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2021-07-31-accounts

Company number: 2050044 Charity Commission number: 295192 OSCR number: SC049476

Vocational Training Charitable Trust

Report and financial statements for the year ended 31 July 2021

Vocational Training Charitable Trust

Contents

For the year ended 31 July 2021

Reference and administrative information ...................................................................................... 1 Trustees’ annual report .................................................................................................................. 3 Independent auditor’s report ....................................................................................................... 15 Consolidated statement of financial activities (incorporating income and expenditure account) .. 19 Balance sheets .............................................................................................................................. 20 Consolidated statement of cash flows ........................................................................................... 21 Notes to the financial statements ................................................................................................. 22

Vocational Training Charitable Trust

Reference and administrative information

For the year ended 31 July 2021

Company number 2050044
Country of incorporation United Kingdom
Charity number 295192
Country of registration England & Wales
Charity number SC049476
Country of registration Scotland
Registered office
and operational address Aspire House
Annealing Close
Eastleigh
Hampshire
SO50 9PX
Trustees Trustees, who are also directors under company law, who served during the
year and up to the date of this report were as follows:
Jennifer Sworder Appointed as Chair (from 03/12/2020)
Isabel Sutcliffe Appointed as Vice Chair (from 03/12/2020)
Julian Glicher Vice Chair (to 03/12/2020)
Andrew Mondon Appointed 23/05/2021
Barbara Mitchell
Jayne Lewis-Orr
Katherine Quinn Appointed 01/06/2021
Lesley Shepperson Appointed 21/05/2021
Meri Huws
Stephanie Barnett
Stephanie Richardson
Stephen Dennison
Dr Christopher Laws Resigned as Chair and Trustee on 03/12/2020
Key management Alan Woods OBE Chief Executive
personnel Ashley Barnes Deputy Chief Executive
Janet Field Chief Financial Officer (appointed 01/03/2021)
Marcus Bull Chief Commercial Officer (resigned 15/10/2021)
Carina Fagan Chief Academic Officer

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Vocational Training Charitable Trust

Reference and administrative information

For the year ended 31 July 2021

Bankers NatWest Bank Plc
34 Southampton Road
Eastleigh
Hampshire
SO50 9XN
Solicitors Blake Morgan LLP
New Kings Court
Tollgate
Chandler’s Ford
Eastleigh
SO53 3LG
Auditor Sayer Vincent LLP
Chartered Accountants and Statutory Auditor
Invicta House
108-114 Golden Lane
LONDON
EC1Y 0TL
Investment Smith & Williamson Investment Management Limited
manager 25 Moorgate
London
EC2R 6AY
Business and Grant Thornton UK LLP
financial advisors No 1 Dorset Street
Southampton
Hampshire
SO15 2DP

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

The trustees present their report and the audited financial statements for the year ended 31 July 2021.

This last year (2020/21) was an extremely challenging year for the education and skills sector with the coronavirus (COVID-19) pandemic continuing to impact the sector. Specifically, extraordinary measures were implemented by the qualification regulators throughout the UK and other agencies across the sector. We also implemented an organisational restructure of VTCT, to align with our coronavirus recovery strategy.

Despite these challenges we effectively and efficiently navigated the business, continuing to deliver our charitable purpose. Our continuing ability to provide support and services to all customers was only made possible by our talented, motivated, and dedicated workforce. The trustees would like to thank the whole of the VTCT team and other colleagues who support the organisation, as well as all centre staff for their continued support, professionalism, and commitment in what has been another challenging year. As designated key workers, they should be proud of their continuing efforts to support providers and learners.

The support that VTCT has been able to give to beneficiaries has only been possible because of the dedication and sheer hard work of everyone involved. We very much look forward to next year and the implementation of the new 2021-26 corporate strategy ‘Leading. Growing. Supporting’, which has been developed with our staff. This strategy will ensure we continue to support centres to recover from the impact of the coronavirus, ensuring learners continue to receive an

outstanding experience, while pursuing a range of exciting growth initiatives through the delivery of our core activities of awarding, assessment, accreditation, research, and digital education. This growth of the organisation is significantly aided by VTCT being successful in its partnership bid with the Awarding Organisation NCFE to Department for Education, to design and deliver the new government T-Level in Hairdressing and Beauty Therapy for delivery from 2023.

Reference and administrative information set out on pages 1 and 2 form part of this report. The financial statements comply with current statutory requirements, the articles of association and the Statement of Recommended Practice - Accounting and Reporting by Charities: SORP applicable to charities preparing their accounts in accordance with FRS 102. This trustees’ annual report includes a directors’ report as required by company law.”

Objectives and activities

Purposes and aims

VTCT is the UK’s leading specialist technical and professional awarding organisation and examination/ apprenticeship assessment board for the hairdressing and beauty therapy sector. It also has a growing presence in other sectors, including sport, leisure and fitness, aesthetics and learning and development. VTCT operates within all these sectors in over fifty countries worldwide.

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

The charity’s objects, being for the public benefit throughout the United Kingdom and Internationally, are the advancement of education by:

The strategies employed to achieve the charity’s aims and objectives are:

The trustees review the aims, objectives and activities of the charity each year. This report looks at what the charity has achieved and the outcomes of its work in the reporting period. The trustees report the success of each key activity and the benefits the charity has brought to those groups of people that it is set up to support and achieve their qualification ambition. The review also helps the trustees ensure the charity's aims, objectives and activities remained focused on its stated purposes.

The trustees have referred to the guidance contained in the Charity Commission's general guidance on public benefit when reviewing the charity's aims and objectives and in planning its future activities. In particular, the trustees consider how planned activities will contribute to the aims and objectives that have been set.

Strategic report

Achievements and performance

The charity's main activities and whom it seeks to support are described below. All of its charitable activities focus on providing learners with the skills and qualifications necessary to obtain employment or to become self-employed; or to enable learners to add to their skills and knowledge, thereby improving their career prospects or progression to a higher level of education. All charitable activities are undertaken to further VTCT’s purpose of advancing education for public benefit.

The trustees consider a variety of key performance indicators and targets when considering how the organisation has performed, including the number of new learners and newly approved and

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

active centres. I n 2020/21 learner registrations increased significantly to 166,796 (2019/20: 92,239). This increase should be noted with caution given the detrimental impact of the coronavirus on 2019/20 learner registrations. However, this is still a significant increase versus the 111,014 learner registrations seen in 2018/19. VTCT continues to be the largest market share holder of the hair and beauty awarding market, increasing to 58.5% in 2021 (2019/20: 54.5%).

The trustees review the ongoing regulatory status of VTCT with qualification regulators and compliance against regulatory conditions and principles. VTCT is audited by Ofqual and other regulators and self-assesses against Ofqual’s “General Conditions of Recognition,” the Vocational and Technical Qualification (VTQ) Contingency Regulatory Framework and other regulatory principles and documents from other UK regulators. The trustees consider the various regulators’ audit findings as positive and demonstrate the ongoing success and compliance of VTCT.

The 2020/21 academic year was the second successive year to be impacted by the coronavirus, given global and regional ‘lockdowns’, closure of education and training providers and businesses, ongoing restrictions related to social distancing and other public health measures. VTCT was supported by Ofqual and other regulators during this period in the implementation of a range of risk mitigation strategies to ensure the reliable, accurate and timely award of qualification results to enable learners to progress to the next stage of their learning journey. These strategies included awarding qualifications based on Teacher Assessed Grades and previously Centre Assessed Grades which were quality assured by VTCT, as well as adapted assessments. These adaptions were permitted under the Vocational Contingency Regulatory Framework (VCRF) published by Ofqual and approved by CCEA Regulation, Scottish Qualifications Authority and Qualifications Wales.

VTCT continues to contribute to policy implementation groups set up by Ofqual, including the Vocational and Technical Qualifications Oversight Board which consists of senior representatives from Ofqual and regulators in Wales, Northern Ireland and Scotland, the Department for Education, the Federation of Awarding Bodies (FAB), Joint Council for Qualifications and a small selection of awarding organisations.

The Apprenticeship End Point Assessment (EPA) activity was once again interrupted by lockdown restrictions and sector closures over the last year. VTCT worked with colleagues at the Institute for Apprenticeships and Technical Education and the regulator Ofqual, to agree COVID-19 flexibilities and dispensations for apprentices affected by pandemic disruption to their learning and assessment plans. Despite the disruption, most apprentices were able to complete their apprenticeships as planned. VTCT continues to seek additional approvals from the Education and Skills Funding Agency to offer EPA services for additional standards. These additional apprenticeship standards, including those in Hairdressing, will allow VTCT to support and assess apprentices to develop a repertoire of skills to enable them to gain valuable employment.

Technical education reforms continue in England, and in particular the awarding of exclusive sector licences to deliver T-Level qualifications in Further Education. VTCT partnered with NCFE, a large, general awarding organisation based in Newcastle to collaboratively produce a bid for the

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

Hairdressing and Beauty Therapy contract. We were informed in September 2021 that we had been successful in our joint bid with NCFE. VTCT will develop the technical content of the qualification ready for delivery in colleges and schools from September 2023.

VTCT continued its focus on the continual improvement of the quality of its provision and maintained its external accreditations (ISO27001 Information Security; ISO9001 Quality Management; Cyber Security Essentials Plus) while also achieving the Investors in People Silver Award. These accreditations will ensure VTCT continues to maintain the high quality of its provision, whilst safeguarding the charity’s information assets. The Investor in People Award continues our strong desire to invest in our staff and this has been further developed over the past year with a new Learning and Development Manager position, Employee Engagement Manager and a renewed focus on equality, diversity, and inclusion. Over the next year, VTCT is planning a major upgrade of its CRM platform, in addition to streamlining and, where possible automating, many of the business processes concerned with customer on-boarding and retention. There are also plans to embrace big-data more extensively to better understand our customers’ needs and to inform decision making, specifically those related to the development of new products and services. VTCT continues to enhance the quality of its data, enabling better decision making and tailored marketing campaigns, focusing specifically on customer needs and benefits sought.

VTCT now has staff working internationally in both business development and quality assurance roles in Australia, Africa, South-East Asia and Hong Kong, and continues to support its centres in South Africa through its office and staff in Johannesburg. The office in Ireland services not only Irish centres who deliver our qualifications, but also acts as our European hub.

The VTCT Skills Advisory Board (SAB) is a VTCT sponsored advisory panel that brings together the industry leaders and employers with our sector awarding teams. The SAB helps VTCT to better understand the current and future skills needs, and to shape, review and design our qualifications. This direct industry expert advice enables VTCT to ensure that our vocational and technical qualifications align with current employment opportunities and employer needs. The VTCT SAB strengthens the partnership that VTCT has directly with employers, as the market leading awarding and assessment organisation in the sector. We are seeking to extend this approach to include an array of consortia, which cover each of our major consumer segments to drive intelligence and inform our approach.

Beneficiaries of our services

We consider the beneficiaries of our services to be the learners undertaking study or apprenticeships with our approved training providers, which includes, schools, further education colleges and private training providers. We measure the benefit provided through both the number of learners on active programmes and the number achieving a regulated qualification. During the year, 70,395 (2020: 44,489) learners were awarded with a regulated VTCT qualification and 22,089 (2020: 13,055) learners were awarded a regulated iTEC qualification, which are our primary, but not exclusive, international branded qualifications.

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

Financial review

The trustees are pleased with the outturn for the financial year given the continuation of the difficult circumstances faced in the period under review. While a surplus of £2.183m (2020: deficit £2.755m) is reported, this is after accounting for the amortisation of historic acquisitions (£403k annual impairment). The total reserves of the Group are £16.9m, (2020: £14.7m) with free reserves within the range specified within the charity’s reserves policy.

Total operating income exceeded previous year by £1.295m which was a result of centres starting to recover from the effects of the pandemic and new income generated from the infection control qualifications. These were developed in response to the pandemic and deemed essential to enable centres and salons to maintain the necessary protocols to carry on teaching. VTCT also benefited from a government grant of £188k under the Coronavirus Job Retention Scheme.

Qualification and Assessment income for the year was up on previous year by 18% to £8.439m and Apprenticeship End Point Assessment income increased by 22% to £327k, despite the effects of the lockdown periods. The trustees consider this is an excellent result given the challenges faced.

Operational expenditure fell by 6% to £7.796m (2020: £8.291m). This was a due to the regional travel restrictions preventing centre visits and planned marketing events being cancelled due to the pandemic, and also to the benefit of the grant referred to above.

The second year of our bursary scheme has been well received by centres. The bursaries are being used to enhance the learners’ journey in many different ways from paying for guest speakers to come into the centres conducting master classes to paying for student kits. We are seeing more students struggling financially after the pandemic and the programme has given them the opportunity to follow in their chosen career without the challenge of the financial burden. The grants and bursary programme also allows the charity to promote its products and services to a wider group of centres and learners. Due to the success of the scheme VTCT have doubled the contribution under the scheme to £150,000 in 2021/22.

Income from investments fell by 7% to £175k but the value of the investment portfolio increased. Investment funds are held under discretionary management with a total return mandate, as detailed below.

The investment portfolio increased in value recovering the losses sustained in the previous year, with net gains in the year of £1.342m. The trustees highlight that the expenditure during the year includes amortisation of £403k for the historic acquisition of iTEC, which was a non-cash transaction. Net cash provided by operating activities was £2.218m (2020: £281k) and the net cash increase after managed fund investment activities in the year was £2.395m (2020: £339k) with a closing cash balance of £4.1m. This included a £1m coronavirus business interruption loan (CBILS) received from NatWest Bank in September 2020. This has subsequently been repaid in August 2021.

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

Despite another challenging year VTCT remains in a strong position with continued investment in the charity to improve the quality and range of education provision and benefit to learners.

Investment policy and objectives

VTCT operates a total return approach to its investment portfolios. Under the articles of association, the Charity has the power to invest monies not immediately required for the furtherance of its objects in or upon such investments as may be thought fit. The trustees delegate the investment management to external investment managers (Smith & Williamson Investment Management), whose performance is monitored by the Board of Trustees and the Finance and Audit Committee.

Portfolio performance is measured against the performance of the WMA Balanced (TR) Index (formally APCIMS) and the FTSE 100. The target return set for the investment portfolio was a total return of CPI + 1.5%. Year on year CPI at July 2021 was 0.7% leading to a total return target of 2.2% for the year. Due to the recovery of the effects of the coronavirus, performance was significantly up with a positive return of 6% over the year.

The minimal investment (£11k) held in the COIF Property Fund was liquidated in full and funds transferred to the bank.

Following a review last year of the investment portfolio and the charity’s approach to asset risk, the trustees have amended the mandate for the SWIM investment portfolio from a Balanced Approach to a Conservative Approach. The trustees anticipate that this will reduce the level of volatility exposure within the portfolio by a reduced investment in equities.

Principal risks and uncertainties

VTCT will continue to respond to the government’s programme of education and skills agenda, specifically, technical and professional education reform. In parallel, VTCT will continue to support centres throughout this unprecedented and uncertain period given the impact of the coronavirus pandemic.

VTCT’s principle risks are captured on the Corporate Risk Register and updated and regularly reviewed by the Finance and Audit Committee. They are risk rated and mitigations put in place where possible.

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

T (Technical) Levels

In September 2021, the Institute for Apprenticeships and Technical Education (IfATE) awarded the contract for the T Level in Hairdressing and Beauty Therapy. As the lead AO and market share holder of the UK qualifications we are delighted in the success of our bid, in partnership with the educational charity NCFE, who were awarded the contract to deliver the T Level in this pathway. The public sector, in particular Further Education colleges, contribute significantly to VTCT’s overall income and it is vital that this revenue stream is maintained for the foreseeable future with the award of this contract. It is imperative that all milestones set by IfATE are met to enable delivery of the qualification in 2023. We have taken steps to ensure we have the resources to mitigate the risk of not meeting our obligations under our partnership.

Whilst the Further Education sector is a significant contributor to VTCT’s income, the UK and global private segments are also important markets for VTCT and will continue to be supported with a strong focus on customer service, with specific market segments targeted to contribute to overall growth.

Coronavirus pandemic

The coronavirus pandemic continues to challenge the global economy on an unprecedented scale. More specifically, the impact and disruption on the education and skills sector has been significant. Despite this impact, there is a feeling that the sector is now in a period of recovery and is returning to some sort of normality, which is the result of a widespread vaccination programme in the UK. Schools and colleges in general, have resumed, many of which continue to observe social distancing measures and/or require students to wear masks. Perhaps the biggest shift concerns qualification delivery whereby many colleges and training providers are now delivering blended learning programmes using technology. This mass migration towards embracing digital is now becoming commonplace and more natural to providers who were initially forced to change their delivery models at speed. Providers continue to develop and improve these solutions to ensure learners receive a high-quality learning experience. The move to on-line teaching has been a significant challenge to vocational learning and one in which our relationship with our on-line learning platform partner Pivot Point has been key to our organisational success.

Notwithstanding the ongoing risk of further national and regional lockdowns, the future impact of the coronavirus now appears to be lower and more manageable based on the lessons learned over the last 18 months. However, VTCT continues to maintain sufficient resources to support and protect learners. It also has sufficient reserves and liquidity in excess to what might be required to manage this risk. But challenges remain for the near future because of the pandemic.

VTCT has developed a range of digital products and platforms, such as Pivot Point to support its customers through this challenging period. However, given the technical nature of many personal services qualifications, where human contact is a necessity, face-to-face assessments remain a formal requirement.

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

Impact of changes in Government policy

VTCT continues to monitor changes in Government policy and spending as many VTCT centres draw funding from public funds and there is a risk that change in policy could have an adverse effect on income.

Reserves policy and going concern

On 31 July 2021 the Charity and the Group had reserves totalling £17.4m (2020: £15.2m) and £16.9m (2020: £14.7m), respectively. Free reserves for the Charity and the Group totalled £13.6m (2020: £10.6m) and £14.1m (2020: £11m) respectively. There were no Reserves held in restricted funds (2020: £13k). The trustees consider the level of reserves to be appropriate to support the ongoing activities of the Charity.

The VTCT Reserves Policy targets a free reserves range of £9.1m to £16.6m. The reserves range is calculated to enable the charity to mitigate the financial impact of a significant disruption to charitable activities and to allow the trustees to ensure funds are available for current commitments and obligations. The trustees are pleased to report that the reserves level continues to sit within the ranges set out in the policy.

Furthermore, the trustees acknowledge that VTCT has an indirect reliance on public funding as Further Education colleges and private training providers are funded by government and associated bodies. VTCT’s income is thus partially reliant on this funding, which exposes the charity to government policy changes and any government spending changes. Ensuring reserves are maintained in line with the reserves policy enables VTCT to continue to diversify its income sources through increasing private training provision, higher-level qualification development, apprenticeship assessment and international activity, both through organic growth as well as through partnership / joint venturing and acquisition. The trustees confirm that they conclude VTCT is a going concern as appropriate for the 2020/21 statutory accounts.

Plans for the future

Our new vision and strategy entitled, ‘Leading. Growing. Supporting’, focuses on building on our core purpose of advancing education, providing a direct line of sight to a job to more learners, and improving career prospects. We are acutely aware that the coronavirus will continue to threaten education and skills and, specifically, our core sector areas of hair, beauty, aesthetics, and sport - as they are often the first industries required to lockdown and amongst the very last to open.

The need for us to continue to support our learners, apprentices and centres in this initial post-pandemic recovery phase is the most significant thread of our actions. While delivering this support to the best of our ability, we are also navigating various external factors, including political reform and increasing challenges from new competitors and alternative provision. In response to these challenges, we will extend our reach to new learners by diversifying our current apprenticeship offer, championing higher-level qualifications and supporting a range of other

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

exciting initiatives.

Over the course of the next year VTCT will continue to support centres to recover from the impact of the coronavirus. In parallel, the company is working in partnership with a range of stakeholders to develop a range of new products and services while building stronger relationships as the business focusses on providing a best-in-class customer service; listening, supporting and responding to customer needs and demands.

Specifically, VTCT will work towards the following strategic pillars:

Supporting recovery: Embracing digital, big-data and relationship marketing to develop credible insight into customer need, building loyalty and supporting centre growth and learner achievement.

Driving Growth: Co-creating new products and service with customers and key stakeholders and strengthening our position in hairdressing and barbering.

Leading technical education: Inclusively innovating and leading technical education in the hair, beauty and aesthetics sector, engaging more centres and learners through high-stakes qualifications.

Structure, governance and management

The charity is committed to a continuous programme of governance review and improvement. The trustee board has reviewed the Charity Governance Code for Large Charities and how it applies to VTCT. The trustees have formally adopted the Code and, for each of the seven principles, to apply the Code and ensure that VTCT policies are updated to reflect current practice.

VTCT is a company limited by guarantee, incorporated in 1986 under the Companies Act 1985, and registered under the Charities Act 2011 on 30 September 1986.

VTCT registered with the Office of the Scottish Charity Regulator, on 25 July 2019.

The company’s Articles of Association were updated on 13 July 2020.

All trustees give their time voluntarily and, save as disclosed below, receive no benefits from the charity. Any expenses reclaimed from the charity are set out in note 6 to the accounts.

Appointment of trustees

The number of trustees is not limited by the charity’s Articles of Association. However, the level of reform taking place in the educational sector together with the growing complexity of VTCT as an organisation means the trustees consider the optimum number of trustees to be up to fifteen, to reflect the skill sets required by trustees based on an annual skills assessment of the Board.

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

In line with good practice the charity will continue to seek and appoint trustees with appropriate skills for strong governance. New trustees are sought by advertising and by more informed methods of search; promising candidates are interviewed by trustees and briefed by senior staff.

Trustee induction and training

New trustees undergo an induction period to brief them on their obligations under charity and company law, the content of the Articles of Association, the committee structure and decisionmaking process, the operational strategy, current issues and recent financial performance of the charity. During the induction they meet key employees and other trustees. Trustees attend board workshops and appropriate external training events where these will facilitate the undertaking of their role. Examples of these include investment management and governance.

Trustees and Governance

Under the terms of the articles, Trustees may be appointed for a maximum of three three-year terms. This period of service as Trustee may be extended upon appointment as Chair.

Jenny Sworder was appointed Chair of VTCT in December 2020 and brings with her 8 years of service as Trustee of VTCT, as well as considerable experience in the commercial and retail sectors in her earlier career. We welcome Jenny’s appointment as Chair and Isabel Sutcliffe’s appointment as Vice Chair. We also welcome the appointment of Katherine Quinn, Andrew Mondon and Lesley Shepperson to the trustee board.

Following Jenny’s appointment as Chair, the trustees have now reviewed the trustee governance of VTCT and have established the following committees to strengthen VTCT governance and trustee oversight:

Remuneration Committee: Chair - Jayne Lewis-Orr Regulatory Committee: Chair - Isabel Sutcliffe Finance and Audit Committee: Chair - Julian Glicher

During the period under review, Dr Chris Laws resigned as Chair and Trustee, and we thank him for his valuable contributions.

Related parties and relationships with other organisations

VTCT has five wholly owned subsidiaries:

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

During the year the VTCT engaged with Pure HR, a company owned by trustee Stephanie Barnett, to provide HR consultancy. The Charity has paid £5,875 (2020: £4,291) for the HR consultancy service.

The share capital of Education & Media Services Ltd was acquired on 8 November 2016. Any transactions and management charges between VTCT and Education & Media Services Ltd are supported by a Shared Services Agreement and are on an arm’s length basis.

Remuneration policy for key management personnel

Key management personnel are remunerated based on an assessment of market rates applicable for the role. Salary benchmarking is undertaken using the Korn Ferry Hay salary data sets and all key staff have had their roles independently reviewed by Korn Ferry Hay and are remunerated within the banded scales.

Fundraising compliance

Under the fundraising reporting requirements for The Charities (Protection and Social Investment) Act 2016 the Charity confirms that it does not engage in public fundraising and does not use professional fundraisers or commercial participators. The Charity has not received any complaints relating to the Act during the year.

Statement of responsibilities of the trustees

The trustees (who are also directors of Vocational Training Charitable Trust for the purposes of company law) are responsible for preparing the trustees’ annual report, including the strategic report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the trustees to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the charitable company and group and of the incoming resources and application of resources, including the income and expenditure, of the charitable company or group for that period. In preparing these financial statements, the trustees are required to:

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Vocational Training Charitable Trust

Trustees’ annual report

For the year ended 31 July 2021

The trustees are responsible for keeping adequate 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 group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustees are aware:

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

Members of the charity guarantee to contribute an amount not exceeding £10 to the assets of the charity in the event of winding up. The total number of such guarantees at 31 July 2021 was 13 (2020: 13). The trustees are members of the charity but this entitles them only to voting rights. The trustees have no beneficial interest in the charity.

Auditor

Sayer Vincent LLP was re-appointed as the charitable company's auditor during the year and has expressed its willingness to continue in that capacity.

The trustees’ annual report has been approved by the trustees on 2 December 2021 and signed on their behalf by

Jenny Sworder Chair

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Independent auditor’s report

To the members of

Vocational Training Charitable Trust

Opinion

We have audited the financial statements of Vocational Training Charitable Trust (the ‘parent charitable company’) and its subsidiary (the ‘group’) for the year ended 31 July 2021 which comprise the consolidated statement of financial activities, the group and parent charitable company balance sheets, the consolidated statement of cash flows and the notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 group 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 Vocational Training Charitable Trust’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.

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Independent auditor’s report

To the members of

Vocational Training Charitable Trust

Other Information

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

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

We have nothing to report in this regard.

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 group and the parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ annual report, including the strategic report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion:

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Independent auditor’s report

To the members of

Vocational Training Charitable Trust

Responsibilities of trustees

As explained more fully in the statement of trustees’ responsibilities set out in the trustees’ annual report, the trustees (who are also the directors of the parent 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 group’s and the parent 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 group or the parent charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with regulations made under those Acts.

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 are set out below.

17

Independent auditor’s report

To the members of

Vocational Training Charitable Trust

Capability of the audit in detecting irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

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

18

Independent auditor’s report

To the members of

Vocational Training Charitable Trust

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 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. 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.

Judith Miller (Senior statutory auditor) 8 February 2022

for and on behalf of Sayer Vincent LLP, Statutory Auditor Invicta House, 108-114 Golden Lane, LONDON, EC1Y 0TL

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

19

Vocational Training Charitable Trust

Consolidated statement of financial activities (incorporating an income and expenditure account)

For the year ended 31 July 2021

Note
Income from:
2
3
4
5
6
Reconciliation of funds:
Total income
Expenditure on:
Investment managers' fees
Total expenditure
Charitable activities
Qualification and assessment costs
Net gains/(losses) on investments
Net expenditure before net gains on
investments
Total funds brought forward
Total funds carried forward
Net income for the year and net movement
in funds
Investments
Donations and grant Income
Charitable activities
Qualification and assessment income
and other educational income		 Unrestricted
£
-
9,243,083
174,846		 Restricted
£
188,288
-
-		 2021
Total
£
188,288
9,243,083
174,846		 Unrestricted
£
-
7,895,250
188,601		 Restricted
£
565,129
-
-		 2020
Total
£
565,129
7,895,250
188,601
9,417,929 188,288 9,606,217 8,083,851 565,129 8,648,980
8,506,416
57,899		 201,376
-		 8,707,792
57,899		 10,310,697
52,978		 552,041
-		 10,862,738
52,978
8,564,315 201,376 8,765,691 10,363,675 552,041 10,915,716
853,614
1,342,383		 (13,088)
-		 840,526
1,342,383		 (2,279,824)
(487,838)		 13,088
-		 (2,266,736)
(487,838)
2,195,997
14,661,534		 (13,088)
13,088		 2,182,909
14,674,622		 (2,767,662)
17,429,196		 13,088
-		 (2,754,574)
17,429,196
16,857,531 - 16,857,531 14,661,534 13,088 14,674,622

All of the above results are derived from continuing activities. There were no other recognised gains or losses other than those stated above. Movements in funds are disclosed in note 20 to the financial statements.

20

Vocational Training Charitable Trust

Company no. 2050044

Balance sheets

As at 31 July 2021

Note
Fixed assets:
11
12
13
14
Current assets:
16
Liabilities:
17
19
Total unrestricted funds
Total funds
Net current assets
Total net assets
Investments
Cash at bank and in hand
Tangible assets
Investment in subsidiaries
Intangible assets including goodwill
Debtors
Creditors: amounts falling due within one year
Funds:
Restricted income funds
Unrestricted income funds:
General funds		 2021
2020
£
£
2,535,044
2,658,367
227,614
965,688
10,588,230
9,316,398
-
-
13,350,888
12,940,453
1,358,610
781,581
4,103,590
1,708,871
5,462,200
2,490,452
(1,955,557)
(756,283)
3,506,643
1,734,169
16,857,531
14,674,622
-
13,088
16,857,531
14,661,534
16,857,531
14,661,534
16,857,531
14,674,622
The group		 2021
2020
£
£
2,535,044
2,658,367
227,614
965,688
10,588,230
9,316,398
-
-
13,350,888
12,940,453
1,358,610
781,581
4,103,590
1,708,871
5,462,200
2,490,452
(1,955,557)
(756,283)
3,506,643
1,734,169
16,857,531
14,674,622
-
13,088
16,857,531
14,661,534
16,857,531
14,661,534
16,857,531
14,674,622
The group		 2021
2020
£
£
2,532,493
2,653,397
227,614
563,102
10,588,230
9,316,398
1,019,509
1,422,095
14,367,846
13,954,992
1,249,267
763,139
3,680,928
1,119,229
4,930,195
1,882,368
(1,854,341)
(630,652)
3,075,854
1,251,716
17,443,700
15,206,708
-
13,088
17,443,700
15,193,620
17,443,700
15,193,620
17,443,700
15,206,708
The charity		 2021
2020
£
£
2,532,493
2,653,397
227,614
563,102
10,588,230
9,316,398
1,019,509
1,422,095
14,367,846
13,954,992
1,249,267
763,139
3,680,928
1,119,229
4,930,195
1,882,368
(1,854,341)
(630,652)
3,075,854
1,251,716
17,443,700
15,206,708
-
13,088
17,443,700
15,193,620
17,443,700
15,193,620
17,443,700
15,206,708
The charity
13,350,888
1,358,610
4,103,590		 12,940,453
781,581
1,708,871		 14,367,846
1,249,267
3,680,928		 13,954,992
763,139
1,119,229
5,462,200
(1,955,557)		 2,490,452
(756,283)		 4,930,195
(1,854,341)		 1,882,368
(630,652)
3,506,643 1,734,169 3,075,854 1,251,716
16,857,531 14,674,622 17,443,700 15,206,708
-
16,857,531		 13,088
14,661,534		 -
17,443,700		 13,088
15,193,620
16,857,531 14,661,534 17,443,700 15,193,620
16,857,531 14,674,622 17,443,700 15,206,708

Approved by the trustees on 2 December 2021 and signed on their behalf by

Jenny Sworder Chairman

21

Vocational Training Charitable Trust

Consolidated statement of cash flows

For the year ended 31 July 2021

Reconciliation of net expenditure to net cash flow from operating activities

Net income/(expenditure) for the reporting period
(as per the statement of financial activities)
Depreciation charges
Amortisation charges
Gains on investments
Dividends and interest from investments
(Profit) / Loss on the disposal of fixed assets
(Increase) / Decrease in debtors
Increase / (Decrease) in creditors
Decrease in long term creditors
Net cash provided by operating activities
Note
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Change in cash and cash equivalents in the year
Cash flows from operating activities
Net cash used in investing activities
Net cash used provided by/(used by) operating
Cash flows from investing activities:
Dividends and interest from investments
Proceeds from the sale of fixed assets
Purchase of fixed assets
Proceeds from sale of investments
Purchase of investments
Change in cash in investment portfolio
Purchase of intangible assets		 £
£
2,218,034
174,846
630
(32,078)
(37,264)
1,658,623
(1,797,078)
209,006
176,685
2,394,719
1,708,871
4,103,590
2021		 £
£
2,218,034
174,846
630
(32,078)
(37,264)
1,658,623
(1,797,078)
209,006
176,685
2,394,719
1,708,871
4,103,590
2021		 2021
£
2,182,909
155,376
775,338
(1,342,383)
(174,846)
(605)
(577,029)
1,199,274
-		 2020
£
(2,754,574)
167,651
2,063,102
487,838
(188,601)
(37)
677,652
(171,830)
-
2,218,034 281,201
2,394,719
1,708,871		 339,325
1,369,546
4,103,590 1,708,871

22

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

a) Statutory information

The registered office and operational address is Aspire House, Annealing Close, Eastleigh, Hampshire, SO50 9PX.

b) Basis of preparation

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)- (Charities SORP FRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy or note.

These financial statements consolidate the results of the charitable company and its wholly-owned subsidiary, Education & Media Services Ltd, on a line by line basis. Transactions and balances between the charitable company and its subsidiary have been eliminated from the consolidated financial statements. Balances between the companies are disclosed in the notes of the charitable company's balance sheet. A separate statement of financial activities, or income and expenditure account, for the charitable company itself is not presented because the charitable company has taken advantage of the exemptions afforded by section 408 of the Companies Act 2006.

c) Public benefit entity

The charitable company meets the definition of a public benefit entity under FRS 102.

d) Going concern

The trustees consider that despite the impact of COVID-19 on the Income there are no material uncertainties about the charitable company's ability to continue as a going concern. The Charity have addressed the anticipated reduced income in the next reporting period by restructuring and therefore reducing the operating costs.

The trustees do not consider that there are any sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next reporting period.

e) Income

Income is recognised when the group has entitlement to the funds, any performance conditions attached to the income have been met, it is probable that the income will be received and that the amount can be measured reliably.

Income received in advance of the provision of a specified service is deferred until the criteria for income recognition are met.

Income from government and other grants, whether 'capital' grants or 'revenue' grants, is recognised when the charity has entitlement to the funds, any performance conditions attached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably and is not deferred

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 bank.

Dividend income receivable from the charity's investment portfolio is recognised when declared.

g) Fund accounting

Unrestricted funds are donations and other incoming resources received or generated for the charitable purposes.

23

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.

Resources expended are allocated to the particular activity where the cost relates directly to that activity. Support costs are re-allocated to each of the activities on the following basis:

 Qualification and assessment costs 100%

Governance costs are re-allocated to each of the activities on the following basis which is the ratio of expenditure between activities:

 Qualification and assessment costs 100%

Governance costs are the costs associated with the governance arrangements of the charity. These costs are associated with constitutional and statutory requirements and include any costs associated with the strategic management of the charity’s activities.

Intangible assets include trademarks acquired, goodwill arising from the acquisition of business and trade assets, and cost incurred in developing software to be used by the company.

Software development is amortised over four years on a straight-line basis.

Trademarks acquired are initially recognised at cost and are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to the statement of financial activities using the straight line method over 10 years. This is the shorter of their estimated useful lives and periods of contractual rights.

Goodwill represents the difference between the cost of acquisition of business trade and the fair value of the net assets. Goodwill is recognised separately as intangible assets and carried at cost less accumulated amortisation. Goodwill is amortised over five years on a straight-line basis.

Items of equipment are capitalised where the purchase price exceeds £500. Depreciation costs are allocated to activities on the basis of the use of the related assets in those activities. Assets are reviewed for impairment if circumstances indicate their carrying value may exceed their net realisable value and value in use.

Where fixed assets have been revalued, any excess between the revalued amount and the historic cost of the asset will be shown as a revaluation reserve in the balance sheet.

Depreciation is provided at rates calculated to write down the cost of each asset to its estimated residual value over its expected useful life. The depreciation rates in use are as follows:

 Freehold Land Not depreciated  Buildings 2% straight line  Property Improvements 5% straight line  Fixtures 20% straight line  Computer equipment and software 25% straight line

l) Listed investments

Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. Any change in fair value will be recognised in the statement of financial activities and any excess of fair value over the historic cost of the investments will be included within general funds in the balance sheet. Investment gains and losses, whether realised or unrealised, are combined and shown in the heading “Net gains/(losses) on investments” in the statement of financial activities. The charity does not acquire put options, derivatives or other complex financial instruments.

24

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

m) Investments in subsidiaries Investments in subsidiaries are at cost.

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

o) Cash at bank and in hand

Cash at bank and cash 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.

p) Creditors and provisions

Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

q) 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.

r) Pensions

The charity operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the charity in an independently administered fund. The pension cost charge represents contributions payable under the scheme by the charity to the fund. The charity has no liability under the scheme other than for the payment of those contributions.

Income from donations and grant income ome
Unrestricted
£
-
-
(Coronavirus Job Retention Scheme)
-
Unrestricted
£
9,243,083
9,243,083
Qualification and assessment income
and other educational income
Government grant income CJRS
Income from charitable activities
CCLA - COIF Property Fund
Smith & Williamson Investment Management
Income from investments
Qualification Wales grant income		 Unrestricted
£
-
-		 £
-
188,288
Restricted		 2021
Total
£
-
188,288		 Unrestricted
£
-
-		 £
52,354
512,775
Restricted		 2020
Total
£
52,354
512,775
- 188,288 188,288 - 565,129 565,129
Unrestricted
£
9,243,083
 £
-
Restricted		 2021
Total
£
9,243,083		 Unrestricted
£
7,895,250		 £
-
Restricted		 2020
Total
£
7,895,250
9,243,083 - 9,243,083 7,895,250 - 7,895,250
2021
Total
£
174,846
-		 2020
Total
£
164,161
24,440
174,846 188,601

25

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

5a Analysis of expenditure

Charitable activities

Staff costs (Note 7)
Verifier, examination fees & expenses
Premises costs
Telephone & fax
Postage, stationery & assessment materials
Other office costs
Travelling, meeting & committee expenses
Marketing & publicity
Legal & professional
Audit & accountancy
Depreciation
Amortisation
Profit on disposal of fixed assets
Bank charges & foreign exchange
Sundry expenses
ICT Hosting & support
Consultancy support
Support costs
Governance costs
Total expenditure 2021
Total expenditure 2020		 Qualification
and assessment
costs
£
2,723,625
516,301
59,245
15,657
478,254
59,803
71,104
85,340
32,553
18,375
89,974
449,678
(350)
13,836
33,199
394,332
9,595		 Support Costs
£
1,831,403
347,168
39,837
10,528
321,584
40,213
47,811
57,384
21,889
12,356
60,499
302,370
(236)
9,303
22,323
265,154
6,452		 Governance
Costs
£
140,877
26,706
3,064
809
24,737
3,093
3,678
4,413
1,683
951
4,654
23,259
(18)
716
1,717
20,397
497		 2021
Total
£
4,695,905
890,175
102,146
26,994
824,575
103,109
122,593
147,137
56,125
31,682
155,127
775,307
(604)
23,855
57,239
679,883
16,544		 2020
Total
£
4,851,988
1,203,320
116,337
36,673
660,938
106,839
291,497
245,049
57,879
30,656
167,614
2,063,139
(37)
64,256
196,797
694,084
75,709
5,050,521
3,396,038
261,233		 3,396,038
(3,396,038)
-		 261,233
-
(261,233)		 8,707,792
-
-		 10,862,738
-
-
8,707,792 - - 8,707,792 -
10,862,738
10,862,738 - -

26

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

5b Analysis of expenditure (Prior year)

Charitable activities

Staff costs (Note 7)
Verifier, examination fees & expenses
Premises costs
Telephone & fax
Postage, stationery & assessment materials
Other office costs
Travelling, meeting & committee expenses
Marketing & publicity
Legal & professional
Audit & accountancy
Depreciation
Amortisation
Profit on disposal of fixed assets
Bank charges & foreign exchange
Sundry expenses
ICT Hosting & support
Consultancy support
Support costs
Governance costs
Total expenditure 2020		 Qualification
and assessment
costs
£
2,862,673
1,203,320
68,639
21,637
389,954
63,035
171,984
144,579
34,149
-
98,892
1,217,252
(22)
37,911
116,110
409,510
44,668		 Support Costs
£
1,892,275
-
45,371
14,302
257,766
41,667
113,684
95,569
22,573
-
65,369
804,624
(15)
25,060
76,751
270,693
29,526		 Governance
Costs
£
97,040
-
2,327
734
13,218
2,137
5,829
4,901
1,157
30,656
3,353
41,263
-
1,285
3,936
13,881
1,515		 2020
Total
£
4,851,988
1,203,320
116,337
36,673
660,938
106,839
291,497
245,049
57,879
30,656
167,614
2,063,139
(37)
64,256
196,797
694,084
75,709
6,884,291
3,755,215
223,232		 3,755,215
(3,755,215)
-		 223,232
-
(223,232)		 10,862,738
-
-
10,862,738 - - 10,862,738

27

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

6 Net (expenditure)/ income for the year

This is stated after charging / (crediting):

This is stated after charging / (crediting):
2021 2020
£ £
Depreciation 155,127 167,651
Amortisation 775,307 2,063,102
Loss or (profit) on disposal of fixed assets (604) (37)
Operating lease rentals:
Property 14,479 14,302
Other 66,023 87,524
Auditor's remuneration (excluding VAT):
Audit 25,000 24,500
Other services 950 900
Foreign exchange (gains) or losses 3,548 44,686

Staff costs were as follows:

Staff costs were as follows:
Social security costs
Other forms of employee benefits
Salaries and wages
Redundancy and termination costs paid in the year
Employer’s contribution to defined contribution pension schemes		 2021
£
3,765,434
116,109
379,792
258,398
176,172		 2020
£
3,932,343
3,082
395,638
276,221
244,704
4,695,905 4,851,988

The following number of employees received employee benefits (excluding employer pension costs and national insurance) during the year between:

insurance) during the year between:
2021 2020
No. No.
£60,000 - £69,999 1 5
£70,000 - £79,999 1 1
£80,000 - £89,999 - 1
£100,000 - £109,999 1 -
£110,000 - £119,999 - 1
£120,000 - £129,999 1
£130,000 - £139,999 - 1
£140,000 - £149,999 - 1
£150,000 - £159,999 2
£180,000 - £189,999 - 1
£190,000 - £199,999 1 -

The total employee benefits including pension contributions and employer's national insurance of the key management personnel were £871,320 (2020: £860,002)

The charity trustees were not paid or received any other benefits from employment with the charity in the year (2020: £nil). No charity trustee received payment for professional or other services supplied to the charity (2020: £nil) save as disclosed in note 9 below.

Trustees' expenses represents the payment or reimbursement of travel and subsistence totalling £2,640 (2020: £7,968) incurred by 10 (2020: 11) trustees relating to attendance at Board meetings.

Trustee indemnity insurance is now included within the charitable company's indemnity insurance.

28

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

8 Staff numbers

The average number of employees (head count based on number of staff employed) during the year was as follows:

Qualifications and Assessment
Support
Governance		 2021
No.
94
30
2		 2020
No.
117
36
2
126 155

9 Related party transactions

Related party transactions with the charity's subsidiary company are disclosed within note 14.

During the year the Charity engaged with Pure HR, a company owned by Trustee Stephanie Barnett, to provide HR consultancy. The Charity paid £5,875 (2020: £4,291) for the consultancy service. All payments have been made prior to year end.

There are no donations from related parties.

10 Taxation

The charity is exempt from corporation tax as all its income is charitable and is applied for charitable purposes. The charity's trading subsidiary Education & Media Services Limited will gift aid profits earned in year to the parent charity.

11 Tangible fixed assets

The group

The group
Net book value
At the start of the year
Cost
At the start of the year
At the end of the year
At the end of the year
At the end of the year
Additions in year
Depreciation
Disposals in year
At the start of the year
Charge for the year
Eliminated on disposal		 Freehold
property
£
1,289,458
-
-		 Property
Improvements
£
1,889,769
-
-		 Fixtures and
fittings
£
138,076
-
(1,320)		 Computer
equipment &
Software
£
1,226,079
32,078
(85,379)		 Total
£
4,543,382
32,078
(86,699)
1,289,458 1,889,769 136,756 1,172,778 4,488,761
114,254
17,629
-		 507,676
87,184
-		 129,008
2,879
(1,320)		 1,134,077
47,683
(85,353)		 1,885,015
155,376
(86,673)
131,883 594,860 130,567 1,096,407 1,953,717
1,157,575 1,294,909 6,189 76,371 2,535,044
1,175,204 1,382,093 9,068 92,002 2,658,367

Land with a value of £407,232 (2020: £407,232) is included within freehold property and not depreciated.

All of the above assets are used for charitable purposes.

29

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

11 Tangible fixed assets (continued)

The charity

The charity
At the start of the year
Additions in year
At the end of the year
Net book value
At the start of the year
Depreciation
At the start of the year
Charge for the year
Disposals in year
Eliminated on disposal
At the end of the year
At the end of the year
Cost		 Freehold
property
£
1,289,458
-
-		 Property
Improvements
£
1,889,769
-
-		 Fixtures and
fittings
£
138,076
-
(1,320)		 Computer
equipment &
Software
£
1,213,910
32,079
(85,379)		 Total
£
4,531,213
32,079
(86,699)
1,289,458 1,889,769 136,756 1,160,610 4,476,593
114,254
17,629
-		 507,676
87,184
-		 129,008
2,879
(1,320)		 1,126,878
45,264
(85,353)		 1,877,816
152,956
(86,673)
131,883 594,860 130,567 1,086,789 1,944,099
1,157,575 1,294,909 6,189 73,820 2,532,493
1,175,204 1,382,093 9,068 87,032 2,653,397

12 Intangible fixed assets

The Group

The Group
Cost
Amortisation
At the end of the year
At the start of the year
At the start of the year
Charge for the year
At the end of the year
At the start of the year
Additions in year
At the end of the year
Net book value		 Software &
Resources
£
1,474,144
37,264		 Goodwill
£
4,720,540
-		 Trademarks
£
4,800
-		 Total
2021
£
6,199,484
37,264
1,511,408 4,720,540 4,800 6,236,748
913,162
372,272		 4,317,954
402,586		 2,680
480		 5,233,796
775,338
1,285,434 4,720,540 3,160 6,009,134
225,974 - 1,640 227,614
560,982 402,586 2,120 965,688

30

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

12 Intangible fixed assets (continued)

The Charity

The Charity
Cost
Amortisation
13
At the end of the year
At the start of the year
Fair value at the end of the year
Net gain in fair value
Listed investments comprise:
Listed investments
Net book value
Fair value at the start of the year
At the start of the year
Additions in year
Change in cash in the portfolio
At the end of the year
At the start of the year
Charge for the year
At the end of the year
Additions at cost
Disposal proceeds		 Software &
Resources
£
1,474,144
37,264		 Goodwill
£
87,500
-		 Trademarks
£
4,800
-		 2021
Total
£
1,566,444
37,264
1,511,408 87,500 4,800 1,603,708
913,162
372,272		 87,500
-		 2,680
480		 1,003,342
372,752
1,285,434 87,500 3,160 1,376,094
225,974 - 1,640 227,614
560,982 - 2,120 563,102
10,588,230 9,316,398 10,588,230 9,316,398
14
At the start of the year
Amortisation recognised
At the end of the year
Fair value at the end of the year
Investments held in subsidiary undertakings
Shares listed on the London Stock Exchange
UK Common investment funds
Cash and short term deposits held by fund manager
Property Funds
Other Investments Including Overseas Equities,
Alternatives and Multi-Asset
Subsidiary undertakings		 2021
2020
£
£
11,307
3,256,017
2,930,685
2,040,863
1,735,013
839,806
740,109
4,451,544
3,899,284
10,588,230
9,316,398
The group		 2021
2020
£
£
-
11,307
3,256,017
2,930,685
2,040,863
1,735,013
839,806
740,109
4,451,544
3,899,284
10,588,230
9,316,398
2021
2020
£
£
1,422,095
3,100,203
(402,586)
(1,678,108)
1,019,509
1,422,095
The charity
The charity
10,588,230 9,316,398 10,588,230 9,316,398
1,019,509 1,422,095
Listed investments comprise:
The group The charity
2021 2020 2021 2020
£ £ £ £
Property Funds 11,307 - 11,307
UK Common investment funds 3,256,017 2,930,685 3,256,017 2,930,685
Shares listed on the London Stock Exchange 2,040,863 1,735,013 2,040,863 1,735,013
Cash and short term deposits held by fund manager 839,806 740,109 839,806 740,109
Other Investments Including Overseas Equities,
Alternatives and Multi-Asset 4,451,544 3,899,284 4,451,544 3,899,284
Fair value at the end of the year 10,588,230 9,316,398 10,588,230 9,316,398
14 Subsidiary undertakings
The charity
2021 2020
£ £
Investments held in subsidiary undertakings
At the start of the year 1,422,095 3,100,203
Amortisation recognised (402,586) (1,678,108)
At the end of the year 1,019,509 1,422,095

31

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

14 Subsidiary undertakings (continued)

Education & Media Services Ltd

VTCT acquired the share capital of Education & Media Services Ltd (EMS) on 8 November 2016. The cost of acquisition along with associated professional support and advice totalled £5,600,049. The cost of the share capital was settled through a cash payment, with a retention amount paid in March 2017 based on EMS's performance. The trustees consider the useful economic life of EMS to be 5 years and the goodwill has been amortised.

A summary of the results of the subsidiary shown below.

A summary of the results of the subsidiary shown below.
The aggregate of the assets, liabilities and reserves was:
Assets
Liabilities
Gift aid to parent undertaking
Administrative expenses
Interest receivable
Operating profit / (loss)
Gross profit
Turnover
Cost of sales
Profit/(Loss) for the period
Reserves
Profit on ordinary activities		 2021
£
2,140,524
(253,007)		 2020
£
1,814,989
(420,571)
1,887,517
(976,622)		 1,394,418
(1,361,240)
910,895
2,153		 33,178
2,327
913,048
(967,131)		 35,505
-
(54,083) 35,505
2021
£
646,223
(217,629)		 2020
£
712,532
(225,108)
428,594 487,424

During the year, intercompany charges were made from VTCT to EMS totalling £886,379 (2020: £1,134,608) for management time and support.

15 Parent charity

The parent charity's gross income and the results for the year are disclosed as follows:

2021 2020
£ £
Gross income 8,352,072 7,968,599
Net result for the year 2,236,992 (2,790,080)

32

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

Debtors
Other debtors and prepayments
Trade debtors
Amounts due from other group entities		 2021
2020
£
£
890,878
372,682
-
-
467,732
408,899
1,358,610
781,581
The group		 2021
2020
£
£
715,814
295,534
87,230
81,327
446,223
386,278
1,249,267
763,139
The charity
1,358,610 781,581 1,249,267 763,139

Other Debtors includes a non current debtor of £144k comprising of a loan made in 2014 to Truro & Penwith College contributing to the provision of specialist teaching facilities.

17 Creditors: amounts falling due within one year

Other creditors
Trade creditors
Taxation and social security
Deferred income (note 18)
CBILs Loan		 2021
2020
£
£
180,000
193,317
203,383
199,577
400,291
210,394
1,000,000
-
171,883
152,995
1,955,557
756,283
The group		 2021
2020
£
£
180,000
193,317
203,383
199,577
400,291
210,394
1,000,000
-
171,883
152,995
1,955,557
756,283
The group		 2021
2020
£
£
178,767
191,661
232,567
217,726
378,695
175,554
1,000,000
-
64,312
45,711
1,854,341
630,652
The charity		 2021
2020
£
£
178,767
191,661
232,567
217,726
378,695
175,554
1,000,000
-
64,312
45,711
1,854,341
630,652
The charity
1,955,557 756,283 1,854,341 630,652

Other Creditors includes a £1,000,000 coronavirus business interruption loan (CBILS) received from Nat West Bank on 2/9/2020. This was on a 72 month term with a 12 month interest free period in the initial year. If repayment was not made at the end of the first year interest would be charged at 2.62% over base rate. Note 22 details the repayment of the loan in full, post balance sheet.

18 Deferred income

Deferred income comprises of payments received for qualification services supplied after the year end date.

Balance at the beginning of the year
Amount released to income in the year
Amount deferred in the year		 2021
2020
£
£
152,995
154,930
(152,995)
(154,930)
171,883
152,995
171,883
152,995
The group		 2021
2020
£
£
152,995
154,930
(152,995)
(154,930)
171,883
152,995
171,883
152,995
The group		 2021
2020
£
£
45,711
54,036
(45,711)
(54,036)
64,312
45,711
64,312
45,711
The charity		 2021
2020
£
£
45,711
54,036
(45,711)
(54,036)
64,312
45,711
64,312
45,711
The charity
171,883 152,995 64,312 45,711

19a Analysis of group net assets between funds (current year)

Net assets at 31 July 2021
Intangible assets including goodwill
Tangible fixed assets
Investments
Net current assets		 General
unrestricted
£
2,535,044
227,614
10,588,230
3,506,643		 Restricted
funds
£
-
-
-
-		 Total funds
£
2,535,044
227,614
10,588,230
3,506,643
16,857,530 - 16,857,530

33

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

19b Analysis of group net assets between funds (prior year)

Tangible fixed assets
Net assets at 31 July 2020
Investments
Net current assets
Intangible assets including goodwill		 General
unrestricted
£
2,658,367
965,688
9,316,398
1,721,081		 Restricted
funds
£
-
-
-
13,088		 Total funds
£
2,658,367
965,688
9,316,398
1,734,169
14,661,534 13,088 14,674,622

20a Movements in funds (current year)

Government grant income CJRS
(Coronavirus Job Retention Scheme)
General funds
Total funds
Total unrestricted funds
Qualifications Wales
Restricted funds
Unrestricted funds:		 At 1 August
2020
£
13,088
-		 Income & net
gains
£
-
188,288		 Expenditure
& losses
£
(13,088)
(188,288)		 Transfers
£
-
-		 At 31 July
2021
£
-
-
13,088 188,288 (201,376) - -
14,661,534 9,417,929 (7,221,932) - 16,857,531
14,661,534 9,417,929 (7,221,932) - 16,857,531
14,674,622 9,606,217 (7,423,308) - 16,857,531

The narrative to explain the purpose of each fund is given at the foot of the note below.

20b Movements in funds (prior year)

Government grant income CJRS*
General funds
Restricted funds
Total funds
Qualifications Wales
Unrestricted funds:
Total unrestricted funds		 At 1 August
2019
£
-
-		 Income & net
gains
£
52,354
512,775		 Expenditure
& losses
£
(39,266)
(512,775)		 Transfers
£
-
-		 at 31 July
2020
£
13,088
-
- 565,129 (552,041) - 13,088
17,429,196 8,083,852 (10,851,513) - 14,661,534
17,429,196 8,083,852 (10,851,513) - 14,661,534
17,429,196 8,648,980 (11,403,554) - 14,674,622

Restricted funds for the year comprise of:

Qualifications Wales - for Welsh translations of qualification materials and a short term appointment of a bilingual officer.

*Government Scheme - Coronavirus Job Retention Scheme (CJRS) - to cover a percentage of salary, pension and NI costs incurred for furloughed workers.

34

Vocational Training Charitable Trust

Notes to the financial statements

For the year ended 31 July 2021

21 Operating lease commitments

The group's total future minimum lease payments under non-cancellable operating leases is as follows for each of the following periods:

each of the following periods:
Less than one year
One to five years		 2021
2020
£
£
14,300
10,362
16,327
-
30,627
10,362
Property		 2021
2020
£
£
39,495
44,316
26,308
66,715
65,803
111,031
Equipment/Other
30,627 10,362 65,803 111,031

The charity's total future minimum lease payments under non-cancellable operating leases is as follows for each of the following periods:

each of the following periods:
Less than one year
One to five years		 2021
2020
£
£
-
-
-
-
-
-
Property		 2021
2020
£
£
39,495
44,316
26,308
66,715
65,803
111,031
Equipment/Other
- - 65,803 111,031

22 Post Balance Sheet Events

The Charity repaid the Coronavirus Business Interruption Scheme (CBILS) of £1,000,000 from NatWest Bank on 9th August 2021.

23 Legal status of the charity

The charity is a company limited by guarantee and has no share capital. The liability of each member in the event of winding up is limited to £10.

35