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2021-07-31-accounts

The London Institute of Banking & Finance Annual Report & Accounts 2020- 2021 4) 11 féts;'F- •, on on nc .libf.ac.

Page
Welcome from the Chief Executive 3
Organisation Overview 4
Professional Education 6
Higher Education 9
Financial Education & Community Outreach 11
Global Learning/MENA 14
Human Resources/People 16
Equality and Diversity Policy Statement 17
Centre for Digital Banking & Finance 18
Centre for Sustainable Finance 18
Centre for Governance, Risk and Regulation 18
Sustainability 20
Financial Review 21
Statement of Corporate Governance 24
Statement of Responsibilities of the Board of Governors 24
Board of Governors (Trustees) 25
Committees of the Board of Governors 26
Risk Management 27
Reference and Administrative Details 28
Disclosure of Information to Auditors 28
Auditor’s Report 29
Statement of Principal Accounting Policies 31
Consolidated Statement of Comprehensive Income and Expenditure34
Consolidated and Institute Statement of Changes in Reserves 35
Consolidated and Institute Balance Sheets 36
Consolidated Statement of Cash Flows 37
Notes to the Financial Statements 38

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Welcome

Alex Fraser Chief Executive

It is pleasing to be able to reflect on a very successful year across the range of our different activities, both in the UK and internationally, despite the continuing impact and uncertainty of Covid-19. The results are a great testimony to the hard work of my colleagues and to the resilience and commitment of the many thousands of students who have sat for one of our qualifications this year.

Our two full-time undergraduate degrees have for the first time attracted over 500 applicants and we will welcome the largest ever first-year cohort to our campus this year. For the 2021 academic year, given the increased enrolments, we plan to devote more of our London estate to our full-time students and to enhance the support we provide for them in areas such as careers and employability. We have increased the number of degree apprenticeship schemes and are currently running programmes for major financial institutions based in the UK, North America and Japan.

Despite continued Covid-related disruption, over 650 schools and colleges have registered students for our Financial Education qualifications this year and we were particularly pleased with the increase in registrations for our Level 3 qualifications. This clearly demonstrates the importance educational professionals attach to ensuring that young people leave secondary education with a good grasp of financial matters.

In Professional Education, the various government schemes to support the property market have helped drive the highest numbers of registrations for our suite of Mortgage Advice qualifications since the financial crisis. We have also enjoyed success with our other regulated advice qualifications.

Internationally, we have seen a strong recovery in our Trade and Transaction Banking qualifications as Covid-related restrictions were eased in key South East Asian markets and as more students took advantage of the flexible assessment options that we introduced during the year.

Our partnership with Abu Dhabi Global Market (ADGM) Academy has entered its fourth year of operation and this year 100 young Emiratis studied for the Institute’s International Banking qualifications prior to embarking on a career in banking as part of the government’s Emiratisation programme. Outside of Abu Dhabi, we have continued to work with partners and financial institutions in Saudi Arabia, Bahrain and Egypt. We have continued to invest in our MENA operation with a view to building more teaching and business development capacity in the region and broadening the range of programmes we offer.

We had a successful year in South East Asia, winning mandates in Singapore and forging new relationships in other parts of the region.

In May we launched a Centre for Governance, Risk and Regulation to sit alongside our existing Centres for Digital Banking and Sustainable Finance. These Centres bring together leading practitioners and educators in the disciplines, who collaborate on the rapidly growing number of programmes the Institute runs and contribute to our thought leadership.

Finally, I would like to take this opportunity to thank all those who give of their time so generously in support of the Institute and our work. Through their insightful contributions at our various Boards and Committees and through their participation at the many virtual events we have staged this year, they have played an important part in our success.

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Organisation Overview

We are The London Institute of Banking & Finance, lifelong partners for financial education.

We have a rich heritage of providing education in banking and finance that stretches back over 140 years. Founded in 1879 as the Institute of Bankers, we have evolved in line with the financial services and banking industries. We gained our Royal Charter in 1987 and in 1996 developed the first professional award linked to a university degree. We gained Taught Degree Awarding Powers (TDAP) in 2010 and were granted University College title in 2013.

We exist for a very simple reason – to advance banking and finance by providing outstanding education and thinking, tailored to the needs of business, individuals and society. Our focus is on lifelong learning; equipping individuals with the knowledge, skills and qualifications to achieve what they want throughout their career and life. We provide a balance of experience, insight and thought leadership into today’s financial world, delivered by industry leaders, thinkers and members of our community.

And because we’ve been at the heart of the sector since 1879, we create connections and build partnerships between people and business that make banking and finance more accessible and understood, and enhance social inclusion through better financial capability.

The organisation’s strategic plan, LIBF 2023, outlines the key objectives we aim to achieve.

We focus on lifelong learning; equipping you with the knowledge, skills and qualifications to achieve what you want throughout your career and life.

Financial Education & Community Outreach

We are the only specialist provider of dedicated personal finance qualifications for children and young people and play a leading role in the development of financial understanding in the wider community. We have over 50,000 students studying our qualifications in over 800 institutions.

over 40,000 young people taking our financial education qualifications each year

Higher Education

100%

of full-time students in employment or further study within 6 months of graduating

Our undergraduate and postgraduate degrees provide the knowledge and skills you need for a successful career in banking and finance. We place employability at the heart of everything we do, ensuring you graduate with the insight and understanding to perform effectively.

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Delivery of the strategy is through four core areas:

Financial Education & Community Outreach

Higher Education

Professional Education

International

We help schools instil the knowledge and confidence their pupils need to make good financial decisions, as well as inspiring the next generation of finance and banking professionals. Our learning programmes, qualifications and wider communitybased initiatives focus on everyday financial skills and essential skills employers say are missing. And through financial champions in schools, membership and higher education qualifications, we make the banking and finance sector more accessible.

Delivered by respected academics, practitioners and industry thinkers, we provide the skills and knowledge that the sector expects from you early in your career. Our learning is based on contemporary real life, using a combination of practice and theory which means you graduate better prepared to advance in the industry. All of our graduates are eligible to apply for Chartered status, a mark of professional standing in the sector.

Developed by respected industry practitioners, our qualifications follow the FCA guidelines to ensure you have a thorough understanding of their regulations. This gives you the insights required to perform effectively and responsibly and, where required, the authorisation to practise in diverging roles.

Our trade finance qualifications are recognised internationally and studied in over 90 countries. They help you to enhance your knowledge and skills, demonstrate technical competence and take your career to the next level. In Abu Dhabi, we are very proud of our partnership with the ADGM Academy and are working with them to build programmes that are locally relevant but firmly set in a global context.

Professional Education

Enabling you to advance your career and help organisations to deliver great performance. We provide clear pathways to match competency with career development in banking and finance. In regulated advice, there is a range of specialist certificates and diplomas for those working in Mortgages, Financial Advice, Pensions and Trade Finance. We ensure that professional recognition can be attained by everyone at all levels, from the award of a certificate through to the grant of our highly regarded Chartered Associate status.

A global community of students and alumni in over 120 countries

Community

over 140 years Providing industry leading education and thought leadership

We are a focal point for the sector. We have an active global community of like-minded individuals and professionals so you can continue your development and grow your networks. We share insight and generate thought leadership through events, training programmes and publications.

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Professional Education

Mark Heaton Managing Director, Professional Education

Key Strategic Priorities

Measuring Success

Professional Education was created in August 2020 as a merger of our UK and most of our International Business areas. It is pleasing to note that our overall year end revenue figure was £11.9m and 33% ahead of last year’s figure. This has been influenced by a burgeoning growth in Mortgage Advice and supported further by our other areas faring well in what has been a difficult business landscape. We have made positive strides forward in the training sector, securing a small number of sizeable training mandates; this success has heightened our desire to further develop our offering within this space.

Progress During the Year

Financial Services

Mortgage Advice: Our Mortgage Advice area generated £5.03m in revenue at year end – the highest total for many years. While we have been helped by the buoyant property market and various government support schemes, we have also introduced a new qualification for protection advisers (CertPro), which has been very well received, created new and improved support materials, and in June launched a new designation, Certified Mortgage Adviser (CMA), which has proved popular.

Following what was a turbulent year for the housing market, our flagship qualification CeMAP® has benefited greatly from the significant increase in house purchases propelled by the government incentive schemes. Although registration figures stabilised towards the end of the year, CeMAP® continued to perform significantly ahead of last year and, as a result of the increased registrations for mortgages, our expanded support packages have also seen an increase in demand, showing an uplift of 60.7% on 2019/20 figures.

The launch of the Certificate in Protection (CertPro) has exceeded expectations, achieving its first year’s business plan 3 months ahead of schedule, securing an impressive 452 registrations at year end. We have forged strong corporate links with three significant advice networks who are using CertPro as a standard of professionalism for their protection advisers. The process for granting a unit exemption into CeMAP® has also been completed.

Financial Advice: Our Diploma for Financial Advisers (DipFA®) remains one of the leading regulated FCAapproved financial advice qualifications, with income generated up 10.3% on last year. The Level 6 Diploma in Financial Advice (Adv DipFA®) remains strong, with the introduction of a new enhanced unit of study, Financial Planning in Retirement (FPIR). Within the first registration period, 50 students applied and have completed the first phase of the qualification. The innovation incorporated into FPIR has further enhanced our reputation for practicality, utilising forum contribution, video presentation and a timed open-book assessment.

Later-life planning continues to grow with an ageing population wishing to pass on their wealth to their families within their lifetime. As a result, more advisers are moving into this area, both for financial advice and equity release advice. With increased focus on this segment of the industry, we have worked with our corporate partners to introduce a set of webinars in partnership with UK Finance and have consulted with the Equity Release Council and other corporates to take forward plans to produce an industry standard CPD proposition that is recognised by the Institute.

Banking

It has been a challenging year for banking, with registrations and revenue down across the majority of qualifications due to Covid-19, the impact of bank restructures and the associated effects on student capacity to study. The pandemic resulted in many students pausing programmes or deferring their exams by up to 12 months, although in recent months we have noticed a positive trend of students re-engaging with their studies and moving through to completion.

This year has seen the addition of two new programmes to enhance our offering in the banking arena, the Level 3 Certificate in Retail and Digital Banking (CertRDB) and the Professional Experiential Route (PER) to chartered status. CertRDB’s target market is frontline staff working in retail banking and/or digital roles. We have already received significant interest from several key banking relationships and we are anticipating this to be very popular with the banks in the next financial year. PER provides a route to chartered status for banking professionals with a minimum of ten years’ industry experience. Achievement is gained through selfreflective learning rather than the traditional professional qualification route.

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Trade and Transaction Banking

Despite ongoing market challenges, we have made significant progress over the last 12 months with our Trade and Transaction Banking qualifications and have substantially broadened our international reach. Revenue increased by 27% when compared to last year, taking us to £2.9m, which was no doubt influenced by our increased network, the introduction of remote invigilation, the conversion to on-demand for certain qualifications and the significant number of deferred registrations from last year.

Covid-19 has had a profound transformative impact across the whole global banking and finance sector, including significant reductions in headcount and L&D spend, but as predicted last year it has also given rise to a range of new opportunities, as banks that may have resisted in the past look to go fully digital. This digital movement has also paved the way for conversion to a learner-led ‘on-demand’ exam system, allowing students to tailor their exam booking, providing flexibility with date, time and location of the sitting.

The pandemic also prompted an expected and significant rise in the number of deferrals and a reduction of new registrations in the Asia market for session-based examinations. We responded swiftly and positively to this challenge, moving forward with the digitisation of our Trade Finance learning materials, enhancing the learning experience with the usage of Brightspace and converting CDCS and CSDG to on-demand, resulting in our qualifications becoming easily accessible to students wherever they are. With the extensive Pearson VUE exam centres’ presence globally, the test centre footprint has been widened considerably from what was previously capitals and second cities. With test centre availability even in the most remote parts of the world, an on-demand approach to exams will also dramatically reduce the need for travel and associated costs at a time when movement might be restricted due to subsequent Covid outbreaks.

Our third annual trade finance conference held in May was a great success, this year hosted as a virtual event, which allowed it to be more inclusive, attracting a much higher number of participants. By way of example, our corporate partner in Egypt registered 40 candidates from a number of Egyptian banks that would not have been able to make the journey to London when it was held as a live event. This conference continues to keep the Institute relevant in the trade and transaction banking arena and allows us to promote the Certificate in Trade Finance Compliance (CTFC) to a far wider audience.

Singapore Office

The Singapore office was opened mid-2019 to offer bespoke training for local and international banks along with a selection of LIBF’s professional qualifications in the Asia Pacific region. The Singapore entity provides LIBF with a ‘stepping stone’ from which to service the wider APAC community through long standing corporate relationships. Our key focus for the coming year will be to strengthen partnerships and continue to build our profile within five key ASEAN countries: Singapore, Malaysia, Thailand, Vietnam and Indonesia. Following the successful delivery of multiple training programmes and to support our plans to develop in this region, we have also appointed a new Business Development Director to spearhead our growth in these target markets.

This year we have established a number of new partnerships and collaborations in the region. In Singapore, the Institute of Banking & Finance have been accrediting each of our new programmes, enabling students to take advantage of the enhanced course subsidies that are currently being offered.

In the wider APAC region, our partnership with the Asian Banking School is going from strength to strength. Having delivered a selection of bespoke Professional Education programmes to students in Malaysia and beyond, we are now looking to expand the offering into other specialist areas. Most recently, in Thailand, we have initiated a collaboration with the University of the Thai Chamber of Commerce.

Programme Partners and Accreditation

A new Level 6 qualification delivered by Practical Financial Exams has been accredited by LIBF. We were impressed with their innovative ways of assessing students and their programme complements our own Level 6 proposition for investment advice.

Gold-standard Trusted Partner status has been awarded this year to Simply Academy, a long-standing provider of CeMAP® learning support. In addition to this, we are now working with them to provide a Financial Adviser Academy focusing on adviser skills training; this is scheduled for launch in the autumn.

Despite a challenging year within the leasing industry, registrations for our Level 5 DipAF have remained buoyant due to the quality of the programme and the strong relationship we hold with our long-standing partner, the Finance & Leasing Association (FLA).

This period has also seen us develop new relationships with the Institute of Banking Studies in Yemen, International Chamber of Commerce Vietnam and Institute of Banking and Finance in Cambodia, as well as enhancing our existing partnerships. In conjunction with this, we have also developed more meaningful direct relationships with a number of banks in Asia, the Middle East, Africa and Europe. All were developed using video calls with people who had previously been reluctant to engage using that tool.

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Professional Education

Regulatory Bodies and Stakeholder Engagement

We continue to be proactive in building our relationships with standard-setting bodies, policymakers and regulators. Being an active member of the accredited bodies forum of the Financial Conduct Authority (FCA) supports our work to ensure our members fulfil regulatory obligations. Work also continues with our own forum, the Regulatory Education Advisory Panel (REAP), bringing together representatives from mortgage and financial advice firms. REAP provides us with an informed sounding board to aid our understanding of the needs of the sector with regards to professional education and development.

We continue to work closely with the FCA to support the inclusion of membership of professional bodies in the new FCA Directory of Certified and Assessed Persons, which launched earlier this year.

Key Risks

Looking Ahead

A key part of our growth strategy this year is to increase brand awareness and reach in Asia Pacific through our Singapore office. Successful growth in this market is pivotal to support the expansion of our three centres both in the UK and internationally.

Additional focus will also be given to our UK regulated advice business with more programmes added when appropriate opportunities arise. Alongside this, we will be working to enhance our CPD and membership proposition in order to aid our students and members with their career development and client support needs.

We constantly review our qualification portfolios to ensure that our product offer remains relevant and up to date with an emphasis on digital enhancements and learner support facilitated by the migration to our new online learning platform.

In August we launched the new Certificate in Business Banking, which replaced the existing CertBB&C qualification and has been enhanced to include valuable content on managing problem loans, social and technological influences, the role of banks in a digital environment and open banking, APIs, fintech, AI and blockchain.

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Higher Education

Hema Tank Managing Director, Higher Education

Delivered by academics, practitioners and industry thinkers, we provide the skills and knowledge that the sector expects from students early in their career. Our learning is based on contemporary real life, using a combination of practice and theory, which means students graduate better prepared to advance in the industry.

Right from the beginning, all of our students become members with the associated benefits that brings. On graduation they are eligible to apply for chartered status, a mark of professional standing in the sector.

Key Strategic Priorities

Measuring Success

We have continued to see revenue growth in Higher Education due to an increase in the number of students on both our undergraduate and apprenticeship programmes. Our degree-level apprenticeships programmes now comprise both early career and senior professionals. Our first cohort of degree-level apprentices graduated during 2020. The graduation ceremony, while held virtually, gave them a unique opportunity to celebrate their success.

We continue to work on enhancing our portfolio of programmes through international partnerships specifically through our MENA regional office and the development of our postgraduate offer through our Research Centres.

Progress During the Year

Employer connections and employability: In 2020/21 we built upon our work, achievements and strategic focus for careers and employability. There were 113 new registrations in the Careers Centre and over 280 one-to-one career coaching sessions. We hosted over 18 companies (digitally), including HSBC, Columbia Threadneedle Investments, Bloomberg, BDO, Commerzbank and Lloyds Banking Group. We have worked with other universities and the Office for Students (OfS) to promote the new Graduate

Employment and Skills Guide. This is a comprehensive document containing lots of useful advice and guidance for students impacted by the pandemic. Our employment statistics continue to remain high, with 100% of those working doing so in high- or mediumskilled roles.

Student experience: Our focus is always on listening to student feedback and acting on that to improve their experience. This year, in the light of the pandemic, we continued to deliver classes virtually. When allowed, in line with government guidance, we gave students the opportunity to attend campus, although many chose to still study online. We adapted our assessment strategy to allow students to sit examinations at home and this was well received. Following guidance from both OfS and the Quality Assurance Agency for Higher Education (QAA) we continued with our ‘No Detriment’ policy which provided students with a safety net for their grade mark average.

Student support: We moved to digital delivery of library resources more than 15 years ago when we invested in transferring all our books, journals and other resources online. This has meant that students have been able to access all their learning resources, including access to the Bloomberg terminal, from home during the pandemic, while still having access to library support. The Library Services Team have seen a 19% increase in students’ use of their services over the last year. Alongside this, they have increased the amount and range of training and teaching that they do. Most of that has, necessarily, moved online during the last year.

Health and well-being: Our Professional Counsellor saw an uptick in those seeking support during the year. Students were looking for help in coping with anxiety relating to the ongoing pandemic. Counselling sessions were able to continue online, and students engaged with these sessions to benefit from the support on offer. In addition to the work of our Professional Counsellor, all Programme Officers are trained mental health first-aiders providing support to HE students. We have had several initiatives throughout the year to support well-being, including the launch of a new webpage with numerous resources for mental well-being and a new publication called Mind Matters that focuses on different mental health issues each month.

Student recruitment: As face-to-face events continued to be restricted, we moved our open days, widening participation sessions, offer-holder activity and school engagement to virtual events. We also created new relationships with organisations such as Whatuni and TARGETcareers, who will help us reach out to students virtually in the continued absence of face-to-face recruitment fairs.

Regulatory oversight: We were pleased to learn that our application to the QAA for indefinite taught degree awarding powers was successful. The review took place in the spring of 2021 following which we

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Higher Education

100% of those working doing so in high- or medium-skilled roles

received notification that we had successfully met all the assessment criteria. From April 2021 our degree apprenticeship provision was overseen by Ofsted. They have announced that those offering degree apprenticeship provision can expect a monitoring visit in the near future.

Looking Ahead

We will continue to develop a diverse range of programmes that will enable us to further increase our revenue. We are making progress in this area and are seeing an increase in the number of apprentice partners we are working with. We will support our current apprentices through both their studies with us and their end-point assessment during the next academic year.

Though our current undergraduate programmes are delivered face to face, we will continue to focus on enhancing our digital capacity to deliver, teach and support students through virtual learning platforms. We will review our online assessment strategy, introduced to support students through the pandemic, to ensure it continues to be fit for purpose. We will invest in the tools, training and technology to develop an e-learning environment to enable us to be flexible to adapt to a rapidly changing environment. This is becoming increasingly important for our apprentices who will undoubtedly continue to study in a hybrid mode going forward to align with the direction of financial services organisations.

Through our strong networks and connections in the sector, we will continue to work with employers in developing content, as guest lectures and as members on our deliberative committees so that our students have the knowledge, skills and competencies to be successful in their careers.

Key Risks

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Financial Education & Community Outreach

Catherine Winter Managing Director, Financial Capability & Community Outreach

Strategic Objective

Provide lifelong learning through impactful financial education in UK schools and colleges.

Strategic Priorities

Our focus continued to be on four key areas: outstanding customer service, business development, meeting our regulatory requirements and the development of new qualifications.

Firstly, we succeeded in continuing to provide outstanding customer service and retaining as many existing centres as possible. We achieved an 89% retention rate, set against a 2019/20 rate of 67%. We also exceeded our target for new centres by 20%. We have delivered to over 30,000 children and young people in over 650 mainstream schools, colleges, pupil referral units (PRUs) and special educational (SEND) institutions. This has all been made possible due to detailed strategic planning, collaborative work and the agility and determination of the Financial Capability team.

Secondly, we continued to focus on business generation activities. Heading towards the end of the school academic year, we continued to receive many registrations for our qualifications; many of these were received from our centres based in Wales. Internationally, we were successful in securing a bid to provide a financial education programme in Abu Dhabi. We provided a full programme of learning materials derived from our LiFE programme, ahead of schedule, to support this exciting partnership. In March, we saw the first cohort of students graduating from this programme.

Measuring Success

Despite a challenging year, we have finished the year with income above expectations.

Our qualifications and learning programmes ensure schools and colleges instil the knowledge, confidence and resilience children and young people need in order to be confident and competent financial consumers. They also provide the essential skills employers say young people are lacking as they enter the workplace.

In addition to our UK success, we have also expanded our international network of delivery centres to include Hong Kong and Germany; our delivery to schools in China continues. We are currently working with an intermediary on a potential option to expand the provision of our Level 3 qualification in China on a more substantive level. We continue to explore options to increase the uptake of our programmes internationally.

Progress During the Year

This year’s performance is set against a complex backdrop of issues. We continue to deal with the implications of the removal of our Level 2 qualifications from performance tables. National school closures have led to an issue of differentiated learning outcomes and led the government to cancel summer exams as well as implement a further year of teacher-assessed grades. We have been unable to deal with our customers face-toface, and our biggest challenge has been supporting our centres to continue to deliver meaningful financial education in an already squeezed curriculum where schools have needed to focus on core subjects.

However, these challenges have not adversely impacted our income in this financial year. We finished the year strongly and reported an income of just over £2.54m, slightly above our budget and a 14% increase on last year. All our programmes continue to perform well. We have seen an increase in income from our LiFE programme (19%) and Level 3 (16%).

Our qualifications continue to feature in Department for Education (DfE) performance tables, to be fully funded and offer maximum UCAS points for those students progressing to university.

Due to Covid-19, schools in the UK were closed in January 2021. Schools have continued to deliver virtual learning and the LiFE programme has enabled schools and colleges to continue to deliver financial education outside of the classroom. The LiFE programme was enhanced with the inclusion of a unit that develops skills for employment. This is proving very popular with schools and colleges who are now looking to meet the Gatsby benchmarks (government guidelines on school/ college career advice) and, as a result, are more focused on ensuring students can make informed choices about post-18 options.

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Financial Education & Community Outreach

Strategic Objective

Provide lifelong learning through impactful financial education in UK

We have responded to the closure of schools in January and the cancellation of summer 2021 exams in two ways. First, although we were working with reduced capacity, we continued to provide first-class support and customer service to our delivering centres. Adapting to new working environments, we have completed over 950 virtual school visits. These included annual reviews, teacher CPD, career talks, scholarship presentations to encourage our university applications, open evenings and student engagement sessions.

Second, we have worked collaboratively with Ofqual on their Extraordinary and Extended Extraordinary Regulatory Framework. These frameworks consult on the operational processes required to maintain the robustness of our qualifications and the assessment of grades for students for summer 2021 and autumn resit assessment. We have also started consultation regarding potential plans for summer 2022 assessment. Ofqual have continued to monitor all our procedures for the teacher-assessed grades (TAG) process.

New processes have been developed to create a robust system to collect and quality-assure the TAGs received from schools and colleges, and by the end of July 2021 the TAG process was complete. All centres who have sent in predictions for their students have been awarded a grade. We have awarded grades to over 31,000 students via more than 900 centres. Additionally, new appeals processes have been developed along with the planning for delivery of resit opportunities for students in the autumn.

We also continue the long-term strategy of reviewing and creating new programmes. Our priority is, in line with Ofqual guidance, to provide robust and reliable qualifications that schools, colleges and employers can trust and respect. We have identified key development areas for our qualifications.

Having received notification in March 2020 from the DfE of the lifting of the moratorium on Level 2 technical qualifications, we started working on developing a new Level 2 technical qualification for inclusion in performance tables. This qualification was submitted for approval in January 2021. The outcome of this submission is due in September 2021 for delivery to centres starting September 2022. This qualification will be a replacement for the Level 2 CeFE qualification, which was removed from the performance tables at the end of the 2018/19 academic year.

On 14 July, the DfE published outcomes for the second phase of the government’s consultation on the future shape of the post-16 Level 3 qualification landscape. We contributed to this consultation and garnered significant support for our Financial Education qualification.

However, the government have made few concessions to awarding bodies. T Levels will be the centrepiece of the technical offering. Funding for qualifications (such as ours) that overlap with T Levels will be withdrawn over the next few years, in our case from 2024.

This means that we will continue to see some registrations for our two-year Level 3 programme in 2021/22 and in 2022/23. Although we are confident of achieving the budgeted revenues for 2021/22, the likelihood is that we will see more significant reductions in 2022/23.

We could reform and resubmit our qualification, but the chances of success appear remote as we do not meet the criteria set out by the government. However, we are nonetheless pursuing this. Additionally, there is currently a moratorium on submission of new Level 3 qualifications.

The Level 3 registrations account for £1.5m out of a total school’s income of £2.5m in 2020/21. We are, of course, looking at ways in which we can diversify into different areas, including adult education.

Community Outreach

We have continued to expand our reach further than the traditional classroom environment, targeting the most vulnerable children and young people in the community. We have worked with national charities to support individuals at risk of financial exclusion to help them gain invaluable financial awareness and increase their digital, literacy and numeracy skills. Our work for this period has continued to focus on the homeless and children and young people with special educational needs (SEND).

Five years on from the launch of our LiFE programme, we are delighted to see that we are gradually removing barriers to accessible financial capability education. Many special schools, PRUs and hospital schools are now offering the LiFE programme and benefiting from the SEND guide that supports it. As members of the National Association for Special Educational Needs (Nasen), we have continued to attend various events and gained valuable feedback from SEND professionals around the country.

We continue to focus on building strong external stakeholder relationships. We are particularly pleased that we continue to grow our footprint in Wales, thanks in part to the support of Principality Building Society. By the end of this academic year, Principality will have donated a further £36,500 to support the delivery of FE qualifications to over 20 schools and 800 learners in Wales in 2021.

Earlier in the year we started working with the Worshipful Company of International Bankers on an initial project to provide our LiFE programme to a group of young people studying at the London Academy of Excellence in Stratford, London. This sixth form academy was set up with the objective of improving social mobility. This

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is our first project with them and to date we have seen over 50 students enrol on the programme. We have had feedback about the positive impact this has already had on these young people.

Our Young Financial Journalist competition was again sponsored by the Financial Times. This competition helps us to engage with a wider audience on the issues facing young people and their relationship with money. In March we launched the findings from our Young Persons’ Money Index and were subsequently asked to give evidence to an All-Party Parliamentary Group on young people and their relationship with money. We are currently in discussion with the Bank of England on how we can work collaboratively on creating a framework for a financial education quality standard for schools and colleges.

Policy Engagement

We continue to work closely with policymakers – the DfE, Institute for Apprenticeships and Technical Education, and Money and Pensions Service (MaPS) – and other organisations that are passionate about financial education. On behalf of MaPS, we continue to chair the children and young people (CYP) steering committee, which includes other charities, Ofsted, and key financial services organisations. The key objectives are:

Looking Ahead

The Covid-19 pandemic will continue to cause challenges for schools and colleges. Most schools face the challenge of dealing with a substantial loss of learning over the past 18 months and will need to prioritise students’ knowledge in core subjects. As financial education is not a compulsory subject, we will face our biggest challenge in keeping our programmes and qualifications on the agenda for school leaders. We will continue to engage and support centres to the best of our ability and build on the outstanding relationships we have with our customers.

We continue to support our HE colleagues through the work on our scholarship programme, which recognises and rewards high academic achievement by students who have taken the Certificate and Diploma in Financial Studies (CeFS and DipFS). Scholarships have continued to raise the profile of both FC and our university. The Financial Capability team have co-ordinated the delivery of over 1,000 scholarship certificates. This year over 30% of the undergraduates on our HE courses came from our school qualifications and nearly 20% of students joined our university taking advantage of the scholarship scheme.

Key Risks

We will also continue to contribute to the various DfE consultations that are ongoing, in particular the post16 consultation and the Post Qualification Admissions consultation. The government proposal is to change the admission system to university to allow students to receive their grades before they apply. If this proposal is successful, this would create operational issues for our assessment teams who will need to turn around grades in half the current time. We have planned for this possibility and are well placed to manage this change effectively.

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Global Learning/MENA

Kareem Refaay Managing Director, Gulf & MENA

Key Strategic Priorities

Progress During the Year

In Abu Dhabi we have developed a strong relationship with the Human Resources Authority, which has enabled us to launch a flagship National Development Programme. The Bankers Programme was launched with cohorts from two leading banks in Abu Dhabi.

Building on key relationships with partners across the MENA and GCC region, we have expanded our cross-regional business in Bahrain, Kuwait, Egypt and Saudi Arabia through the delivery of short courses, accreditation arrangements and international banking certificates.

Within MENA, interest in our core banking qualifications – the International Banking and Finance Certificates – was received from banks in countries including Egypt, demonstrating the potential to offer the qualifications across the GCC and MENA region.

Within Professional Education, our bespoke training offer has seen growing interest, especially in the areas of digital banking and sustainable finance, as well other bespoke programmes with the largest bank in Abu Dhabi, covering cloud banking, fintech and AI.

Measuring Success

The MENA Regional office measures success through sustainable growth.

This year was LIBF MENA’s third year of operation and saw growth of over 200% with revenues of £1.67m, which included £1.456m from corporate, professional qualifications and training. Significantly, it demonstrates LIBF’s future growth potential.

LIBF MENA measures success through the impact created in the community. This extends not only to professionals in the banking and finance sector but to the citizens and residents within the region. Our financial inclusion education programme, Ghaya, in collaboration with the Department of Community Development in Abu Dhabi is considered as the first of its kind in the UAE. This programme has supported over 150 beneficiaries to improve their financial literacy and take practical steps to improve their financial situation.

We are very proud of empowering young UAE nationals, especially young females, through our Bankers Programme in which 80% of the participants are females below the age of 25.

The second cohort of the Executive Postgraduate Certificate in Sustainable Finance commenced in January. The first cohort of the Executive Postgraduate Certificate in FinTech launched in May – this is the inaugural cohort for the programme and marks a historic first for the organisation.

In Financial Capability, the first cohort of the Ghaya financial capability programme concluded with a virtual graduation event in March. The second cohort of the programme, open to Arabic-speaking residents and citizens, started in June with almost 100 beneficiaries taking part. Additional Abu Dhabi government departments have partnered for cohort two of Ghaya to provide a wider range of beneficiaries. Cohort three is scheduled for October 2021.

Leveraging the expertise within our Research Centres, we supported the banking and finance sector in the region to approach challenging and disruptive trends through an array of qualifications, bespoke training and board-level sessions covering sustainable finance, digital and fintech, and governance, risk and compliance. We saw a growing level of interest and maintained a strong pipeline of proposals throughout the year.

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Our accreditation services, Technical Banking Diagnostics Assessment Centre and Career Development Centre continue to support new accreditation arrangements, including our strengthening relationship with the Bahrain Institute of Banking and Finance (BIBF). We supported the launch of the BIBF Sustainable Development Academy with a representative from our Centre for Sustainable Finance joining their Open House event in July ahead of delivering our suite of sustainable finance short courses during 2021.

Key Risks

Reflecting the opportunities for growth, a new Business Development Manager has been recruited. In addition, we appointed a Senior Faculty Lead for MENA, recognising the importance of growing our regional faculty to support qualification and programme delivery across the MENA and GCC region.

Looking Ahead

LIBF MENA will focus on sustainable growth through the continued provision of innovative and customised programmes that respond to the needs of the banking and finance industry in the MENA and GCC region. We will launch the Certified FinTech Practitioner MENA programme in September 2021, demonstrating our commitment to offer regionally oriented programmes.

We will continue to diversify our geographic coverage through the introduction of successful programmes into other countries in the region, most notably our flagship National Development Programme format, financial inclusion, and International Banking and Finance Certificates. This will support strategic government initiatives around employability, upskilling and economic development, and evidence our commitment to financial inclusion and diversity.

We will work with ADGM Academy and other strategic partners on themed programme series in sustainable finance, digital banking, and governance and risk, which leverage the expertise within the LIBF Research Centres and provide further opportunities for bespoke programmes, short courses and qualifications.

We will engage with the banking and finance community across the region through an extensive thought leadership agenda that reflects the specific challenges and experiences of the MENA and GCC region.

We will keep working with our partners in Abu Dhabi toward the full local accreditation of our Higher Education programmes in the year 2021/22.

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Human Resources/People

Key Strategic Priorities

During the year, we revised our People Strategy to support our aim of keeping people engaged in the ever-changing world of work and to enable our move to hybrid working. Our revised strategic priorities are:

Measuring Success

Developing our people: in 2020 the average number of development days per employee was 7.85 hours; as expected this figure has decreased compared to previous years due to the Covid-19 pandemic.

Retaining our people: the voluntary turnover rate in 2020/21 reduced further to 10% from 12% in 2019/20.

Maintaining our employer brand: our rating on Glassdoor over the last 12 months to July 2021 has been maintained at 3.8.

Maintaining our sickness absence rate below the national average: in 2020 the UK sickness absence rate fell to 1.8% (Personnel Today). Our sickness absence reduced significantly to 1.25% so was under the national average.

Update increasing flexible working: the proportion of part-time workers has increased by 3.5% from the same time last year as shown opposite. This is a result of our continuing drive to increase flexibility in our workforce and could be influenced by individuals’ life choices during the pandemic.

31 July 2021

----- Start of picture text -----
47
Total 181 staff
part-time
full-time
134
31 July 2020
44
Total 194 staff
part-time
full-time
150
----- End of picture text -----

Learning and Development

During the year we:

Reward

We have made some progress in the area of reward in the last year by updating one of our recognition schemes to the virtual environment. We are continuing to recognise our employees’ length of service and to market rate all of our roles to ensure that we are rewarding our staff at the appropriate level. In the last 12 months our Pension Governance Committee has reviewed the performance of our pension provider, committed to increasing our employees’ knowledge of pensions and surveyed our employees to identify what information they would appreciate.

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Recruitment and Retention

We continue to strive to be an employer of choice and have focused on how we recruit and retain particularly working in a virtual environment. We have also developed our onboarding process, from interview to job offer and induction. Engaging our workforce is key to our success. We have developed an onboarding promise for our new starters with the aim of making our process as smooth as possible so that their move to LIBF is a success.

We continue to make vacancies available to all internal applicants and to provide feedback after interviewing along with suitable development where appropriate. This work has resulted in our voluntary turnover rate remaining low.

Engagement

Employee engagement activity has increased during the year with more frequent Town Hall meetings, sessions to involve our employees in evolving our Values and revising our People Strategy.

We have continued to undertake some ‘temperature check’ surveys and have been pleased by how well our employees have managed to transition to home working.

Our staff representation group, Your Voice, and other collaborative project groups have helped to move the organisation towards hybrid working.

Well-being

Our success as an organisation is very much dependent on the well-being of our staff. We have created a wellbeing commitment with the overall aim being that we take a people-centred approach and create a company culture which recognises that well-being is high on the agenda and part of our people strategy going forward. Our vision is to promote and embed positive physical, mental and social health and well-being behaviours, which are underpinned by our values.

During this period, our Wellbeing Group have continued to provide various activities remotely, for example mindfulness sessions and remote buddy groups, where staff have been able to share their feelings and experiences through a Teams discussion. We have also supported events such as Diabetes Week, Stress Awareness Month, World Sleep Day and Mental Health Awareness Week. We have increased our qualified mental health first-aiders to a total of eight. Further activities have included a nature photo competition and a virtual pets corner. We have also continued to promote our employee assistance scheme, where staff can obtain a 24-hour counselling service.

We have a regular programme of learning and development around health and well-being, eg mental health, and we have repeated our resilience training courses for staff throughout the organisation.

Looking Ahead

In the coming year we are planning to continue to work on the key HR strategic themes aiming to support the business areas to achieve their objectives.

Our focus will be on developing our leadership talent, implementing our evolved values and the competency framework, and revising associated processes and developing our staff for the future. We will review the strong engagement practices that we already have with our employees to support engagement within a hybrid way of working.

We will also continue our journey to become an employer of choice to be able to recruit and retain staff to meet our business objectives. Fair and transparent reward systems will also support this, recognising people for their efforts and achievements.

Key Risks

Equality and Diversity Policy Statement

We are committed to creating a culture in which diversity and equality of opportunity are promoted and in which unlawful discrimination is not tolerated. We recognise the real educational and business benefits of having a diverse community of staff, students, members and subscribers to any services and therefore work towards building and maintaining an environment that values such diversity. To meet this commitment, we aim to ensure that:

We will aim to create a working environment that considers the needs of all stakeholders and ensures equality, diversity and inclusion for all.

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Centres of Excellence

Some of the big issues affecting society have a direct impact on how the finance sector operates. Fintech, sustainable finance and managing risk are top of the agenda for many working in finance today.

To help share knowledge and expertise in these areas, we’ve developed three specialist centres. The centres seek to bring together expertise, highlight best practice and disseminate thought-provoking and impactful insights.

They also offer bespoke training and qualifications in key areas.

CENTRE FOR DIGITAL BANKING AND FINANCE

The Centre for Digital Banking and Finance offers executive education, advisory services and thought leadership to the UK and international banking and finance sector.

Our network of subject matter experts, practitioners and associates have years of experience growing digital businesses, deploying digital solutions and leading fintech organisations.

Our work looks beyond the hype of digital technology and examines the current and future implications for banks and their employees. That helps us ensure we provide banking professionals and organisations with the skills, knowledge and insights they need to thrive in a rapidly changing environment.

digital.libf.ac.uk

CENTRE FOR GOVERNANCE, RISK AND REGULATION

The Centre for Governance, Risk and Regulation brings together an international network of subject matter experts, practitioners and associates with years of experience in risk, regulation, governance and compliance.

We have a long history of working globally, so we understand that each region has its own distinct risks and opportunities.

Through our unique approach, we can help you prepare for the risks and uncertainties of a constantly changing environment – no matter where you are in the world.

risk.libf.ac.uk

CENTRE FOR SUSTAINABLE FINANCE

The Centre for Sustainable Finance was founded in response to the growing need for the financial sector to adapt to sustainable development and environmental change. We champion thought leadership, research and education to address the emerging trends and practices that have an impact on the sector.

The Centre seeks to address the interests and concerns of market participants around the world – including commercial and development banks, investors, governments, corporations or regulators.

libf.ac.uk/csf

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In the summer and autumn of 2020, we developed and launched the Certified Fintech Practitioner programme (CFP) in partnership with media and events company LendIt Fintech. CFP is an open enrolment fully online course combining live virtual lectures with self-paced study and reflection over a period of 6 – 8 weeks. The pilot was a great success and we have subsequently delivered two further sessions (March and June).

Overall the programme has generated circa £40,000 of revenue and attracted over 80 students from across Europe, Asia, Africa and North and South America who have now gained Certified Fintech Practitioner status. We have also partnered with the Findexable Fintech Diversity Radar to provide a number of Women in Fintech Scholarships in the form of a waiver of the CFP course fee.

We have also successfully bid for a series of bespoke corporate training programmes, including the delivery of a virtual course on digital transformation for a US based development bank, large scale courses on cloud computing and digital transformation/fintech for banks in the MENA region and fintech awareness programmes for a national financial services regulator in South East Asia.

We have held seven webinars over the period attracting over 2,000 delegates, including a session on Central Bank Digital Currencies, delivered in partnership with the Whitechapel Think Tank, and very well received panel sessions on future careers and digital identity.

We have continued to publish articles, blogs and insight pieces on the digital centre microsite (digital.libf.ac.uk) authored by our content team, members of our faculty and by participants in some of our programmes. Members of the faculty have also regularly featured in content produced by others. Most notably, Helene Panzarino, The Director of the Centre has contributed to various national and international online events and podcasts and once again been recognised as a key influencer in the sector - for example being shortlisted by ComputerWeekly for their ‘Most Influential Woman in UK Tech’ award.

The Centre for Governance, Risk and Regulation (CGRR) was launched in early 2021 to support the organisation’s need to enhance its visibility, develop its capabilities in the Executive training area and support its existing programmes in the traditional but evolving fields of Governance, Risk and Regulation.

We focus on corporate rather than open programmes, except when these are run by partner organisations. We have developed a range of short course outlines and content to support sales and relationship building efforts. In the past year, members of the Centre’s faculty of experts were deployed on programmes in Malaysia and Bahrain. Being largely focused on delivery of executive courses to international clients, training opportunities and revenue opportunities are impacted by the pandemic, but all our expected deliveries going forward can be online as well as face to face.

The Centre’s content output takes place through events in live but virtual delivery; our launch event in collaboration with the CSFI attracted over 200 participants. We also produce content in the form of videos, podcasts, and articles/blogs on relevant themes which dove-tail with our strategic intents.

In May, the Centre launched its own microsite risk.libf.ac.uk to help raise its profile, create a more visible home for LIBF content and programmes related to governance, risk and regulation, and project a brand in keeping with the expectations of the target audience. The Centre is also establishing its own social media channels, predominantly LinkedIn and Twitter, and have taken a proactive approach to sharing content and engaging with relevant influencers. Members of the faculty have also been active participants in a range of both physical and virtual events run by third parties. Events have been hosted with ORX, the Operational Risk Association in May, the Risk Coalition in July and have been planned in the Middle East for the summer of 2021.

The strategic priorities were supported during the year by various online events and activities to facilitate the growth and progress of the Centre:

We achieved our objective to produce relevant content by working with external institutions and also to publish quality academic research. We have also collaborated on the P4G-funded project, FLAWLESS, which aims to halve food loss and waste (FLW) in alignment with Sustainable Development Goal (SDG) 12.3. We are providing technical input to develop financial products that will align the interests and incentives of banks and investors with companies working to reduce FLW.

In July 2020, LIBF signed the Green Finance Education Charter and we participated in a series of meetings and webinars during the year promoting the importance of education in achieving the transition to a greener economy.

The Centre contributed to the re-design of the Certificate in Sustainable Finance that was delivered to a second cohort during the year in partnership with the ADGMA.

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Sustainability

Working to Address UN Sustainable Development Goals

The Sustainable Development Goals (SDGs) are 17 global goals set by the United Nations General Assembly in 2015 for the year 2030. We continue to focus on the SDGs where we believe we can make the most impact through our operations.

Goal 5: Achieve gender equality and empower all women and girls

Targets seek to:

• end all forms of discrimination against all women and girls everywhere;

LIBF actions

• Our REACH programme encourages people from underrepresented groups to sign up to our degree programmes and begin their careers in banking and finance. Our Women in Finance event had 60 attendees. We also hosted BAME and Mature Learners events.

Goal 12: Responsible consumption and production

Targets aim to:

LIBF actions

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Financial Review – Results for the Year Ended 31 July 2021

Ian Parrett Chief Operating Officer

Introduction

As an educational charity incorporated under Royal Charter, The London Institute of Banking & Finance uses all its income to advance banking and finance by providing outstanding education and thinking, tailored to the needs of individuals, business and society.

We receive a variety of tax exemptions on our educational activities and on our investment income and gains. We are also entitled to an 80% reduction in business rates on the property occupied for our charitable purposes. The financial benefits received from these tax exemptions are all used for educational purposes.

The fees, kept as low as possible to ensure affordability and wider access, are sufficient to cover the cost of running current programmes and investing in new ones. Funding comes from a variety of sources both public and private. Employers fund many students and some students, studying for qualifications that are in Ofqual’s Qualifications and Credit Framework (QCF), have indirect access to public funding. Full-time students studying for a degree on an appropriate ‘designated’ course are eligible to borrow their fees from the Student Loans Company.

The Institute is supported in its activities by its wholly owned subsidiary, LIBF Learning Ltd, whose main activities encompass sponsorship and events, The London Institute of Banking & Finance (MENA) Ltd, which covers all activities within Abu Dhabi and The London Institute of Banking & Finance (APAC) PTE Ltd which supports all activities within the APAC region.

The surplus of £875,000, shown in the consolidated statement of comprehensive income and expenditure on page 34, is broken down as follows:

----- Start of picture text -----
Income Expenditure Surplus
£000 £000 £000
General fund
18,302 -17,066 1,236
Restricted
13 -45 -32
funds
Pension fund
-35 -35
Strategic
-117 -117
investment
Depreciation
-177 -177
18,315 -17,440 875
----- End of picture text -----

percentage of revenue of between 5-10%. Depreciation, investment performance and funds allocated to strategic projects are excluded from this calculation so we can focus on the ability to generate cash flow. Restricted funds include the Alumni Fund, which gives past students the opportunity to participate in this vision and support diverse future generations of financial services professionals through funding and scholarships; the Bursary fund, which provides meanstested assistance to both full and part-time students, and The Grunfeld Foundation, which supports the education of people working in banking and financial services in London.

Strategic funds are those that have been designated by the Board separately from the general fund for major projects.

Income

Total income from continuing operations for 2020/21 was £18.315m, an increase of 14.3% over the previous year’s total of £16.025m, with the key revenue analysis as follows:

■ Higher Education ■ Corporate & Professional ■ Schools & Outreach ■ Professional Services ■ Investment & Other

Within Higher Education, revenue from full-time degree programmes increased by 33% to £1.63m, following much larger intakes for the previous three years, which has significantly increased the overall number of students. Demand for part-time courses has increased with the introduction of degree apprenticeships.

Corporate and Professional qualifications revenue grew by 23% to £11.93m, with demand for mortgage advice, financial advice and trade finance qualifications all recovering from the previous Covid-19 impacted year.

Registrations for Level 3 Financial Education qualifications grew by 16.3%, but the withdrawal of Level 2 from league tables continued to affect overall revenue and the number of schools delivering our qualifications in this area.

Professional services revenue fell 8%, with a reduction in revenue from events combined with a drop in membership revenue.

The general fund is the primary fund against which underlying financial performance is measured. We look to generate a surplus to produce sufficient cash to support strategic objectives and long-term sustainability, targeting an annual surplus as a

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Financial Review – continued

Expenditure

Total expenditure for 2020/21 was £17.44m, a decrease of 5% over the previous year’s total from continuing operations of £18.267m, with the key analysis as follows:

■ Staff Costs ■ Academic Departments ■ Professional Services ■ Premises ■ Central Services ■ Other/Depn

As a result of various changes due to the Covid-19 pandemic, staff costs fell by 10% to £8.179m. This represents 45% of income (2019/20 50%). Costs for academic departments increased by 6% to £4.453m, reflecting the increased volumes delivered during the year. Premises costs remained broadly in line with the previous year while the costs of professional services reduced, and central services increased following an increase in the running costs of the pension scheme during Covid-19.

Working Capital

To shore up working capital, the Institute applied for a £1.5m Coronavirus Business Interruption Loan (CBIL), which was received at the end of August 2020. The loan is secured on the Canterbury premises with a loan term of six years and no interest or repayment in the first year. Thereafter it is at a margin of 2.44% above base rate, with a covenant requirement to maintain general fund EBITDA above 1.5 times debt service. In July 2021, due to an increase in the market value of investments, £650k was withdrawn from the investment fund and used to pay off part of the balance of the loan, leaving £850k outstanding at the year end.

Investments

At 31 July 2021, following a withdrawal of £650k, we held fixed-asset investments with a market value of £3.543m (compared with £3.455m in 2020).

Our bank balances are held in cash funds managed by BlackRock, which aims to reflect London Interbank Bid (LIBID) seven-day rates, and in a range of fixed-term deposits with Barclays.

Pensions

The London Institute of Banking & Finance operates two schemes: a defined-contribution scheme, which is available to all employees, and a defined-benefit scheme that closed to future accrual on 31 March 2009.

The most recent triennial valuation of the definedbenefit scheme was 31 December 2019, and this showed a technical provisions surplus of £2.42m (106% funded). No contributions were made to the fund during the year but, from 1 August 2021, LIBF has agreed to pay £100,000 per annum to the fund as a voluntary employer contribution as it aims to reach a fully funded position on a low-dependency basis. As at 31 December 2020, the surplus had fallen to £1.723m.

Financial Outlook and the Impact of Covid-19 on Going Concern

To ensure we have a sound financial base and are well resourced to meet the challenges and opportunities we face, the long-term strategic plan contains key performance indicators (KPIs) on the level of operating surplus (excluding strategic investments) that we should generate each year – broadly 5-10% of revenue.

The strategy also outlines provision for building reserves and cash so they fall within the boundaries of our reserves policy. We aim to maintain a level of reserves that would enable us to fulfil our future commitment to existing alumni and students, notwithstanding unforeseen adverse events. The KPI, a target range for the appropriate quantum of reserves, is currently estimated to be one year’s operating costs in respect of alumni services, plus between one and two years’ operating expenditure relevant to the provision of qualification services. This equates to a target level of between £6m and £12m.

The Trustees, through the Senior Executive Team, delegate the discretionary powers of management of our fixed-asset investments to investment manager Rathbones.

The investment objective is to maximise longterm total return and it is measured against an agreed target. There is no specific direction given to the investment manager regarding social, environmental and ethical considerations.

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Reserves for this purpose are defined as consolidated unrestricted income and expenditure reserves less tangible fixed assets. The overall value of those reserves increased by £1.659m to £2.554m as follows:

----- Start of picture text -----
2020/21 2019/20
£000 £000
General reserves brought forward 895 2,933
Surplus/(deficit) in general funds 1,236 -1,208
Strategic investments and capital -230 -261
Restructuring costs - -350
Investment gains 653 -219
General reserves carried forward 2,554 895
Represented by: unrestricted 4,402 2,807
income and expenditure reserve
Less: tangible fixed assets -1,848 -1,912
2,554 895
----- End of picture text -----

Covid-19 began to impact international revenue early in 2020 as examinations were cancelled or deferred and in the UK during the initial period of lockdown from March to June 2020. During the second lockdown in autumn of 2020, revenues were largely unaffected as many of the examinations were able to be studied online. In addition, a restructuring programme was completed early in the financial year reducing staff and other operational costs.

The forecasts and budget for 2021/22 indicate a surplus with enough margin to meet covenant requirements and which will grow in the next four years within the targets set by the financial strategy. Early trading for 2021/22 indicates we have exceeded our intakes for full-time students and other qualification revenue is in line with projections.

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Statement of Corporate Governance

Structure, Governance and Management

The governing body of The London Institute of Banking & Finance is the Board of Governors, which comprises the Chair, the Chief Executive and up to 15 appointed members, including a representative from the student body and a representative of the academic community. As Governors, members of the Board have a single overarching responsibility, which is to ensure that we fulfil our object as stated below. In addition, the members of the Board are the Trustees of the charity.

Corporate Governance

We have adopted the Charity Governance Code published by the Charity Governance Code Steering Group (a cross-sector collaboration with an independent chair). The code is not mandatory, but we have decided to adopt it. We also take into account the Guide for Members of Higher Education Governing Bodies in the UK and the HE Senior Staff Remuneration Code, both published by the Committee of University Chairs.

Constitution

The London Institute of Banking & Finance was established in 1879 as the Institute of Bankers and has latterly used the working names Institute of Financial Services, ifs School of Finance and ifs University College . It was incorporated by Royal Charter in February 1987 and registered as a charity in June 1987. Amendments to the Charter followed in February 2000, December 2003, July 2006, May 2008, July 2010 and September 2016. These included formally changing the name and changes to the governance.

Charter

The Charter sets out our objects and powers. It requires us to establish a Board of Governors, who are the Trustees, and an Academic Board.

The object for which we are constituted is the advancement of knowledge of, and education in, financial services as the Board of Governors may determine from time to time, and to carry out research and publish the useful results of such research for the benefit of the public.

The Trustees are cognisant of the Charity Commission guidance on public benefit and, in particular, guidance for fee-charging charities. The Trustees are satisfied with the steps they have taken in this regard.

Board of Governors

Members of the Board of Governors include senior personnel within the financial services and educational sectors who ‘donate’ their expertise, experience and limited time on a voluntary basis to act as Governors.

The primary responsibility of the Board is to oversee our strategic academic and educational direction and monitor the progress through regular, timely reporting, including reports from all of the key Committees and reviews of key performance indicators. The Board also oversees the management of the finances, property and all business affairs.

Statement of Responsibilities of the Board of Governors

The Governors are responsible for preparing the Governors’ Annual Report and the financial statements in accordance with applicable law and regulations.

The Charities Act 2011 requires the Governors to prepare financial statements for each financial year. The Governors have to prepare the financial statements in accordance with UK Generally Accepted Accounting Practice (UK Accounting Standards and applicable law), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. The Governors must not approve the financial statements unless they are satisfied that they give a true and fair view of our state of affairs, and of the incoming resources and application of resources of the group for that period. In preparing these financial statements, the Governors are required to:

The Governors are responsible for keeping adequate accounting records that are sufficient to show and explain our transactions, disclose with reasonable accuracy at any time our financial position and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008, and the provisions of our Charter and Statutes. They are also responsible for safeguarding our assets and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Governors are responsible for the maintenance and integrity of the corporate and financial information included on our website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

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The Board meets at least four times a year and receives regular reports from management on our operational aspects, including a quarterly update against the operational plan and minutes from all of the sub-committees, including the Academic Boards. At least one of the meetings includes a review of the strategy and five-year plan.

Through leadership of the Board, the Chair plays a key role in our business, ensuring that we are well connected with our stakeholders. The Chair promotes the well-being and efficient operation of the Board, and ensures that members work together effectively and have confidence in the procedures laid down for the conduct of business. The Chair ensures that committees play a central role in the proper conduct of the Board’s business by exercising delegated powers and reporting back to the Board appropriately. The Chair should not be drawn into the day-to-day executive management.

Day-to-day responsibility is delegated to the Chief Executive leading the senior executive team. The Chief Executive is our academic and executive head and is responsible to the Board for academic, business and financial affairs, and for advising the Board on strategic direction.

It is management’s duty to report on operational matters to the Board, including any variances to plan, and to ensure that the Board is presented with relevant information to support its debate on strategic issues.

Board of Governors (Trustees)

The Trustees as at 31 July 2021 are as follows:

Steven Haberman (Chair)

Steven is currently Professor of Actuarial Science at Cass Business School, City, University of London. From 2002 to 2012, he was Deputy Dean and Director of Cass Business School, and then Dean for 3 years to the end of 2015.

Steven graduated in mathematics at the University of Cambridge. He qualified as a Fellow of the Institute of Actuaries in 1975, and obtained his PhD and DSc in actuarial science from City University. He is also a Fellow of the Royal Statistical Society and an Honorary Fellow of the Italian Institute of Actuaries.

Steven has worked at Prudential Assurance and for the Government Actuary’s Department, and has been a member of the Council of the Institute and Faculty of Actuaries (for two terms). He has also been a member of TheCityUK Advisory Council, Governor of the City of London Academy Islington, and a member of the External Advisory Panel to the Morris Review of the UK Actuarial Profession, as well as a founder member of the Financial Reporting Council’s Board for Actuarial Standards. He has acted as a consultant to Deutsche Bank, Swiss Re, the Financial Services Authority and the National Audit Office among others.

He is currently a member of Legal & General’s Longevity Science Panel.

Governor Selection and Induction

Board members are selected from the financial services industry, commerce, the educational system, the securities and investment sector, and public services.

When first elected to the Board, members receive a personalised induction programme, which comprises briefing sessions with the Chief Executive. These sessions provide Governors with an insight into our workings, nature and the Board; our strategic objectives; and their personal responsibilities as Governors.

In addition, opportunities are provided to meet other members of staff engaged in our activities, and an information pack is available for new and existing Governors. Governors are required to complete a register of interests and a fit and proper person declaration.

He has co-authored 5 books and has written over 190 papers on a wide range of topics, including mortality and morbidity models, annuities, insurance pricing and pensions. His papers have won research prizes from the Institute of Actuaries (UK) and Society of Actuaries (US). He has also successfully supervised 33 doctorial students.

John Annette

Binta Darboe Student Representative (appointed November 2020) Sabrina Del Prete Shelley Doorey-Williams Alex Fraser Paul Gordon David Kennedy Ali Miraj Sakhila Mirza Philip O’Shea Annabel Todd Arjan van den Berkmortel Damian Ward Eddie Webb Student Representative (appointed November 2020)

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Statement of Corporate Governance

The following Trustees served during the year but were not Board members when this report was signed:

Harry Crossley Student Representative (resigned August 2020)

Elona Gega Student Representative (resigned September 2020)

Committees of the Board of Governors

----- Start of picture text -----
Board of Governors
Academic Audit Remuneration Executive
Board Committee and Committees
Nominations
Committee
----- End of picture text -----

Academic Board

The Academic Board meets at least four times a year and minutes of its meetings are reported to the Board of Governors.

Board members and external members of the committee are:

Alex Fraser (Chair) John Annette Tony Gandy Alexander Gleave Cathy Higgs Claire McCafferty Heather McLaughlin Gulnur Muradoglu Osy Plummer Mark Shackleton Hema Tank Damian Ward Suellen White Simon Wolfe

The Academic Board is our supreme academic authority and guardian of the academic integrity and quality of our higher education awards.

The membership of the Board comprises a majority of persons with academic knowledge and experience at a senior level. The Board is chaired by the Chief Executive and is attended by all of the relevant academic heads and directors. Appointed members include no more than 12 academics with relevant qualifications and experience, 1 academic delivering teaching for our academic awards, 2 representatives of the student body, and 1 elected member of staff responsible for the delivery of the academic programmes who does not manage other staff engaged in such delivery. The principal functions of the Academic Board include to:

Audit Committee

The basic responsibility of the Audit Committee, which meets at least twice a year, is to satisfy itself as far as it can that the annual accounts follow approved accounting principles and give an accurate account of our affairs in as comprehensible a way as possible. It must satisfy itself that the external auditors have no cause for disquiet about any aspect of the accounts or of our control and audit procedures. The Committee also monitors the risk management and internal control processes and provides the Board of Governors with an annual report of its work. The Audit Committee is chaired by a member of the Board of Governors and comprises at least one other Board member and one external member. It is also attended by a representative from the external and internal auditors.

David Kennedy (Chair) Hanif Barma Paul Gordon Philip O’Shea (appointed March 2021) Maria Vetrone

26

Risk Management

Remuneration and Nominations Committee

Organisation Risk Management

The Chair of the Board of Governors chairs the Remuneration and Nominations Committee, which meets at least once a year. It is responsible for making recommendations to the Board of Governors on the appointment of Governors, the Chair of the Board, the Chief Executive and Chairs of Committees.

The Committee determines and approves a framework and consistent policy for us on remuneration and pension arrangements. It is specifically responsible for setting the terms of service of the Chief Executive and Secretary to the Board and considers, where necessary and subject to the legislation and regulations applying to charitable bodies, any remuneration for the Chairs of the Board and the Audit Committee.

Steven Haberman (Chair) Shelley Doorey-Williams Sakhila Mirza Arjan van den Berkmortel Damian Ward (Chair for discussion on remuneration)

Strategic Risks

Operational Risks

Those mainly in the external market Relate primarily and environment to our day-to-day over which we have running. These are little or no control: more likely to be we may be able to within our control, mitigate the impact, in terms of our but we will not be ability to affect the able to control the probability of the probability of the risk occurring and risk occurring and to mitigate the the risk may have a impact. fundamental impact on our future strategic direction.

The following served during the year but was not a member when this report was signed:

Harry Crossley (resigned August 2020)

Executive Committees

The Senior Executive Team comprises fortnightly meetings of business heads, which focus on strategy creation, budgets and financial review, and quarterly meetings of the Operating Committee, which oversees the successful management of operational risk, regulatory compliance and project management for shared services.

Senior Executive Team

Board of Governors

Ultimate responsibility for the system of risk management and control.

Audit Committee

Monitoring and reviewing the effectiveness of the risk management and control arrangements.

Alex Fraser, Chief Executive Anna Boyce, HR Director

Mark Heaton, Managing Director, Professional Education

Richard Martindale, Company Secretary

Linden Muirhead, Deputy Chief Operating Officer Ian Parrett, Chief Operating Officer

Chris Ray, Director of Innovation and Transformation Kareem Refaay, Managing Director, Gulf & MENA Angela Sutton, HR Director

Hema Tank, Managing Director, Higher Education Heather Tilston, Head of Marketing and PR Suellen White, Registrar, Quality, Policy and Regulation Catherine Winter, Managing Director, Financial Capability and Community Outreach

Senior Executive Team

Identification, assessment, management, monitoring and reporting of strategic risk.

Operating Committee

Identification, assessment, management, monitoring and reporting of operational risk.

27

Reference and administrative details

Charity name The London Institute of Banking & Finance

Charity number 297107

Incorporated in England by Royal Charter, registered number RC000719.

Registered office 8th Floor Peninsular House 36 Monument Street London EC3R 8LJ

Principal advisers

Bankers

Barclays Bank PLC 9 St George’s Street Canterbury Kent CT1 2JX

Solicitors

DAC Beachcroft 25 Walbrook London EC4N 8AF

External auditor BDO LLP 2 City Place Beehive Ring Road Gatwick West Sussex RH6 0PA

Internal auditor

RSM UK 25 Farringdon Street London EC4A 4AB

Investment manager Rathbones Investment Management Ltd 8 Finsbury Circus London EC2M 7AZ

The Report of the Board of Governors was approved by the Board of Governors on 25 November 2021 and signed for and on their behalf by

Steven Haberman Chair

Disclosure of Information to Auditors

At the date of making this report, each of the Governors, as set out on page 25, confirm the following:

The external auditor, BDO LLP, was re-appointed in the year.

Approved by the Board of Governors on 25 November 2021 and signed for and on their behalf by

Steven Haberman Chair

Alex Fraser Chief Executive

28

Auditor’s Report

Independent Auditor’s Report to the Board of Governors of The London Institute of Banking & Finance

Opinion on the financial statements

Our responsibilities and the responsibilities of the Board with respect to going concern are described in the relevant sections of this report.

Other information

In our opinion, the financial statements:

We have audited the financial statements of The London Institute of Banking & Finance (“the Institute”) and its subsidiaries (“the Group”) for the year ended 31 July 2021 which comprise the consolidated and institute statement of comprehensive income and expenditure, consolidated and institute statement of changes in reserves, consolidated and institute balance sheets, consolidated statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

The Board is responsible for the other information. Other information comprises the information included in the annual report and accounts, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information we do not express any form of assurance conclusion thereon.

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

We have nothing to report in this regard.

Opinion on other matters required by the Office for Students (“OfS”)

Basis for opinion

In our opinion, in all material respects:

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group and the Institute 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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Board members’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group and Institute’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.

We have nothing to report in respect of the following matters in relation to which the OfS requires us to report to you if, in our opinion:

Matters on which we are required to report by exception

We have nothing to report in respect of the following matter where the Charities Act 2011 requires us to report to you if, in our opinion:

29

Auditor’s Report

Responsibilities of the board

As explained more fully in the Statement of Responsibilities of the Board of Governors set out on page 24, the Board is 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 Board 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 Board is responsible for assessing the Group and the Institute’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 Board either intend to liquidate the Group or the Institute or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud

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

Based on our understanding of the Group and the sector in which it operates, we identified that the principal risks of non-compliance with laws and regulations are related to their registration with the Office for Students (“OfS”) and their ongoing conditions of registration, and we considered the extent to which noncompliance might have a material effect on the Group Financial Statements or their continued operation.

We also considered those laws and regulations that have a direct impact on the financial statements such as compliance with the OfS Accounts Direction, Charities and Higher Education SORP and tax legislation.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial results and management bias in accounting estimates.

The audit procedures to address the risks identified included:

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

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

In addition, we also report to you whether income from funding bodies, grants and income for specific purposes and from other restricted funds administered by the Institute have been properly applied only for the purposes for which they were received and whether income has been applied in accordance with the Statutes and, where appropriate, with the Terms and Conditions of Funding with the OfS.

Use of our report

This report is made solely to the governors, as a body, in accordance with paragraph 154 of the Charities Act 2011. Our audit work has been undertaken so that we might state to the Board 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 Institute and the Board as a body, for our audit work, for this report, or for the opinions we have formed.

James Aston (Senior Statutory Auditor) For and on behalf of BDO LLP, Statutory Auditor, Gatwick Date: 14 December 2021

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

30

Statement of Principal Accounting Policies

The London Institute of Banking & Finance is a Registered Charity and incorporated by Royal Charter in England and Wales.

1. Accounting Policies

a) Basis of preparation

The financial statements have been prepared under the historical cost convention, modified by the revaluation of investments and certain tangible assets. The financial statements have been prepared in accordance with the Statement of Recommended Practice (SORP): accounting for further and higher education 2019, and in accordance with Financial Reporting Standard FRS 102. We are a public benefit entity and have therefore applied the relevant public benefit requirements of FRS 102. The functional currency is pound sterling.

The Institute meets the definition of a qualifying entity under FRS 102 as the results of the Institute are consolidated into the group financial statements, which are publicly available. In accordance with FRS 102 section 1.12, the Institute has taken advantage of the exemptions in respect of the preparation of a cash flow statement, disclosure of the remuneration of key management personnel and the disclosure of financial instruments.

of around £3m, which can be drawn at relatively short notice.

Management will review the financial performance of the organisation on a monthly basis, including an evaluation of actual results compared to budgets and forecasts, and will report regularly to the Board.

The Board has a reasonable expectation that we have sufficient resources to continue in operation for at least 12 months from the signing date of these financial statements and therefore considers it appropriate to adopt the going-concern basis of accounting in preparing these financial statements.

c) Basis of consolidation

The consolidated financial statements combine our financial statements and subsidiary undertakings. Further details of the subsidiary undertakings are disclosed in the notes to the accounts.

The subsidiary company, Institute of Financial Services Ltd, has remained dormant throughout the period. Both LIBF Learning Ltd, The London Institute of Banking & Finance (MENA) Ltd and The London Institute of Banking (APAC) PTE Ltd were trading during the period and have been consolidated into the financial statements.

b) Going concern

We have considered the principal risks on the business for the next 12 months. The situation is more stable than the previous year, but we do consider how we may respond to the variety of challenges.

Within higher education, our 2021/22 intake exceeded expectations and we have the ability to deliver our programmes using a blend of face-to-face and online teaching or entirely online if required. We see no reason why there would be a decline in our intake for the next academic year starting in 2022.

Overseas centres have not been consolidated on the basis that they operate as separate legal entities governed by their own constitution. The grants made are given on the express undertaking that they will be applied wholly for educational purposes. Grants are included on the basis of amounts payable.

d) Recognition of income

Income from tuition fees and education contracts is recognised over the length of the course being offered.

Investment income is included on a receivable basis.

There is no current plan to close schools again, but we have shown our ability to adapt our assessments to the changes in guidelines, and registrations are in line with our forecasts.

Our corporate and professional qualifications saw the largest impact from the Covid-19 lockdown, but primarily they were impacted by the ability to deliver assessments rather than a shrinking market and these areas have since recovered to pre-Covid levels. We were already assessing many qualifications using electronic testing and have introduced a range of alternatives to enable this to be completed without attending a centre. A number of our international qualifications in trade finance have been adapted to enable them to be examined by electronic testing. To boost liquidity, we arranged for a £1.5m governmentbacked Coronavirus loan, which was received during August 2020, and we also have the investment fund

With no new life subscriptions being received, the balance is being released to income over a 20-year period on a straight-line basis. Other subscriptions and income are included on the basis of amounts receivable and any amounts received in advance included within deferred income.

Donations are included in the financial statements on the basis of amounts received.

All other incoming resources are included in income and expenditure when we are legally entitled to the income and the amount can be quantified with reasonable accuracy. Any amounts received in advance are included within deferred income.

Gift Aid is recognised as a distribution at the point that a specific obligation has been created.

31

Statement of Principal Accounting Policies

e) Accounting for retirement benefits

We operate a funded defined-benefit scheme, the assets of which are held in a specific trust separately from those of The London Institute of Banking & Finance. Contributions to the scheme are charged to the statement of financial activities so as to spread the cost evenly over employees’ working lives with us. The contributions are determined by a qualified actuary on the basis of triennial valuations using the projected unit method and discounted using an AA corporate bond rate. The pension scheme assets are valued at market rate. Pension fund deficits are recognised in the balance sheet, but surpluses are not recognised as assets where they cannot be recovered either through a refund from the scheme or reductions in future benefits.

We also operate a money purchase (defined contribution) pension scheme. Contributions payable to this scheme are charged to the statement of comprehensive income and expenditure in the year to which they relate. These contributions are invested separately from the charity’s assets in an independently administered fund.

f) Post-retirement benefits

Post-retirement benefits are included within the financial statements on the basis of the net present value of future cash flows, with any gains or losses charged to the income and expenditure account.

g) Operating leases

Rentals paid under operating leases are charged to revenue on a straight-line basis over the terms of the leases. Where incentives are offered at the start of a lease, these are spread over the period of the lease. Transitional arrangements have been applied to those lease incentives already in place at the time of transition.

h) Foreign currency transactions

Foreign currency transactions arising from normal trading activities are recorded at the rates in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the year-end are translated at the year-end exchange rate. Foreign currency gains and losses are credited or charged to the statement of comprehensive income and expenditure as they arise.

i) Fixed assets

Individual assets costing £1,000 or more are capitalised at cost.

Depreciation is provided to write off the cost or valuation, less estimated residual values, of all fixed assets over their expected useful lives. It is calculated using the following rates:

----- Start of picture text -----
Leasehold improvements 10% over initial lease
term
Computer hardware 33% per annum on cost
and software
Furniture and equipment 25% per annum on cost
----- End of picture text -----

Computer hardware, software and items of furniture and equipment under £1,000 have been charged in full to revenue in the year of purchase.

The freehold building is stated at cost and depreciated over a period of 50 years.

Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised in the income statement for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of the fair value less costs to sell and the value in use.

j) Investments

All investments are stated at market value, except for the 100% shareholding in the subsidiaries, which is stated at cost. Market values have been determined as follows, with realised and unrealised gains and losses taken to the statement of financial activities:

k) Stock and work in progress

Stock and work in progress are valued at the lower of cost or net realisable value.

Work in progress represents expenditure on the production of our publications where the first print is still to take place. Such expenditure will be written off at the first print run.

l) Cash and cash equivalents

Cash flows comprise increases or decreases in cash. Cash includes cash in hand and deposits but excludes cash held as part of the investment portfolio.

32

m) Taxation

We are an exempt charity within the meaning of the Charities Act 2011 and, as such, are a charity within the meaning of section 506(1) of the Income and Corporation Taxes Act 1988. Accordingly, we are potentially exempt from taxation in respect of income or capital gains received within categories covered by section 505 of the Income and Corporation Taxes Act 1988 or section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that such income or gains are applied to exclusively charitable purposes. We receive no similar exemption in respect of value added tax.

The subsidiary trading companies operate as commercial organisations and are subject to corporation tax. The profits of these companies are Gift Aided to us and tax is provided for to the extent that trading profits exceed the amounts formally committed to in the year.

n) Reserves

General funds are unrestricted funds that are available for use at the discretion of the trustees in furtherance of our general objectives and which have not been designated for a specific purpose.

Designated funds comprise unrestricted funds that have been set aside by the trustees for a particular purpose. The aim of each designated fund is set out in the notes to the financial statements.

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

33

Consolidated statement of comprehensive income and expenditure

for the year ended 31 July 2021

Notes
Income
1
2
Other income
3
Investment income
4
Donations
5
Total income
Expenditure
Staff costs
6
Other operating expenditure
7a
Depreciation
9
Interest and other finance costs
8
Total expenditure
Gains/(losses) on investment assets
10
Actuarial gain/(loss) in respect of pension schemes
21
Surplus/(deficit) for the financial year
Represented by:
Tuition fees and education contracts
Funding Body Grants
Surplus/(deficit) before other gains and losses
Restricted comprehensive income for the year
Unrestricted comprehensive income for the year
Total comprehensive income for the year		 Consolidated
Institution
Consolidated
Institution
£000s
£000s
£000s
£000s
16,607
14,977
13,663
13,101
127
127
94
94
1,496
1,494
2,063
2,060
82
85
95
98
3
3
110
110
18,315
16,686
16,025
15,463
8,179
7,664
9,103
8,777
9,080
8,200
8,972
8,188
177
177
192
192
4
4
-
-
17,440
16,045
18,267
17,157
875
641
(2,242)
(1,694)
743
743
(237)
(237)
82
82
(192)
(192)
1,700
1,466
(2,671)
(2,123)
1,700
1,466
(2,671)
(2,123)
58
58
(225)
(225)
1,642
1,408
(2,446)
(1,898)
1,700
1,466
(2,671)
(2,123)
Year ended 31 July 2020
Year ended 31 July 2021

All items of income and expenditure relate to continuing activities.

The accompanying notes on pages 38 to 47 form part of these financial statements.

34

Consolidated and institute statement of changes in reserves

for the year ended 31 July 2021

----- Start of picture text -----
Consolidated Unrestricted Restricted Total
£000s £000s £000s
Balance at 1 August 2019 4,961 651 5,612
(Deficit) from the income and expenditure account (2,446) (225) (2,671)
Total comprehensive income for the year (2,446) (225) (2,671)
Balance at 1 August 2020 2,515 426 2,941
Surplus from the income and expenditure account 1,642 58 1,700
Total comprehensive income for the year 1,642 58 1,700
Balance at 31 July 2021 4,157 484 4,641
Institution Unrestricted Restricted Total
Balance at 1 August 2019 4,985 651 5,636
(Deficit) from the income and expenditure account (2,224) (225) (2,449)
Total comprehensive income for the year (2,224) (225) (2,449)
Balance at 1 August 2020 2,761 426 3,187
Surplus from the income and expenditure account 1,408 58 1,466
Total comprehensive income for the year 1,408 58 1,466
Balance at 31 July 2021 4,169 484 4,653
----- End of picture text -----

35

Consolidated and institute balance sheets

as at 31 July 2021

----- Start of picture text -----
As at 31 July 2021 As at 31 July 2020
Consolidated Institute Consolidated Institute
Notes £000s £000s £000s £000s
Non-current assets
Fixed assets 9 1,848 1,848 1,912 1,912
Investments 10 3,543 3,543 3,455 3,455
5,391 5,391 5,367 5,367
Current assets
Stock and work in progress 11 30 30 47 47
Trade and other receivables 12 3,007 3,030 1,838 2,195
Cash at bank and in hand 1,400 1,343 873 750
4,437 4,403 2,758 2,992
Creditors: amounts falling due within one year 13 (4,163) (4,117) (4,804) (4,792)
Net current assets/(liabilities) 274 286 (2,046) (1,800)
Total assets less current liabilities 5,665 5,677 3,321 3,567
Creditors: amounts falling due after more than one year 14 (680) (680) - -
Provisions
Other provisions 15 (99) (99) (88) (88)
Pension provisions 22 (245) (245) (292) (292)
Total net assets 4,641 4,653 2,941 3,187
Restricted funds
Income and expenditure reserve - restricted 16 484 484 426 426
Unrestricted reserves
Income and expenditure reserve - unrestricted 4,402 4,414 2,807 3,053
Pension reserve 21 (245) (245) (292) (292)
4,157 4,169 2,515 2,761
Total Reserves 4,641 4,653 2,941 3,187
----- End of picture text -----

The financial statements were approved by the Board of Governors on 25 November 2021 and signed on its behalf on that date by:

Steven Haberman Chair

Alex Fraser Chief Executive and Accountable Officer

The accompanying notes on pages 38 to 47 form part of these financial statements.

36

Consolidated statement of cash flows

for the year ended 31 July 2021

2021 2020
Notes £000s £000s
Cash flow from operating activities
Surplus/(deficit) for the year 1,700 (2,671)
Adjustment for non-cash items
(Gains)/losses on investments and property 10 (743) 237
Investment income 4 (82) (95)
Depreciation, profit on sale and amortisation 9 177 192
Decrease in stocks 11 17 8
Net (increase)/decrease in debtors 12 (1,169) 1,027
Net (decrease)/increase in creditors 13 (811) (135)
(Decrease)/increase in pension provision 21 (47) 192
Increase in other provisions 15 11 8
Net (outflow) from operating activities (947) (1,237)
Cash flows from investing activities
Investment income
Payments to acquire tangible fixed assets
Payments to acquire investments
Receipts from sales of investments		 4
9
10
10		 82
(113)
(1,117)
1,704		 95
(76)
(990)
966
556 (5)
Cash flows from financing activities
New secured loans
Repayments of amounts borrowed		 14
14		 1,500
(650)		 -
-
850 -
Increase/(decrease) in cash and cash equivalents in the year 17 459 (1,242)
Cash and cash equivalents at the beginning of the year 17 988 2,230
Cash and cash equivalents at the end of the year 17 1,447 988

The accompanying notes on pages 38 to 47 form part of these financial statements.

37

Notes to the financial statements

for the year ended 31 July 2021

2021 2021 2020 2020
Consolidated Institute Consolidated Institute
£000s £000s £000s £000s
1. Tuition fees and education contracts
Higher Education students
Full-time Home and EU students 1,627 1,627 1,222 1,222
Part-time students 525 525 522 522
Financial Education qualifications 2,525 2,351 2,217 2,217
Professional Education qualifications 11,930 10,474 9,702 9,140
16,607 14,977 13,663 13,101
2. Funding body grants
Office for Students recurrent grant 98 98 94 94
Office for Students capital grant 14 14 - -
Office for Students hardship grant 15 15 - -
127 127 94 94
3. Other income
Professional and alumni services 1,432 1,432 1,550 1,484
Government grants 60 60 416 416
Rent receivable 4 - 97 -
Management charges - 2 - 160
1,496 1,494 2,063 2,060
The government grant represents money received under the UK Government Coronavirus Job Retention Scheme
4. Investment income
Investment income on restricted reserves 10 10 8 8
Other investment income 72 72 87 87
Gift aid - 3 - 3
82 85 95 98
5. Donations
Restricted fund donations 3 3 110 110
General donations - - - -
3 3 110 110
Note: The source of grant and fee income, included in notes 1 to 3 is as follows:
Grant income from the OfS 127 127 94 94
Grant income from other bodies 60 60 416 416
Fee income from non-qualifying courses (exclusive of VAT) 14,455 12,825 11,919 11,357
Fee income for taught awards (exclusive of VAT) 2,152 2,152 1,744 1,744
16,794 15,164 14,173 13,611

38

Notes to the financial statements

for the year ended 31 July 2021

----- Start of picture text -----
6. Staff costs 2021 2021 2020 2020
Group and Institute Consolidated Institute Consolidated Institute
£000s £000s £000s £000s
Salaries 7,015 6,516 7,541 7,215
Social security costs 706 697 723 723
Pension costs 458 451 489 489
8,179 7,664 8,753 8,427
Restructuring costs - - 350 350
8,179 7,664 9,103 8,777
Remuneration of the Chief Executive
Emoluments 203 193
Pension costs 5 15
Benefits - medical insurance 3 2
----- End of picture text -----

The Chief Executive’s basic salary is 6.2 times (2020 6.3 times) the median pay of staff, where the median pay is calculated on a full-time equivalent basis for the salaries paid by LIBF to its staff.

The Chief Executive's total remuneration is 6.2 times the median total remuneration of colleagues (2020 6.3), where the median pay is calculated on a full-time equivalent basis for the salaries paid by LIBF to its staff.

The Chief Executive's salary is reviewed annually by the Remuneration and Nominations Committee. This takes into account a review of the personal objectives and performance of LIBF by the Chair. The salary of the Chief Executive is determined according to a number of factors including the breadth of responsibilities, accountability, size of organisation and comparative data.

----- Start of picture text -----
|||| |---|---|---| |2021|2020| |Average monthly number of employees calculated on the basis of full time equivalents was:|Number|Number| |Academic departments and support services|99|100| |Professional services|22|26| |Premises|3|8| |Central services|36|37| |160|171|

----- End of picture text -----

----- Start of picture text -----
|||| |---|---|---| |The basic remuneration of higher paid staff, excluding pension contributions in excess of £100,000 was:| |£100,000 - £104,999|1|-| |£105,000 - £109,999|-|2| |£120,000 - £124,999|-|1| |£140,000 - £144,999|1|-| |£155,000 - £159,999|-|-| |£190,000 - £194,999|-|1| |£200,000 - £204,999|1|-|

----- End of picture text -----

Key management personnel listed on page 27 are those persons having authority and responsibility for planning, directing and controlling the activities of the organisation. This includes the Chief Executive and members of the Senior Executive Team. No Board member has received any remuneration/waived payments from the group during the year in respect of their services to the Board.

----- Start of picture text -----
|||| |---|---|---| |2021|2020| |£000s|£000s| |Key management personnel compensation|1,490|1,639|

----- End of picture text -----

39

Notes to the financial statements

for the year ended 31 July 2021

6. Staff costs (continued)

Severance payments - during the year the Institute did not undertake any restructuring resulting in compensation for loss of office being paid. (2019/20: £54k to 3 employees). Shortly before the start of the financial year the Institute undertook a significant restructure which resulted in £350k in compensation for loss of office being paid to 21 employees for which a provision was made in the previous year's accounts.

All severance payments including compensation for loss of office in respect of higher paid staff are approved by the Institution's Remuneration Committee. Amounts for compensation for loss of office and redundancy for all other staff are approved by Institution management in accordance with delegated authority.

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7a. Other operating expenditure 2021 2021 2020 2020
Consolidated Institute Consolidated Institute
Other operating expenses included: £000s £000s £000s £000s
Academic departments and support services 4,453 3,573 4,187 3,404
Professional services 365 365 544 544
Premises 1,538 1,538 1,578 1,578
Central services 2,629 2,629 2,387 2,386
Restricted funds 45 45 221 221
Auditor's remuneration
External auditor's remuneration in respect of audit services 50 50 55 55
- - - -
External auditor's remuneration in respect of non-audit services
9,080 8,200 8,972 8,188
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7b. Access and participation plan (APP) expenditure
Access investment
Financial support provided to students
Support for disabled students
Research and evaluation expenditure
The total of the approved expenditure in our APP for the year ended 31 July 2021 was		 2021
2020
£000s
£000s
35
10
82
25
-
-
4
5
121
40
100
40

Actual expenditure was greater than the approved plan due to hardship payments of £20k, theses were funded by the OfS £15k and LIBF donations of £5k.

Details of the approved plan can be found at: https://www.libf.ac.uk/docs/default-source/HE/HE-Policies/access-participation-plan-2019-20.pdf?sfvrsn=9910508d_9

40

Notes to the financial statements

for the year ended 31 July 2021

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8. Interest and other finance costs 2021 2021 2020 2020
Consolidated and Institute Consolidated Institute Consolidated Institute
£000s £000s £000s £000s
Net cost on pension scheme 4 4 - -
4 4 - -
9. Fixed assets
Consolidated and Institute Computer
installation,
Freehold Leasehold furniture and
property improvements equipment Total
£000s £000s £000s £000s
Cost
At 1 August 2020 1,664 1,534 1,896 5,094
Additions - - 113 113
- -
Disposals (98) (98)
At 31 July 2021 1,664 1,534 1,911 5,109
Depreciation
At 1 August 2020 149 1,354 1,679 3,182
Charge for the period 26 56 95 177
- -
Disposals (98) (98)
At 31 July 2021 175 1,410 1,676 3,261
Net book value
At 31 July 2021 1,489 124 235 1,848
At 31 July 2020 1,515 180 217 1,912
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Cost of freehold property and net book valued prior to revaluation £833,243.

A valuation, based on existing use value, was carried out by a qualified chartered surveyor, Strutt and Parker, as at 31 July 2016, showing the value at £1.6m. The value of land included within freehold property is £350,000. As this is not significantly different from the net book value there is no indication of impairment of the asset.

41

Notes to the financial statements

for the year ended 31 July 2021

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2021 2020
General Restricted Total Total
10. Non-current investments (Consolidated & Institute) £000s £000s £000s £000s
As at 1 August 2020 2,897 443 3,340 3,553
Additions 1,106 11 1,117 990
Disposals (1,643) (61) (1,704) (966)
Investment gains 653 90 743 (237)
As at 31 July 2021 3,013 483 3,496 3,340
Investments at cost
Managed funds
UK equities 967 414 1,381 1,559
Overseas equities 820 - 820 879
UK fixed interest 267 - 267 261
Alternatives 401 - 401 451
Cash 46 1 47 115
2,501 415 2,916 3,265
Investments at market value
Managed funds
UK equities 1,132 483 1,615 1,481
-
Overseas equities 1,198 1,198 1,129
UK fixed interest 260 - 260 255
Alternatives 423 - 423 475
3,013 483 3,496 3,340
Cash 46 1 47 115
3,059 484 3,543 3,455
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Funds were managed during the year by Rathbones. Fees are charged separately to The London Institute of Banking & Finance and deducted from the investment portfolio.

The Charity controls the following subsidiary undertakings, in which its investment amounts to £6 (2020 £5).

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|||||| |---|---|---|---|---| |Holding|Nature of Business|Incorporated| |LIBF Learning Limited|100% £1 Ordinary shares|Events, sponsorship|England and Wales| |Institute of Financial Services Limited|100% £1 Ordinary shares|Dormant|England and Wales| |ifs|ProShare Limited|100% £1 Ordinary shares|Dormant|England and Wales| |The London Institute of Banking & Finance (MENA) Ltd|100% $1 Ordinary shares|Education in MENA region|Abu Dhabi| |The London Institute of Banking & Finance (APAC) PTE Ltd|100% $1 Ordinary shares|Education in APAC region|Singapore|

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The results of the limited companies, which are incorporated into the statement of income and expenditure and balance sheet are:

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|||||| |---|---|---|---|---| |LIBF Learning Limited|LIBF (MENA) Ltd| |2021|2020|2021|2020| |£000s|£000s|£000s|£000s| |Income|5|163|1,630|562| |Expenditure|(2)|(160)|(1,365)|(784)| |Surplus/(deficit) for the year|3|3|265|(222)| |Current assets|7|6|1,424|389| |Creditors|(7)|(6)|(1,436)|(635)| |Total net assets|-|-|(12)|(246)|

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42

Notes to the financial statements

for the year ended 31 July 2021

11. Stock and work in progress
Publications and sundry stock
12. Trade and other receivables
Due within one year
Members and trade receivables
Amounts owed from group undertakings
Other debtors
Prepayments
Due after more than one year
Members and trade receivables
13. Creditors: amounts falling due within one year
Secured loans
Trade payables
Other creditors and accruals
Social security and other taxation payable
Deferred income (see below)		 2021
2021
2020
2020
Consolidated
Institute
Consolidated
Institute
£000s
£000s
£000s
£000s
30
30
47
47
30
30
47
47
2,229
860
1,275
1,022
-
1,400
-
630
5
5
2
2
744
736
484
464
29
29
77
77
3,007
3,030
1,838
2,195
170
170
-
-
548
548
795
795
1,393
1,350
1,572
1,564
159
156
150
150
1,893
1,893
2,287
2,283
4,163
4,117
4,804
4,792

Included within deferred income are the following items of income which have been deferred until specific performance related conditions have been met.

Subscriptions
Qualifications
Life subscriptions
Grants
14. Creditors: amounts falling due after more than one year
Secured Loans
Due within one year
Due between two and five years
Due in five years or more
Due after more than one year
Total secured loans		 360
360
377
377
1,469
1,469
1,834
1,830
64
64
74
74
-
-
2
2
1,893
1,893
2,287
2,283
170
170
-
-
680
680
-
-
-
-
-
-
680
680
-
-
850
850
-
-

Included in loans are the following

Barclays Bank PLC under the UK Government Coronavirus Business Interruption Loan Scheme Amount £1.5m

Interest rate 2.44% above base

Repayment Date: 6 years after the date of first drawdown 25/8/2026 A one-off repayment of £650k was made in July 2021

43

Notes to the financial statements

for the year ended 31 July 2021

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15. Provision for liabilities Post-
Consolidated and Institution Retirement
Healthcare
£000s
Balance at 1 August 2020 88
Amounts released during the year (8)
Discount charges for the year 4
Charged to income and expenditure account 15
Balance at 31 July 2021 99
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Post-retirement healthcare

The London Institute of Banking & Finance continues to provide post-retirement healthcare benefits to certain retired employees and their spouses, a benefit that ceased to be offered to existing staff some years ago. A provision is made in line with FRS 102 using a discount rate of 5.0% (2020 5.0%) and a rate of increase in medical costs of 7% (2020 7%).

16. Restricted funds

Reserves with restrictions are as follows: Consolidated and Institution

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|||||||| |---|---|---|---|---|---|---| |Alumni and| |Scholarship|Bursary|Grunfeld|Strudwick|2021|2020| |fund|fund|fund|Prize fund|Total|Total| |£000s|£000s|£000s|£000s|£000s|£000s| |New donations|3|-|-|-|3|110| |Investment income|6|3|1|10|8| |Expenditure|(11)|(23)|(11)|-|(45)|(325)| |(2)|(20)|(10)|-|(32)|(207)| |Increase in market value of investments|50|30|10|-|90|(18)| |48|10|-|-|58|(225)| |Fund balances brought forward at 1 August 2020|248|147|27|4|426|651| |Fund balances carried forward at 31 July 2021|296|157|27|4|484|426| |Represented by:| |Investments|296|161|27|-|484|445| |Net current assets|-|(4)|-|4|-|(19)| |296|157|27|4|484|426|

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The Alumni and Scholarship fund gives past students the opportunity to participate in this vision and support diverse future generations of financial services professionals. The primary purpose of the fund is to provide support for students undertaking The London Institute of Banking & Finance’s full-time undergraduate degree programmes. The Bursary fund provides means-tested assistance to both full and part-time students.

The Grunfeld fund was received by The London Institute of Banking & Finance from the Henry Grunfeld Foundation in March 1999 on the undertaking that it would fulfil the foundation’s existing obligations and hold the balance of the fund for the purposes of the education of persons working in banking and financial services in London.

The Strudwick Prize fund was received as bequest under the will of Mr HEH Strudwick, FCIB on the undertaking that the £30,000 be used to support a prize in his name.

44

Notes to the financial statements

for the year ended 31 July 2021

17. Reconciliation of cash flow to balance sheet

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Balance at Cash Balance at
1 Aug 20 flows 31 Jul 21
£000s £000s £000s
Cash at bank and in hand 873 527 1,400
Cash held with investments 115 (68) 47
988 459 1,447
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18. Lease obligations

Total rentals payable under operating leases

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|||||| |---|---|---|---|---| |2021|2020| |Land &|Land &| |Buildings|Other|Buildings|Other| |£000s|£000s|£000s|£000s| |Future minimum lease payments due| |Not later than 1 year|1,075|29|1,075|29| |Later than 1 year and not later than 5 years|2,896|21|3,169|33| |Later than 5 years|1,671|-|2,556|-| |Total lease payments due|5,642|50|6,800|62|

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19. Related party transactions

The London Institute of Banking & Finance has taken advantage of the exemption available under FRS102 Related Party Transactions not to disclose transactions included within the group.

The Institute's Board of Governors are the trustees for charitable law purposes.

One trustee was paid £1,740 for Chief Examiner, assessment setting and marking activities (2020 £1,860).

20. Contingent liabilities

There are no contingent liabilities as at 31 July 2021 (2020 nil).

45

Notes to the financial statements

for the year ended 31 July 2021

21. Pension scheme

The London Institute of Banking & Finance operates two schemes, a defined contribution scheme that is available to new employees and a defined benefit scheme that closed to future accrual on 31 March 2009. Contributions to the defined benefit scheme for the year ending 31 July 2020 are expected to be £nil.

A full actuarial valuation was completed as at 31 December 2019 and the results from this valuation have been updated to 31 July 2021 by a qualified independent actuary as follows:

2021 2020
Discount rate 1.6% 1.3%
Price inflation (CPI) 2.8% 2.1%
Pension increases pre 2006 excess over GMP 2.8% 2.1%
Pension increases post 2006 pension 2.0% 1.7%
Assumed life expectancies on retirement at age 60 are:
Retiring today Males 27.1 27.1
Females 29.6 29.5
Retiring in 20 years' time Males 28.6 28.5
Females 31.1 31
The assets in the scheme were: Value at Value at Value at Value at
31 Jul 21 31 Jul 20 31 Jul 19 31 Jul 18
£000s £000s £000s £000s
Investment fund 17,402 15,828 20,217 21,399
Matching fund 30,842 31,386 26,232 21,455
Fair value of scheme assets 48,244 47,214 46,449 42,854
The actual return on assets over the period was:
2,378
Present value of funded obligations
Fair value of scheme assets		 5,146 705
2021
£000s
(48,489)
48,244		 2,267
2020
£000s
(47,506)
47,214
Surplus in funded scheme
Irrecoverable surplus		 (245)
-		 (292)
-
Net liability in balance sheet (245) (292)

46

Notes to the financial statements

for the year ended 31 July 2021

2021 2020
£000s £000s
Reconciliation of opening and closing balances of the present value of the defined benefit obligation
Benefit obligation at the beginning of the year 47,506 45,983
Interest cost 609 907
Actuarial gain/(loss) 1,691 1,893
Past service cost - -
Benefits paid (1,317) (1,277)
Liabilities at the end of year 48,489 47,506
Fair value of scheme assets at beginning of year
Expected return on scheme assets
Actuarial gain/(loss)
Benefits paid
Fund administrative costs
Analysis of movement in the present value of scheme assets		 47,214
605
1,773
(1,317)
(31)		 46,449
915
1,227
(1,277)
(100)
Fair value of scheme assets at end of year 48,244 47,214
Analysis of amount recognised in the comprehensive income and expenditure account
Service cost - including current service cost, past service cost and settlements
Service cost - administrative cost
Net interest cost on net defined benefit liability		 -
31
4		 -
100
-
Total expense 35 100
Remeasurement of the net defined benefit liability/(asset) to be shown in other comprehensive income
Actuarial gains/(losses) on the liabilities
Return on assets, excluding interest income
Change in the amount of surplus that is not recoverable, excluding interest income		 1,691
(1,773)
-		 1,893
(1,227)
(474)
The measurement of the net defined benefit liability/(asset) to be shown in other comprehensive income (82) 192

22. Accounting estimates and judgements

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:

Defined benefit scheme – management’s estimate of the scheme is based on a number of critical underlying assumptions such as rates of inflation, mortality and the investment returns of the scheme. The assumptions are reviewed annually with a qualified actuary. Variation in these assumptions may significantly impact the net valuation which is currently showing deficit of £0.3m. If the discount rate assumption is increased by 0.1% a year, then it is estimated this will reduce the liabilities (present value of funded obligations) as at 31 July 2021 by approximately £0.9m (from £48.5m to £47.6m) which would result in a surplus of around £0.6m

Useful lives of depreciable assets – management reviews its estimate of the useful lives of depreciable assets at each reporting date. Uncertainties in these estimates relate to changes in the useful lives of certain software and IT hardware as well as the useful life and value of the building the Institute own. The value of the building is deemed cost as at 1 August 2015.

Post-retirement healthcare – management’s estimate of the liability is based on assumptions about the discount rate, the rate of inflation as well as mortality. The assumptions are reviewed annually based on the prevailing marketing conditions with the current obligation valued at £99,000.

47

Annual Report & Accounts 2020 – 2021

We exist for a very simple reason – to advance banking and finance by providing outstanding education and thinking, tailored to the needs of business, individuals, and society.

Our focus is on lifelong learning; equipping individuals with the knowledge, skills and qualifications to achieve what they want throughout their career and life.

We provide a balance of experience, insight and thought leadership into today’s financial world, delivered by industry leaders, thinkers and members of our community.

And because we’ve been at the heart of the sector since 1879, we create connections and build partnerships between people and business that make banking and finance more accessible and understood, and enhance social inclusion through better financial capability.

We are The London Institute of Banking & Finance, lifelong partners for financial education.