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2021-08-31-accounts

CHELTENHAM COLLEGE Council's Report and Financial Statements Year ended 31 August 2021

CHELTENHAM COLLEGE

Council’s Report and Financial Statements Year ended 31 August 2021

Contents
 Page
Introduction by the President of Council 2-3
Council Members, Officers and Advisors 4-5
Annual Report of the Council 6-19
Statement of Trustees’ responsibilities 20
Independent auditor’s Report to the Trustees of Cheltenham College 21-24
Consolidated Statement of Financial Activities 25-26
Consolidated and College Balance Sheets 27
Consolidated Cashflow Statement 28-29
Notes to the Financial Statements 30-57

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Introduction by the President of Council

Even though we were optimistic that the end of lockdown in July 2020 would see a return to a more normal school life, 2020/21 has followed the previous year as one significantly affected by the Covid Pandemic. There was some normality in that pupils were allowed to be on site, groups were able to play sport, attend chapel and have a form of social life, but bubbles continued to impact how pupils and staff interacted. Pupil and staff absence, while not cataclysmic, was frequent. The closure of schools to all but the children of key workers in January 2021 was a real blow and this lead to a decision by Government that public exams in the summer of 2021 would be cancelled, giving way to teacher assessed grades.

The GCSE and A level results were very encouraging given the disruption to learning. 71% pupils obtained grades 7-9 in GCSE, and 91% achieved A*-B in their A levels. 5 pupils were successful in securing places at Oxford or Cambridge and 94 secured places at Russell Group universities. A speech day and leavers ball was allowed to take place, albeit under strict regulation and we are hopeful once again, that 2021/22 will see something like a return to normal life.

Building work commenced on the final phase of the College lawn project – to create a suitable home for the house parent, additional social space and 16 additional bedrooms for sixth form girls. This will complete in time for the September 2022 cohort. And the final touches were made to the new Cheltenham College Muscat, where recruitment is underway for entry from September 2021.

The Council in June 2021 adopted a new Environmental Sustainability Strategy, and early progress has already been made with a transfer to electric vehicles for the estates fleet and procurement of a new electricity provider, secured entirely from green sources. There will be significant challenges ahead in readying the College for the 2050 Carbon Net Zero target, but the strategy will point us in the right direction. There is no doubt that our pupils are keen to make progress on key issues about which they feel strongly and there will be much to report over the coming years.

Cheltenham College is committed to advancing equality, diversity and inclusion through not only actively promoting EDI at every opportunity but also creating and implementing a strategic plan to fully embed EDI within the organisation. Following the death of George Floyd and the impetus his death gave to the Black Lives Matter movement, Cheltenham College redoubled its efforts to eradicate racism at any level, beginning with a focus on unconscious bias in the September 2020 INSET and an equality audit of the curriculum early in 2021, with the view of creating an Equality Development Plan. The Equality Development Plan was launched during 2021, a year in which Everyone's Invited and the release of the Ofsted review of Sexual Harassment in Schools once again brought sexism and misogyny into sharp focus. The plan maps out how Cheltenham College will be further developing its culture of inclusivity and respect, ensuring equality of opportunity for all pupils in and out of the classroom, ensuring pupils including LGBTQ+ and those undergoing gender reassignment experience College as an inclusive, caring and safe community and celebrates the diversity of its pupils and teachers of all races and ethnicities.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

The pandemic has placed significant strain on all facets of Cheltenham College. I am pleased to say that the whole College community has battled through the difficult buffeting winds and continues to thrive. The hope for a year of normal school life in 2021/22 prevails but for now the financial, academic, pastoral and spiritual wellbeing of Cheltenham College is in good shape.

William Straker-Nesbit

5 March 2022

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Council Members, Officers and Advisors

The members of College Council are the trustees of the charity. The following served as members of Council during the period from 1 September 2020 to the date of this report.

(1) (2) (3) (4) (5) (6)
Mr W J Straker-Nesbit (President) * * * * * *
Mr H Monro (Deputy President) * * * * * *
Mr A Barr (Appointed 19 June 2021) ● ●
Mr J Beardmore-Gray ●
Dr A Butland ●
Mr P Brettell
Mr M Chicken ●
Mr C Cooper ● ●
Ms G Elwood ● ● ●
Mrs C Willgoss ● ●
Ms E Goldsmith ●
Mr L Humphreys-Davies ● ●
Mr D McNiffe (Appointed 4 March 2022)
Mr N Roskilly (Appointed 1 September 2021)
Mr T Smith ● ● ● ●
Mr D Stewart
Revd Canon K Wilkinson ● ● ●
Dr P Wingfield
Mr M Wynne (Retired 5 March 2022) ● ●

During the year the activities of the Governing Body were carried out through the Council itself and through the Committees shown above.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Executive

N Huggett (MA (Oxon)) Head of College T O’Sullivan (LLB (Hons)) Head of Preparatory School

P Attwell (BSc MSc) Bursar

Principal address

Bath Road, Cheltenham GL53 7LD

Investment manager

Quilter Cheviot Limited, Second floor, Three Temple Quay, Temple Way, Bristol, BS1 6DZ

Independent auditor

Crowe U.K. LLP, St. James House, St. James Square, Cheltenham GL50 3PR

Banker

Lloyds Bank plc, 130 High Street, Cheltenham GL50 1EW

Solicitor

Harrison Clark Rickerbys Limited, Ellenborough House, Wellington Street, Cheltenham GL50 1YD

Website

www.cheltenhamcollege.org

Charity name

Cheltenham College and Cheltenham College Preparatory School, also known as Cheltenham College.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Annual Report of the Council

The Council is pleased to present its Annual Report for the year ended 31 August 2021 under the Charities Act 2011.

Status and administrative information

Cheltenham College was founded in 1841 and is registered with the Charity Commission under charity number 311720.

College operates two schools known as Cheltenham College and Cheltenham College Preparatory School.

There is one Governing Body for the two Schools called the Council. Details of the membership of College Council, its executive officers and professional advisors are given on pages 4 and 5.

Structure, governance and management

Governing Documents

The Charity is governed by the Cheltenham College Act 1894 and the Charities (Cheltenham College) Orders 1976 and 2011.

Council

The governance of College is vested in the President and Council, as laid down in the governing documents. Membership of Council is as follows: -

Appointment and induction of Council Members

On the occurrence of a vacancy amongst the nominated members of the Council (other than the member nominated by the Cheltonian Society) the President shall be responsible, on behalf of the Council, for notifying and entering negotiations with the nominating authority.

The elections of the members of the Council to be nominated by the teaching staff of either College or the Preparatory School are conducted by the Head or by a member or members of the teaching staff delegated by him, who shall report the methods by which the elections were conducted and their results to the Council.

Co-opted members of Council are identified and nominated by the Nominations Committee and elected by Council.

All new members of Council receive a comprehensive briefing pack and induction workshop from the Bursar and Secretary to Council on trusteeship, the workings of College, its policies and objectives. Newly appointed, as well as established Council members, are encouraged to attend

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

training courses, conferences, regulatory updates and other appropriate externally organised events in order to continually develop the knowledge and expertise of the governing body.

Organisational Management

By virtue of The Cheltenham College Act 1894, the Council is responsible for “the entire management of the concerns and property of College” and “may receive, invest, lay out and dispose of all the stocks, effects, funds, money and securities for the benefit of College”. It meets not less than three times each year. Both the President and Deputy President are ex-officio members of the principal sub-committees but are not required to chair them.

The Finance, Risk & Development Committee (FRD) is chaired by Mr Tim Smith and meets not less than five times a year. This committee sets financial targets for approval by the full Council and monitors results against such targets. The Committee is also responsible for overseeing risk management, compliance with statutory legislation and facilities development. College executive team is responsible for managing the business within the financial parameters and general policy laid down by Council on the recommendations of the FRD.

The Audit Committee is chaired by Mr Chris Cooper and meets at least annually to review the annual accounts and receive the independent auditor’s report.

The Education Committee meets termly and is chaired by Revd Canon Wilkinson and is a consultative forum in which issues of educational policy, provision and performance are discussed. Executive authority lies with the Council, which may, however, through the President, delegate such authority to the Committee.

The Membership & Governance Committee meets once per term and was chaired, until his retirement, by Mr Mike Wynne. Gillian Ellwood has replaced Mike Wynne as the chair. Its principal duties include regular review of the composition of Council in terms of its numbers, skills and experience as well as succession planning for retiring members. The Committee also maintains oversight of the governance of Cheltenham College, promoting the adoption and use of accepted best practice based on the Charity Governance Code.

The Welfare & Safeguarding Committee meets three times a year and is chaired by Dr Andrea Butland. Its principal duties include the review of policies relating to Child Protection and Safeguarding to ensure compliance with regulatory requirements in College and Prep, and the monitoring of pupil and staff welfare matters.

Matters relating to strategic planning sit primarily with the Council, which considers proposals for the development of the School and advises senior management of the strengths and weaknesses of strategic options. The Council may establish ad hoc committees to undertake more detailed planning and appraisal of development proposals.

The day-to-day running of the schools is delegated to the respective Heads and Bursar. They are also supported by Cheltenham Executive Committee (CEC) (the key management for the purposes of these financial statements) and a number of other senior management teams spanning the academic, pastoral and operational areas of the two schools.

Remuneration

Remuneration of the key management personnel is set by the Remuneration Committee, with the policy objective of providing appropriate incentives to encourage enhanced performance and of

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

rewarding fairly and responsibly individual contributions to College’s success. The Remuneration Committee was chaired by Mr Hugh Munro and meets twice a year; once in the Autumn Term and again in the Summer Term.

It is essential for College to engage credible professionals to bring sector expertise, significant leadership experience and strong capability to drive inspirational teaching and learning excellence, strong academic results, high quality pastoral care, a strong and vibrant community of pupils and staff, excellent facilities and sound finances. In the light of this strategy, College's pay policy seeks to:

The appropriateness and relevance of the remuneration policy is reviewed annually, including reference to comparisons with other independent schools to ensure that College remains sensitive to the broader issues of pay and employment conditions elsewhere.

College aims to recruit, subject to experience, at the lower to medium point within a band, providing scope for rewarding excellence. Delivery of College’s charitable vision and purpose is primarily dependent on our key management personnel (with the CEC being the most senior operations committee) and staff costs are the largest single element of our charitable expenditure.

Employment policy

College is an equal opportunities employer. Full and fair consideration is given to job applications from disabled persons and due consideration is given to their training and employment needs. Consultation with employees, or their representatives, has continued at all levels with the aim of taking the views of employees into account when decisions are made that are likely to affect their interests. Employees are made aware of the financial and economic performance of College.

Communication with employees continues through normal management channels in a variety of forms and also through exceptional channels to apprise staff of current issues.

Group structure and relationships

At the year end Cheltenham College had one wholly owned active trading subsidiary, Cheltenham College Services Limited, which continues to provide corporate letting facilities, transport and retailing services. Cheltenham College International Limited was incorporated in 2019-20 and has been consolidated in the financial statements now that it has commenced trading.

Other subsidiaries, Cheltenham College Enterprises Limited and Cheltenham College 2nd Hand Clothing Store Limited remained dormant during the year.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Cheltenham College Charitable Trust (CCCT) is an Independent Charity with objects similar to those of Cheltenham College. It holds a number of funds raised for specific activities or purposes and these include the provision of scholarships, bursaries and prizes. It also holds funds raised for development projects at Cheltenham College and accumulates these funds until released to help finance the projects the funds were donated for. Whilst it is managed, and run, as an independent charity, due to the majority of trustees being common to Cheltenham College, its financial statements are consolidated with those of College to comply with FRS 102.

The financial performance of each subsidiary is described in note 23. Details on transactions between group companies are also set out in note 23.

Cheltenham College maintains membership of appropriate representative bodies with the aim of ensuring familiarity with, and delivery of, the highest educational and pastoral care standards.

College also seeks and develops strong relationships with other local schools (both independent and state-maintained) with the clear objective of further widening public access to the benefits our pupils enjoy, whilst at the same time developing in our own pupils, a better understanding of the wider social context in which we operate.

Investment policy and objectives

College’s investment objectives in relation to funds held in College and in CCCT are to balance the current and future needs by:

To meet these objectives, College’s investments as a whole are managed to produce capital growth and income, maintaining diversification across a range of asset classes to produce an appropriate balance between risk and return. The investment strategy and policy are monitored by the Finance, Risk and Development sub-committee, as is investment performance for which appropriate asset management sector benchmarks have been determined.

In 2006 College made the decision to adopt an ethical investment strategy, restricting investments to exclude any tobacco and armaments providers.

All the investments held by College and the Charitable Trust benefited from a strong underlying investment climate. The combined realised and unrealised gains during the period, after the reinvestment of income and sale of investments, totalled £1,113,000 (2020: £100,000) on an opening portfolio of £6.7 million closing at £7.9 million, following the sale of investments. Further details are set out in note 13 to the financial statements.

Charity Governance Code

The Council is acutely aware of the updated guidance from the Charity Commission in relation to the Code and fully supports the core values, principles and disciplines the Code seeks to inculcate into the governance of College.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

As such, all Council members (in their capacity as Trustees) complete a ‘Board Appraisal’ annually. The appraisal includes 30 statements (drawing on the seven principles of the Code), which Council members are asked to consider and then rate how strongly they agree, or disagree, with them. The appraisal seeks to follow the ‘key outcomes’ for good governance as identified in the Code as well as seeking to improve the operations and effectiveness of the Council as the governing body of College.

The Appraisal will be completed annually in the Autumn term in respect of the preceding academic year. Council members’ ratings and comments will be collated and progress in each of the areas covered by the statements will be tracked and reported over time.

Objects, aims, objectives and activities

The principal objective of College is to provide an excellent academic and broadly based education, in a predominantly boarding environment, for boys and girls from the age of three to eighteen in accordance with Christian principles. Within these objectives, College also has to maintain its heritage endowment of Grade I and II listed buildings; various works of art; artefacts; books and historical documents relating to College’s history, as well as a number of trust funds held for special purposes in connection with the development of College’s facilities, the provision of scholarships, bursaries, prizes and for other educational purposes.

College has continued to focus on the provision of improved academic performance, improving the quality of the built environment and continuing to widen access to College for pupils for whom an independent education would otherwise be unaffordable. Further details are set out below.

College welcomes pupils from all backgrounds, who have the potential to benefit from the education we provide. An individual’s economic status, gender, ethnicity, race, religion or disability do not form part of the assessment process. College is committed to safeguarding and promoting the welfare of its pupils and expects all staff and volunteers to share this commitment.

Policy

The Council’s fundamental policy is to ensure that: -

Strategies to achieve the year’s objectives

Cheltenham College and Cheltenham College Preparatory School continued a value-added approach, not only with the objective of achieving academic excellence but balanced by a strong emphasis on sport, music, drama and other co-curricular activities. There was also a clear focus on the development of leadership, for both pupils and staff, and social skills together with the provision of a wide variety of activities, including College’s Humanitarian Aid Projects (CHAPS) in Romania,

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Kenya and the Shamrock School in Nepal. Both schools continued to conduct adventurous expeditions and international sports and choral tours.

Principal activity

College’s principal activity remains the advancement of education and, in this, College has again had a successful year. The combined schools averaged 1,129 pupils (2020: 1,111); in College 81% of pupils were boarders or day boarders (2020: 80%), the balance were day pupils. The Prep School continues to be predominantly a day school, with day pupils representing 89% (2020: 88%) of the total.

Public benefit

College remains committed to the aim of providing public benefit in accordance with its founding principles. Charity legislation includes a requirement to demonstrate that public benefit for any charitable purpose where it had hitherto been presumed in the absence of evidence to the contrary. In this regard, the Council remains committed to giving full and careful consideration to the Charity Commission’s general guidance on public benefit and confirm that they have complied with their duty under Section 17 of the Charities Act 2011.

The awarding of means-tested bursaries is a measurable means of providing public benefit. College takes the view that bursaries awarded to those who would not otherwise be able to afford the fees are important, but not to the exclusion of the much wider benefit that College provides within the community. Those pupils who attend our schools and who receive financial support contribute to the school community in a variety of ways, and so the benefit is not purely to these pupils but to the whole College and, in some cases, to the wider community.

This year College awarded 524 bursaries and scholarships totalling £3.1m (2020: 505 awards totalling £2.7m). Within this, means-tested awards, based on a sliding scale according to financial circumstances, totalled £1.35m including ten pupils for 85% or more of fees when scholarship awards are included (2020: £1.29m). The increase in bursaries provided additional support to certain parents whose incomes had been negatively affected by Covid-19. College continued to refine means-testing this year by introducing a more rigorous and detailed process that continues to develop. In the context of these refinements however the provision of bursaries to pupils who are expected to contribute fully to both schools over a broad spectrum of academic and nonacademic activities remains a key part of College’s strategy. Further fee subventions are granted in respect of certain staff children, serving military families and to parents with more than two children in the two schools.

In addition to bursaries, College has engaged in a number of other activities that provide benefit to the public within College’s objectives. College continues to invest in its enhanced partnerships with two local state schools; College with All Saints’ Academy, and the Prep School with Saint John’s C of E Primary School. The formal parameters of these partnerships have been codified in MOUs.

The scope and depth of these partnerships is being co-ordinated by the Director of Partnerships (together with the recently appointed Director of Outreach at the Prep school) but the principal focus of both is the raising of academic attainment for state school pupils. Beyond that immediate focus, the artistic and sporting needs of these pupils is also being addressed, and College is making available support in terms of facilities, coaching and logistical support.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

In addition, College is closely involved in developing long-term relationships with other schools and charitable organisations. Through these links our aim is to build on a shared vision that makes an outstanding and meaningful difference to our local community.

The key partnership focus for College has been creating the Cheltenham Education Partnership (CEP), an equal partnership combining 10 of Cheltenham’s state and independent secondary schools, plus the University of Gloucestershire (full partners), supported by a number of the town’s important organisations: Cheltenham Festivals, The Cheltenham Trust, the National Cyber Security Centre, Cheltenham Christian Arts Festival, Gloucestershire County Council, Cheltenham Borough Council and the Diocese of Gloucester (supporting partners).

The structure of CEP includes a Steering Group, comprising leaders from our full and supporting partners, who meet termly and have strategic oversight of the CEP. An Operations Group brings together ‘champions’ from each full and some supporting partners, who meet every 4-6 weeks to plan the Programme of Activities. In September 2019 CEP appointed a partnership Coordinator who chairs the Operations Group meetings and leads the administration, planning and delivery of the Programme of Activities. The CEP Coordinator reports back to the Steering Group on the partnership’s activities.

The aims of CEP, to which College has invested professional staff time and financial support, are as follows:

College continues to strive to awaken in our pupils an awareness of the social context of the allround education they receive. The overriding aim is to connect our pupils with communities of disadvantage, deprivation or disability. The Community Action Program (CAP) continues to offer a strong presence within the locality of Cheltenham. Over sixty Sixth Form pupils and twenty four Year 10 pupils took part in the program in a variety of settings including visits to care homes, schools, Cotswold Riding for the Disabled and the Wilson Gallery. This year we secured two new additional placements for volunteering; the Leonard Cheshire Home where pupils engaged and supported individuals with physical disabilities enabling them to carry out creative tasks, and the RVS Coffee Shop at Cheltenham Hospital where two of our pupils learned to make coffee and sell goods to the public. Although the majority of the pupils on the program are Year 12 and Year 10, we have secured work experience places for Upper Sixth pupils wishing to undertake medicine at university. This has been invaluable for them and their personal statements, giving them an experience working in a hospital setting.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

In service week (June 2021) a group of 24 Year 10 pupils completed a Social Action Project and were mentored in this by representatives of Young Gloucestershire. During this same week most of Year 9 pupils were involved in the following community-based projects: Riding for the Disabled, Family Space, Litter picking, Care home visits and wall painting at the General hospital. Many members of staff, in addition to the Director of Community and Partnerships, manage the delivery of this programme.

College continues to work with local charities and educational bodies in our ongoing endeavours to widen public access to the schooling we provide. Our sports facilities, including the Swimming Pool, are made available to local primary schools at minimal cost.

During the year the fundraising activities of the pupil leadership team were much curtailed by Covid, however they raised £4,100 which, together with support from the College’s humanitarian aid fund, will help to cover the cost of equipping the libraries of the Gogar schools in Kenya with 20,000 books.

At the start of the academic year 2021-22 the new pupil leadership team elected to support the work of Pied Piper Appeal, a local (Gloucestershire) charity with the following objectives:

In addition, the pupils pledged to continue supporting the charity ‘Active Impact’, a Gloucestershire based disability charity.

The total amount raised for charitable causes in 2021 across both schools was approximately £10,000. This sum was much lower than previous years and this can be explained by the impact of the lockdown on our fundraising abilities and our overall ability to engage with community partners. The rapid and near-complete withdrawal of cash from our school community has also hit our ability to generate sums.

In addition to this sum, College directed £22,600 (2020: £37,250), from its Humanitarian Aid fund towards supporting schools in Nepal, Kenya, South Africa and Romania.

College has also partnered with the charity ‘Talent Tap’ and All Saints’ Academy. This initiative offers pupils from the academy access to the alumni networks of independent school partners in order to develop business acumen.

Finally, College remains committed to our overseas supported schools’ partnerships. In normal years these schools flourish through the dedicated care of College and overseas staff. Working closely with 4 schools in Nepal, Romania, Kenya and South Africa our longest standing association started 20 years ago. Our main focus is to:

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Intended impact

With the combination of the provision of first class education, an extensive range of co-curricular activities and the granting of significant bursaries and scholarships, College continues to develop the academic, sporting, artistic and social potential of children from a broad spectrum of financial and social backgrounds.

Review of achievements and performance for the year

College’s consistently excellent performance in public examinations was maintained again this year with 75% of A level exams achieving Ato A grade (2020: 59%) and 91% A to B grade (2020: 83%). College retains its place amongst the top schools in the country for academic performance which, combined with the added breadth of the educational experience, enables pupils to reach their full potential. At the Prep School, every final year pupil moved to their first choice senior school with 28 pupils (2020: 21) obtaining scholarships and exhibitions at their chosen school.

Maintaining a mix of excellent academic achievement and sporting and cultural activities this year remained a key element of our ethos. College has a policy of sport for all and as a result up to five teams per year group represent us in each sport. The ‘major’ sports include rugby, netball, hockey, cricket, tennis, racquets and athletics. A broad range of ‘minor’ sports are also promoted.

College gives a high priority to the performing arts. In addition to a strong academic performance across drama and music in public examinations, there are weekly concerts, major music and drama productions, house concerts and group productions, many of which allow a broad participation for pupils across the age range from 8 to 18.

Capital and other projects

Both the financial effects of Covid-19 and the physical restrictions that lockdown required, inevitably curtailed many of the planned capital investment projects for the last two years, 2019-21. The proposed extension to College Lawn of 16 new bedrooms and Housemistress accommodation commenced in July 2021. Completion is expected in time for the start of the new 2022-23 academic year.

Improvements to the facilities at Pre-Prep in the Prep were completed during the 2021 Summer holidays in time for the new 2021-22 term. Groundworks and construction of a new Nursery facility at the Prep commenced in November 2021; it is anticipated that completion will be in time for the 2022-23 academic year.

In addition, the 2021-22 academic year will see a significant investment into changing room facilities at the Sports Hall for both home and away teams at College and the Prep. This project commenced in January 2022 with an expected completion in August 2022 ready for the new academic year.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Cheltenham College Muscat

Preparations for the opening of Cheltenham Muscat continued throughout the year. The new school subsequently opened its doors and welcomed its first pupils on 12 September 2021.

Cheltenham Muscat is the first British branded, co-educational independent school to be established in Oman. Its construction on a 45,000 sqm site in the Al Seeb district of the city has progressed well in spite of the many challenges presented by a global pandemic, and pupil registrations have substantially exceeded forecasts. Our ‘sister school’ is locally owned and operated by an independent company led by the Oman Ministry of Defence Pension Fund. The Founding Principal at Cheltenham Muscat is Mr Crispin Dawson, previously Senior Deputy Head of Cheltenham College.

In addition to generating incremental income that will be used to fund bursary provision - thus further widening access to College – Cheltenham Muscat will also strengthen the profile and reach of the Cheltenham College brand internationally, and will offer a range of exciting opportunities for staff and pupil cooperation and development.

Fundraising performance

Donations received for the year fell, primarily due to the economic uncertainty arising from Covid19, to £23,000 (2020: £149,000). Donations received were either restricted to a specific use, such as bursaries and various capital projects, or directed to the area of greatest need. All donations received are held in the Cheltenham College Charitable Trust (Charity No. 1006429).

The Development Office cost base was significantly lower for the year on account of operating budget and staff cost reductions.

Cheltenham College’s Code of Practice for Fundraising, which is available on the College website, states that:

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Cheltenham College did not receive any complaints with respect to fundraising for the year to 31 August 2021.

Financial Review

Results for the year

The group’s net income for the year to 31 August 2021 amounted to £2,559,000 (2020: £1,100,000). Realised and unrealised investment gains of £1,113,000 (2020: £100,000) are included in this figure. The gains on investment do not form part of the core financial planning for College; excluding these gains College met the financial performance targets set by Council. Such a surplus will strengthen College’s ability to invest in facilities in both schools in the years to come.

Our trading subsidiary has contributed to the above achievements by optimising the use of College’s assets and generating a trading surplus for donation to College as reported below.

Reserves

College does not hold any free reserves; all operating surpluses are invested in fixed assets and infrastructure to ensure the continued development of College. The general reserve, accumulated since the founding of College has been retained to cover these fixed assets investments, provide working capital and also a buffer against fluctuations in income resultant from significant adverse variations in pupil numbers. In the unlikely event of the need to call upon reserves, the level and variety of fixed assets held are such that disposal of an appropriate asset could realise sufficient resources to meet the requirement. The Trustees have reviewed the reserves policy as part of their strategic planning and decided that continued investment in College’s facilities remains essential to ensure continued recruitment of healthy pupil numbers through the provision of excellent facilities in both schools.

Total consolidated funds at the year end stood at £70.9 million (2020: £68.3 million).

The Unrestricted Designated Funds of £728,000 (2020: £390,000) are used to hold College Lottery receipts, unused amounts from bequests and to make provision for future discounts in respect of fees paid in advance. Following the closure of the Closed FIA scheme in May 2015 (see note 18) College continues to hold a prudent proportion of advance fees in liquid investments. The Lottery element of these funds are used throughout the academic year to subsidise school trips in the Prep and College (including cricket and netball tours to Dubai, a geography trip to Cuba and the annual Prep year 8 trip to Bude) as well as fund projects in our partner schools in Nepal and Kenya, and the Romanian Orphanage project. Other funds will be allocated according to need.

The Restricted Funds of £1,818,000 (2020: £1,673,000) are scholarship income (normally all used in the year of receipt), College’s bursary fund that is subscribed to by parents on accepting a place for their children at the Senior School and monies belonging to the CCCT.

The Endowed Funds of £4,370,000 (2020: £3,595,000) consist of Scholarship, Bursary and Prize Funds, which are invested to provide income for scholarships and other awards, which are designed to help widen access to College.

Note 26 to the accounts analyses the assets attributable to the various funds. These assets are sufficient to meet the Charity’s obligations on a fund-by-fund basis.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

The reserve maintained for the Fees in Advance Scheme will continue to provide a strong level of asset backing for longer term liabilities. The restricted and endowed investment reserves are held through College’s Scholarship and Endowment Reserves or through CCCT and continue to support College’s development as well as providing support for specific pupil grants.

Principal risks and uncertainties

The Council considers the economic turbulence of recent years and the affordability of fees by parents across the independent sector to be the principal risks faced by College. College is currently full and expects to expand in the future alongside investments in College Lawn, but the Council remains acutely aware of the importance of affordability of fees. For September 2021, the Council has limited fee changes to a 3.75% increase which we believe to be relatively low compared with College’s peer group. The provision of bursaries remains a key plank in College’s strategy to make fees affordable.

College continues to review the political risks that attach to the independent schools sector. These include maintenance of charitable status, possible VAT on fees, Brexit and rates relief on principal buildings.

Health and safety, and pupil safeguarding are always a significant area for risk management and reflect the immense responsibilities College takes in regard to both pupils and staff. A robust set of policies is constantly updated and supported by a number of well-established committees which include the senior officers of College. Recruitment of staff is the first step in inculcating College’s policies in regard to these risks. Further communication of those policies to staff and pupils, and the monitoring of compliance is a vital part of the ongoing risk management plan.

College has invested heavily both in terms of IT hardware and IT staff during the last year. This is not only to provide the level of bandwidth and resilience that teachers, operational staff and pupils require but also to provide stability and reliable back-up facilities in the event of an IT infrastructure failure.

The loss of Tier 4 Sponsor status, whereby College takes responsibility for a number of overseas pupils, is deemed to be a risk to College’s reputation and could result in the loss of a number of overseas pupils. College’s Director of Compliance and Operations continues to oversee compliance with UK Visas and Immigration requirements.

Detailed consideration of risk is delegated to FRD, which reports formally to the Council. The risk management process and the resulting report identifies risks, assesses their impact and likelihood and, where necessary, recommends controls to mitigate and monitor those risks. The generic controls used by College to minimise risk include:

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Further details as to the Council’s approach to the current Covid-19 pandemic is detailed on pages 18 to 19.

The Council regularly review the effectiveness of current plans and strategies for managing all identified major risks for both College and its subsidiaries.

Future plans

College’s current Development Plan has been agreed by Council and is subject to annual review. The primary future plans for College are set out in the core elements of the Development Plan. These are:

These aims underpin development plans which have been developed for each of the two schools and so College continues to enhance its ability to provide a first-class education to its pupils.

Covid-19 and going concern

2020-21 continued to witness the effects of the Covid-19 pandemic. While the effects were less severe than 2019-20 College’s sporting and other extra-curricular activities were curtailed by UK Government restrictions and by College’s own desire to keep pupils and staff safe. While the pandemic is said to be in decline and the UK Government is easing the curbs previously imposed, College remains vigilant to the effects of Covid-19 among the pupil and staff bodies. To support this level of confidence College has, as with all UK schools, put in place a strict testing regime with pupils tested in their respective houses or, with day pupils, under parental supervision. All staff are, likewise, subject to a regime of regular testing.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

The ‘Capital and other projects’ section of this report highlights some of the large individual investments College is making in 2021-22 to help expand the pupil base and also improve the extracurricular experience for College’s pupils and for visiting teams. In addition to those projects a strategy has been agreed with Council to increase the spend on the 2021-22 program of remedial work on College’s current infrastructure. The program will enhance the academic and pastoral life of pupils and staff while seeking to meet the challenges of new teaching methodologies that have emerged from the Covid-19 lockdowns. This program is set in the context of strong pupil numbers in both College and Prep. In addition demand for new places for both schools for September 2022 onwards remains both buoyant and greater than in previous years.

College has discussed the nature, timings and expected costs of its investment plans with its bankers who have expressed support for the proposed program. One of the loans requested for the capital projects has recently been put in place and drawn down, other loans and facilities are expected to be in place in the next two or three months. In light of the various factors touched on above, Council believe that College’s financial resources and contingency planning are sufficient to ensure the ability of College to continue as a going concern for the foreseeable future and therefore the financial statements have been prepared on this basis.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Statement of Trustees’ responsibilities

The Trustees are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards).

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

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

The Annual Report and this Statement of Trustees’ responsibilities have been signed on behalf of the Trustees.

William Straker-Nesbit President of the Council 5 March 2022

Page 20

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Independent Auditor’s Report to the Trustees of Cheltenham College

Opinion

We have audited the financial statements of Cheltenham College for the year ended 31 August 2021 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity's or the group’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Other information

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

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

We have nothing to report in this regard.

Matters on which we are required to report by exception

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

Responsibilities of Trustees

As explained more fully in the Trustees Responsibilities statement, Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under section 151 of the Charities Act 2011 and report in accordance with the Acts and relevant regulations made or having effect thereunder.

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

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.

Details of the extent to which the audit was considered capable of detecting irregularities, including fraud and non-compliance with laws and regulations are set out below.

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.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion.

We obtained an understanding of the legal and regulatory frameworks within which the charity and group operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Charities Act 2011, together with the Charities SORP (FRS 102). We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the charity’s and the group’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charitable company and the group for fraud. The laws and regulations we considered in this context for the UK operations were The Education (Independent School Standards) Regulations 2014.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of Trustees and other management and inspection of regulatory and legal correspondence, if any.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing of recognition of income from donations, grants and ancillary trading income, procurement processes for significant capital projects, and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management, and the Audit Committee about their own identification and assessment of the risks of irregularities,

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CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

sample testing on the posting of journals, designing audit procedures over income and capital projects, reviewing accounting estimates for biases, reviewing regulatory correspondence with the Charity Commission, Independent Schools Inspectorate and Ofsted, and reading minutes of meetings of those charged with governance.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

Use of our report

This report is made solely to the charity’s Trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charity’s Trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s Trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Crowe UK LLP

Crowe U.K. LLP Statutory Auditor 4th Floor, St James House St James Square Cheltenham GL50 3PR

6 April 2022

Crowe U.K. LLP is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.

Page 24

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Consolidated Statement of Financial Activities for the year end 31 August 2021

Unrestricted Unrestricted Restricted Endowed 2021 2020
Notes Funds Funds funds Total Total
£’000 £’000 £’000 £’000 £’000
Income and endowments
from:
Charitable activities
School fees receivable 2 27,094 - - 27,094 24,821
Ancillary trading income 3 1,458 - - 1,458 647
Other trading activities
Non-ancillary trading income 4 2 - - 2 2
Other activities 4 27 - - 27 1
Investments
Investment income 5 47 68 - 115 136
Bank and other interest 6 53 - - 53 78
Donations, grants and legacies 7 313 4 - 317 1,288
Total income 28,994 72 - 29,066 26,973
Expenditure on:
Raising funds
Non-ancillary trading 8 (273) - - (273) (257)
Financing costs 9 (339) - - (339) (377)
Investment management (17) (2) (24) (43) (40)
Fundraising and development (193) - - (193) (333)
Total deductible costs 8 (822) (2) (24) (848) (1,007)
Charitable activities
Education and grant making 8 (26,720) (52) - (26,772) (24,966)
Total expenditure (27,542) (54) (24) (27,620) (25,973)
Net income/(expenditure)
before investment gains		 1,452 18 (24) 1,446 1,000
Gains on investments 13 293 73 747 1,113 100
Net income 1,745 91 723 2,559 1,100

Page 25

Council’s Report and Financial Statements Year ended 31 August 2021

CHELTENHAM COLLEGE

Consolidated Statement of Financial Activities for the year end 31 August 2021 (continued)

Unrestricted Restricted Endowed 2021 2020
Notes
Funds		 Funds Funds Total Total
£’000 £’000 £’000 £’000 £’000
Net income 1,745 91 723 2,559 1,100
Transfers between funds 24 (106) 54 52 - -
Net movement in funds 1,639 145 775 2,559 1,100
Reconciliation of funds
Fund balances brought forward at 1
September 2020 63,042 1,673 3,595 68,310 67,210
Fund balances carried forward at
31 August 2021 64,681 1,818 4,370 70,869 68,310

The notes on page 30 to 57 form part of these financial statements.

Page 26

CHELTENHAM COLLEGE

Council’s Report and Financial Statements Year ended 31 August 2021

Balance Sheets as at 31 August 2021

Note
Fixed assets
Tangible assets
12
Fees in Advance Scheme invested
13
Securities investments
13
Current assets
Stock
14
Debtors
15
Cash and deposits
Current liabilities
Creditors payable within one year
16
Net current (liabilities)
Total assets less current liabilities
Long-term liabilities
Creditors payable after one year
17
Net assets
Represented by:
Endowed funds
24
Restricted funds
24
Unrestricted funds
General and designated reserves
24		 Group
College
2021
2020
2021
2020
£’000
£’000
£’000
£’000
80,084
80,033
80,302
80,223
2,802
2,536
2,802
2,536
5,092
4,173
3,559
2,912
87,978
86,742
86,663
85,671
126
106
101
79
1,107
1,214
1,829
1,931
1,891
1,507
1,292
1,028
3,124
2,827
3,222
3,038
(8,694)
(8,185)
(9,243)
(8,805)
(5,570)
(5,358)
(6,021)
(5,767)
82,408
81,384
80,642
79,904
(11,539)
(13,074)
(11,539)
(13,074)
70,869
68,310
69,103
66,830
4,370
3,595
3,558
2,912
1,818
1,673
1,031
935
64,681
63,042
64,514
62,983
70,86968,310
69,103
66,830

The surplus, before gains on investments, for the financial year dealt with in the financial statements for College was £2,273,000 (2020: £1,061,000).

These financial statements were approved by the Council on 5 March 2022 and were signed on its behalf by:

William Straker-Nesbit (President of Council)

The notes on page 30 to 57 form part of these financial statements.

Page 27

CHELTENHAM COLLEGE

Council’s Report and Financial Statements Year ended 31 August 2021

Consolidated Cashflow statement for the year ending 31 August 2021

Note

£’000
Cash flows from operating activities
Net cash provided by operating activities (a)
Cash flows provided by/(used in) investing activities:
Payments for tangible fixed assets
(1,159)
Proceeds on sale of tangible fixed assets
2
Additions to securities investments portfolio
(1,586)
Withdrawals from securities investments
portfolio
1,514
Net cash used in investing
activities
Cash flows provided by/(used in) financing
activities:
New loans
-
Loan repayments
(943)
Finance income received
115
Bank interest paid
(257)
Net cash used in financing activities
Fees in advance schemes
New fees in advance contracts
2,384
Refunded fees
(71)
Capital utilised in year
(2,191)
Change in cash and cash equivalents
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash in the year (b)
Cash (outflow)/inflow from movement in
debt and hire purchase
Net bank debt at 1 September 2020
Net bank debt at 31 August 2021		 2021
£’000
2,576
(1,229)		 2020

£’000
£’000

1,888
(424)
-
(1,495)
1,440

(479)

1,409
3,000
(2,844)
136
(312)

(20)
1,243
(2)
(2,837)

(1,596)

(207)

(207)

(194)

(7,258)

(7,659)		 2020

£’000
£’000

1,888
(424)
-
(1,495)
1,440

(479)

1,409
3,000
(2,844)
136
(312)

(20)
1,243
(2)
(2,837)

(1,596)

(207)

(207)

(194)

(7,258)

(7,659)
1,347
(1,085)
122		 1,409
(20)
(1,596)
384 (207)
384
943
(7,659)		 (207)
(194)
(7,258)
(6,332) (7,659)

The notes on page 30 to 57 form part of these financial statements.

Page 28

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Consolidated Cashflow statement for the year ending 31 August 2021 (continued)

(a) Reconciliation of net income to net cash flow from operating activities

Net income before investment gains
Elimination of non-operating cash flows:
Finance income received
Bank interest paid
Fees in advance fair value adjustment
Depreciation charge
Loss on sale of assets
(Increase) in stocks
Decrease in debtors
(Decrease) in creditors (excluding fees in
advance scheme and bank loans)
Net cash inflow from operations

(b) Analysis of changes in net debt
Cash at bank
Loans due within 1 year
Loans due after 1 year
Net bank debt
£’000
(115)
257
(15)
1,102
3
(19)
108
(191)		 2021
£’00
1,44
1,13		 2020
0
£’000
£’000
6
1,000
(136)
312
(58)
1,154
1
(23)
66
(428)
0
888
6
1,888
r
31 August
0
Cash flows
2021
0
£’000
£’000
7
384
1,891
)
(550)
(1,576)
)
1,493
(6,647)		 2020
0
£’000
£’000
6
1,000
(136)
312
(58)
1,154
1
(23)
66
(428)
0
888
6
1,888
r
31 August
0
Cash flows
2021
0
£’000
£’000
7
384
1,891
)
(550)
(1,576)
)
1,493
(6,647)
2,57 1,888
1 Septembe
202
£’00
1,50
(1,026
(8,140		 31 August
2021
£’000
1,891
(1,576)
(6,647)
(7,659 )
1,327		 (6,332)

Page 29

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

Cheltenham College (“College”) is a Public Benefit Entity registered as a charity on 10 June 1965 in England and Wales (number 311720). Its principal office is Bath Road, Cheltenham GL53 7LD.

1. Principal Accounting Policies

The financial statements have been prepared in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Charities Act 2011 and the Statement of Recommended Practice (the Charities SORP (FRS 102)) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) - effective 1 January 2015.

The financial statements have been prepared to give a ‘true and fair’ view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a ‘true and fair view’. This departure has involved following Accounting and Reporting for Charities that prepare their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2015 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

(a) Basis of Consolidation

The consolidated Statement of Financial Activities and Balance Sheet include the financial statements of Cheltenham College and its wholly owned trading subsidiary, Cheltenham College Services Limited.

Cheltenham College Charitable Trust is an independently run charity. The charity is consolidated into College in order to comply with FRS 102 Section 9. Cheltenham College International Limited was incorporated in 2019-20. It commenced trading during the year and as such has been included in the consolidated financial statements.

College has taken advantage of the exemption available to a qualifying entity in FRS 102 from the requirement to present a charity only Cash Flow Statement within the consolidated financial statements.

(b) Going Concern

Having reviewed the funding facilities available to the Group together with the expected ongoing demand for places and the Group’s future projected cash flows, the Council have a reasonable expectation that the Group has adequate resources to continue its activities for the foreseeable future and consider that there were no material uncertainties over the Group’s financial viability. Accordingly, they also continue to adopt the going concern basis in preparing the financial statements as outlined in the Statement of Trustees' Responsibilities on page 20.

At the time of approval, the cases arising in the UK and most developed countries from the Covid-19 virus and more particularly the Omicron variant appear to have stabilised and indeed started a gentle downward trend. Despite the apparent improving situation, College remains alert to any upswing in cases and the potential impact on College’s fees and staffing availability.

Page 30

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

1. Principal Accounting Policies (continued)

(b) Going Concern (continued)

The Council have undertaken detailed planning and forecasting and continue to closely monitor the developing situation. Please refer to pages 18 to 19 of the Council’s Report where they have reflected on the current situation and have outlined the impact for the College. Despite the current circumstances the Council believe that the College’s financial resources and contingency planning is sufficient to ensure the ability of College to continue as a going concern for the foreseeable future, being at least twelve months from the date of approval of these financial statements and therefore have prepared the financial statements on a going concern basis.

(c) Fees Receivable

Fees receivable consists of charges billed for fees, board and tuition for the School less bursaries and allowances. They are accounted for in the period in which the services are provided. Fees received for education to be provided in future years are carried forward as deferred income.

(d) Trading Activities

Trading income comprises the trading activities of College and the subsidiaries and is credited to the Statement of Financial Activities on a receivables basis.

(e) Donations, Grants and Legacies

Donations, grants and legacies are recognised in the financial statements when the Group has entitlement to the funds, any performance conditions attached to the items of income have been met, it is probable that the income will be received and the amount can be measured reliably.

(f) Expenditure

Expenditure is included in the Statement of Financial Activities on an accruals basis. Overheads and other costs not directly attributable to particular functional activity categories are apportioned over the relevant categories on the basis of management estimates of the amount attributable to that activity in the year, either by reference to staff time or space occupied, as appropriate. The irrecoverable element of VAT is included with the item of expense to which it relates. Costs of generating funds includes all staffing and fundraising costs. Charitable activity expenses are allocated to functional groups on a direct cost basis or apportioned on a staff time basis.

Governance costs are included in charitable expenditure and comprise the costs of running College including strategic planning for its future development, also external audit, any legal advice for the Council, and all the costs of complying with constitutional and statutory requirements, such as the costs of Council meetings and of preparing statutory financial statements and satisfying public accountability.

Page 31

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

1. Principal Accounting Policies (continued)

(g) Pension Scheme Arrangements

College is involved with a number of pension schemes for its employees.

Cheltenham College contributes to the Teachers’ Pension Defined Benefit Scheme at rates set by the Scheme Actuary and advised to College by the Scheme Administrator. The Scheme is a multi-employer pension scheme and it is not possible to identify the assets and liabilities of the Scheme, which are attributable to College. In accordance with FRS 102 Section 28.11 the Scheme is accounted for as a defined contribution scheme and contributions are accounted for when advised as due by the Scheme Administrator.

Other staff have the option of joining a defined contribution scheme operated by an insurance company. College and members of staff pay fixed percentages of salaries to the insurance company. College’s contributions are charged in the Statement of Financial Activities as they fall due.

(h) Fund Accounting

Details and the nature and purpose of each fund is set out within the Investment policy and objectives on page 9 of the Annual Report of the Council. Funds held for the general purpose of College are held as unrestricted funds. Those held by College for specific purposes outside normal operations such as College lottery, bequests and the Tinson Hardship Fund are held as designated funds and set aside by the Trustees. Those subject to specific wishes of the donors are included within the relevant restricted or endowed funds.

(i) Tangible Fixed Assets

The cost of tangible fixed assets is their purchase cost, together with any incidental costs of acquisition and is subject to a de-minimis limit of £1,000. Freehold land and buildings include original cost and subsequent alterations and additions. The cost of land and buildings includes interest paid on specific related borrowings during the construction period.

(j) Depreciation

Depreciation is calculated on a straight-line basis to write off the cost, less estimated residual value, of fixed assets over their estimated useful lives as follows: -

Freehold buildings 1% - 20% on cost Furniture & equipment 4% - 33% on cost, based on life expectancy - Boilers 10% on cost - Computers & electronic equipment 10% - 50% on cost Cars 25% on cost Other motor vehicles 10% - 50% on cost

Page 32

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

1. Principal Accounting Policies (continued)

(j) Depreciation (continued)

Depreciation commences in the year of acquisition or when the asset is brought into use and as a result assets under construction are not depreciated. College’s buildings have to be maintained in good working order, with many having listed building status. Most of these buildings are therefore considered to have an expected useful life in excess of one hundred years. In accordance with FRS 102 Section 27.7 the buildings are tested for impairment annually, because their expected useful life exceeds 50 years. College, in determining the value of the buildings, has based its consideration on the service potential of the assets to further their charitable objectives. Depreciation on those buildings not already being depreciated commenced in September 2000 at a rate of not less than 1% based on their life expectancy. Land is not depreciated.

(k) Investments

Investment in subsidiaries is stated at cost.

Listed investments are reported at their fair values at the balance sheet date based on their quoted market prices. Gains and losses arising on investment assets are disclosed separately in the Statement of Financial Activities which includes realised gains or losses where the investments have been sold and unrealised where they are still held at the balance sheet date. In both cases the gain or loss is calculated with regard to the market value at the beginning of the year, or its cost if purchased during the year.

(l) Stock

Stock is valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost is defined as the average cost of finished goods and raw materials including transport and handling costs. Net realisable value is based on estimated selling price less further costs expected to be incurred prior to disposal.

(m) Debtors Short term debtors are measured at transaction price, less impairment. Details of these financial assets are set in note 15.

(n) Cash and Cash Equivalents

Cash is represented by cash in hand and deposits with financial institutions.

(o) Creditors

Short term creditors are initially measured at the transaction price. Details of these financial liabilities are set in notes 16, 17 and 18 below.

Page 33

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

1. Principal Accounting Policies (continued)

(p) Financial Instruments

Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of investments and the complex fees in advance scheme, which are held at fair value.

Financial assets measured at their settlement value comprise cash, trade and fee debtors, group and other debtors and accrued income. See note 15 for further details.

Financial liabilities measured at their settlement value comprise trade creditors, bank loans and overdrafts, group and other creditors, and accruals. See notes 16, 17 and 20 for further details.

College offered an inflation free fees in advance scheme as described in note 19.

The liability recognised in respect of this scheme is considered to be a non-basic financial instrument and has therefore been classified as a financial liability measured at fair value through profit or loss.

(q) Recognition of Liabilities

Liabilities are recognised once there is a legal or constructive obligation that commits College to the obligation.

(r) Fees in Advance

Under the current FIA scheme, which was introduced in July 2015, a fee payer may enter into a contract to pay College in advance for fixed contributions towards the tuition fees for a period agreed with College. These contributions give rise to a fixed discount on future fees.

The discount arising on the contributions is charged to the Statement of Financial Activities on a year by year basis.

In the event of a parent withdrawing their capital sum from the old FIA scheme, interest arises on the undrawn balance at 1% below the bank base rate. Any such interest is disclosed as a potential liability under the scheme.

(s) Judgments in applying Accounting Policies and Key Sources of Estimation Uncertainty

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

(i) Useful economic lives of tangible assets

The annual depreciation charge for the tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 12 for the carrying amount of the fixed assets and note 1(j) for the useful lives for each class of assets.

Page 34

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

1. Principal Accounting Policies (continued)

(ii) Impairment of debtors

The group makes an estimate of the recoverable value of fee and other debtors. When assessing impairment of fee and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 15 for the net carrying amount of the debtors.

(iii) Fees in advance Scheme

As set out in notes 18 and 19 the liabilities of one of the extant Fees in Advance Schemes was closed for new business in May 2015.

Page 35

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

2. Charitable activities – Fees receivable

Fees receivable consist of:
School fees
Less: Total scholarships and bursaries
Waiving of boarding fees (Covid-19)
Discount on fees/day fees arising from Covid 19
Add back: Bursaries and other awards paid for by restricted
funds		 2021
2020
£’000
£’000
32,731
32,081
(4,182)
(3,830)
-
(1,716)
(1,507)
(1,772)
27,042
24,763
52
58
27,094
24,821

536 awards including scholarships, bursaries and other awards were awarded to pupils across both schools in the year to 31 August 2021 (2020: 505). Within this means-tested bursaries totalling £1.53million were granted (2020: £1.56 million).

3. Ancillary Trading income

Extras and trips
Lettings and other revenue
Entrance and registration fees
4. Other trading activities
Trading income
Tuck Shop
Other activities
(Profit)/loss on sale of assets
Other income		 2021
2020
£’000
£’000
443
116
591
339
424
192
1,458
647
2021
2020
£’000
£’000
2
2
2
1
25
-
27
1

Page 36

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

5. Investment Income
Unrestricted Restricted Endowed Total Total
2021 2020
£’000 £’000 £’000 £’000 £’000
Equities 47 68 - 115 136
6. Bank and other interest income
Unrestricted Restricted Endowed Total Total
2021 2020
£’000 £’000 £’000 £’000 £’000
Interest on overdue fees
and other charges 53 - - 53 78
7. Donations, grants and legacies
Unrestricted Restricted Endowed Total Total
2021 2020
£’000 £’000 £’000 £’000 £’000
Grants to Group for Bursaries from:
College Lottery Scheme 77 - - 77 70
Donations and legacies 19 4 - 23 157
Government
grant		 -
Furlough 217 - - 217 1,061
313 4 - 317 1,288

Page 37

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

8. Analysis of Expenditure

(a) Total expenditure

(a) Total expenditure
Expenditure on raising
funds
Non-ancillary trading
Financing costs (note 9)
Investment management
Fundraising and
development
Total costs of raising
funds
Charitable expenditure
Education and grant making
Teaching
Welfare
Premises
Support costs of schooling
Governance costs
Grants, awards and prizes
Total charitable
expenditure
Total expended		 Staff costs
Depreciation
Other
Total
Total
(note 11)
(note 12)
2021
2020
£’000
£’000
£’000
£’000
£’000
-
30
243
273
257
-
-
339
339
377
-
-
43
43
40
158
-
35
193
333
158
30
660
848
1,007
12,022
210
1,821
14,053
13,767
2,839
-
1,273
4,112
3,343
1,342
862
3,399
5,603
4,716
1,789
-
966
2,755
2,815
133
-
34
167
184
-
-
82
82
141
18,125
1,072
7,575
26,772
24,966
18,283
1,102
8,235
27,620
25,973

Governance costs consist of 15% of the salary costs of both Heads, 25% of the Bursar, Deputy Bursar and Director of Finance. The other governance costs are the audit fee, governance legal costs and Council members’ expenses. See note 8(c) for further details.

(b) Grants, awards and prizes
From Restricted Funds:
Bursaries and other grants and awards
From Unrestricted Funds:
Prizes and leaving awards		 2021
2020
£’000
£’000
52
58
31
84
83
142

Page 38

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

8. Analysis of Expenditure (continued)

(c) Other governance included above:
Remuneration paid to auditor:
-
for audit services
-
for taxation and VAT (included in Support costs of
Schooling)
-
for Teachers Pension returns
Council expenses
Reimbursement of personal expenses to Council		 2021
2020
£’000
£’000


17
11
2
18
4
1
2
11
2
2
34
36

Travel expenses were reclaimed by one member (2020: 1) of the Council in relation to attendance at Council meetings.

9. Financing costs

Fees in Advance debt-financing cost
Release of fair value provision for Fees in Advance
Bank and loan interest		 2021
2020
£’000
£’000
97
123
(15)
(58)
257
312
339
377

10. Taxation

College is a registered charity and as such is entitled to certain tax exemptions on income and profits from investments and surpluses on any trading activities carried on in furtherance of College's primary objectives, if these profits and surpluses are applied solely for charitable purposes.

Page 39

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

11. Staff costs and related party transactions

The aggregate payroll costs for the year were as follows:
Wages and salaries
Social security costs
Other pension costs (note 22)
Life assurance costs		 2021
2020
£’000
£’000
14,868
14,869
1,317
1,293
2,237
2,174
(89)
96
18,333
18,432

None of the Governors received any remuneration or other benefits from College or from any connected body.

The key management for the purposes of the analysis below represents the five members (2020: five) of College Executive Committee (CEC) currently comprising the Heads of both schools, the Bursar, the Deputy Head Pastoral of College and one of the Deputy Heads of the Prep. The total employee benefits of those personnel sitting on CEC while employed by College, including employers’ National Insurance and pensions costs, were:

Aggregate employee-benefits of the CEC:
Number of higher paid employees (excluding National Insurance and
Pension) including the CEC, in bands of:
£60,001 to £70,000
£70,001 to £80,000
£80,001 to £90,000
£90,001 to £100,000
£110,001 to £120,000
£120,001 to £130,000
£150,001 to £160,000
£170,001 to £180,000		 2021
2020
£’000
£’000
804
791
2021
2020
number
number
6
6
3
2
1
1
-
1
-
1
1
-
1
1
1
1

Certain bandings and the aggregate benefits figure for 2019-20 have been restated to reflect the appropriate disclosure of employer’s national insurance, and to provide consistency with 2020-21.

Page 40

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

11. Staff costs and related party transactions (continued)

11. Staff costs and related party transactions (continued)
2021 2020
The number with retirement benefits accruing number number
- in Defined Contribution schemes: 4 4
of which the contributions amounted to (£000's) 52 50
- in Defined Benefit schemes: 9 9
of which the contributions amounted to (£000's) 198 189

The average number of College’s employees during the year was as follows:

Teaching
Welfare
Premises
Support
Other activities		 2021
2020
number
number
305
299
115
109
55
55
94
96
7
7
576
566

The average number of College’s full time equivalent employees during the year was as follows:

Teaching
Welfare
Premises
Support		 2021
2020
number
number
220
206
90
79
45
42
61
56
416
383

During the year there were a number of termination payments made which amounted to £22,000 (2020: £26,300). These payments arose out of the restructuring of a number of departments within College and were calculated in line with College's contractual commitments.

Page 41

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

12. Tangible fixed assets

Group
Cost
At 1 September 2020
Additions
Disposals
At 31 August 2021
Depreciation
At 1 September 2020
Charge for the year
Disposals
At 31 August 2021
Net book value
At 31 August 2021
At 31 August 2020		 Freehold
Land &
Buildings
Assets
under
Construction
Furniture
&
Equipment
Motor
Vehicles
Total
£’000
£’000
£’000
£’000
£’000
83,911
-
8,843
195
92,949
108
509
526
16
1,159
-
-
(410)
(2)
(412)
84,019
509
8,959
209
93,696
6,577
-
6,168
171
12,916
483
-
610
9
1,102
-
-
(406)
-
(406)
7,060
-
6,372
180
13,612
76,959
509
2,587
29
80,084
77,334
-
2,675
24
80,033

Page 42

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

12. Tangible fixed assets (continued)

College
Cost
At 1 September 2020
Additions
Disposals
At 31 August 2021
Depreciation
At 1 September 2020
Charge for the year
Disposals
At 31 August 2021
Net book value
At 31 August 2021
At 31 August 2020		 Freehold
Land &
Buildings
Assets
under
Construction
Furniture
&
Equipment
Motor
Vehicles
Total
£’000
£’000
£’000
£’000
£’000
84,224
-
8,241
222
92,687
108
509
523
15
1,155
-
(278)
(1)
(279)
84,332
509
8,486
236
93,563
6,628
-
5,638
199
12,465
487
-
579
9
1,075
-
-
(279)
-
(279)
7,115
-
5,938
208
13,261
77,217
509
2,548
28
80,302
77,596
-
2,603
23
80,223

College holds no 'heritage assets' as defined by FRS 102 as such assets are employed in operational use.

Page 43

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

13. Securities Investments

13. Securities Investments
Group investments
At 1 September 2020
Net dividends
Investment management fees
Net (losses)/gains in value of investments
Group investments at 31 August 2021
Investments comprise:
Listed investments
Fixed interest
Alternative investments
Equities
Cash
Group investments
College investments
At 1 September 2020
Net dividends
Investment management fees
Net gains/(losses) in value of investments
College investments at 31 August 2021		 Fees in advance
Scholarship and Trust
Investments
investments
2021
2020
2021
2020
£’000
£’000
£’000
£’000
2,536
2,551
4,173
3,960
43
52
72
83
(16)
(15)
(27)
(24)
239
(52)
874
154
2,802
2,536
5,092
4,173
1,656
1,548
659
585
681
568
795
576
371
375
3,462
2,931
94
45
176
81
2,802
2,536
5,092
4,173
2,536
2,551
2,912
2,755
43
52
43
57
(14)
(15)
(19)
(16)
237
(52)
623
116
2,802
2,536
3,559
2,912

The main Securities investments and Fees in Advance Scheme investment deposits are managed for College by Quilter Cheviot Investment Management.

Page 44

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

13. Securities Investments (continued)

Alternative investments, as above, comprise investment in property and commodity fund and unit trusts.

Holdings at the year-end comprising more than 5% of the above combined total are:

2021 2020
£’000 £’000
Group and College
Ishares Ii Index-linked Gilts UCITS 423 397
Charities Prop Property Fund Income - 295
Ishares Core S&P 500 UCITS ETF USD - 274

Further details on the investments in subsidiaries are set out in note 23.

14. Stock

14. Stock
Works department materials
Catering
Other		 Group
College
2021
2020
2021
2020
£’000
£’000
£’000
£’000
9
11
11
11
20
21
20
21
97
74
70
47
126
106
101
79

Stock in the Group is stated after a provision for impairment of £2,400 (2020: £1,900).

15. Debtors

15. Debtors
Due in one year
Fees and extras
Trade
Other debtors
Other prepayments and accrued income
Amounts due from subsidiary companies
Due after one year
Prepayment to subsidiary company		 Group
College
2021
2020
2021
2020
£’000
£’000
£’000
£’000
692
817
692
817
71
51
61
51
38
36
17
20
306
310
290
303
-
-
31
-
1,107
1,214
1,091
1,191
-
-
738
740
1,107
1,214
1,829
1,931

Page 45

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

16. Creditors: amounts falling due within one year

Bank loans and overdraft (note 20)
Deposits from parents
Fees received from parents in advance of
term
Trade creditors
Taxation and social security
Other creditors
Fees in Advance Scheme (note 18)
Fees in Advance Scheme - Fair value (note
18)
Accruals
Amounts due to subsidiary companies		 Group
College
2021
2020
2021
2020
£’000
£’000
£’000
£’000
1,576
1,026
1,576
1,026
465
533
465
533
2,528
2,269
2,5282,269
258
181
246
171
344
317
342
310
387
668
313
660
1,899
1,839
1,899
1,839
37
39
37
39
1,200
1,313
1,200
1,313
-
-
637
645
8,694
8,185
9,243
8,805

The amount owed to subsidiaries is repayable on demand.

17. Creditors: amounts falling due after more than one year

Deposits from parents
Fees in Advance Schemes (Note 18)
Fees in Advance Scheme - Fair value (Note 18)
Bank loans (Note 20)		 College & Group
2021
2020
£’000
£’000
2,379
2,470
2,440
2,378
73
86
6,647
8,140
11,539
13,074

Deposits from parents are received by College at the time of final acceptance of a place. These deposits are returned at the end of the term in which the pupil leaves College or Prep. Deposits for those pupils who College are aware are leaving, primarily Upper College leavers, are treated as due within one year.

Page 46

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

18. Fees in advance schemes

College has liabilities arising from two separate Fees in advance (FIA) schemes. One of these schemes (the Closed Scheme) allowed the fee payer to fix future fees at the fee rates applicable at the time of entering into a contract. This scheme closed to new business in May 2015 albeit certain contracts remain. The financial obligations arising from the Closed Scheme FIA contracts are deemed under FRS 102 to arise from being a 'complex financial instrument'. Further details for the accounting of these obligations are set out in Note 19.

Under the new FIA scheme which was introduced in July 2015, a fee payer may enter into a contract to pay College in advance for fixed contributions towards the tuition fees for a period agreed with College. These contributions give rise to a fixed discount on future fees.

The money may be returned subject to specific conditions on the receipt of notice within no more than 90 days. Assuming pupils will remain in College, fees in advance under both schemes will be applied as follows:

Due within one year
Adjustment for fair value due in one year
Within one to two years
Within two to five years
After five years
Adjustment for fair value due in more than one year
Balance at 31 August 2021
Summary of movements in liability
Balance at 1 September 2020
New contracts
Release of fair value provision
Repayments
Amounts used to pay fees
Balance at 31 August 2021		 2021
2020
£’000
£’000
1,899
1,839
37
39
1,936
1,878
791
977
1,374
1,056
275
345
73
86
2,513
2,464
4,449
4,342
2021
2020
£’000 £’000
4,342
5,996
2,384
1,243
(15)
(58)
(71)
(2)
(2,191)
(2,837)
4,449
4,342

Page 47

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

19. Fees in Advance Scheme - Complex financial instrument

Closed FIA scheme liability (opening balance)
Transfer to fee income before finance charge
Revenue foregone (finance charge)
Refunds to parents
Closed FIA scheme liability before future finance charge
Present value of future finance charges
Due in one year
Due after one year
Fair value of full liability grossed up for future finance charges		 2021
2020
£’000
£’000
622
1,119
(202)
(446)
(36)
(49)
(18)
(2)
366
622
37
39
73
86
476
747

The fair value of the Closed FIA Scheme liability reflects the present value of the future expected fee income, where the discount rate used represents the financial effect of the expected fee increases forgone spread over the term of the arrangement. This fair value has been estimated by allocating the estimated expected future fee increases over the arrangement term on a straight-line basis. These estimated expected future fee increases are reviewed and revised where appropriate on an annual basis. At the yearend the annualised expected future fee increase over the next five years is calculated on an average rate of 2.75%. In the view of the Trustees this approach results in a carrying value which is materially consistent with that which would be generated by a more detailed fair value calculation.

There were no impairment losses charged to financial assets measured at amortised cost in the year. In the event of a request for a refund by all remaining participants in the Closed Scheme as at 31 August 2021, no accrued interest will be payable, calculated on the basis of a discount to prevailing bank base rate, over and above the capital payments received of £366,000 (2020: £622,000).

20. Loans & Overdraft

An analysis of loans and overdrafts is below:

Bank Loans
Due within one year
Due between one and two years
Due between two and five years
Due after five years
Due after more than one year
Total bank loans		 College & Group
2021
2020
£’000
£’000
1,576
1,026
1,045
1,548
2,629
2,872
2,973
3,721
6,647
8,140
8,223
9,167

Page 48

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

20. Loans & Overdraft (continued)

College bank loans as well as any overdrafts are secured by fixed charges over specific freehold land and building assets. The Bank also has a financial covenant requiring that College’s consolidated net incoming resources before bank interest paid, depreciation, amortisation and corporation tax paid is not less than 125% of the capital repayments due on its structured loan facilities and the bank interest paid in the financial year. In addition, a security covenant requires that total borrowings do not exceed 70% of the value of all property.

21. Financial Instruments

An analysis of financial instruments, as defined under FRS 102, is below:

Group College College
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Financial assets measured at fair value 7,624 6,583 6,152 5,352

Financial assets held at fair value include assets held as investments.

22. Pensions

College participates in the Teachers’ Pension Scheme (“the TPS”) for its teaching staff. The pension charge for the year includes contributions payable to the TPS of £1.77 million (2020: £1.71 million) and at the year-end £Nil (2020 - £Nil) was accrued in respect of contributions to this scheme.

The TPS is an unfunded multi-employer defined benefits pension scheme governed by The Teachers’ Pensions Regulations 2010 (as amended) and The Teachers’ Pension Scheme Regulations 2014 (as amended). Members contribute on a “pay as you go” basis with contributions from members and the employer being credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.

The employer contribution rate is set by the Secretary of State following scheme valuations undertaken by the Government Actuary’s Department. The most recent actuarial valuation of the TPS was prepared as at 31 March 2016 and the Valuation Report, which was published in March 2019, confirmed that the employer contribution rate for the TPS would increase from 16.4% to 23.6% from 1 September 2019. Employers are also required to pay a scheme administration levy of 0.08% giving a total employer contribution rate of 23.68%.

The 31 March 2016 Valuation Report was prepared in accordance with the benefits set out in the scheme regulations and under the approach specified in the Directions, as they applied at 5 March 2019. However, the assumptions were considered and set by the Department for Education prior to the ruling in the ‘McCloud/Sargeant case’. This case has required the courts to consider cases regarding the implementation of the 2015 reforms to Public Service Pensions including the Teachers’ Pensions.

Page 49

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

22. Pensions (continued)

On 27 June 2019 the Supreme Court denied the government permission to appeal the Court of Appeal’s judgment that transitional provisions introduced to the reformed pension schemes in 2015 gave rise to unlawful age discrimination. The government is respecting the Court’s decision and has said it will engage fully with the Employment Tribunal as well as employer and member representatives to agree how the discriminations will be remedied. The government announced on 4 February 2021 that it intends to proceed with a deferred choice underpin under which members will be able to choose either legacy or reformed scheme benefits in respect of their service during the period between 1 April 2015 and 31 March 2022 at the point they become payable.

The TPS is subject to a cost cap mechanism which was put in place to protect taxpayers against unforeseen changes in scheme costs. The Chief Secretary to the Treasury, having in 2018 announced that there would be a review of this cost cap mechanism, in January 2019 announced a pause to the cost cap mechanism following the Court of Appeal’s ruling in the McCloud/Sargeant case and until there is certainty about the value of pensions to employees from April 2015 onwards. The pause was lifted in July 2020, and a consultation was launched on 24 June on proposed changes to the cost control mechanism following a review by the Government Actuary. Following the public consultation, the Government have accepted three key proposals recommended by the Government Actuary, and are aiming to implement these changes in time for the 2020 valuations.

In view of the above rulings and decisions the assumptions used in the 31 March 2016 Actuarial Valuation may become inappropriate. In this scenario, a valuation prepared in accordance with revised benefits and suitably revised assumptions would yield different results than those contained in the Actuarial Valuation.

Until the cost cap mechanism revision is completed it is not possible to conclude on any financial impact or future changes to the contribution rates of the TPS. Accordingly no provision for any additional past benefit pension costs is included in these financial statements.

In addition to auto-enrolment, College also runs a scheme for its non-teaching staff, which is a defined contribution scheme. The cost for the year represents the school’s contributions to the scheme and for auto-enrolment of £467,000 (2020: £450,000).

23. Subsidiaries

During the year College invoiced CCSL £15,000 (2020: £500) for catering and other services. CCSL invoiced College £53,000 (2020: £83,000) primarily for transport services. At the year end College's intercompany balances with CCSL were a balance due to CCSL of £576,000 (2020: £644,000).

Page 50

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

23. Subsidiaries (continued)

Cheltenham College Charitable Trust is an independently run charity (Charity number 1006429) (CCCT). The charity is consolidated in order to comply with FRS 102 section 9. As at 31 August 2021 CCCT had assets, including investments, of £1.97 million (2020: £1.75 million) and short term liabilities of £3,080 (2020: £2,500); as such its net assets were £1.97 million (2020: £1.75 million). CCCT had a balance due to College of £31,000 (2020: £Nil) at the year end. CCCT’s revenue for the period was £107,000 (2020: £154,000) and its net surplus was £225,000 (2020: deficit of £11,000). During the year CCCT made donations and grants towards various building projects and by way of financial support to a number of pupils at College. In 2020-21 these grants and donations totalled £131,000 (2020: £194,000).

Cheltenham College International Limited (company number 11246905) was incorporated during 2017-18 with a share capital of £1. It commenced trading during the year and as such has been included in the consolidated financial statements. At the year end College's intercompany balances with CCIL were a balance due to CCIL of £60,000 (2020: £Nil)

Cheltenham College Enterprises Limited (company number 01849118) (CCEL) ceased trading during 201516 with its activities transferred to CCSL. CCEL balance due to College was £80 (2020: £80) at the year end. The net assets and reserves of CCEL at the year end were £100 (2020: £100).

Cheltenham College 2nd Hand Clothing Store Limited remained dormant during the year.

Page 51

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

24(a). Movement in Funds – Current year

Consolidated
Endowed funds
College (Scholarship)
CCCT
Endowed
Restricted funds
College (Bursary)
CCCT
Restricted
Unrestricted funds
General reserve
CCCT
Designated (FIA & Lottery)
Unrestricted
Consolidated reserves
movement
College
Endowed funds
(Scholarship)
Restricted funds
College (Bursary)
Unrestricted funds
General
Designated (FIA & Lottery)
Unrestricted
College reserves
movement		 Transfers
Investment
gain/(losses)
1
September
2020
Net
movement
31
August
2021
£’000
£’000
£’000
£’000
£’000
2,913
(19)
52
613
3,559
682
(4)
-
133
811
3,595
(23)
52
746
4,370
981
42
54
-
1,077
692
(25)
-
74
741
1,673
17
54
74
1,818
62,278
1,359
(106)
-
63,531
374
(6)
-
54
422
390
99
-
239
728
63,042
1,452
(106)
293
64,681
68,310
1,446
-
1,113
70,869
2,912
(19)
52
613
3,558
935
42
54
-
1,031
62,593
1,299
58
-
63,950
390
99
(164)
239
564
62,983
1,398
(106)
239
64,514
66,830
1,421
-
852
69,103

Page 52

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

24(a). Movement in Funds – Current year (continued)

The net transfers set out above of £106,000 (2020: £158,000) represents the net movement in College’s Bursary Fund.

College's Endowed scholarship funds comprise a number of individual endowments of varying sizes. Those representing more than 5% of the total funds are:

General Fund (£404,100) (2020: £330,700)

Marsh Bequest (£716,600) (2020: £586,300) For the benefit of the children of members of the medical profession Victor Percival Bequest (£287,600) For the benefit of the children of members of the (2020: £235,400) medical profession Unwin Bequest (£607,600) (2020: £497,100) For the benefit of the children and descendants of those killed on active military service Cadbury (£1,109,100) (2020: £965,000) For the benefit of descendants of Martin and Anne Cadbury

College's restricted fund of £1,031,000 (2020: £817,000) comprises the contributions made by parents at registration towards the bursary fund less any drawdown on those funds by College during the year.

Further details of the restricted and endowed funds of CCCT are set out in the Annual Report of CCCT.

Designated funds, comprising accrued lottery surpluses and dividend income for the Fees in Advance investment fund, are drawn down annually to support the tours and projects ordinarily supported by the lotteries across both schools and to maintain a base of investments to support the Fees in Advance Schemes.

Page 53

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

24(b). Movement in Funds - Prior Year

Consolidated
Endowed funds
College (Scholarship)
CCCT
Endowed
Restricted funds
College (Bursary)
CCCT
Restricted
Unrestricted funds
General reserve
CCCT
Designated (FIA & Lottery)
Unrestricted
Consolidated reserves
movement
College
Endowed funds
(Scholarship)
Restricted funds
College (Bursary)
Unrestricted funds
General
Designated (FIA & Lottery)
Unrestricted
College reserves		 1
September
2019
Net
movement Transfers
Investment
gain/(losses)
31
August
2020
£’000
£’000
£’000
£’000
£’000
2,757
(17)
58
115
2,913
666
(4)
-
20
682
3,423
(21)
58
135
3,595
791
190
-
-
981
639
(57)
100
10
692
1,430
133
100
10
1,673
61,518
818
(58)
-
62,278
454
12
(100)
8
374
385
58
-
(53)
390
62,357
888
(158)
(45)
63,042
67,210
1,000
-
100
68,310
2,755
(16)
58
115
2,912
745
190
-
-
935
61,822
829
(58)
-
62,593
385
58
-
(53)
390
62,207
887
(58)
(53)
62,983
65,707
1,061
-
62
66,830

Page 54

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

25. Capital commitments

At 31 August 2021 there were commitments for capital spend of £1,944,000 (2020: £87,000) for the construction of further accommodation in the College Lawn girls boarding house.

26(a). Allocation of Net assets between funds – Current year

Consolidated (2021)
Tangible Fixed assets
Securities investments
FIA Scheme investments
Net Current Assets/(Liabilities) excluding FIA
FIA current liabilities
FIA fair value adjustment
Long-Term Liabilities excluding FIA (< 1 yr)
FIA long term liabilities
FIA fair value adjustment (> 1 yr)
Total funds
College (2021)
Tangible Fixed assets
Securities investments
FIA Scheme investments
Net Current Assets/(Liabilities) excluding FIA
Fees in Advance current liabilities
Fees in Advance fair value adjustment
Long-Term Liabilities excluding FIA (< 1 yr)
FIA long term liabilities
FIA fair value adjustment (> 1 yr)
Total funds		 Unrestricted
Restricted
Endowed
2021
Funds
Funds
funds
Total
£’000
£’000
£’000
£’000
80,084
-
-
80,084
-
762
4,330
5,092
2,802
-
-
2,802
(4,730)
1,056
40
(3,634)
(1,899)
-
-
(1,899)
(37)
-
-
(37)
(9,026)
-
-
(9,026)
(2,440)
-
-
(2,440)
(73)
-
-
(73)
64,681
1,818
4,370
70,869
80,302
-
-
80,302
-
-
3,558
3,558
2,802
-
-
2,802
(5,115)
1,031
-
(4,084)
(1,899)
-
-
(1,899)
(37)
-
-
(37)
(9,026)
-
-
(9,026)
(2,440)
-
-
(2,440)
(73)
-
-
(73)
64,514
1,031
3,558
69,103

Page 55

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

26(b). Allocation of Net assets between funds – Prior year

Consolidated (2020)
Tangible Fixed assets
Securities investments
FIA Scheme investments
Net Current Assets/(Liabilities) excluding FIA
Fees in Advance current liabilities
Fees in Advance fair value adjustment
Long-Term Liabilities excluding FIA (< 1 yr)
FIA long term liabilities
FIA fair value adjustment (> 1 yr)
Total funds
College (2020)
Tangible Fixed assets
Securities investments
FIA Scheme investments
Net Current Assets/(Liabilities) excluding FIA
Fees in Advance current liabilities
Fees in Advance fair value adjustment
Long-Term Liabilities excluding FIA (< 1 yr)
FIA long term liabilities
FIA fair value adjustment (> 1 yr)
Total funds		 Unrestricted
Restricted
Endowed
2020
Funds
Funds
funds
Total
£’000
£’000
£’000
£’000
80,033
-
-
80,033
-
618
3,555
4,173
2,536
-
-
2,536
(4,575)
1,055
40
(3,480)
(1,839)
-
-
(1,839)
(39)
-
-
(39)
(10,610)
-
-
(10,610)
(2,378)
-
-
(2,378)
(86)
-
-
(86)
63,042
1,673
3,595
68,310
80,223
-
-
80,223
-
-
2,912
2,912
2,536
-
-
2,536
(4,825)
935
-
(3,890)
(1,839)
-
-
(1,839)
(39)
-
-
(39)
(10,609)
-
-
(10,609)
(2,378)
-
-
(2,378)
(86)
-
-
(86)
62,983
935
2,912
66,830

27. Related Party Transactions

Mrs Huggett had two children attending College during the year. As is common practice within independent education, staff members are allowed a discount against fees. The discount was at the same percentage rate as that allowed to all staff members. No fees were outstanding at the year end (2020: £Nil).

There were no other related party transactions during the year which require disclosure.

Page 56

CHELTENHAM COLLEGE Council’s Report and Financial Statements Year ended 31 August 2021

Notes to the Financial Statements

28. College results

College’s own results for the year included in the consolidated Statement of Financial Activities were:

Income and endowments from:
Charitable activities
School fees receivable
Ancillary trading income
Other trading activities
Non-ancillary trading income
Other activities
Investments
Investment income
Bank and other interest
Donations, grants and legacies
Total income
Expenditure on:
Raising funds
Financing costs
Fundraising and development
Total deductible costs
Charitable activities
Education and grant making
Total expenditure
Net income before investment gains
Gains on investments
Net income on funds
Reconciliation of Funds
Fund balances brought forward at 1 September 2020
Fund balances carried forward at 31 August 2021		 2021
2020
Total
Total
£’000
£’000
27,093
24,816
1,064
363
2
2
26
1
95
111
53
78
480
1,482
28,813
26,853
(347)
(392)
(193)
(334)
(540)
(726)
(26,853)
(25,066)
(27,393)
(25,792)
1,420
1,061
853
62
2,273
1,123
66,830
65,707
69,103
66,830

Page 57