and the notes to the financial statements. 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 conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter – financial statements prepared on a basis other than going concern

We draw attention to the statement regarding going concern in the principal accounting policies, which indicates that the board of trustees has prepared the financial statements on a basis other than a going concern basis. This is due to the activities, assets and liabilities of the charitable company being transferred to London South East College on 1 January 2021. Our opinion is not modified in respect of this matter.

Other information

The other information comprises the information included in the annual report and financial statements, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report and financial statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have

11

Independent Auditor’s Report - Year to 31 July 2021 performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do

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

12

Independent Auditor’s Report - Year to 31 July 2021

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

We assessed the susceptibility of the charitable company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management and override of controls, we

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of noncompliance. Auditing standards also limit the audit procedures required to identify non-compliance with

13

Independent Auditor’s Report - Year to 31 July 2021

laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Catherine Biscoe (Senior Statutory Auditor) For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL

Date: 19 December 2021

14

Statement of Financial Activities - Year to 31 July 2021

(Incorporating an Income and Expenditure Account)

Notes
Income from:
Charitable activities
. Education and training
1
Other trading activities
2
Investments
3
Other
Surplus on disposal of tangible fixed assets
Total income
Expenditure on:
Charitable activities
. Education and training
4
Transfer to parent undertaking
2
Total expenditure
Net expenditure and net movement in funds
6
Reconciliation of funds
Balances brought forward at 1 August 2020
Balances carried forward at 31 July 2021		 Total
2021
£		 Total
2020
£
505,730
18,083
—
4,351
—		 1,566,381
106,655
16
8,505
78,555
528,164 1,760,112
616,555
588,485		 2,098,586
—
**1,205,040 ** 2,098,586
(676,876)
676,876
(338,474)

1,015,350
**— ** 676,876

All of the charity’s activities are derived from continuing operations. On 1 January 2021 the activities, assets and liabilities of the charity were transferred to LSEC (see note 12)

The charitable company has no recognised gains and losses other than those shown above.

All income and expenditure in both of the above years was unrestricted.

15

Balance sheet 31 July 2021

Notes
Tangible fixed assets
9
Current assets
Tangible assets
9
Debtors
10
Cash at bank and in hand
Creditors: amounts falling due
within one year
11
Net current assets
Total net assets
Funds
Unrestricted funds		 2021
£
—
—
—
—
—		 2021
£
—
—
—
—
—		 2020
£
43,836
121,030
1,142,176
1,307,042
(630,166)		 2020
£
—
676,876
676,876
676,876
676,876

The financial statements have been prepared in accordance with the special provisions applicable to small companies within Part 15 of the Companies Act 2006

Signed on behalf of the board of trustees by:

David Eastgate

Trustee

Approved by the Board on: 8 December 2021

London Skills for Growth Limited

Registered Company Number 01747251 (England and Wales)

16

Statement of cash flows Year to 31 July 2021

A
B		 Notes 2021
£
Cash flows from operating activities:
Net cash used in operating activities
A
Cash flows from investing activities:
Investment income
Net proceeds from disposal of tangible fixed assets
Purchase of tangible fixed assets
Net cash (used in) provided by investing activities
Change in cash and cash equivalents in the year
Transfer to parent undertaking
Cash and cash equivalents at 1 August 2020
B
Cash and cash equivalents at 31 July 2021
B		 (65,993)
—
—
(19,200)
(19,200)
(85,193)
(1,056.983)
1,142,176
—
Net movement in funds (as per the statement of financial
activities)
Adjustments for:
Depreciation charge
Investment income
Transfer to parent undertaking
Surplus on disposal of tangible fixed assets
Decrease (increase) in debtors
(Decrease)/increase in creditors
Net cash used in operating activities		 (676,877)
—
26,220
588,485
—
9,906
(13,727)
(65,993)
Analysis of cash and cash equivalents 2021
£
1,056,983
(1,056,983)
—
Cash at bank and in hand
Transfer toparent undertaking
Total cash and cash equivalents

No separate reconciliation of net debt has been prepared as there is no difference between the net cash (debt) of the charity and the above cash and cash equivalents.

17

Notes to the financial statements 31 July 2021

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the accounts are laid out below.

Basis of preparation

These financial statements have been prepared for the year to 31 July 2021.

The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant accounting policies below or the notes to these accounts.

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) (Charities SORP FRS 102 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011.

The charity constitutes a public benefit entity as defined by FRS 102.

The financial statements are presented in sterling and are rounded to the nearest pound.

Critical accounting estimates and areas of judgement

Preparation of the financial statements requires the trustees and management to make significant judgements and estimates.

The items in the financial statements where these judgements and estimates have been made include:

Assessment of going concern

The trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The trustees have made this assessment in respect to a period of one year from the date of approval of these financial statements.

As described in the trustees’ report, the decision has been taken to cease the charity’s operations and its assets, liabilities and activities were transferred to the ultimate parent entity on 1 January 2021.The trustees have prepared the financial statements on a basis other than a going concern basis.

18

Notes to the financial statements 31 July 2021

Income

Income is recognised in the period in which the charity has entitlement to the income, the amount of income can be measured reliably and it is probable that the income will be received.

Grants are included in the statement of financial activities on a receivable basis. The balance of income received for specific purposes but not expended during the year is shown in the relevant funds on the balance sheet. Where income is received in advance of meeting any performance related conditions there is not unconditional entitlement to the income and its recognition is deferred and included in creditors as deferred income until the performance related conditions are met. Where entitlement occurs before income is received, the income is accrued.

Bank interest and rental income are included in full in the statement of financial activities when receivable.

Expenditure and the basis of apportioning costs

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to that category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Expenditure comprises training and education costs associated with the operation of the training centres and the training of individuals.

Tangible fixed assets

All tangible fixed assets costing more than £5,000 are capitalised and are stated at cost less depreciation. Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life:

Leased assets

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to the statement of financial activities on a straight line basis over the lease term.

Fund accounting

The restricted funds comprise monies given for specific purposes or subject to specific donorimposed conditions. The unrestricted general fund comprises those monies which may be used towards meeting the charitable objectives of the charitable company at the discretion of the trustees.

Debtors

Debtors are recognised at their settlement amount, less any provision for non-recoverability. Prepayments are valued at the amount prepaid. They have been discounted to the present value of the future cash receipt where such discounting is material.

19

Notes to the financial statements 31 July 2021

Cash at bank and in hand

Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition.

Creditors and provisions

Creditors and provisions 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. Creditors and provisions are recognised at the amount the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material.

1 Income from charitable activities – education and training

ESFA income – Adult funding
ESFA income – 16-19 funding
ESFA – adjustment to prior year funding
Coronavirus Job Retention Scheme
Commercial income
Bursary income
Total funds		 Total funds
2021
£
96,001
449,976
(47,991)
1,257
6,487
—
505,730		 Total funds
2020
£
250,209
1,182,554
—
66,552
64,411
2,655
1,566,381

The charity claimed under the Government Coronavirus Job Retention Scheme (CJRS) for a number of staff where their employment was directly related to income streams affected by the Covid-19 pandemic. Staff were furloughed for varying lengths of time of at least 4 weeks and total of 2 staff were furloughed at various times during the pandemic. This included staff employed in teaching and management. The funding received in respect of 2 staff of £1k (2019/20: 12 staff of £67k) relates to staff costs which are included within the staff costs note below as appropriate.

2 Other trading activities

3 Total funds
2021
£		 Total funds
2020
£
106,655
Rental income 18,083
Income from investments Total funds
2021
£
—		 Total funds
2020
£
16
Interest receivable

20

Notes to the financial statements 31 July 2021

4 Expenditure on charitable activities

Education and training
. Registration costs
. Staff costs (note 8)
. Staff travel costs
. Premises expenses
. Support costs (note 5)
Total funds		 Total funds
2021
£
Total funds
2020
£
—
2,933
357,496
940,682
1,600
9,833
167,853
871,681
89,606
273,457
616,555
2,098,586

5 Support costs

Support costs
2021
£
419
50,207
5,775
8,752
78
15,561
8,994
89,606		 2020
£
20,192
117,667
11,476
12,127
329
92,583
19,083
273,457
Human resources and staff training
Office costs
Consultancy fees
Legal fees
Bank and credit card charges
Subscriptions and licences
Sundry expenses

6 Net movement in funds

This is stated after charging:

2021
£
357,496
54,519
9,000
26,220		 2020
£
Staff costs (note 8)
Operating lease rentals
Auditor’s remuneration
Depreciation		 940,682
267,111
12,360
180,787

7 Taxation

The charitable company is a registered charity and therefore is not liable for corporation tax on income derived from its charitable activities, as it falls within the various exemptions available to registered charities.

8 Staff costs and trustees’ remuneration

Staff costs and trustees’ remuneration
2021
£
319,492
29,941
8,063
357,496		 2020
£
Staff costs
. Wages and salaries
. Social security costs
. Pension costs		 836,867
81,105
22,710
940,682

21

Notes to the financial statements 31 July 2021

The number of employees during the year, expressed as average headcount, was:

2021 2020
Teachers 14 17
Administration 8 10
Management 1 1
23 28

The number of employees who earned £60,000 per annum or more (including taxable benefits but excluding pension contributions) during the year was as follows:

excluding pension contributions) during the year was as follows:
2021 2020
£60,001 - £70,000 — 2

No trustee received any remuneration in respect of their services as a trustee during the year ended 31 July 2021 (2020 – none). No expenses were reimbursed to trustees during the year (2020 – none).

In addition to the trustees, the key management personnel during the year were considered to be the Chief Executive Officer, Operations Director and the Deputy Operations Director. The total remuneration (including taxable benefits and employer's pension contributions) of the key management personnel employed by the charity during the year was £64,137 (2020 – £154,250). The charge represents the total remuneration provided during the five-month period.

9 Tangible assets

Cost
At 1 August 2020
Additions
Transfer to parent undertaking
At 31 July 2021
Depreciation
At 1 August 2020
Charge for the year
Transfer to parent undertaking
At 31 July 2021
Net book value
At 31 July 2021
At 31 July 2020		 Leasehold
improvements
£		 Computer
Equipment
£		 Assets under
construction
£
—
19,200
(19,200)
—
—
—
—
—
—
—		 Total
£
139,051
—
(139,051)		 240,687
—
(240,687)		 379,738
19,200
(398,938)
— — —
120,288
18,763
(139,051)		 215,614
7,457
(223,071)		 335,902
26,220
(362,122)
— — —
— — —
18,763 25,073 43,836

22

Notes to the financial statements 31 July 2021

10 Debtors

Debtors
2021
£		 2020
£
Trade debtors
Prepayments and accrued income
Other debtors
Transfer to parent undertaking		 —
51,088
60,036
(111,124)		 9,980
111,050
—
—
— 121,030

11 Creditors: amounts falling due within one year

2021
£		 2020
£
Trade creditors
Social security and other taxes
Accruals
Other creditors
Transfer to parent undertaking		 26,839
22,461
285,520
281,619
(616,439)		 47,225
14,597
309,194
259,150
—
— 630,166

12 Funds transferred to parent undertaking

On 1 January 2021the following assets, liabilities and reserves were transferred to the parent undertaking, London South East College.

Tangible assets
Debtors
Cash at bank and in hand
Creditors
Represented by unrestricted reserves		 £
36,816
111,124
1,056,983
(616,439
588,485
588,485

13 Leasing commitments

Operating leases

At 31 July 2021 the charitable company had total commitments under non-cancellable operating leases as follows:

Land and buildings Equipment
2021
£
2020
£
—
800
—
800
—
800
—
2,400
2021
£		 2020
£		 2021
£
Amounts due:
. Within one year
. Within one to two years
. Within two to five years		 —
—
—		 44,519
—
—		 —
—
—
— 44,519 —

23

Notes to the financial statements 31 July 2021

14 Liability of members

The charity is constituted as a company limited by guarantee. In the event of the charity being wound up members are required to contribute an amount not exceeding £1.

15 Ultimate parent undertaking

The Corporation of Bromley College, trading as London South East Colleges (LSEC), is the ultimate parent undertaking by virtue of being the sole member of the charitable company. LSEC will continue the activities of LSfG.

16 Related party transactions

The charity did not undertake any transactions with related parties during the year. Other than the transfer to LSEC (see note 12)

17 Post Balance Sheet Event

There are no post balance sheet events.

24