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2022-08-31-accounts

London School of Theology Report and Financial Accounts

2022 Company Registered No: 381332 Registered Charity No: 312778 Year ended 31 August 2022

Introduction from the Principal

Welcome It is a pleasure to write this introduction as I come to the end of my third year as Principal of London School of Theology. It is a privilege to serve in this capacity and, despite the challenges of recent years, I see many positive signs of LST continuing to fulfil the original vision of our founders.

It has been good to begin to move past the serious challenges of the Covid-19 pandemic and as an institution we have done very well overall. Sadly, the pandemic brought a ‘sting in the tail’ with lower student recruitment this year, despite valiant efforts by many of our staff and faculty, especially our Engagement Team. The impact of the cost-of-living crisis continues to be seen and, no doubt, will be with us for the foreseeable future. Despite these challenges, our students enjoy their time with us, produce some outstanding pieces of academic work, and contribute to the Christian community both on campus and online. LST remains a fun place to study theology in the context of a vibrant evangelical spirituality.

We enjoyed a stimulating research conference in April, which again picked up the theme of creation care under the auspices of the Science for Seminaries project. Our graduation in July was truly wonderful, with Emmanuel Church packed with the joyful families and friends of our graduates. In partnership with the British and Foreign Bible Society we hosted a symposium on ‘Christianity and the Chinese community in Britain’ in October. We also held our annual Laing lecture in November, which was delivered by Dr Monique Ingalls, an ethnomusicologist from Baylor University, on the subject of congregational praise and worship. Recently we enjoyed a Christmas Concert again, which was wonderful and reminded us of what we had missed during the Covid-19 pandemic.

This year marked the end of a re-envisioning process that had begun in September 2020 at an Executive Team away day, involved various consultation events and discussions throughout 2021 and culminating in various drafts of a strategic plan presented to the Board of Trustees in January and April 2022 and finally signed off at the June 2022 meeting. I am grateful for everyone who has contributed to this very positive process. The result was a detailed strategic plan and an accessible twopage summary.

The new vision of LST is forming disciples, resourcing churches, impacting society . We form disciples of Jesus Christ and resource the ministry of churches, impacting society by means of our witness to the good news of the Kingdom of God. We do this by providing theological and interdisciplinary education in Christian community. We are unique in British Higher Education by being a residential college in London that provides research and practice-led teaching in an interdenominational and evangelical context.

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The London School of Theology continues to educate individuals, equip local churches and engage in leading research.

OUR KEY FIVE-YEAR OBJECTIVES INCLUDE:

I am extremely grateful to all of my colleagues, trustees, executive team members, faculty and staff. We serve a wonderful community of students, and it is a privilege to do so. I am particularly grateful to the Revd Kate Douglas who will be stepping down as Academic Secretary and Director of Academic Services at the end of 2022. Kate has been an extraordinary colleague and we shall miss her on the Executive Team. Kate will be succeeded in the role by our registrar, Dr Shivanthi Manickasingham. I am delighted with this appointment.

Finally, I continue to hold the LST motto before me in the work that I do, ‘Set your mind on things above’ (Col 3.2). In all things we fix our spiritual gaze on the ascended Christ, seated at the right hand of the Father. To him be glory in the church, the academy and the world, now and for evermore.

Please do visit our website to read our two-page vision and strategy summary and to watch a short video (https://lst.ac.uk). May I invite you contact us to discuss our vision and strategy and how you might help us to enable it to become a reality.

The Revd Professor Mark J. Cartledge Principal

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2021 2022

At A Glance

Income & Expenditure 2021-22 Year ended 31 August

Balance Sheet 2021-22

Balance at 31 August

ear ended 31 August Balance at 31 August
Income
Expenditure
Net (loss)
Investment gains / (losses)
Pension scheme gains / (losses)
Net movement in funds		 2022
£’000		 2021
£’000		 Tangible assets
Investments
Net current assets
Pension scheme asset / (liability)
Net assets		 2022
£’000		 2022
£’000
3,210
(3,700)		 3,602
(3,757)		 1,724
8,671
660		 1,906
10,152
915
(490)
(1,428)
343		 (155)
1,607
928
11,055
770		 12,973
427
(1,575) 2,380 11,825 13,400

Our Income 2021-22

----- Start of picture text -----
Education 64%
Investments / Trading 25%
Fundraising (Excl. Legacies) 7%
Legacies 3%
Conferences 1%
0% 10% 20% 30% 40% 50% 60% 70%
Our Expenditure 2021-22
Education 92%
Bursaries 3%
Fundraising 3%
Trading / Conferences 2%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
----- End of picture text -----

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2021 2022

What We Achieved

London School of Theology graduated 61 undergraduate level qualifications

London School of Theology graduated 61 undergraduate students (Certificate, Diploma and BA Degree programmes) in Theology, Theology & Counselling, Theology & Music, and Theology, Music & Worship.

London School of Theology’s undergraduate programmes bring the opportunity to study the Bible in greater depth, with world-class scholars. We have three Levels, across four programmes designed to train those looking to learn more about their faith.

London School of Theology graduated 19 postgraduate qualifications

London School of Theology graduated 19 postgraduate students across the MA in Aspects & Implications of Biblical Interpretation, MA in Integrative Theology and MA in Theological Education programmes.

Postgraduate study at London School of Theology equips students with skills of understanding, discovery, depth and determination. When they graduate, students are equipped to teach others and make a positive difference in their lives. Their qualification opens up significant employment opportunities in academia, Christian leadership and the marketplace.

Each year the postgraduate students take up leadership roles all over the world. The majority of our graduates can be found teaching in churches, seminaries and university faculties around the world. As part of a larger network of over 400 students from all over the world, London School of Theology’s postgraduate centre is a unique and exciting place to study.

London School of Theology graduated 12 research qualifications

London School of Theology graduated 12 postgraduate research students across the Master of Theology, Master of Philosophy and Doctor of Philosophy programmes.

The purpose of a research degree is to establish and demonstrate competence in a theological discipline via a thesis project. The discoveries made by research students contribute not only to their personal growth but also to the academy and the community they serve.

Those taking a research programme at London School of Theology are expected to demonstrate critical knowledge of their chosen field. Research degrees are not taught courses, although students may be asked to take a course of guided reading or attend relevant classes.

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2021 2022

P lans for 2O22[-] 2O23

The priority for the new academic year was again twofold. For new on-campus / blended students it was to integrate them into campus life. For returning students, it was to quickly assess their progress and ensure there was a clear pathway in place to progress to the next level.

For some this was immediate, but for others, who had chosen to defer assessments from one or both semesters, this could mean they were not able to progress for another year, until all of these assignments have been completed. The development of the new five-year strategy went through a few final iterations and was signed off by the board in June, having been approved the work to implement it has now started with the 2022/23 academic year being a year of preparation for change.

• Implement actions to improve student NSS scores and to respond to staff and faculty surveys.

• Meet agreed student recruitment targets and improve student retention.

Student Life

We are committed to offering the highest standard of education

We are at the forefront of theological education designed to equip Christians for life in the real world. More than ever, there is a need to train Christians to have a deeper understanding of Scripture and its relevance to the world. To help support this, we have a range of bursaries and scholarships available to help students with their fees and essentials such as food and travel. These funds have been established and supported by generous donors who have a heart to help students in need of financial assistance.

We are a resource for the local Church

London School of Theology continues to seek to equip churches in multiple ways: through public lectures and partnership in mission, including offering students for placements. Our faculty and staff teach and preach in churches across the country and around the world. We also make our wide range of seminar rooms, excellent catering and accommodation available at competitive rates to churches, charities and Christian organisations.

We have an Alumni Association across the world

London School of Theology is one of the largest, most diverse theological colleges in Europe, with over 7,500 alumni across 40 countries. As our alumni continue to make meaningful contributions to the Church worldwide, the Alumni Association helps to maintain valuable connections to the School, faculty and classmates, as well as provide them with appropriate resources. We are confident that our Alumni website https://alumni.lst.ac.uk will be instrumental in facilitating this still further.

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2021 2022

What Our Students Say

In all my years of education I have never felt so supported and loved by a group of people; this community at LST really is like nothing I have ever experienced before.

Grace Callaghan

Although I am only in my second year of study at LST, I can say with absolute confidence that it has been one of the best experiences in my life so far. Even though to study God and scripture (and all the things it involves) is such a wonderful opportunity to have, my first year was daunting! However the support that the faculty offered during that first essay season, really encouraged me. In all my years of education I have never felt so supported and loved by a group of people; this community at LST really is like nothing I have ever experienced before.

Being surrounded by people that pray for you and with you, that come alongside you and sit with you in the lows but rejoice with you in the highs, is something I have always desired to have and studying at LST has given me that. Not only has it blessed me with so many great relationships, but studying here has also challenged me spiritually and emotionally. Over the past 15 months or so, I have grown and stretched in more ways than I anticipated when applying to come here. I have grown in knowledge, not just about theology but also grown in knowledge about myself and discovered things about my character and person, that I didn’t know before.

I have grown in confidence in my ability to do the things God is calling me to do (like this degree) because I now recognise more than ever that He is always with me. And I have most definitely been tested in my patience during some really challenging moments. But most importantly my love for the Lord has grown, and for that I am so incredibly thankful for LST now, and I will continue to be for the rest of my time here and beyond.

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2021 2022

What Our Students Say

Sandra Micklethwait

From the moment I came for an Open Day, I felt reassured that LST would be a safe place to come and study. This community proved to be just that. Academically, LST challenged me in many positive ways, opening my eyes to church history and theological thinkers that have influenced my faith today. Love for God and his Word shone through all of the lecturers, whose highly varied teaching styles brought added value to the learning experience.

Through my time at LST a love was nurtured for the biblical languages, as well as a deep respect for the biblical translators. One of the greatest gifts I received was the further development of my critical thinking and awareness. This has helped me to become aware of personal and cultural biases, and to understand why we do the things we do. This greater self-awareness was key for me in terms of character formation, as well as enabling me to minister more effectively to others. Overall, the LST community has a very special place in my heart. God used it to train and equip me, as well as to develop relationships with the lecturers, staff and students that have impacted me both during and after my course.

Patrick Aggrey-Fynn

I felt God was calling me to become a church minister about 20 years ago, I was not confident that I could fulfil this role. I never thought in a million years that I would have the opportunity to study Theology, but my passion to study did not go away but grew more intense. When I relocated from Ghana to the UK, I tried to pursue God’s calling to study Theology but did not know which institution to enrol at. One day after a discussion with my Pastor about my passion for studying Theology, he recommended London School of Theology to me. Fast forward and I got accepted to study Theology. Studying at LST is a dream come true, and I have never regretted it.

LST has truly developed my critical thinking in my studies and my life. I have felt like a whole new world has opened to me, thanks to the selfless staff and dedicated faculty. I have never left lectures without being positively challenged about my Theological methods as a Christian. There are various modules which are all different yet intertwined with each other. LST cares about all their students, it’s a place where no one is left behind, and I am a typical example of that. I have received tremendous support in my studies. Writing this testimony makes me think about the in-depth help and knowledge the College has given me, and I am humbled and grateful. To cut a long story short, I highly recommend London School of Theology to anyone who wants a life-changing experience and is looking for a great place to study.

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Year ended 31 August 2022

Report and Financial Statements

Company Name

London School of Theology

Company Number

381332

Registered Charity Number

312778

Address of School and Registered Office

London School of Theology Green Lane, Northwood, HA6 2UW

Bankers

National Westminster Bank Plc 159 High Street, Rickmansworth, Herts, WD3 1AR

Auditors

Haysmacintyre LLP 10 Queen Street Place, London, EC4R 1AG

Solicitors

Pothecary Witham Weld

70 St George’s Square, London, SW1V 3RD

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GOVERNORS' REPORT

Year ended 31 August 2022

Governors’ Report

Introduction

The Governors, who are the trustees and directors of the London School of Theology, have pleasure in presenting their report and the financial statements for the year ended 31 August 2022.

Statement of Governors’ responsibilities in preparing the accounts

Company law requires the Governors to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the charitable company and of the surplus or deficit for that period. In preparing those financial statements, the Governors are required to:

The Governors are responsible for maintaining proper accounting records, which disclose, with reasonable accuracy at any time, the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for prevention and detection of fraud and other irregularities.

Preparation of accounts

The accounts have been prepared in accordance with the Statement of Recommended Practice for Accounting and Reporting by Charities and the Companies Act 2006. The accounting policies are listed in Note 2 to the accounts.

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Governance and management of the charity

Trustees

The following served as Governors of the charitable company for the whole of the period, and up to the approval of the accounts, unless otherwise stated:

Name Honorary Position Note
Mr Steve Hughes* Chair of the Board Chair of F&GP from 04/22
Mrs Margaret Doyle
Prof Peter Oakes+
Mr Ian Thompson
Revd Johnny Douglas
Canon Yemi Adedeji
Mr Paul Smith
Rt Revd Graham Cray
Mrs Kate Meathrel
Mrs Susan Stapleford*
Revd Dr Jenni Williams+
Ms Lydia Lee
Revd Alton Bell		 Vice-Chair of the Board
Chair of the AAC
Chair of the F&GP		 Until 03/22
Until 10/21
Until 10/21
From 01/22
From 06/22

Attendees and Representatives

The following attended meetings of the Board of Governors:

----- Start of picture text -----
Name Position Note
Revd Prof Mark Cartledge Principal
Dr Cornelis Bennema + Academic Dean Until 07/22
Rev Dr David Hilborn+ Academic Dean From 08/22
Revd Kate Douglas+ Academic Secretary, Director of Academic Until 12/22
Support
Dr Shivanthi Manickasingham Academic Secretary, Director of Academic From 01/23
Services
Mr Jonathan Mead Director of Finance and Administration
Company Secretary
Dr Graham McFarlane Faculty Representative Until 09/22
Dr Cornelis Bennema+ Faculty Representative From 10/22
Rev Dr Chris Steed+ Faculty Representative From 10/22
Ms Clare Miller Staff Representative Until 09/22
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continued overleaf >>

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GOVERNORS' REPORT

Year ended 31 August 2022

(continued) Governance and management of the charity

Attendees and Representatives (continued)

Name Position Note
Mrs Ruth Dowsett Staff Representative Until 12/21
Mr Anir Karki
Mrs Elizabeth Case
Mr Jude King
Miss Esther Watts
Miss Rachel Walters		 Staff Representative
Staff Representative
Student Body President
Student Body Female Vice-President
Student Body President		 From 10/22
From 10/22
Until 03/22
Until 03/22
From 04/22
Mr Boaz Moody Student Body Male Vice-President From 04/22

Company Secretary

Mr Jonathan Mead

Methods of Recruitment of Trustees

The Charity draws on its wide range of supporters and former students, from whom trustee candidates with the required experience and skills are sought. It is the Charity’s aim always to maintain a broad representation among its trustees, in terms of their academic, financial, interpersonal, cultural, business skills and religious commitments.

Methods of Appointment

Once potential trustees have been identified and following a discussion at a meeting of the Board of Governors, the candidates are asked to submit a CV for consideration at the next Board meeting. Once candidates have been accepted by the Board and have confirmed their agreement to the Charity's Doctrinal Basis statement, they are usually co-opted onto the Board. Subsequently, at the next AGM they formally stand for election as a Company Member (if required) then stand for election as a Governor for a three year term.

Training and induction provided for trustees

Our trustees will already be familiar with the ethos and working practices of the Charity, but each new trustee is personally briefed about their role. The Charity arranges suitable training for all trustees includes regular safeguarding training. Trustees are also asked to access the Charity Commission's website on a regular basis. Trustees are encouraged to attend and to be involved in the Charity's activities throughout the year.

Senior Employees

Serving as the School's Executive Team during the year 2021/22:

Revd Prof Mark Cartledge Principal
Dr Cornelis Bennema
Rev Dr David Hilborn
Mr Jonathan Mead		 Academic Dean (until 07/22)
Academic Dean (from 08/22)
Director of Finance and Administration
Revd Kate Douglas Academic Secretary, Director of Academic Support

The arrangements for setting the remuneration of the senior employees are detailed in note 5.

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Statement of Corporate Governance

The Governors confirm that the financial Statements comply with the current statutory requirements and with the requirements of the charity’ governing document.

The Board of Governors meets three or four times a year to consider all matters pertaining to the governance of the Charity. In addition to the trustees, the members of the executive team and elected student, staff and faculty representatives also attend. The main operating sub-committees of the Board also meet three or four times a year and are the Finance & General Purposes Committee (F&GP), which is chaired by Steve Hughes and manages the Charity's fiscal and business affairs under its devolved responsibility from the Board and the Academic Affairs Committee (AAC) chaired by Prof. Peter Oakes. In addition, there is a Scholarships and Bursaries Committee and a Pensions Committee, the former being chaired by the Director of Finance and Administration and the latter by a Pensions Trustee. The School reviews the terms of reference for all sub committees of the Board of Governors every two years to ensure the School’s governance is to the levels required by the School’s status as a HEI.

The School has posted all its policies on matters of public, students and staff interest on the School’s website. Please see: - https://lst.ac.uk/our policies/

How the Charity is managed

The Executive Team (ExT) is the day-to-day decision-making body of the Charity, covering its full life and operations. The ExT meets regularly and is accountable to the Board of Governors.

Salaries of key staff are reviewed from time to time taking into account pay in comparable organisations and the finances of the Charity.

On academic matters arising from the Charity's work in providing higher education courses, the Charity has the Academic Affairs Committee mentioned above and an Academic Board that is chaired by the Academic Dean and to which various academic sub-committees report.

Internal Control

The governors are responsible for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives, while safeguarding the public and other funds and assets for which it is responsible, in accordance with the responsibilities assigned to the members of the Board in the terms and conditions of funding with the OfS.

The system of internal control is designed to manage rather than eliminate the risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an ongoing process designed to identify the principal risks and to evaluate the nature and extent of those risks and to manage them efficiently, effectively, and economically.

THE KEY ELEMENTS OF THE SCHOOL’S SYSTEM OF INTERNAL CONTROL ARE AS FOLLOWS:

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GOVERNORS' REPORT

Year ended 31 August 2022

(continued) Governance and management of the charity

The Board’s view of the effectiveness of the system of internal control is informed by the work of the Finance & General Purposes Committee and management who have responsibility for the development and maintenance of the internal control framework, and comments made by the external auditor in their management letter and other reports.

Fundraising approach and performance

The School undertakes fundraising activity to its supporters via direct mail, email, telephone and fundraising events. Our fundraising promise is:

WHEN YOU SUPPORT US, YOU CAN BE SURE OF THE FOLLOWING:

These promises are also designed to protest vulnerable people, by ensuring we are not unreasonable or persistent or place undue pressure on any of our prospective donors.

The charity does not work with any other organisation to deliver its fundraising activity. We have a training programme for all our fundraising staff to regularly reinforce our fundraising ethics.

During the year we received a very small number of complaints about our fundraising activities, typically around the stated preferences of our recipients.

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The purpose of the charity

Summary of the Objects of the Charity

The principal activity and objectives of the charitable company, as set out in the Articles of Association, is the advancement of the Christian religion, by such means as the Company may determine, including but not limited to:

All such activities are carried on in strict accordance with the School's Doctrinal Basis of Faith.

Public Benefit of the Charity

Trustees are aware of the guidance on Public Benefit as described by the Charity Commission, have taken it into account in operating the Charity, and have sought to ensure that any decisions taken are in furtherance of the Charity's benefit to the public. Trustees consider that the Charity's aims, objectives and activities as described below demonstrate proof of public benefit in the advancement of religion and in the advancement of education. In addition, through the operation of the Charity, associated benefits to the public arising from the operation of the Charity include:

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GOVERNORS' REPORT

Year ended 31 August 2022

Strategic report

Aims, objectives and activities

Aims

To establish LST as an exemplar of engaged evangelical theological education in the UK.

WE ACHIEVE THESE AIMS BY PROVIDING:

WE SEE OUR KEY VALUES AS BEING:

AND SOME OF OUR UNIQUE SELLING POINTS WOULD BE HAVING:

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Activities

All activities undertaken are in support of the aims and objectives of the Charity. Our primary activity is the provision of high-quality academic education that will equip our students for Christian service and leadership. All our other activities support that primary activity and help ensure that the School operates in a financially viable manner. Full details of our courses and other resources can be found on our website (www.lst.ac.uk).

Key Objectives and Activities for 2021/22 were:

Measures of Success and Outcomes in 2021/22

Future Objectives and Activities for 2022/23

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GOVERNORS' REPORT

Year ended 31 August 2022

The operation of the Charity relationships and affiliations

The partnership with Middlesex University as the School's validating authority continues and remains a positive relationship.

The School is a member of the Evangelical Alliance, Global Connections (the Evangelical Missionary Alliance), the Association of Bible College Principals, the Association of Bible College Bursars, the European Evangelical Accrediting Agency and the British Association for Counselling and Psychotherapy (BACP).

Risk Management Statement

The Charity's risk management strategy continues to be reviewed to identify the potential risks that could materially impact the Charity. The F&GP Committee reviews and monitors risk on a regular basis, taking direction from the risk evaluation undertaken by the school's departments during the year through a risk matrix. It seeks to mitigate identified risks on an ongoing basis. The key risks facing the School during the year were identified as Covid – the uncertainty this brings around educational delivery; student recruitment, progression and retention – shortcomings in this area impact our students study ambitions and have a multi-year impact on the finances of the School, Staff recruitment – we are not alone in seeing higher than normal levels of staff choosing to leave and then struggling to attract new employees to replace them; compliance - failure to meet all of the third-party requirements (Educational, GDPR and Health and Safety related). Actions to address these risks include for Covid closely monitoring our students well-being and academic progress and stepping in with additional support; student retention and progression, we have engaged the Academic Board to look at the issues impacting this and allocated additional budget to engage a third party specialist to advise us on how to better address the area and for student recruitment we have appointed a new admissions manager to oversee the end to end process from advertising, social media, conference attendance and open day events through to applications and the offering of places; for staff recruitment we are finding it difficult to match the salary expectations of potential new employees, so have had to resort to increasing the number of sites / publications where we place adverts and if necessary make use of head hunters to help us fill key roles; compliance, we have employed a more experienced Compliance and Reporting Officer and continue to develop the Student Information System so it can deliver more timely and accurate data.

The purchase of appropriate insurance products is also used to protect the Charity’s assets and operations.

The Covid-19 pandemic had less of an impact on the running of the School than in the previous two academic years. The emergence of the OMICRON strain towards the end of the autumn term did result in cases increasing, more residential students having to isolate in the rooms and lectures having to be delivered in blended mode again and ultimately in the curtailment of some of the end of term activities such as the carol service. Its most significant impact was on the mental wellbeing of students with a much higher number that normal choosing to either defer the submission of their assignments or interrupt their studies. Where they chose to defer their submissions, this then had a knock on effect for later submissions in the year with many again being deferred, which led to a material number of students not then having sufficient credits completed before the commencement of the new academic year and so not being in a position to be able to enrol for their next level of study.

Dependence on Volunteers

The Charity is reliant on the continuing voluntary commitment of the trustees, as well as other volunteers who have helped in a number of ways around the school. Students also volunteered in areas such as the library and helping with events, as well as running the student committee and acting as course representatives on academic committees.

Facilitating Access to Christian Theological Education

The Charity operates thirteen separate restricted bursary funds. The Charity's policy is to award grants on the basis of demonstrable financial need, subject to any restrictions imposed by the original donors of the funds. Award decisions are made by the Charity's Scholarship and Bursary Committee.

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The finances of the Charity

Whilst the physical impacts of Covid started to decline during the year, it had a sting in its tail financially. New students were reticent to sign up and a material number of existing students struggled in some way, which led to more interrupting, dropping out, having to retake the year or having too many modules to complete or retake which meant they could not progress. All of this impacted student numbers and resulted in a £300k plus drop in our fees.

Reserves

The total Unrestricted Funds amount to £8.9m (2021: £10.7m) before accounting for the pensions reserve surplus of £770k (2021: £427k). Included in these funds are £6.5m of designated income investments and functional fixed assets valued at £1.7m. Free reserves thus stand in surplus by £1.5m (2021: £1.5m).

This level of free reserve exceeds the 20% target of annual unrestricted Funds expenditure. This level of free reserves gives the trustees confidence that the School remains a going concern.

The value and purposes of the School’s various restricted funds are set out in note 12.3. The Trustees make use of these funds as opportunities arise.

Investments

Over the year the value of the School's fixed asset investments decreased by £1,481k to £8,672k (2021: increase of £1,558k). These investments are invested with JM Finn investment managers.

The School's investment objectives are to provide long-term growth of both capital and income. These objectives form part of the contract with the fund manager JM Finn. The investments are reviewed quarterly by the F&GP Committee, who also meet with JM Finn as required.

The School's investments are held in managed funds. The school operates an Ethical investment policy which is based largely on the Church of England policy, to ensure that the school’s investments are held in companies and sectors that demonstrate a proper regard for the environment and for the well-being of the created order.

Financial Results

Overall income decreased from £3,602k to £3,210k (2021: decreased from £3,628k to £3,602k). Expenditure in total decreased from £3,757k to £3,700k as actions were taken to try and compensate for the lower than expected income. Declining income continues to be a significant issue, we had hoped that with covid concerns starting to fade confidence might start to return to our existing and potential new students, but instead cost of living concerns have only exacerbated these, creating even more uncertainty and increasing the chances of students interrupting or dropping out. Realistically there is a strong chance this will continue for at least a few more years so it is imperative that actions are taken to address the financial viability of existing programmes and introduce new ones which might attract more new students. The final result for the year was an operational loss of £490k (2021: operational loss of £155k).

Investment values also suffered as a result of the global economic uncertainties more or less reversing the gains of the previous year. The overall losses for the year were £1.4m (2021: gains of £1.6m).

The falling investment values also impacted the School’s Defined Benefit Pension Scheme, but an increase in the discount rate (based on the yields of long dated high quality corporate bonds) from 1.55% to 4.2% as part of the actuarial assumptions for the FRS 102 year end valuation, reduced the predicted liabilities of the scheme by a greater amount than the investment losses, leading to the pension fund surplus actually increasing from £427k to £770k.

The School's funds have been applied for the purpose of the principal activity.

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GOVERNORS' REPORT

Year ended 31 August 2022

Future plans

The delivery of a first class education to our students continues to be our principal aim. We are acutely aware that the tail end of the pandemic, a looming recession and significant cost of living challenges, will present our students with additional pressures and uncertainties in the next few years and deter many potential students from applying. We are determined to increase the level of support we have in place for our students to monitor their progress and well-being and work with our lecturers, tutor group leaders and support staff to monitor any concerns they observe, so these can be quickly followed up by our excellent pastoral and registry teams. We are also focused on implementing our new five year strategic plan which we are confident will help us address many of the challenges we and other similar colleges in our sector are currently facing.

Independent Auditors

A resolution was made at the AGM in 2022 to reappoint Haysmacintyre LLP as auditors to the Charity. This appointment and the auditor’s remuneration will be reviewed again at the AGM in 2023.

Statement of disclosure to Auditors

As far as the Trustees are aware:

This Governors’ Report, which incorporates the Strategic Report, was signed on behalf of the Board of Governors in their capacity as the Company Directors by:

Mr Steve Hughes Chairman 25th January 2023

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Independent Report of the Auditor's to the Members and Trustees of London School of Theology

Opinion

We have audited the financial statements of London School of Theology for the period ended 31 August 2022 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

IN OUR OPINION, THE FINANCIAL STATEMENTS:

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial

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21

INDEPENDENT REPORT OF THE AUDITOR’S TO THE MEMBERS AND TRUSTEES OF LONDON SCHOOL OF THEOLOGY

Year ended 31 August 2022

Other information (continued)

statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ Report (which incorporates the strategic report and the directors’ report).

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Other matters prescribed by the Office for Students

We have nothing to report in respect of the following matters in relation to which the Office for Students (‘OfS’) requires us to report to you in Regulatory advice 9: Accounts direction if, in our opinion in all material respects:

Responsibilities of trustees for the financial statements

As explained more fully in the trustees’ responsibilities statement set out on page 10 the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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22

Auditor’s responsibilities for the audit of the financial statements

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

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

Based on our understanding of the charitable company and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to regulations prescribed by the Office for Students, employment law, safeguarding regulations and Company and Charity law and we considered the extent to which noncompliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, Charities Act 2011, OfS Accounts Direction and the Higher Education SORP.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to discount rate applied to interest free loans. Audit procedures performed by the engagement team included:

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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

Use of our report

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

Adam Halsey (Senior Statutory Auditor) for and on behalf of Haysmacintyre LLP, Statutory Auditors

10 Queen Street Place London EC4R 1AG

27th January 2023

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23

STATEMENT OF FINANCIAL ACTITIVIES

Statement of Financial Actitivies

Year ended 31 August 2022

Notes
Income From
Donations and legacies
Charitable activities
Education
3
Investments
Trading income
Other income
Total Income
Expenditure On
Raising Funds
Investment manager fee
Trading expenses
Fundraising costs
Charitable activities
Education
Conferences
Total Expenditure
4
Net expenditure before transfers
Investment gains/(losses)
Net income/ (expenditure)
Defined benefit pension scheme
(losses)/gains
Net movement in funds
Balance brought forward at
1 September 2021
Balance carried forward at
31 August 2022		 Unrestricted
Funds
£
155,411
2,533,503
207,876
72,246
33,720
3,002,756
43,571
50,133
58,205
3,369,606
36,894
3,558,409
(555,653)
(1,221,402)
(1,777,055)
343,000
(1,434,055)
11,104,657
9,670,602		 Restricted
Funds
£
164,378
-
42,477
-
-
206,855
-
-
-
140,319
-
140,319
66,536
(175,500)
(108,964)
-
(108,964)
2,007,123
1,898,159		 Endowment
£
-
-
-
-
-
-
973
-
-
-
-
973
(973)
(30,983)
(31,956)
-
(31,956)
288,768
256,812		 Total 2022
£
319,789
2,533,503
250,353
72,246
33,720
3,209,611
44,544
50,133
58,205
3,509,925
36,894
3,699,701
(490,090)
(1,427,885)
(1,917,975)
343,000
(1,574,975)
13,400,548
11,825,573		 Total 2021
£
383,042
2,856,523
256,705
43,855
62,240
3,602,365
40,482
48,773
59,871
3,569,394
38,389
3,756,909
(154,544)
1,606,722
1,452,178
928,000
2,380,178
11,020,370
13,400,548

The School had no recognised gains and losses other than the result for the period. There were no movements on reserves other than those on the Statement of Financial Activities above.

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24

BALANCE SHEET

Balance Sheet

As at 31 August 2022

----- Start of picture text -----
2022 2021
Notes £ £ £ £
Fixed Assets
Tangible assets 7 1,723,723 1,905,782
Investments 8 8,671,508 10,152,071
10,395,231 12,057,853
Current Assets
Stocks 9 21,733 19,889
Debtors 10 172,380 156,873
Cash at bank and in hand 942,822 1,283,556
1,136,935 1,460,318
Current Liabilities
Creditors: within one year 11 (476,593) (544,623)
Net Current Assets 660,342 915,695
Total assets less current liabilities 11,055,573 12,973,548
Pension scheme asset 770,000 427,000
Net Assets including Pension
11,825,573 13,400,548
Scheme assets
Funds
Unrestricted 12 ,13 8,900,602 10,677,657
Restricted 12 ,13 1,898,159 2,007,123
Endowment 12 ,13 256,812 288,768
Funds (excluding pension scheme
reserve) 11,055,573 12,973,548
Unrestricted pension reserve 770,000 427,000
11,825,573 13,400,548
----- End of picture text -----

The financial statements were approved and authorised for issue by the Board on 25th January 2023 and were signed on its behalf by:

Mr Steve Hughes (Chairman)

Revd Prof Mark Cartledge (Principal)

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25

CASH FLOW STATEMENT

Cash Flow Statement

Year ended 31 August 2022

of changes in resources to net cash inflow
from operating activities
Net outgoing resources for the year
Depreciation charged
Increase in stocks
Increase in debtors
Decrease in creditors
Decrease in pension scheme reserve net of
actuarial gains and losses
Less investment income
Net cash flow from operating activities
Investing activities
Investment income
Additions to investments
Sale of investments
Purchase of tangible fixed assets
Decrease in cash in the year
sh equivalents at the beginning of the year
nd cash equivalents at the end of the year
Cash and cash equivalents comprise:
Cash at bank		 2022
£
£
(490,090)
203,653
(1,844)
(15,507)
(68,030)
-
(250,353)
(132,081)
(622,171)
250,353
(2,667,100)
2,719,778
(21,594)
281,437
(340,734)
1,283,556
942,822
942,822
942,822		 2021
£
£
(154,544)
210,615
(5,117)
(1,915)
(101,239)
(511,000)
(256,705)
(665,361)
(819,905)
256,705
(671,156)
719,734
(45,313)
259,970
(559,935)
1,843,491
1,283,556
1,283,556
1,283,556		 2021
£
£
(154,544)
210,615
(5,117)
(1,915)
(101,239)
(511,000)
(256,705)
(665,361)
(819,905)
256,705
(671,156)
719,734
(45,313)
259,970
(559,935)
1,843,491
1,283,556
1,283,556
1,283,556
(819,905)
259,970
(559,935)
1,843,491
1,283,556
1,283,556
1,283,556

Reconciliation of changes in resources to net cash inflow from operating activities

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year Cash and cash equivalents comprise: Cash at bank

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26

NOTES TO THE FINANCIAL STATEMENTS

Notes to the Financial Statements

Year ended 31 August 2022

1. Company Status

London School of Theology is a charitable company incorporated in England and Wales. Further company information can be found on page 9.

London School of Theology is a company limited by guarantee and not having a share capital. The members have each undertaken to contribute such a sum as may be required, not exceeding £10, in the event of the company being wound up.

The London School of Theology is also a registered charity and as such is exempt from Corporation Tax on its charitable activities.

2. Accounting Policies

The financial statements have been prepared in accordance with applicable accounting standards and the Statement of Recommended Practice for Charities (SORP 2015) (Second Edition, effective 1 January 2019), the Companies Act 2006 and FRS102 the Financial Reporting Standard applicable in the UK and the Republic of Ireland.

London School of Theology meets the definition of a public benefit entity under FRS 102. The comparative figures in these financial statements relate to the year ended 31 August 2021.

Having reviewed the funding facilities available to the School together with the expected ongoing demand for places and the School’s future projected cash flows, The Governors consider that there are no material uncertainties regarding the charity’s ability to continue as a going concern. As part of this review specific consideration has been given to the finances, cashflow as well as the potential risks and how these could be mitigated. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

(a) Basis of accounting

The financial statements are prepared under the historical cost convention which has been modified to include the revaluation of fixed asset investments.

(b) Fees and similar income

Fees receivable and charges for services and use of premises are accounted for in the period in which the service is provided. Fees receivable include contributions received from Restricted Funds for scholarships, bursaries and other grants.

(c) Legacies

Legacies receivables are credited to the Statement of Financial Activities only to the extent that the 3 principles of entitlement, probability and measurability can be applied.

(d) Donations and Fund accounting

Donations under Gift Aid are included in the Statement of Financial Activities inclusive of any tax recoverable. Donations received for the general purposes of the charity are included as Unrestricted Funds. Donations whose application is restricted by the wishes of the donor are taken to Restricted Funds and donations that are required to be retained as capital in accordance with the donor's wishes are accounted for as Endowments. Designated funds are those funds set aside by the Trustees out of the Unrestricted Funds for a particular purpose.

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27

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 August 2022

(e) Expenditure

Resources Expended are accounted for on an accruals basis. Certain expenditure is apportioned to cost categories based on the estimated amount attributable to that activity in the year. These include some specific costs and the following larger cost areas:

The Administration Department activities cover supporting teaching and students as well as administering the charity. 5% of the Administration Department's staff costs are charged to the Governance of the charity.

The Communication Department activities cover the issue of information to prospective students as well as publicising the charity for fundraising purposes. 20% of the Communication Department's costs are charged to fundraising and publicity.

Catering & Housekeeping costs are apportioned between the following activities at the given percentages, based on the estimated use of these resources during the year.

Raising Funds

Fund-raising trading costs - 2%

Charitable activities

Education - 94% Conferences - 4%

Other administration and IT costs and Property & Services costs are apportioned between the following activities at the given percentages:

Costs of generating funds

Costs of generating voluntary income - 2% Fund-raising trading costs - 0%

Charitable activities

Education - 96% Conferences - 2%

(f) Recognition of liabilities

Liabilities are recognised in the period to which they relate. Shortfalls in anticipated future pension scheme commitments are calculated on the basis of assumptions stated in Note 15. Constructive obligations under pension arrangements are also recognised as liabilities.

(g) Grants and bursaries

Grants and bursaries from Restricted Funds are included as expenditure in the period in which the award is given.

(h) Investments and investment income

Investments are stated at the middle market price at the balance sheet date. Realised increases or decreases in the value of these investments are shown as realised gains or losses in the statement of financial activities. Investment income is accounted for in the period in which the charity is entitled to receive it.

(i) Interest receivable

The cash holdings of the special funds are held in the general fund bank accounts. The interest receivable on these balances is based on each of the special funds’ holdings at the balance sheet date and transferred to the individual special funds as income in that year.

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28

(j) Tangible fixed assets

All assets are included at cost and capitalised only where the value is greater than £500.

Depreciation is calculated (except on freehold land) to write off the cost of buildings and tangible fixed assets on a straight-line basis over their estimated useful lives. Rates for fixed assets are applied as follows:

Land 0% Equipment 20% - 25% Buildings 2% Computers 33% Fixture and fittings 10%

A depreciation rate on the building element of the properties reflects the anticipated active life of the existing structures. The Governors are, nevertheless, of the opinion that the residual value of the School's freehold buildings is substantially in excess of the present book value.

Leasehold properties are depreciated over the remaining life of the lease.

(k) Stock

Stocks of catering and other supplies are valued at the lower of cost and net realisable value.

(i) Exchange gains and losses

Transactions designated in foreign currencies are translated at the rate prevailing on the date of the transaction. Balances denominated in foreign currencies are translated at the rate prevailing at the balance sheet date.

(m) Operating leases

Operating lease premiums are spread on a straight-line basis over the lease term.

(n) Pension costs

Defined Benefit Scheme

Contributions to the defined benefit scheme are charged to the statement of financial activities on the basis of the current service cost as reported by the scheme actuaries under FRS 102.

Defined Contribution Scheme

Contributions payable to the defined contribution pension scheme are charged to the statement of financial activities in the period to which they relate.

(o) Critical sources of estimation uncertainty and accounting judgements

The preparation of the organisation's financial statements requires management to make judgements, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income, and expenses. These judgements, estimates, and associated assumptions are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The governors consider the following to be the key sources of estimation uncertainty and judgement - the useful lives of fixed assets, valuation of the pension scheme asset/(liability) and the bad debts provision.

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29

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 August 2022

3. Grant and Fee Income

Grant income from the Office for Students
Fee income from taught awards
Fee income from non-qualifying courses
Other Educational and related income
Year Ended 31st August 2022
Direct costs
Staff costs
Depreciation
Bursaries and prizes
Support and governance costs
xpenditure
Year Ended 31st August 2021
Direct costs
Staff costs
Depreciation
Bursaries and prizes
Support and governance costs		 Raising
Funds
£
54,739
85,102
4,073
-
8,968		 2022
£
51,500
1,953,290
6,428
522,285
2,533,503
Charitable
Activities
£
559,054
2,125,937
199,580
140,319
521,929		 2021
£
114,750
2,255,150
7,814
478,809
2,856,523
Total
£
613,793
2,211,039
203,653
140,319
530,897
152,882 3,546,819 3,699,701
Raising
Funds
£
48,319
86,124
4,212
-
10,471		 Charitable
Activities
£
548,634
2,109,189
206,403
113,736
629,821		 Total
£
596,953
2,195,313
210,615
113,736
640,292
149,126 3,607,783 3,756,909

4. Expenditure

Included in expenditure are the following:

The auditor’s remuneration during the year amounted to £13,300 for audit services (2021: £12,300) and

£nil for other services (2021: £nil).

Hire of plant (operating leases) which amounted to £7,814 (2021: £8,364).

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30

5. Staff Costs

taff Costs
Wages and salaries
Social security costs
Pension contributions
Other pension costs
Termination payments		 2022
£
1,864,317
171,492
110,255
64,975
-
2,211,039		 2021
£
1,849,651
163,799
103,943
77,920
-
2,195,313

No members of the London School of Theology, who are trustees and directors for the purposes of the Companies Act received any remuneration for their services during the year, the Revd Johnny Douglas last year (2021) received £620 for facilitating a tutor group during the year. One trustee (2021: 1) received reimbursement of their travel expenses totalling £206 (2021: £81) during the year. There were no other related party transactions during the year.

The average number of employees by function was:
Education
Fund-raising and publicity
Ancillary to main function of education		 2022
No.
69
3
2
74		 2021
No.
67
3
1
71

One employee earned between £70,000 and £80,000 and 2 employees between £60,000 and £70,000 during the year, no other employees earned more than £60,000 (2021: one employee earned between £70,000 and £80,000). Key management personnel remuneration for the period (salaries, taxable benefits and employers pension contributions) totalled £302,000 (2021: £290,000)

Mark Cartledge was principal for the year. He was paid £76k plus pension contributions (2021: £75k plus pension contributions). The principal’s base salary and gross salary including pension contributions are 2.3 times (2021: 2.5 times) the median pay of all other employees (on an FTE basis).

When making changes to the salaries of senior staff, the School takes account of:

The School will review and moderate the pattern of increases across its senior staff in order to ensure fairness and consistency.

Specifically regarding the principal’s remuneration, this is set by the chair and vice chair of trustees taking in to account his or her performance in meeting the goals set as part of the annual appraisal process.

The current level of remuneration at 2.3 (2021: 2.5) times the medium salary of all other staff is considered relatively low, for the level of responsibility held by the post holder, the breadth of courses offered by the School and the significant changes he has had to manage in recent years, including most recently the drafting of the School’s new five year strategic plan.

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31

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 August 2022

6. Access and Participation

Access and Participation
Access investment
Financial support
Research and evaluation
Staff costs included in the above		 Actuals
£
Per Plan
£
70,030
55,000
84,383
156,000
24,166
12,500
178,579
223,500
58,445
2022		 Actuals
£
Per Plan
£
56,010
50,000
130,402
145,000
23,475
11,250
209,887
206,250
47,217
2021
206,250

The School’s Access and Participation Plan can be found at:

https://apis.officeforstudents.org.uk/accessplansdownloads/2024/LondonSchoolOfTheology_APP_2020-21_ V1_10004075.pdf

7. Fixed Assets

Cost
At 1 September 2021
Additions
At 31 August 2022
Depreciation
At 1 September 2021
Charge for the year
At 31 August 2022
Net Book Value
At 31 August 2022
At 31 August 2021		 Freehold and
leasehold property
£
1,287,768
-		 Motor Vehicles
£
3,676
-
3,676
3,676
-
3,676
-		 Fixtures, fittings &
equipment
£
2,353,233
21,594
2,374,827
1,322,597
182,934
1,505,531
869,296
1,030,636		 Total
£
3,644,677
21,594
1,287,768 3,666,271
412,622
20,719		 1,738,895
203,653
433,341 1,942,548
854,427 1,723,723
875,146 - 1,905,782

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32

8. Fixed Assets Investments

Market value at 1 September 2021
Additional investments purchased
Disposals at market value
Investment income reinvested in the period / movement in cash balances
Revaluation in the year
Market value at 31 August 2022
Cost of investments		 2022
£
10,152,071
2,667,100
(2,719,778)
-
(1,427,885)
8,671,508
7,276,421		 2021
£
8,593,927
663,783
(719,734)
7,373
1,606,722
10,152,071
7,276,421

The School’s investments comprise a mixed portfolio of listed investments managed by JM Finn & Co., with a total value as at 31 August 2022 of £8,671,508. During the year the School divested its holdings of BlackRock Charities UK Equity and Bond units, managed by BlackRock Life Limited and added the proceeds to its JM Finn & Co. portfolio.

9. Stocks

Stocks
Catering and other sundry stocks
Fee debtors
Other debtors
Prepayments
Debtors		 2022
£
21,733
2022
£
52,402
1,671
118,307
172,380		 2021
£
19,889
2021
£
52,611
955
103,307
156,873

10. Debtors

11. Creditors: amounts falling due within one year

Creditors: amounts falling due within one year
Trade creditors
Deferred income – payments received on account
Social security costs
Pension scheme contributions
Other creditors
Accruals
 2022
£
72,970
127,299
44,935
16,270
34,693
180,426
476,593		 2021
£
121,299
175,481
39,858
14,894
25,399
167,692
544,623
Balance at 1
September 2021
Fees in advance
145,778
Open learning fees
29,703
175,481
Deferred income comprises:		 Receipts in the
year
122,938
18,782
141,720		 Credited to income
in the year
(160,199)
(29,703)
(189,902)		 Balance at 31
August 2022
108,517
18,782
127,299

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33

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 August 2022

12. General and Special Funds

12.1 Endowment Funds
Montague Goodman Bursary
Jomac Hennell Bursary
Sir John Laing Memorial
Sir John Laing Lecture
Montague Goodman Bursary
Jomac Hennell Bursary
Sir John Laing Memorial
Sir John Laing Lecture		 Balance at 1
September 2021
£
117,072
37,615
117,509
16,572
288,768
Balance at 1
September 2020
£
99,853
32,083
100,226
14,135
246,297		 Income
£
(394)
(127)
(396)
(56)
(973)
Income
£
-
-
-
-
-		 Gains/(Losses)
£
(12,561)
(4,036)
(12,608)
(1,778)
(30,983)
Gains/(Losses)
£
17,219
5,532
17,283
2,437
42,471		 Balance at 31
August 2022
£
104,117
33,452
104,505
14,738
256,812
Balance at 31
August 2021
£
117,072
37,615
117,509
16,572
288,768

The Montague Goodman, Jomac Hennell and Sir John Laing Memorial funds were established for the provision of bursaries to students attending the School. The Sir John Laing Lecture fund was established to finance the organisation of the annual memorial lecture. The capital of these funds are to be kept in perpetuity.

12.2 Unrestricted Funds
General fund
Designated fund
Pensions reserve
General fund
Designated fund
Pensions reserve		 Balance at 1
September
2021
£
2,974,154
7,703,503
427,000
11,104,657
Balance at 1
September
2020
£
3,720,284
6,379,822
(1,012,000)
9,088,106		 Income
£
3,002,756
-
-
3,002,756
Income
£
3,408,043
-
-
3,408,043		 Expenditure/
Fund
transfers
£
(3,558,409)
-
-
(3,558,409)
Expenditure/
Fund
transfers
£
(4,154,173)
-
511,000
(3,643,173)		 Gains/
(Losses)
£
-
(1,221,402)
343,000
(878,402)
Gains
£
-
1,323,681
928,000
2,251,681		 Balance at 31
August 2022
£
2,418,501
6,482,101
770,000
9,670,602
Balance at 31
August 2021
£
2,974,154
7,703,503
427,000
11,104,657

The designated fund was established in 2017 from the proceeds of a land sale and invested with JM Finn to generate long term investment income for the School.

Report and Financial Accounts 2022

34

12.3 Restricted Funds

Henman Memorial
Bursary
Student Grant Bursary
Graham Scholarship
Mary Fisher Memorial
L Smid-Walker bursary
Laing Scholarship
Student Wives Bursary
Music and Worship
Bursary
Students in Need Fund
Reading Prize Fund
Sir Eric Richardson Prize
Griffiths Prize
Faculty Hardship Fund
Children Workers
Course
David Wheaton book
bursary
Beacon Trust
Henman Internet Fund
Tom Rees Evangelist in
residence
Vaux sur Seine
Building Development
Fund
Alumni Fund
Hebrew Prize
W Atkinson Prize
ECLAS Science for
Seminaries
BFBS
Other restricted funds
Endowment Income
Accounts
Montague Goodman
Bursary
Jomac Hennell Bursary
Sir John Laing Memorial
Sir John Laing Lecture
Total		 Balance at 1
September
2021
£
568,109
979,920
162,330
39,458
-
1,582
51,670
1,058
21,559
-
245
2,748
958
1,759
558
8,102
4,013
6,688
2,224
-
17,920
520
-
55,914
-
24,492
23,164
9,404
24,531
(1,803)
2,007,123		 Income
£
11,830
18,698
3,378
825
16,312
12,000
1,243
8,320
19,274
-
9
61
-
-
758
3,000
-
-
-
1,091
3,135
100
1,000
50
67,073
32,266
2,580
829
2,590
433
206,855		 Expenditure
£
-
-
-
(100)
(15,238)
(10,582)
-
-
(18,941)
(100)
(100)
(100)
-
-
(675)
(820)
-
-
-
-
(4,272)
-
(100)
(16,528)
(46,163)
(26,600)
-
-
-
-
(140,319)		 (Losses)
£
(55,253)
(95,305)
(15,788)
(3,838)
-
-
(5,025)
-
-
-
(24)
(267)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(175,500)		 Balance at 31
August 2022
Purpose of fund
£
524,686
For student bursaries
903,313
For student bursaries
149,920
For student bursaries
36,345
For student bursaries
1,074
For international bursaries
3,000
For research student scholarship
47,888
For study support for Students’
spouses
9,378
For bursaries to music and
worship students
21,892
For students in need
(100)
For annual prizes
130
For annual prizes
2,442
For annual prizes
958
For faculty members
1,759
For the development of
Children’s ministry
641
For the purchase of books
10,282
To help support a student from
Latin America
4,013
For the development of IT projects
by LST research students.
6,688
For funding an evangelist in
residence
2,224
For the translation of open
learning resources into French
1,091
For School development projects
16,783
For alumni events and bursaries
620
For high attainment in Hebrew
language studies
900
For taught Masters
39,436
For the advancement of science-
engaged theology
20,910
For research fellow
30,158
For various restricted purposes
25,744
For student bursaries
10,233
For student bursaries
27,121
For student bursaries
(1,370)
For the annual memorial lecture
1,898,159

Report and Financial Accounts 2022

35

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 August 2022

12. General and Special Funds (continued)

12.3 Restricted Funds

Henman Memorial
Bursary
Student Grant Bursary
Graham Scholarship
Mary Fisher Memorial
Laing Scholarship
Student Wives Bursary
Music and Worship
Bursary
Students in Need Fund
Reading Prize Fund
Sir Eric Richardson Prize
Griffiths Prize
Faculty Hardship Fund
Children Workers
Course
David Wheaton Bursary
Maranatha Trust
Scholarship
Beacon Trust
Henman Internet Fund
Tom Rees Evangelist in
residence
Vaux sur Seine
Building Development
Fund
Alumni Fund
Alumni Bursary Fund
Hebrew Prize
ECLAS Science for
Seminaries
Other restricted funds
Endowment Income
Accounts
Montague Goodman
Bursary
Jomac Hennell Bursary
Sir John Laing Memorial
Sir John Laing Lecture
Total		 Balance at 1
September
2020
£
476,579
824,023
136,180
33,270
-
43,153
204
28,703
184
373
2,473
958
1,759
551
22,000
5,102
4,013
6,688
2,224
-
22,176
4,418
520
-
23,677
19,695
8,289
21,049
(2,294)
1,685,967		 Income
£
15,904
25,139
4,541
1,109
12,000
1,670
854
23,879
-
13
83
-
-
975
-
3,000
-
-
-
1,222
46
-
-
60,000
35,330
3,469
1,115
3,482
491
194,322		 Expenditure
£
-
-
-
(200)
(10,418)
-
-
(31,023)
(184)
(200)
(200)
-
-
(968)
(22,000)
-
-
-
-
(1,222)
(5,425)
(3,295)
-
(4,086)
(34,515)
-
-
-
-
(113,736)		 Gains
£
75,626
130,758
21,609
5,279
-
6,847
-
-
-
59
392
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
240,570		 Balance at 31
August 2021
Purpose of fund
£
568,109
For student bursaries
979,920
For student bursaries
162,330
For student bursaries
39,458
For student bursaries
1,582
For research student scholarship
51,670
For study support for Students’
spouses
1,058
For bursaries to music and
worship students
21,559
For students in need
-
For annual prizes
245
For annual prizes
2,748
For annual prizes
958
For faculty members
1,759
For the development of Children’s
ministry
558
For the purchase of books
-
For overseas students to study for
1 year on site
8,102
To help support a student from
Latin America
4,013
For the development of IT projects
by LST research students.
6,688
For funding an evangelist in
residence
2,224
For the translation of open
learning resources into French
-
For School development projects
16,797
For LST alumni events
1,123
For student bursaries
520
For high attainment in Hebrew
language studies
55,914
For the advancement of Science-
engaged theology
24,492
For various restricted purposes
23,164
For student bursaries
9,404
For student bursaries
24,531
For student bursaries
(1,803)
For the annual memorial lecture
2,007,123

Report and Financial Accounts 2022

36

13. Analysis of Net Assets Between Funds

Fund balances at 31 August 2022
Represented by:
Tangible fixed assets
Investments
Current assets
Current liabilities
Pension Scheme reserve		 General Funds
£
1,723,723
6,960,032
693,440
(476,593)
8,900,602
770,000
9,670,602		 Restricted
Funds
£
-
1,454,664
443,495
-
1,898,159
-
1,898,159		 Endowment
Funds
£
-
256,812
-
-
256,812
-
256,812		 Total Funds
£
1,723,723
8,671,508
1,136,935
(476,593)
11,055,573
770,000
11,825,573

14. Corporation Tax

The company is exempt from Corporation Tax on its charitable activities.

15. Pension Commitments

The School operates two pension schemes for its employees; the London School of Theology Pension and Assurance Scheme ("the Defined Benefit Scheme"), which is a defined benefit occupational pension scheme and a Group Personal Pension (GPP) which is a defined contribution arrangement.

The Defined Benefit Scheme is closed to new members. Employees who joined the School after 1 April 2000 are offered membership of the Group Personal Pension (GPP). The assets of the Defined Benefit Scheme are held separately from the assets of the School and are administered by Trustees and managed professionally. The assets of the Group Personal Pension are held separately from the assets of the School and are managed professionally.

Under the Group Personal Pension (GPP) the School pays contributions to personal pension policies for pensionable employees who joined the School after 1 April 2000. The pension cost charge represents contributions payable by the School to the personal pension policies and amounted to £110,255 (2021: £103,943). At 31st August there were £16,270 of outstanding contributions (2021: £14,894) payable to the personal pension policies.

The remainder of this note relates to the pension costs for the Defined Benefit Scheme determined in accordance with the accounting standard FRS 102 as amended by Accounting Standards Board December 2006, amendment. The contributions to the GPP are accounted for on a cash accruals basis in addition to the costs shown below.

The Scheme is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the Scheme is carried out at least every three years to determine whether the Statutory Funding Objective is met. As part of the process the school must agree with the Trustees of the Scheme the contributions to be paid to address any shortfall against the Statutory Funding Objective.

The Defined Benefit Scheme is administered by Barnett Waddingham LLP in accordance with the rules and valuations of that fund. Before the scheme closed to future accruals in the year, contribution rates for employees were 6% of pensionable salary. Employer contributions were 14.1% of pensionable salary. Barnett Waddingham LLP have provided actuarial advice to the Governors.

Report and Financial Accounts 2022

37

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 August 2022

15. Pension Commitments (continued)

Non Scheme Pension Provision

In addition to the Scheme liabilities there is a potential liability of £nil (2021: nil) for discretionary pension benefits, if such payments continued to be made over the lives of the beneficiaries at the present rate. These beneficiaries may include retired members of staff who are not members of the Scheme. These benefits are paid from the School's general fund and not from the Scheme itself.

The Scheme's net surplus of £770,000 plus the non-scheme provision of £nil results in a reserve surplus of £770,000.

The amounts in the balance sheet, excluding the discretionary pension benefit amounts, are as follows:

Scheme assets at year end
Present value of funded obligations obligation
Actuarial (gains) / losses comprise:
Loss / (gain) on scheme assets in excess of interest
Gain from change in assumptions
Experience losses/(gains) on liabilities
Analysis of amounts charged to activity costs categories:
Bank and other Interest / (other finance charges)
Interest on scheme assets
Interest cost
Change in scheme liabilities
Beginning balance
Interest cost
Gains / (losses) from changes in actuarial assumptions
Experience (gains) / losses on liabilities
Changes in demographic assumptions
Benefits paid
Closing balance
Change in scheme assets
Beginning balance
Interest on scheme assets
Return on assets in less interest
Contributions by employer
Benefits paid
Closing balance		 2022
£000’s
5,183
(4,413)
770
1,136
(1,653)
181
(336)
2022
£000’s
(99)
92
(7)
(6,070)
(92)
1,653
(181)
-
277
(4,413)
6,497
99
(1,136)
-
(277)
5,183		 2021
£000’s
6,497
(6,070)
427
(728)
(11)
(153)
(892)
2021
£000’s
(89)
100
11
(6,387)
(100)
(140)
153
151
253
(6,070)
5,411
89
728
522
(253)
6,497

Report and Financial Accounts 2022

38

The major categories of the scheme assets are as follows:

31 August 2022 31 August 2022 31 August 2021 31 August 2021
% of assets Fund value % of assets Fund value
£000s £000s
Equities and other growth assets 45% 2,313 43% 2,786
Bonds and cash 55% 2,870 57% 3,711
Total assets at end of year 5,183 6,497
2022 2021
£000s £000s
Actual return on scheme assets (1,037) 817

The value of the Scheme has been determined by a qualified actuary based on the results of the actuarial valuation as at 5 April 2021, updated to the review date allowing for cashflows in and out of the scheme and using the following assumptions:

Actual assumptions used: 2022 2021
% %
Discount rate 4.2% 1.55%
Rate of increase in pensions in payment 3.8% 3.55%
Rate of RPI price inflation 3.9% 3.6%
Rate of CPI price inflation 2.9% 2.6%
Post – retirement mortality 110% S3PMA/ 110% S3PMA/
105% S3PFA 105% S3PFA
CMI 2020 [1%] CMI 2020 [1%]

Commutation: Members are assumed to take 20% of their pension as tax free cash.

Sensitivity analysis

Impact on the value of liabilities of: Reduction of 0.1% in the Discount Rate £46k increase Increase of 0.1% in inflation assumption £13k increase Increase in long-term mortality projection of 1.5% £56k increase

Report and Financial Accounts 2022

39

NOTES TO THE FINANCIAL STATEMENTS

Year ended 31 August 2022

16. Leasing Commitments

At 31 August 2022, the School was committed to making the minimum lease payments in respect of hire of machinery:

Operating leases which expire:
Within 1 year
Within 2 to 5 years		 2022
£
7,814
9,768
17,582		 2021
£
7,814
17,582
25,396

Report and Financial Accounts 2022

40

17. Comparative Statement of Financial Actitivies

Income From
Donations and legacies
Charitable activities
Education
Investments
Trading income
Other income
Total Income
Expenditure On
Raising Funds
Investment manager fee
Trading expenses
Fundraising costs
Charitable activities
Education
Conferences
Total Expenditure
Net expenditure before transfers
Investment gains
Net income
Defined benefit pension scheme gains
Net movement in funds
Balance brought forward at 1 September 2020
Balance carried forward at 31 August 2021		 Unrestricted
Funds
£
245,737
2,856,523
199,688
43,855
62,240
3,408,043
40,482
48,773
59,871
3,455,658
38,389
3,643,173
(235,130)
1,323,681
1,088,551
928,000
2,016,551
9,088,106
11,104,657		 Restricted
Funds
£
137,305
-
57,017
-
-
194,322
-
-
-
113,736
-
113,736
80,586
240,570
321,156
-
321,156
1,685,967
2,007,123		 Endowment
£
-
-
-
-
-
-
-
-
-
-
-
-
-
42,471
42,471
-
42,471
246,297
288,768		 Total
2021
£
383,042
2,856,523
256,705
43,855
62,240
3,602,365
40,482
48,773
59,871
3,569,394
38,389
3,756,909
(154,544)
1,606,722
1,452,178
928,000
2,380,178
11,020,370
13,400,548

Report and Financial Accounts 2022

41

IJA 42 Report and Flnanci Acco ts 2022

LST in the snow 43

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