Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
**Registered number: 00992831 Charity number: 502259**
## **Tyne North Training Limited**
**(A company limited by guarantee) Annual report Year ended 31 July 2023**
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Contents**
||Page|
|---|---|
|**Reference and administrative details**|1 - 2|
|**Trustees' report**|3 - 9|
|**Independent auditors' report**|10 - 13|
|**Statement of financial activities**|14|
|**Balance sheet**|15|
|**Statement of cash flows**|16|
|**Notes to the financial statements**|17 - 28|
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Reference and administrative details Year ended 31 July 2023**
## **Trustees**
T I Selkirk, Chairman
C Pratt, Vice Chairman
S Armstrong G Longstaff (appointed 8 October 2024)
## **Key management personnel**
Michael Needham, Chief Executive Officer (resigned 30 September 2024) Geoff Moore, Quality Manager
## **Company registered number**
00992831
## **Charity registered number**
502259
## **Registered office**
Embleton Avenue Wallsend Newcastle upon Tyne Tyne and Wear NE28 9NJ
## **Company secretary**
Michael Needham (resigned 30 September 2024)
## **Independent auditor**
UNW LLP Chartered Accountants Citygate St James' Boulevard Newcastle upon Tyne NE1 4JE
## **Bankers**
Barclays Bank Plc 49/51 Northumberland Street Newcastle upon Tyne Tyne and Wear NE1 7AF
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Reference and administrative details (continued) Year ended 31 July 2023**
## **Solicitors**
Hay & Kilner Helix, The Lumen St James' Boulevard Newcastle upon Tyne NE4 5BZ
## **Investment managers**
Brewin Dolphin Time Central Gallowgate Newcastle upon Tyne NE1 4SR
Rathbone Investment Management Limited Earl Grey House 75-85 Grey Street Newcastle upon Tyne NE1 6EF
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report Year ended 31 July 2023**
The trustees, who act as directors for the purposes of company law, are pleased to present their annual report together with the financial statements for the year ended 31 July 2023.
The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, and the Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland.
## **OBJECTIVES AND ACTIVITIES**
The charity’s objects are specific towards the advancement of learning and education for the public benefit of persons employed or intending to be employed in industry and commerce.
## **Core Business Objectives**
- Maintain apprenticeship recruitment levels and the number of new employers
- Maintain or improve overall apprenticeship completion rates
- Achieve a financial operational surplus
- Continually enhance the quality of learning delivery
The overall aim of Tyne North Training Limited remains to increase the skills, knowledge and understanding of those involved in engineering and business-related activities and to deliver high quality services to an increasing number of apprentices and employers within the region.
Contracts with the Education and Skills Funding Agency (ESFA) and employers provide the charity with funding to deliver accredited advanced apprenticeship standards within the engineering manufacturing and business sectors benefitting young people, the majority of which begin their apprenticeships between the ages of 16-18 years old. The total number of apprentices on-programme during 2022 – 2023 was 396 (2021 – 2022: 428).
The policy of the trustees continues to be to utilise charity reserves to support business growth and manage risk with any additional surpluses used to enhance the skills and learning of existing apprentices; support employer engagement; design and implement business model changes in response to ESFA funding rule changes; and be available as contingency funding in the event of apprentices being made redundant and/or the loss of government funded contracts.
The main activities of the charity are to:
- Deliver high quality, sustainable engineering manufacturing and business administration apprenticeships;
- Continue to align business operations to ESFA funding rules and regulations;
- Finance, plan, resource, implement, and manage business change projects in response to market opportunities and to mitigate charity risk;
- Maximise the availability of high quality apprenticeship candidates;
- Drive and sustain employer engagement and business development activities; and
- Deliver support to apprentices made redundant and identify alternative apprenticeship employment opportunities for the continuation of the apprenticeship
The charities main activities and funding levels are reviewed on an annual basis by the trustees. Grant making is not a material part of the charity’s activities.
## **Public Benefit**
Tyne North Training Limited offer a wide range of advanced apprenticeships within the local engineering manufacturing and business sectors, as well as delivering functional skills to relevant apprentices.
We are committed to delivering a high level of quality which will ensure all users of our service are completely satisfied and have the opportunity to make comments, suggestions and complaints if necessary. Our service provides information, advice and guidance to support young people in making appropriate apprenticeship decisions, whilst helping companies understand and comply with apprenticeship standards; commercial contractual arrangements and the apprenticeship levy system.
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
We support all our apprentices, many from disadvantaged backgrounds, to achieve their full potential successfully progressing them through a level 3 apprenticeship whilst providing encouragement and further support onto higher education courses. Tyne North Training also facilitates the smooth transition from one employer to another for apprentices facing the prospect of redundancy.
## **ACHIEVEMENTS AND PERFORMANCE**
## **Achievements and Quality Control**
Achievements of the charity are assessed internally and externally, both qualitatively and quantifiably. Internal assessment is against company operating procedures contained within our continually updated quality management system, along with yearly performance management against business objectives. External assessments are through Ofsted assessing apprenticeship delivery against the Education Inspection Framework (EIF); ESFA Provider Financial Assurance Teams assessing performance against contractual funding requirements and performance management against contractual obligations and national quality measures. The charity has continually maintained its Ofsted Good inspection status, the most recent being March 2020, demonstrating high standards of delivery, highlighting overall Leadership and Management as a particular strength.
The charity achieved its core apprenticeship completion objective by matching the low target set for unsuccessful apprenticeship completions specific to both engineering and business administration. The overall qualification achievement rate (QAR) for apprenticeships was 70.3% (2022: 66.4%). This is an improvement on the previous year’s results from those apprentices whose progression was impacted and delayed with COVID successfully completing their apprenticeships. We did not achieve the core objective for apprenticeship recruitment targets which was mainly due to a fall in the number of suitable candidates applying for an apprenticeship combined with lower-than-expected employer demand for new apprentices.
Both strategic objectives were achieved. The human resource’s objective was to recruit and train human resources to meet functional and business requirements. This was achieved by recruiting new staff and supporting them to become effective additions to the organisation to replace those who departed during the financial year. The second objective was to minimise external risks and ensure high levels of compliance through enhanced process standardisation. This was achieved by focusing on three key areas of compliance and introducing operational an audit processes to ensure compliance with the ESFA funding rules applicable to those three key areas.
The ESFA subcontracting funding rules prohibits any more than 25% of a main providers apprenticeship funding being subcontracted. This requires Tyne North Training to secure and maintain its contractor cap exemption status, which was in place for 2022/23, and a successful application has already been granted for the forthcoming year 2023/24.
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
## **Staff Matters**
After the loss of employees during 2022, staffing levels have stabilised with the company continuing to promote a good working relationship with personnel. Despite the strain, staff have continued to work well, completing all the required procedures and keeping sufficient and appropriate records to allow the company to maintain its high standards.
As disclosed in note 9, during the year the company reached a settlement agreement with the Chief Executive Officer. The settlement was to agree early termination of their employment contract. The agreement was reached in May 2023. Subsequent to the settlement agreement, the Chief Executive Officer stayed on under a new, short term employment contract to ensure a smooth transition.
## **External Factors Impacting Achievement**
The main external factors effecting the achievement of business objectives during 2022 - 2023 were:
- Excessive workload of staff for those learners due for completion in 2022/23 backed up from those learners with completion dates from 2021/22 who were impacted by the coronavirus pandemic;
- Timely completion of subcontracted delivery of qualifications enabling learners to proceed to End Point Assessment;
- The introduction of the new level 3 Machining Technician Standard. Extensive work undertaken by relevant staff to develop an appropriate deliverable programme; and
- Extensive management resource required to recruit and train incoming staff to replace those who had departed the business. These areas were specifically centred around engineering operations, administration and apprenticeship recruitment.
## **FINANCIAL REVIEW**
## **Investment Policy**
The investment policy of the trustees remains one of caution and with continuing cost rises across the board, close monitoring to ensure it achieves the best return is required. An initial £600,000 was invested with two investment managers during July 2018 which during 2022-23 returned a net unrealised loss of £6,579 (2021-22: £47,093 loss).
## **Financial Performance**
Income has decreased to £1,697,366 (2022: £1,741,225), the key movements being a reduction in learners that result in less funding from the ESFA offset by Investment income increasing due to the interest rates. The charitable activities expenditure has increased significantly to £2,058,798 (2022: £1,641,751) largely as a result if the settlement agreement payable to the former CEO (see staff matters section above). The charitable company achieved a deficit of £374,196 (2022: surplus of £45,805) on unrestricted funds, including a loss on investments.
## **Reserves Policy**
The level of unrestricted reserves at 31 July 2023 is £1,076,904. Charity reserves are held for a number of important reasons:
1. Fund business development and growth to remain competitive and to offer the charities services to a wider business community;
2. Support apprentices made redundant to continue to complete their apprenticeships with alternative employers;
3. Enable the charity to discharge all its commitments to existing apprentices and companies should government funding diminish or cease; and
4. Fund necessary activities to minimise risk to the charities ability to operate as a going concern.
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
A designated capital fund of £348,796 was held at 31 July 2023 which is equal to the net book value of the property. The free reserves held at 31 July 2023 was £728,801.
## **Principle Funding Sources**
Principle funding sources and associated activities during 2022-23:
- ESFA – 100% government funding up to the apprenticeship standard funding cap for 16-18 apprentices to cover training costs when employed within a small company employing less than 50 employees with a payroll of less than £3 million, however there is a 5% employer funding contribution should they recruit a 19+ apprentice; 95% funding from the ESFA and 5% funding cost for an employer recruiting an apprentice who employs more than 50 employees but has a payroll of less than £3 million;
- Employers – large companies who employ more than 50 employees with a payroll in excess of £3 million fund Tyne North Training apprenticeships direct through their employer levy accounts; and
- Commercial income, investment income and interest – a small proportion of income is generated through the delivery of NVQs to existing adult employees working within apprenticeship employing companies, plus investment income held by two investment managers and interest received on reserves held.
## **Going Concern**
The board are in ongoing discussions over the future ownership and management structure of the entity. Although the board does not see any impact to the employees or apprentices, it is currently uncertain as to the future structure of the business and consequently its future funding streams. At the time of approval of these financial statements, the board considers that the going concern basis of accounting remains appropriate and therefore continue to prepare these financial statements on such basis. However given the inherent uncertainty over the current position and its potential impact on funding and delivery of training beyond July 2025, there is acknowledgement that the longer term future of the entity is in question.
## **PLANS FOR FUTURE PERIODS**
The company will continue to effectively manage external changes and challenging targets contained within the core objectives agreed each year, effectively capitalise on future growth opportunities and enhance quality delivery. The company is in the early stages of considering a form of partnership with other companies to improve the levels of training.
The charity will continue to focus on achieving its core objectives to:
- Continue to meet ESFA contractual obligations and maintain EAL and Pearson assessment centre status.
- Improve the quality of learning underpinned by effective training officer CPD.
- Focus on sustaining an improvement apprenticeship completion rate.
- Continue to be active in seeking to increase the number of apprenticeships and new employers through proactive business development supported with quality candidate attraction.
- Ensuring the curriculum design and delivery meets or exceeds both employer and apprentice needs and expectations.
The achievement of Tyne North Training’s strategic objectives will seek to safeguard effective, high quality subcontracted delivery and embed a proactive account management system across all business functions.
Management are in the process of assessing the current ownership, board and management structure of the charitable company. They are exploring ways to continue to meet the charitable objectives while ensuring the operations of the charity can continue for the medium to long term future. See the going concern seection of the trustees report and note 1.3 in the accounting policies.
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Governing Documents**
The charity is a charitable company limited by guarantee. It is governed by a Memorandum and Articles of Association.
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## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
## **Organisational Structure and Trustee Induction Process**
Prospective trustees are nominated from member companies and elected onto the Board. Prior to election, wherever possible, prospective trustees attend ‘Executive Committee’ meetings, in an ex-officio capacity, to familiarise themselves with the workings of the charity. They are also provided with a copy of the Memorandum and Articles of Association; the Charity Commission’s ‘The Essential Trustee: What you need to know’; and the current Self-Assessment Report, Strategic and Operational Business Objectives and Quality Improvement Plan.
Members eligible for election must be an ordinary or representative member. An ordinary member is any person being an individual or corporate body who carries on business in the engineering industry or commerce. A representative member is a person nominated by the company, either a partnership or other unincorporated body which carries on business in the engineering industry or commerce.
Excluding the Chairman, the number of trustees must not exceed six nor be less than two. No external body or person is entitled to appoint a trustee to Tyne North Training Limited.
The induction includes a meeting with a member of the key management personnel during which any queries relating to the governance, structure or management of the charity and its aims and objectives would be addressed.
The trustees make strategic and policy decisions on behalf of the business and agree strategic and operational objectives with key management personnel. Financial expenditure is authorised by two signatories required, including the chairman.
Implementing the strategic and operational objectives and the day to day running of the company is delegated to the key management personnel.
## O **ganisation structure**
Until September 2024, the executive committee provided delegated authority to the Chief Executive Officer, who in turn lead the employees to operate the businesa and set the strategic direction. As noted in the Reference and administrative details section of the report, the Chief Executive Officer resigned on 30 September 2024. Since then, the Chair has taken on the role of the Chief Executive Officer until the future of the ownership, board, management structure is finalised.
## **Pay policy for senior staff**
The trustees and senior management team represent the key management of the charity with the trustees being responsible for strategy and directing the charity and the senior management team having responsibility for controlling and operating the charity on a day to day basis. All trustees give their time freely throughout the year without receiving any form of financial remuneration.
The pay of senior staff is reviewed annually by the board of Tyne North Training.
## **Risk Management**
The trustees have identified the following as major risks to which the charity is exposed: the loss or withdrawal of ESFA contracts; the removal of the charity from the ESFA Register of Apprenticeship Training Providers (RoATP) list; an inadequate Ofsted inspection; inadequate financial ESFA health grade leading to ESFA intervention; continual alignment to ESFA subcontracting rules and regulations and the successful retention of the subcontracting cap exemption status; and/or the loss of approval as an assessment centre for EAL and/or Pearson, all of which would render the business unable to deliver engineering manufacturing and business & administration apprenticeships.
The charity has put in place a number of policies, systems and procedures to mitigate these risks to ensure the quality and financial performance of the organisation does not give cause or concern for loss or withdrawal of these ESFA contracts; RoATP and/or approval centre status, as follows:
- Internal quality system designed in accordance with ESFA, Ofsted, EAL and Pearson requirements;
- • Board approved strategic and operational business objectives;
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## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
- A sound financial base, exercising financial probity with a minimum financial ‘satisfactory’ rating from the ESFA;
- Performance figures and success rates consistently above national averages;
- Expert, highly qualified and committed staff who regularly undertake training and CPD activities;
- Continuous, close monitoring of ESFA funding rule changes, contractual requirements and minimum level performance criteria along with the need to continually align its operations to Ofsted, EIF requirements; and
- Ensuring reports are consistent and favourable from EAL external verifier and Pearson standards verifier audits
Additional to the above there are always competitive risks and pressures from other training providers as government funding, apprentice funding rate and the apprenticeship policy is continuously redefined within a financially and operationally competitive environment.
The company manages an effective working relationship with the local college, facilitated by contracts for service delivery and continues to recruit and retain a high number of apprentices whilst achieving completion rates in excess of National averages, all of which contribute towards mitigating risk.
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## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
## **STATEMENT OF TRUSTEES’ RESPONSIBILITIES**
The trustees (who are also directors of Tyne North Training Limited for the purpose of company law) are responsible for preparing the Trustee’s Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the trustees to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure of the charitable company for the year. In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently
- observe the methods and principles in the Charities SORP 2015 (FRS 102)
- make judgements and estimates that are reasonable and prudent
- state whether applicable UK Accounting Standards have been followed subject to any material departures disclosed and explained in the financial statements
- prepare financial statements on a ‘going concern’ basis, unless it is inappropriate to presume that the charitable company will continue in operation
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence taking reasonable steps for the prevention and detection of fraud and other irregularities.
In so far as the trustees are aware:
- there is no relevant audit information of which the charitable company’s auditor is unaware; and
- the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information.
Approved by order of the members of the board of trustees on 14 November 2024 and signed on their behalf by:
**T I Selkirk** Chairman
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## **Independent auditor's report to the Members of Tyne North Training Limited**
## **Opinion**
We have audited the financial statements of Tyne North Training Limited (the 'charitable company') for the year ended 31 July 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the related notes, 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:
- give a true and fair view of the state of the charitable company's affairs as at 31 July 2023 and of its incoming resources and application of resources, including its income and expenditure for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **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 United Kingdom, including the Financial Reporting Council'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.
## **Material uncertainty related to going concern**
We draw attention to note 1.3 in the financial statements, which indicates uncertainty over the future operations of the charitable company as a result of ongoing board discussions around the ownership and management structure of the entity, which may impact future funding. As stated in note 1.3, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the charitable company's ability to continue as a going concern for a period of at least 12 months from the date of this report. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
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## **Independent auditor's report to the Members of Tyne North Training Limited (continued)**
## **Other information**
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
## **Opinion on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Trustees' report for the financial year for which the financial statements are prepared is consistent with the financial statements.
- the Trustees' report has been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' report.
We have nothing to report in respect of the following matters in relation to which Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Trustees' report and from the requirement to prepare a Strategic report.
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## **Independent auditor's report to the Members of Tyne North Training Limited (continued)**
## **Responsibilities of trustees**
As explained more fully in the trustees' responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the charitable company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
## **Auditor's responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identified areas of law and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience and through discussions with the directors and other management (as required by Auditing Standards) and from inspection of the charity's legal correspondence and we discussed with the directors and other management the policies and procedures in place regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit.
Firstly, the charity is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the charity is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; health and safety, employment law, data protection, safeguarding, environmental law and certain aspects of company legislation, recognising the nature of the charity's activities. Auditing Standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance material to the financial statements.
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.
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## **Independent auditor's report to the Members of Tyne North Training Limited (continued)**
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 trustees, 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 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 charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.
## **Anne Hallowell BSc DChA FCA (Senior Statutory Auditor) for and on behalf of UNW LLP, Statutory Auditor**
Chartered Accountants Newcastle upon Tyne
14 November 2024
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## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Statement of financial activities (incorporating income and expenditure account) Year ended 31 July 2023**
|**Note**
**Income from:**
Charitable activities
2
Other trading activities
Investments
3
**Total income**
**Expenditure on:**
Investment management costs
Charitable activities
4
**Total expenditure**
**Net (expenditure)/income before net losses on**
**investments**
Net losses on investments
**Net movement in funds**
**Reconciliation of funds:**
Total funds brought forward
Net movement in funds
**Total funds carried forward**|**Unrestricted**
**funds**
**2023**
**£**
**1,681,311**
**-**
**16,055**
**1,697,366**
**6,185**
**2,058,798**
**2,064,983**
**(367,617)**
**(6,579)**
**(374,196)**
**1,451,100**
**(374,196)**
**1,076,904**|**Total**
**funds**
**2023**
**£**
**1,681,311**
**-**
**16,055**
**1,697,366**
**6,185**
**2,058,798**
**2,064,983**
**(367,617)**
**(6,579)**
**(374,196)**
**1,451,100**
**(374,196)**
**1,076,904**|Total
funds
2022
£
1,726,127
4,194
10,904
1,741,225
6,576
1,641,751
1,648,327
92,898
(47,093)
45,805
1,405,295
45,805
1,451,100|
|---|---|---|---|
The statement of financial activities includes all gains and losses recognised in the year.
The notes on pages 17 to 28 form part of these financial statements.
Page 14
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Balance sheet At 31 July 2023**
||||**2023**|**2023**|2022|
|---|---|---|---|---|---|
||**Note**||**£**||£|
|**Fixed assets**||||||
|Tangible assets|7||**348,796**||358,296|
|Investments|8||**635,363**||636,340|
||||**984,159**||994,636|
|**Current assets**||||||
|Debtors|9|**194,677**||190,906||
|Cash at bank and in hand||**727,810**||451,037||
|||**922,487**||641,943||
|Creditors: amounts falling due within one||||||
|year|10|**(829,742)**||(185,479)||
|**Net current assets**|||**92,745**||456,464|
|**Total assets less current liabilities**|||**1,076,904**||1,451,100|
|**Total net assets**|||**1,076,904**||1,451,100|
|**Charity funds**||||||
|Unrestricted funds|11||**1,076,904**||1,451,100|
|**Total funds**|||**1,076,904**||1,451,100|
The trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.
The financial statements have been prepared in accordance with the provisions applicable to entities subject to the small companies regime.
The financial statements were approved and authorised for issue by the trustees on 14 November 2024 and signed on their behalf by:
**T I Selkirk** OC9286FEBAAD4CSY... Chairman
Company registered number: 00992831
The notes on pages 17 to 28 form part of these financial statements.
Page 15
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Statement of cash flows Year ended 31 July 2023**
|**Cash flows from operating activities**
Net cash used in operating activities
**Cash flows from investing activities**
Interest and dividends received
Purchase of tangible fixed assets
Proceeds from sale of investments
Purchase of investments
**Net cash provided by investing activities**
**Change in cash and cash equivalents in the year**
Cash and cash equivalents at the beginning of the year
**Cash and cash equivalents at the end of the year**|**2023**
**£**
**266,320**
**16,055**
**-**
**46,172**
**(51,774)**
**10,453**
**276,773**
**451,037**
**727,810**|2022
£
(266,430)
10,904
(1,660)
94,901
(87,837)
**16,308**
**(250,122)**
701,159
451,037|
|---|---|---|
The notes on pages 17 to 28 form part of these financial statements
Page 16
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **1. Accounting policies**
A summary of the principal accounting policies adopted (which have been applied consistently, except where noted), judgments and key sources of estimation uncertainty, is set out below.
## **1.1 Basis of preparation of financial statements**
The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.
Tyne North Training Limited meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.
The financial statements are preparedunder the historical cost convention, are presented in pounds sterling and rounded to the nearest £1.
## **1.2 Company status**
The company is a company limited by guarantee, incorporated and domiciled in United Kingdom and registered in England and Wales. The members of the company are the trustees named on page 1. In the event of the company being wound up, the liability in respect of the guarantee is limited to £20 per member of the company.
## **1.3 Going concern**
The company has financial reserves held in cash, investments and fixed assets. The company has strong free reserves (unrestricted reserves not tied up in tangible fixed assets) of £728,108. As a consequence, the trustees believe that the company is well placed to manage its business risks successfully despite the current uncertain economic outlook.
The board are in ongoing discussions over the future ownership and management structure of the entity. Although the board does not see any impact to the employees or apprentices, it is currently uncertain as to the future structure of the business and consequently its future funding streams. At the time of approval of these financial statements, the board considers that the going concern basis of accounting remains appropriate and therefore continue to prepare these financial statements on such basis. However given the inherent uncertainty over the current position and its potential impact on funding and delivery of training beyond July 2025, there is acknowledgement that the longer term future of the entity is in question.
## **1.4 Income**
All income is recognised once the company has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.
Page 17
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **1. Accounting policies (continued)**
## **1.5 Expenditure**
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.
Expenditure on raising funds includes all expenditure incurred by the company to raise funds for its charitable purposes.
Expenditure on charitable activities is incurred on directly undertaking the activities which further the company's objectives, as well as any associated support costs.
All expenditure is inclusive of irrecoverable VAT.
## **1.6 Interest receivable**
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the company; this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited.
## **1.7 Tangible fixed assets and depreciation**
Tangible fixed assets are carried at cost, net of depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
- Freehold property over 50 years - Office equipment 15% straight-line
## **1.8 Investments**
Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the balance sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the statement of financial activities.
## **1.9 Debtors**
Trade and other debtors are recognised at the settlement amount. Prepayments are valued at the amount prepaid.
Page 18
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **1. Accounting policies (continued)**
## **1.10 Cash at bank and in hand**
Cash and cash equivalents includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
## **1.11 Liabilities and provisions**
Liabilities are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that the company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.
## **1.12 Financial instruments**
The company only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.
## **1.13 Operating leases**
Rentals paid under operating leases are charged to the Statement of Financial Activities on a straight line basis over the lease term.
## **1.14 Employee benefits**
## _**Short-term benefits**_
Short-term benefits, including other non-monetary benefits, are recognised as an expense in the period in which the service is received.
## _**Defined contribution pension plan**_
The company operates a defined contribution pension plan for its employees. Contributions are recognised as an expense when they fall due. Amounts due but not yet paid are included within creditors on the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
## **1.15 Fund accounting**
General funds are unrestricted funds which are available for use at the discretion of the trustees in furtherance of the general objectives of the company and which have not been designated for other purposes.
Designated funds comprise unrestricted funds that have been set aside by the trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.
Investment income, gains and losses are allocated to the appropriate fund.
Page 19
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **2. Income from charitable activities**
|**Unrestricted**
**funds**
**2023**
**£**
Education and Skills Funding Agency
1,652,249
Employer contributions
29,062
1,681,311
Unrestricted
funds
2022
£
Education and Skills Funding Agency
1,692,479
Employer contributions
26,616
Workforce development
7,032
1,726,127|**Total**
**funds**
**2023**
**£**
**1,652,249**
**29,062**
**1,681,311**|
|---|---|
||Total
funds
2022
£
1,692,479
26,616
7,032
1,726,127|
## **3. Investment income**
|**Unrestricted**
**funds**
**2023**
**£**
Income from investments
14,622
Interest receivable
1,433
16,055|**Total**
**funds**
**2023**
**£**
**14,622**
**1,433**
**16,055**|
|---|---|
Page 20
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **3. Investment income (continued)**
|Income from investments
Interest receivable|Unrestricted
funds
2022
£
10,877
27
10,904|Total
funds
2022
£
10,877
27
10,904|
|---|---|---|
## **4. Analysis of expenditure by activities**
|Charitable activities
Charitable activities|**Activities**
**undertaken**
**directly**
**2023**
**£**
1,483,690
Activities
undertaken
directly
2022
£
1,390,273|**Support**
**costs**
**2023**
**£**
575,108
Support
costs
2022
£
251,478|**Total**
**funds**
**2023**
**£**
**2,058,798**|
|---|---|---|---|
||||Total
funds
2022
£
1,641,751|
Page 21
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **4. Analysis of expenditure by activities (continued)**
## **Analysis of support costs**
|Staff costs
Premises expenses
Office costs
Motor costs
Bank charges
Subscriptions and professional fees (including auditors' remuneration)
Sundry costs
Depreciation
Equipment costs and repairs|**Total**
**funds**
**2023**
**£**
**384,814**
**31,344**
**36,766**
**49,714**
**152**
**49,088**
**10,680**
**9,500**
**3,050**
**575,108**|Total
funds
2022
£
42,471
31,481
28,615
49,725
1,599
62,891
17,255
11,318
6,123
251,478|
|---|---|---|
## **5. Auditor's remuneration**
The auditor's remuneration amounts to an auditor fee of £11,000 (2022: £6,500), and bookeeping services of £10,800 (2022: £7,258).
## **6. Staff costs**
|Wages and salaries
Social security costs
Pension costs|**2023**
**£**
**970,355**
**116,790**
**132,321**
**1,219,466**|2022
£
680,168
80,621
118,303|
|---|---|---|
|||879,092|
The average number of persons employed by the company during the year was as follows:
||**2023**|2022|
|---|---|---|
||**No.**|No.|
|Charitable activities|**14**|17|
Page 22
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **6. Staff costs (continued)**
The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:
|||**2023**|2022|
|---|---|---|---|
|||**No.**|No.|
|In the band £100,001|- £110,000|**-**|1|
|In the band £420,001|- £430,000|**1**|-|
No expenses were reimbursed to any trustees during the year (2022: £nil). No trustees received any remuneration.
The key management personnel of the charity comprise the senior management team (as listed on page 1), with total employee benefits (including pension costs) of £607,979 (2022: £297,874).
During the year, the company reached a settlement agreement with the Chief Executive Officer totalling £323,269. This amount was split between a payment to the individual of £263,269 and a payment to their pension fund of £60,000. The settlement was to agree early termination of their employment contract. The agreement was reached in May 2023 and paid post year end. In accordance with the chosen accounting policies, the settlement expense has been recognised in May 2023, being the date the obligation to pay the settlement arose. The balance is carried as a liability at 31 July 2023, included within accruals and deferred income. The charity continues to have sufficient unrestricted reserves to fund the settlement payment and continue to fund operations at the balance sheet date.
Page 23
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **7. Tangible fixed assets**
|**Cost**
At 1 August 2022
At 31 July 2023
**Depreciation**
At 1 August 2022
Charge for the year
At 31 July 2023
**Net book value**
At 31 July 2023
At 31 July 2022
**8.**
**Fixed asset investments**
**Cost or valuation**
At 1 August 2022
Additions
Disposals
Revaluations
At 31 July 2023
**Net book value**
At 31 July 2023
At 31 July 2022|**Freehold**
**property**
**£**
**400,000**
**400,000**
**43,204**
**8,000**
**51,204**
**348,796**
356,796|**Office**
**equipment**
**£**
**184,816**
**184,816**
**183,316**
**1,500**
**184,816**
**-**
1,500|**Total**
**£**
**584,816**
**584,816**
**226,520**
**9,500**
**236,020**
**348,796**
358,296
**Listed**
**investments**
**£**
**636,340**
**51,774**
**(46,977)**
**(5,774)**
**635,363**
**635,363**
636,340|
|---|---|---|---|
Page 24
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **9. Debtors**
|**Due within one year**
Trade debtors
Other debtors
Prepayments and accrued income|**2023**
**£**
**148,528**
**5,000**
**41,149**
**194,677**|2022
£
156,071
500
34,335|
|---|---|---|
|||190,906|
## **10. Creditors: amounts falling due within one year**
|Trade creditors
Other taxation and social security
Other creditors
Accruals and deferred income|**2023**
**£**
**344,902**
**35,549**
**6,500**
**442,791**
**829,742**|2022
£
141,331
11,845
7,000
25,303|
|---|---|---|
|||185,479|
Page 25
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **11. Statement of funds**
**Statement of funds - current year**
|**Balance at 1**
**August 2022**
**£**
**Unrestricted funds**
**Designated funds**
Property Fund
**356,796**
**General funds**
General Funds
**1,094,304**
**Total Unrestricted funds**
**1,451,100**|**Income**
**£**
**-**
**1,697,366**
**1,697,366**|**Expenditure**
**£**
**(8,000)**
**(2,056,983)**
**(2,064,983)**|**Gains/**
**(Losses)**
**£**
**Balance at**
**31 July 2023**
**£**
**-**
**348,796**
**(6,579)**
**728,108**
**(6,579)**
**1,076,904**|**Gains/**
**(Losses)**
**£**
**Balance at**
**31 July 2023**
**£**
**-**
**348,796**
**(6,579)**
**728,108**
**(6,579)**
**1,076,904**|
|---|---|---|---|---|
|||||**728,108**|
|||||**1,076,904**|
The designated property fund has a balance equal to the net book value of the freehold property which enables the non-liquid reserves to be easily identifiable.
Page 26
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **11. Statement of funds (continued)**
## **Statement of funds - prior year**
|**Unrestricted funds**
**Designated funds**
Property Fund
**General funds**
General Funds
**Total Unrestricted funds**|Balance at
1 August
2021
£
364,796
1,040,499
1,405,295|Income
£
-
1,741,225
1,741,225|Expenditure
£
(8,000)
(1,640,327)
(1,648,327)|Gains/
(Losses)
£
-
(47,093)
(47,093)|Balance at
31 July 2022
£
356,796|
|---|---|---|---|---|---|
||||||1,094,304|
||||||1,451,100|
## **12. Reconciliation of net movement in funds to net cash flow from operating activities**
|Net income/(expenditure) for the year (as per Statement of Financial
Activities)
**Adjustments for:**
Depreciation charges
Losses/(gains) on investments
Dividends, interests and rents from investments
(Increase)/decrease in debtors
Increase/(decrease) in creditors
**Net cash provided by/(used in) operating activities**|**2023**
**£**
**(374,196)**
**9,500**
**6,579**
**(16,055)**
**(3,771)**
**644,263**
**266,320**|2022
£
45,805|
|---|---|---|
|||11,440
47,093
(10,904)
2,399
(362,263)|
|||(266,430)|
Page 27
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **13. Analysis of cash and cash equivalents**
|Cash in hand
**Analysis of changes in net debt**
**At 1 August**
**2022**
**£**
Cash at bank and in hand
**451,037**|**2023**
**£**
**727,810**
**Cash flows**
**£**
**276,773**|2022
£
451,037|
|---|---|---|
|||**At 31 July**
**2023**
**£**
**727,810**|
## **14. Analysis of changes in net debt**
## **15. Pension commitments**
The charity operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the charitable company which amounted to £192,321 (2022: £118,303).
## **16. Operating lease commitments**
At 31 July 2023 the company had commitments to make future minimum lease payments under noncancellable operating leases as follows:
|Not later than 1 year
Later than 1 year and not later than 5 years|**2023**
**£**
**27,763**
**-**
**27,763**|2022
£
39,568
26,717|
|---|---|---|
|||66,285|
## **17. Related party transactions**
The company has entered into a settlement agreement totaling £323,269 to the Chief Executive Officer in the year. The full amount was owing at 31 July 2023. See note 6 for further information.
Page 28
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
**Registered number: 00992831 Charity number: 502259**
## **Tyne North Training Limited**
**(A company limited by guarantee) Annual report Year ended 31 July 2023**
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Contents**
||Page|
|---|---|
|**Reference and administrative details**|1 - 2|
|**Trustees' report**|3 - 9|
|**Independent auditors' report**|10 - 13|
|**Statement of financial activities**|14|
|**Balance sheet**|15|
|**Statement of cash flows**|16|
|**Notes to the financial statements**|17 - 28|
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Reference and administrative details Year ended 31 July 2023**
## **Trustees**
T I Selkirk, Chairman
C Pratt, Vice Chairman
S Armstrong G Longstaff (appointed 8 October 2024)
## **Key management personnel**
Michael Needham, Chief Executive Officer (resigned 30 September 2024) Geoff Moore, Quality Manager
## **Company registered number**
00992831
## **Charity registered number**
502259
## **Registered office**
Embleton Avenue Wallsend Newcastle upon Tyne Tyne and Wear NE28 9NJ
## **Company secretary**
Michael Needham (resigned 30 September 2024)
## **Independent auditor**
UNW LLP Chartered Accountants Citygate St James' Boulevard Newcastle upon Tyne NE1 4JE
## **Bankers**
Barclays Bank Plc 49/51 Northumberland Street Newcastle upon Tyne Tyne and Wear NE1 7AF
Page 1
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Reference and administrative details (continued) Year ended 31 July 2023**
## **Solicitors**
Hay & Kilner Helix, The Lumen St James' Boulevard Newcastle upon Tyne NE4 5BZ
## **Investment managers**
Brewin Dolphin Time Central Gallowgate Newcastle upon Tyne NE1 4SR
Rathbone Investment Management Limited Earl Grey House 75-85 Grey Street Newcastle upon Tyne NE1 6EF
Page 2
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report Year ended 31 July 2023**
The trustees, who act as directors for the purposes of company law, are pleased to present their annual report together with the financial statements for the year ended 31 July 2023.
The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, and the Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland.
## **OBJECTIVES AND ACTIVITIES**
The charity’s objects are specific towards the advancement of learning and education for the public benefit of persons employed or intending to be employed in industry and commerce.
## **Core Business Objectives**
- Maintain apprenticeship recruitment levels and the number of new employers
- Maintain or improve overall apprenticeship completion rates
- Achieve a financial operational surplus
- Continually enhance the quality of learning delivery
The overall aim of Tyne North Training Limited remains to increase the skills, knowledge and understanding of those involved in engineering and business-related activities and to deliver high quality services to an increasing number of apprentices and employers within the region.
Contracts with the Education and Skills Funding Agency (ESFA) and employers provide the charity with funding to deliver accredited advanced apprenticeship standards within the engineering manufacturing and business sectors benefitting young people, the majority of which begin their apprenticeships between the ages of 16-18 years old. The total number of apprentices on-programme during 2022 – 2023 was 396 (2021 – 2022: 428).
The policy of the trustees continues to be to utilise charity reserves to support business growth and manage risk with any additional surpluses used to enhance the skills and learning of existing apprentices; support employer engagement; design and implement business model changes in response to ESFA funding rule changes; and be available as contingency funding in the event of apprentices being made redundant and/or the loss of government funded contracts.
The main activities of the charity are to:
- Deliver high quality, sustainable engineering manufacturing and business administration apprenticeships;
- Continue to align business operations to ESFA funding rules and regulations;
- Finance, plan, resource, implement, and manage business change projects in response to market opportunities and to mitigate charity risk;
- Maximise the availability of high quality apprenticeship candidates;
- Drive and sustain employer engagement and business development activities; and
- Deliver support to apprentices made redundant and identify alternative apprenticeship employment opportunities for the continuation of the apprenticeship
The charities main activities and funding levels are reviewed on an annual basis by the trustees. Grant making is not a material part of the charity’s activities.
## **Public Benefit**
Tyne North Training Limited offer a wide range of advanced apprenticeships within the local engineering manufacturing and business sectors, as well as delivering functional skills to relevant apprentices.
We are committed to delivering a high level of quality which will ensure all users of our service are completely satisfied and have the opportunity to make comments, suggestions and complaints if necessary. Our service provides information, advice and guidance to support young people in making appropriate apprenticeship decisions, whilst helping companies understand and comply with apprenticeship standards; commercial contractual arrangements and the apprenticeship levy system.
Page 3
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
We support all our apprentices, many from disadvantaged backgrounds, to achieve their full potential successfully progressing them through a level 3 apprenticeship whilst providing encouragement and further support onto higher education courses. Tyne North Training also facilitates the smooth transition from one employer to another for apprentices facing the prospect of redundancy.
## **ACHIEVEMENTS AND PERFORMANCE**
## **Achievements and Quality Control**
Achievements of the charity are assessed internally and externally, both qualitatively and quantifiably. Internal assessment is against company operating procedures contained within our continually updated quality management system, along with yearly performance management against business objectives. External assessments are through Ofsted assessing apprenticeship delivery against the Education Inspection Framework (EIF); ESFA Provider Financial Assurance Teams assessing performance against contractual funding requirements and performance management against contractual obligations and national quality measures. The charity has continually maintained its Ofsted Good inspection status, the most recent being March 2020, demonstrating high standards of delivery, highlighting overall Leadership and Management as a particular strength.
The charity achieved its core apprenticeship completion objective by matching the low target set for unsuccessful apprenticeship completions specific to both engineering and business administration. The overall qualification achievement rate (QAR) for apprenticeships was 70.3% (2022: 66.4%). This is an improvement on the previous year’s results from those apprentices whose progression was impacted and delayed with COVID successfully completing their apprenticeships. We did not achieve the core objective for apprenticeship recruitment targets which was mainly due to a fall in the number of suitable candidates applying for an apprenticeship combined with lower-than-expected employer demand for new apprentices.
Both strategic objectives were achieved. The human resource’s objective was to recruit and train human resources to meet functional and business requirements. This was achieved by recruiting new staff and supporting them to become effective additions to the organisation to replace those who departed during the financial year. The second objective was to minimise external risks and ensure high levels of compliance through enhanced process standardisation. This was achieved by focusing on three key areas of compliance and introducing operational an audit processes to ensure compliance with the ESFA funding rules applicable to those three key areas.
The ESFA subcontracting funding rules prohibits any more than 25% of a main providers apprenticeship funding being subcontracted. This requires Tyne North Training to secure and maintain its contractor cap exemption status, which was in place for 2022/23, and a successful application has already been granted for the forthcoming year 2023/24.
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
## **Staff Matters**
After the loss of employees during 2022, staffing levels have stabilised with the company continuing to promote a good working relationship with personnel. Despite the strain, staff have continued to work well, completing all the required procedures and keeping sufficient and appropriate records to allow the company to maintain its high standards.
As disclosed in note 9, during the year the company reached a settlement agreement with the Chief Executive Officer. The settlement was to agree early termination of their employment contract. The agreement was reached in May 2023. Subsequent to the settlement agreement, the Chief Executive Officer stayed on under a new, short term employment contract to ensure a smooth transition.
## **External Factors Impacting Achievement**
The main external factors effecting the achievement of business objectives during 2022 - 2023 were:
- Excessive workload of staff for those learners due for completion in 2022/23 backed up from those learners with completion dates from 2021/22 who were impacted by the coronavirus pandemic;
- Timely completion of subcontracted delivery of qualifications enabling learners to proceed to End Point Assessment;
- The introduction of the new level 3 Machining Technician Standard. Extensive work undertaken by relevant staff to develop an appropriate deliverable programme; and
- Extensive management resource required to recruit and train incoming staff to replace those who had departed the business. These areas were specifically centred around engineering operations, administration and apprenticeship recruitment.
## **FINANCIAL REVIEW**
## **Investment Policy**
The investment policy of the trustees remains one of caution and with continuing cost rises across the board, close monitoring to ensure it achieves the best return is required. An initial £600,000 was invested with two investment managers during July 2018 which during 2022-23 returned a net unrealised loss of £6,579 (2021-22: £47,093 loss).
## **Financial Performance**
Income has decreased to £1,697,366 (2022: £1,741,225), the key movements being a reduction in learners that result in less funding from the ESFA offset by Investment income increasing due to the interest rates. The charitable activities expenditure has increased significantly to £2,058,798 (2022: £1,641,751) largely as a result if the settlement agreement payable to the former CEO (see staff matters section above). The charitable company achieved a deficit of £374,196 (2022: surplus of £45,805) on unrestricted funds, including a loss on investments.
## **Reserves Policy**
The level of unrestricted reserves at 31 July 2023 is £1,076,904. Charity reserves are held for a number of important reasons:
1. Fund business development and growth to remain competitive and to offer the charities services to a wider business community;
2. Support apprentices made redundant to continue to complete their apprenticeships with alternative employers;
3. Enable the charity to discharge all its commitments to existing apprentices and companies should government funding diminish or cease; and
4. Fund necessary activities to minimise risk to the charities ability to operate as a going concern.
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
A designated capital fund of £348,796 was held at 31 July 2023 which is equal to the net book value of the property. The free reserves held at 31 July 2023 was £728,801.
## **Principle Funding Sources**
Principle funding sources and associated activities during 2022-23:
- ESFA – 100% government funding up to the apprenticeship standard funding cap for 16-18 apprentices to cover training costs when employed within a small company employing less than 50 employees with a payroll of less than £3 million, however there is a 5% employer funding contribution should they recruit a 19+ apprentice; 95% funding from the ESFA and 5% funding cost for an employer recruiting an apprentice who employs more than 50 employees but has a payroll of less than £3 million;
- Employers – large companies who employ more than 50 employees with a payroll in excess of £3 million fund Tyne North Training apprenticeships direct through their employer levy accounts; and
- Commercial income, investment income and interest – a small proportion of income is generated through the delivery of NVQs to existing adult employees working within apprenticeship employing companies, plus investment income held by two investment managers and interest received on reserves held.
## **Going Concern**
The board are in ongoing discussions over the future ownership and management structure of the entity. Although the board does not see any impact to the employees or apprentices, it is currently uncertain as to the future structure of the business and consequently its future funding streams. At the time of approval of these financial statements, the board considers that the going concern basis of accounting remains appropriate and therefore continue to prepare these financial statements on such basis. However given the inherent uncertainty over the current position and its potential impact on funding and delivery of training beyond July 2025, there is acknowledgement that the longer term future of the entity is in question.
## **PLANS FOR FUTURE PERIODS**
The company will continue to effectively manage external changes and challenging targets contained within the core objectives agreed each year, effectively capitalise on future growth opportunities and enhance quality delivery. The company is in the early stages of considering a form of partnership with other companies to improve the levels of training.
The charity will continue to focus on achieving its core objectives to:
- Continue to meet ESFA contractual obligations and maintain EAL and Pearson assessment centre status.
- Improve the quality of learning underpinned by effective training officer CPD.
- Focus on sustaining an improvement apprenticeship completion rate.
- Continue to be active in seeking to increase the number of apprenticeships and new employers through proactive business development supported with quality candidate attraction.
- Ensuring the curriculum design and delivery meets or exceeds both employer and apprentice needs and expectations.
The achievement of Tyne North Training’s strategic objectives will seek to safeguard effective, high quality subcontracted delivery and embed a proactive account management system across all business functions.
Management are in the process of assessing the current ownership, board and management structure of the charitable company. They are exploring ways to continue to meet the charitable objectives while ensuring the operations of the charity can continue for the medium to long term future. See the going concern seection of the trustees report and note 1.3 in the accounting policies.
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Governing Documents**
The charity is a charitable company limited by guarantee. It is governed by a Memorandum and Articles of Association.
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## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
## **Organisational Structure and Trustee Induction Process**
Prospective trustees are nominated from member companies and elected onto the Board. Prior to election, wherever possible, prospective trustees attend ‘Executive Committee’ meetings, in an ex-officio capacity, to familiarise themselves with the workings of the charity. They are also provided with a copy of the Memorandum and Articles of Association; the Charity Commission’s ‘The Essential Trustee: What you need to know’; and the current Self-Assessment Report, Strategic and Operational Business Objectives and Quality Improvement Plan.
Members eligible for election must be an ordinary or representative member. An ordinary member is any person being an individual or corporate body who carries on business in the engineering industry or commerce. A representative member is a person nominated by the company, either a partnership or other unincorporated body which carries on business in the engineering industry or commerce.
Excluding the Chairman, the number of trustees must not exceed six nor be less than two. No external body or person is entitled to appoint a trustee to Tyne North Training Limited.
The induction includes a meeting with a member of the key management personnel during which any queries relating to the governance, structure or management of the charity and its aims and objectives would be addressed.
The trustees make strategic and policy decisions on behalf of the business and agree strategic and operational objectives with key management personnel. Financial expenditure is authorised by two signatories required, including the chairman.
Implementing the strategic and operational objectives and the day to day running of the company is delegated to the key management personnel.
## O **ganisation structure**
Until September 2024, the executive committee provided delegated authority to the Chief Executive Officer, who in turn lead the employees to operate the businesa and set the strategic direction. As noted in the Reference and administrative details section of the report, the Chief Executive Officer resigned on 30 September 2024. Since then, the Chair has taken on the role of the Chief Executive Officer until the future of the ownership, board, management structure is finalised.
## **Pay policy for senior staff**
The trustees and senior management team represent the key management of the charity with the trustees being responsible for strategy and directing the charity and the senior management team having responsibility for controlling and operating the charity on a day to day basis. All trustees give their time freely throughout the year without receiving any form of financial remuneration.
The pay of senior staff is reviewed annually by the board of Tyne North Training.
## **Risk Management**
The trustees have identified the following as major risks to which the charity is exposed: the loss or withdrawal of ESFA contracts; the removal of the charity from the ESFA Register of Apprenticeship Training Providers (RoATP) list; an inadequate Ofsted inspection; inadequate financial ESFA health grade leading to ESFA intervention; continual alignment to ESFA subcontracting rules and regulations and the successful retention of the subcontracting cap exemption status; and/or the loss of approval as an assessment centre for EAL and/or Pearson, all of which would render the business unable to deliver engineering manufacturing and business & administration apprenticeships.
The charity has put in place a number of policies, systems and procedures to mitigate these risks to ensure the quality and financial performance of the organisation does not give cause or concern for loss or withdrawal of these ESFA contracts; RoATP and/or approval centre status, as follows:
- Internal quality system designed in accordance with ESFA, Ofsted, EAL and Pearson requirements;
- • Board approved strategic and operational business objectives;
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
- A sound financial base, exercising financial probity with a minimum financial ‘satisfactory’ rating from the ESFA;
- Performance figures and success rates consistently above national averages;
- Expert, highly qualified and committed staff who regularly undertake training and CPD activities;
- Continuous, close monitoring of ESFA funding rule changes, contractual requirements and minimum level performance criteria along with the need to continually align its operations to Ofsted, EIF requirements; and
- Ensuring reports are consistent and favourable from EAL external verifier and Pearson standards verifier audits
Additional to the above there are always competitive risks and pressures from other training providers as government funding, apprentice funding rate and the apprenticeship policy is continuously redefined within a financially and operationally competitive environment.
The company manages an effective working relationship with the local college, facilitated by contracts for service delivery and continues to recruit and retain a high number of apprentices whilst achieving completion rates in excess of National averages, all of which contribute towards mitigating risk.
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## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
## **STATEMENT OF TRUSTEES’ RESPONSIBILITIES**
The trustees (who are also directors of Tyne North Training Limited for the purpose of company law) are responsible for preparing the Trustee’s Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the trustees to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure of the charitable company for the year. In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently
- observe the methods and principles in the Charities SORP 2015 (FRS 102)
- make judgements and estimates that are reasonable and prudent
- state whether applicable UK Accounting Standards have been followed subject to any material departures disclosed and explained in the financial statements
- prepare financial statements on a ‘going concern’ basis, unless it is inappropriate to presume that the charitable company will continue in operation
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence taking reasonable steps for the prevention and detection of fraud and other irregularities.
In so far as the trustees are aware:
- there is no relevant audit information of which the charitable company’s auditor is unaware; and
- the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information.
Approved by order of the members of the board of trustees on 14 November 2024 and signed on their behalf by:
**T I Selkirk** Chairman
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## **Independent auditor's report to the Members of Tyne North Training Limited**
## **Opinion**
We have audited the financial statements of Tyne North Training Limited (the 'charitable company') for the year ended 31 July 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the related notes, 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:
- give a true and fair view of the state of the charitable company's affairs as at 31 July 2023 and of its incoming resources and application of resources, including its income and expenditure for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **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 United Kingdom, including the Financial Reporting Council'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.
## **Material uncertainty related to going concern**
We draw attention to note 1.3 in the financial statements, which indicates uncertainty over the future operations of the charitable company as a result of ongoing board discussions around the ownership and management structure of the entity, which may impact future funding. As stated in note 1.3, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the charitable company's ability to continue as a going concern for a period of at least 12 months from the date of this report. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
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## **Independent auditor's report to the Members of Tyne North Training Limited (continued)**
## **Other information**
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
## **Opinion on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Trustees' report for the financial year for which the financial statements are prepared is consistent with the financial statements.
- the Trustees' report has been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' report.
We have nothing to report in respect of the following matters in relation to which Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Trustees' report and from the requirement to prepare a Strategic report.
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Independent auditor's report to the Members of Tyne North Training Limited (continued)**
## **Responsibilities of trustees**
As explained more fully in the trustees' responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the charitable company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
## **Auditor's responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identified areas of law and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience and through discussions with the directors and other management (as required by Auditing Standards) and from inspection of the charity's legal correspondence and we discussed with the directors and other management the policies and procedures in place regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit.
Firstly, the charity is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the charity is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; health and safety, employment law, data protection, safeguarding, environmental law and certain aspects of company legislation, recognising the nature of the charity's activities. Auditing Standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance material to the financial statements.
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.
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## **Independent auditor's report to the Members of Tyne North Training Limited (continued)**
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 trustees, 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 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 charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.
## **Anne Hallowell BSc DChA FCA (Senior Statutory Auditor) for and on behalf of UNW LLP, Statutory Auditor**
Chartered Accountants Newcastle upon Tyne
14 November 2024
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Statement of financial activities (incorporating income and expenditure account) Year ended 31 July 2023**
|**Note**
**Income from:**
Charitable activities
2
Other trading activities
Investments
3
**Total income**
**Expenditure on:**
Investment management costs
Charitable activities
4
**Total expenditure**
**Net (expenditure)/income before net losses on**
**investments**
Net losses on investments
**Net movement in funds**
**Reconciliation of funds:**
Total funds brought forward
Net movement in funds
**Total funds carried forward**|**Unrestricted**
**funds**
**2023**
**£**
**1,681,311**
**-**
**16,055**
**1,697,366**
**6,185**
**2,058,798**
**2,064,983**
**(367,617)**
**(6,579)**
**(374,196)**
**1,451,100**
**(374,196)**
**1,076,904**|**Total**
**funds**
**2023**
**£**
**1,681,311**
**-**
**16,055**
**1,697,366**
**6,185**
**2,058,798**
**2,064,983**
**(367,617)**
**(6,579)**
**(374,196)**
**1,451,100**
**(374,196)**
**1,076,904**|Total
funds
2022
£
1,726,127
4,194
10,904
1,741,225
6,576
1,641,751
1,648,327
92,898
(47,093)
45,805
1,405,295
45,805
1,451,100|
|---|---|---|---|
The statement of financial activities includes all gains and losses recognised in the year.
The notes on pages 17 to 28 form part of these financial statements.
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Balance sheet At 31 July 2023**
||||**2023**|**2023**|2022|
|---|---|---|---|---|---|
||**Note**||**£**||£|
|**Fixed assets**||||||
|Tangible assets|7||**348,796**||358,296|
|Investments|8||**635,363**||636,340|
||||**984,159**||994,636|
|**Current assets**||||||
|Debtors|9|**194,677**||190,906||
|Cash at bank and in hand||**727,810**||451,037||
|||**922,487**||641,943||
|Creditors: amounts falling due within one||||||
|year|10|**(829,742)**||(185,479)||
|**Net current assets**|||**92,745**||456,464|
|**Total assets less current liabilities**|||**1,076,904**||1,451,100|
|**Total net assets**|||**1,076,904**||1,451,100|
|**Charity funds**||||||
|Unrestricted funds|11||**1,076,904**||1,451,100|
|**Total funds**|||**1,076,904**||1,451,100|
The trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.
The financial statements have been prepared in accordance with the provisions applicable to entities subject to the small companies regime.
The financial statements were approved and authorised for issue by the trustees on 14 November 2024 and signed on their behalf by:
**T I Selkirk** OC9286FEBAAD4CSY... Chairman
Company registered number: 00992831
The notes on pages 17 to 28 form part of these financial statements.
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Statement of cash flows Year ended 31 July 2023**
|**Cash flows from operating activities**
Net cash used in operating activities
**Cash flows from investing activities**
Interest and dividends received
Purchase of tangible fixed assets
Proceeds from sale of investments
Purchase of investments
**Net cash provided by investing activities**
**Change in cash and cash equivalents in the year**
Cash and cash equivalents at the beginning of the year
**Cash and cash equivalents at the end of the year**|**2023**
**£**
**266,320**
**16,055**
**-**
**46,172**
**(51,774)**
**10,453**
**276,773**
**451,037**
**727,810**|2022
£
(266,430)
10,904
(1,660)
94,901
(87,837)
**16,308**
**(250,122)**
701,159
451,037|
|---|---|---|
The notes on pages 17 to 28 form part of these financial statements
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **1. Accounting policies**
A summary of the principal accounting policies adopted (which have been applied consistently, except where noted), judgments and key sources of estimation uncertainty, is set out below.
## **1.1 Basis of preparation of financial statements**
The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.
Tyne North Training Limited meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.
The financial statements are preparedunder the historical cost convention, are presented in pounds sterling and rounded to the nearest £1.
## **1.2 Company status**
The company is a company limited by guarantee, incorporated and domiciled in United Kingdom and registered in England and Wales. The members of the company are the trustees named on page 1. In the event of the company being wound up, the liability in respect of the guarantee is limited to £20 per member of the company.
## **1.3 Going concern**
The company has financial reserves held in cash, investments and fixed assets. The company has strong free reserves (unrestricted reserves not tied up in tangible fixed assets) of £728,108. As a consequence, the trustees believe that the company is well placed to manage its business risks successfully despite the current uncertain economic outlook.
The board are in ongoing discussions over the future ownership and management structure of the entity. Although the board does not see any impact to the employees or apprentices, it is currently uncertain as to the future structure of the business and consequently its future funding streams. At the time of approval of these financial statements, the board considers that the going concern basis of accounting remains appropriate and therefore continue to prepare these financial statements on such basis. However given the inherent uncertainty over the current position and its potential impact on funding and delivery of training beyond July 2025, there is acknowledgement that the longer term future of the entity is in question.
## **1.4 Income**
All income is recognised once the company has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.
Page 17
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **1. Accounting policies (continued)**
## **1.5 Expenditure**
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.
Expenditure on raising funds includes all expenditure incurred by the company to raise funds for its charitable purposes.
Expenditure on charitable activities is incurred on directly undertaking the activities which further the company's objectives, as well as any associated support costs.
All expenditure is inclusive of irrecoverable VAT.
## **1.6 Interest receivable**
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the company; this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited.
## **1.7 Tangible fixed assets and depreciation**
Tangible fixed assets are carried at cost, net of depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
- Freehold property over 50 years - Office equipment 15% straight-line
## **1.8 Investments**
Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the balance sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the statement of financial activities.
## **1.9 Debtors**
Trade and other debtors are recognised at the settlement amount. Prepayments are valued at the amount prepaid.
Page 18
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **1. Accounting policies (continued)**
## **1.10 Cash at bank and in hand**
Cash and cash equivalents includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
## **1.11 Liabilities and provisions**
Liabilities are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that the company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.
## **1.12 Financial instruments**
The company only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.
## **1.13 Operating leases**
Rentals paid under operating leases are charged to the Statement of Financial Activities on a straight line basis over the lease term.
## **1.14 Employee benefits**
## _**Short-term benefits**_
Short-term benefits, including other non-monetary benefits, are recognised as an expense in the period in which the service is received.
## _**Defined contribution pension plan**_
The company operates a defined contribution pension plan for its employees. Contributions are recognised as an expense when they fall due. Amounts due but not yet paid are included within creditors on the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
## **1.15 Fund accounting**
General funds are unrestricted funds which are available for use at the discretion of the trustees in furtherance of the general objectives of the company and which have not been designated for other purposes.
Designated funds comprise unrestricted funds that have been set aside by the trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.
Investment income, gains and losses are allocated to the appropriate fund.
Page 19
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **2. Income from charitable activities**
|**Unrestricted**
**funds**
**2023**
**£**
Education and Skills Funding Agency
1,652,249
Employer contributions
29,062
1,681,311
Unrestricted
funds
2022
£
Education and Skills Funding Agency
1,692,479
Employer contributions
26,616
Workforce development
7,032
1,726,127|**Total**
**funds**
**2023**
**£**
**1,652,249**
**29,062**
**1,681,311**|
|---|---|
||Total
funds
2022
£
1,692,479
26,616
7,032
1,726,127|
## **3. Investment income**
|**Unrestricted**
**funds**
**2023**
**£**
Income from investments
14,622
Interest receivable
1,433
16,055|**Total**
**funds**
**2023**
**£**
**14,622**
**1,433**
**16,055**|
|---|---|
Page 20
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **3. Investment income (continued)**
|Income from investments
Interest receivable|Unrestricted
funds
2022
£
10,877
27
10,904|Total
funds
2022
£
10,877
27
10,904|
|---|---|---|
## **4. Analysis of expenditure by activities**
|Charitable activities
Charitable activities|**Activities**
**undertaken**
**directly**
**2023**
**£**
1,483,690
Activities
undertaken
directly
2022
£
1,390,273|**Support**
**costs**
**2023**
**£**
575,108
Support
costs
2022
£
251,478|**Total**
**funds**
**2023**
**£**
**2,058,798**|
|---|---|---|---|
||||Total
funds
2022
£
1,641,751|
Page 21
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **4. Analysis of expenditure by activities (continued)**
## **Analysis of support costs**
|Staff costs
Premises expenses
Office costs
Motor costs
Bank charges
Subscriptions and professional fees (including auditors' remuneration)
Sundry costs
Depreciation
Equipment costs and repairs|**Total**
**funds**
**2023**
**£**
**384,814**
**31,344**
**36,766**
**49,714**
**152**
**49,088**
**10,680**
**9,500**
**3,050**
**575,108**|Total
funds
2022
£
42,471
31,481
28,615
49,725
1,599
62,891
17,255
11,318
6,123
251,478|
|---|---|---|
## **5. Auditor's remuneration**
The auditor's remuneration amounts to an auditor fee of £11,000 (2022: £6,500), and bookeeping services of £10,800 (2022: £7,258).
## **6. Staff costs**
|Wages and salaries
Social security costs
Pension costs|**2023**
**£**
**970,355**
**116,790**
**132,321**
**1,219,466**|2022
£
680,168
80,621
118,303|
|---|---|---|
|||879,092|
The average number of persons employed by the company during the year was as follows:
||**2023**|2022|
|---|---|---|
||**No.**|No.|
|Charitable activities|**14**|17|
Page 22
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **6. Staff costs (continued)**
The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:
|||**2023**|2022|
|---|---|---|---|
|||**No.**|No.|
|In the band £100,001|- £110,000|**-**|1|
|In the band £420,001|- £430,000|**1**|-|
No expenses were reimbursed to any trustees during the year (2022: £nil). No trustees received any remuneration.
The key management personnel of the charity comprise the senior management team (as listed on page 1), with total employee benefits (including pension costs) of £607,979 (2022: £297,874).
During the year, the company reached a settlement agreement with the Chief Executive Officer totalling £323,269. This amount was split between a payment to the individual of £263,269 and a payment to their pension fund of £60,000. The settlement was to agree early termination of their employment contract. The agreement was reached in May 2023 and paid post year end. In accordance with the chosen accounting policies, the settlement expense has been recognised in May 2023, being the date the obligation to pay the settlement arose. The balance is carried as a liability at 31 July 2023, included within accruals and deferred income. The charity continues to have sufficient unrestricted reserves to fund the settlement payment and continue to fund operations at the balance sheet date.
Page 23
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **7. Tangible fixed assets**
|**Cost**
At 1 August 2022
At 31 July 2023
**Depreciation**
At 1 August 2022
Charge for the year
At 31 July 2023
**Net book value**
At 31 July 2023
At 31 July 2022
**8.**
**Fixed asset investments**
**Cost or valuation**
At 1 August 2022
Additions
Disposals
Revaluations
At 31 July 2023
**Net book value**
At 31 July 2023
At 31 July 2022|**Freehold**
**property**
**£**
**400,000**
**400,000**
**43,204**
**8,000**
**51,204**
**348,796**
356,796|**Office**
**equipment**
**£**
**184,816**
**184,816**
**183,316**
**1,500**
**184,816**
**-**
1,500|**Total**
**£**
**584,816**
**584,816**
**226,520**
**9,500**
**236,020**
**348,796**
358,296
**Listed**
**investments**
**£**
**636,340**
**51,774**
**(46,977)**
**(5,774)**
**635,363**
**635,363**
636,340|
|---|---|---|---|
Page 24
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **9. Debtors**
|**Due within one year**
Trade debtors
Other debtors
Prepayments and accrued income|**2023**
**£**
**148,528**
**5,000**
**41,149**
**194,677**|2022
£
156,071
500
34,335|
|---|---|---|
|||190,906|
## **10. Creditors: amounts falling due within one year**
|Trade creditors
Other taxation and social security
Other creditors
Accruals and deferred income|**2023**
**£**
**344,902**
**35,549**
**6,500**
**442,791**
**829,742**|2022
£
141,331
11,845
7,000
25,303|
|---|---|---|
|||185,479|
Page 25
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **11. Statement of funds**
**Statement of funds - current year**
|**Balance at 1**
**August 2022**
**£**
**Unrestricted funds**
**Designated funds**
Property Fund
**356,796**
**General funds**
General Funds
**1,094,304**
**Total Unrestricted funds**
**1,451,100**|**Income**
**£**
**-**
**1,697,366**
**1,697,366**|**Expenditure**
**£**
**(8,000)**
**(2,056,983)**
**(2,064,983)**|**Gains/**
**(Losses)**
**£**
**Balance at**
**31 July 2023**
**£**
**-**
**348,796**
**(6,579)**
**728,108**
**(6,579)**
**1,076,904**|**Gains/**
**(Losses)**
**£**
**Balance at**
**31 July 2023**
**£**
**-**
**348,796**
**(6,579)**
**728,108**
**(6,579)**
**1,076,904**|
|---|---|---|---|---|
|||||**728,108**|
|||||**1,076,904**|
The designated property fund has a balance equal to the net book value of the freehold property which enables the non-liquid reserves to be easily identifiable.
Page 26
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **11. Statement of funds (continued)**
## **Statement of funds - prior year**
|**Unrestricted funds**
**Designated funds**
Property Fund
**General funds**
General Funds
**Total Unrestricted funds**|Balance at
1 August
2021
£
364,796
1,040,499
1,405,295|Income
£
-
1,741,225
1,741,225|Expenditure
£
(8,000)
(1,640,327)
(1,648,327)|Gains/
(Losses)
£
-
(47,093)
(47,093)|Balance at
31 July 2022
£
356,796|
|---|---|---|---|---|---|
||||||1,094,304|
||||||1,451,100|
## **12. Reconciliation of net movement in funds to net cash flow from operating activities**
|Net income/(expenditure) for the year (as per Statement of Financial
Activities)
**Adjustments for:**
Depreciation charges
Losses/(gains) on investments
Dividends, interests and rents from investments
(Increase)/decrease in debtors
Increase/(decrease) in creditors
**Net cash provided by/(used in) operating activities**|**2023**
**£**
**(374,196)**
**9,500**
**6,579**
**(16,055)**
**(3,771)**
**644,263**
**266,320**|2022
£
45,805|
|---|---|---|
|||11,440
47,093
(10,904)
2,399
(362,263)|
|||(266,430)|
Page 27
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **13. Analysis of cash and cash equivalents**
|Cash in hand
**Analysis of changes in net debt**
**At 1 August**
**2022**
**£**
Cash at bank and in hand
**451,037**|**2023**
**£**
**727,810**
**Cash flows**
**£**
**276,773**|2022
£
451,037|
|---|---|---|
|||**At 31 July**
**2023**
**£**
**727,810**|
## **14. Analysis of changes in net debt**
## **15. Pension commitments**
The charity operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the charitable company which amounted to £192,321 (2022: £118,303).
## **16. Operating lease commitments**
At 31 July 2023 the company had commitments to make future minimum lease payments under noncancellable operating leases as follows:
|Not later than 1 year
Later than 1 year and not later than 5 years|**2023**
**£**
**27,763**
**-**
**27,763**|2022
£
39,568
26,717|
|---|---|---|
|||66,285|
## **17. Related party transactions**
The company has entered into a settlement agreement totaling £323,269 to the Chief Executive Officer in the year. The full amount was owing at 31 July 2023. See note 6 for further information.
Page 28
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
**Registered number: 00992831 Charity number: 502259**
## **Tyne North Training Limited**
**(A company limited by guarantee) Annual report Year ended 31 July 2023**
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Contents**
||Page|
|---|---|
|**Reference and administrative details**|1 - 2|
|**Trustees' report**|3 - 9|
|**Independent auditors' report**|10 - 13|
|**Statement of financial activities**|14|
|**Balance sheet**|15|
|**Statement of cash flows**|16|
|**Notes to the financial statements**|17 - 28|
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Reference and administrative details Year ended 31 July 2023**
## **Trustees**
T I Selkirk, Chairman
C Pratt, Vice Chairman
S Armstrong G Longstaff (appointed 8 October 2024)
## **Key management personnel**
Michael Needham, Chief Executive Officer (resigned 30 September 2024) Geoff Moore, Quality Manager
## **Company registered number**
00992831
## **Charity registered number**
502259
## **Registered office**
Embleton Avenue Wallsend Newcastle upon Tyne Tyne and Wear NE28 9NJ
## **Company secretary**
Michael Needham (resigned 30 September 2024)
## **Independent auditor**
UNW LLP Chartered Accountants Citygate St James' Boulevard Newcastle upon Tyne NE1 4JE
## **Bankers**
Barclays Bank Plc 49/51 Northumberland Street Newcastle upon Tyne Tyne and Wear NE1 7AF
Page 1
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Reference and administrative details (continued) Year ended 31 July 2023**
## **Solicitors**
Hay & Kilner Helix, The Lumen St James' Boulevard Newcastle upon Tyne NE4 5BZ
## **Investment managers**
Brewin Dolphin Time Central Gallowgate Newcastle upon Tyne NE1 4SR
Rathbone Investment Management Limited Earl Grey House 75-85 Grey Street Newcastle upon Tyne NE1 6EF
Page 2
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report Year ended 31 July 2023**
The trustees, who act as directors for the purposes of company law, are pleased to present their annual report together with the financial statements for the year ended 31 July 2023.
The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, and the Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland.
## **OBJECTIVES AND ACTIVITIES**
The charity’s objects are specific towards the advancement of learning and education for the public benefit of persons employed or intending to be employed in industry and commerce.
## **Core Business Objectives**
- Maintain apprenticeship recruitment levels and the number of new employers
- Maintain or improve overall apprenticeship completion rates
- Achieve a financial operational surplus
- Continually enhance the quality of learning delivery
The overall aim of Tyne North Training Limited remains to increase the skills, knowledge and understanding of those involved in engineering and business-related activities and to deliver high quality services to an increasing number of apprentices and employers within the region.
Contracts with the Education and Skills Funding Agency (ESFA) and employers provide the charity with funding to deliver accredited advanced apprenticeship standards within the engineering manufacturing and business sectors benefitting young people, the majority of which begin their apprenticeships between the ages of 16-18 years old. The total number of apprentices on-programme during 2022 – 2023 was 396 (2021 – 2022: 428).
The policy of the trustees continues to be to utilise charity reserves to support business growth and manage risk with any additional surpluses used to enhance the skills and learning of existing apprentices; support employer engagement; design and implement business model changes in response to ESFA funding rule changes; and be available as contingency funding in the event of apprentices being made redundant and/or the loss of government funded contracts.
The main activities of the charity are to:
- Deliver high quality, sustainable engineering manufacturing and business administration apprenticeships;
- Continue to align business operations to ESFA funding rules and regulations;
- Finance, plan, resource, implement, and manage business change projects in response to market opportunities and to mitigate charity risk;
- Maximise the availability of high quality apprenticeship candidates;
- Drive and sustain employer engagement and business development activities; and
- Deliver support to apprentices made redundant and identify alternative apprenticeship employment opportunities for the continuation of the apprenticeship
The charities main activities and funding levels are reviewed on an annual basis by the trustees. Grant making is not a material part of the charity’s activities.
## **Public Benefit**
Tyne North Training Limited offer a wide range of advanced apprenticeships within the local engineering manufacturing and business sectors, as well as delivering functional skills to relevant apprentices.
We are committed to delivering a high level of quality which will ensure all users of our service are completely satisfied and have the opportunity to make comments, suggestions and complaints if necessary. Our service provides information, advice and guidance to support young people in making appropriate apprenticeship decisions, whilst helping companies understand and comply with apprenticeship standards; commercial contractual arrangements and the apprenticeship levy system.
Page 3
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
We support all our apprentices, many from disadvantaged backgrounds, to achieve their full potential successfully progressing them through a level 3 apprenticeship whilst providing encouragement and further support onto higher education courses. Tyne North Training also facilitates the smooth transition from one employer to another for apprentices facing the prospect of redundancy.
## **ACHIEVEMENTS AND PERFORMANCE**
## **Achievements and Quality Control**
Achievements of the charity are assessed internally and externally, both qualitatively and quantifiably. Internal assessment is against company operating procedures contained within our continually updated quality management system, along with yearly performance management against business objectives. External assessments are through Ofsted assessing apprenticeship delivery against the Education Inspection Framework (EIF); ESFA Provider Financial Assurance Teams assessing performance against contractual funding requirements and performance management against contractual obligations and national quality measures. The charity has continually maintained its Ofsted Good inspection status, the most recent being March 2020, demonstrating high standards of delivery, highlighting overall Leadership and Management as a particular strength.
The charity achieved its core apprenticeship completion objective by matching the low target set for unsuccessful apprenticeship completions specific to both engineering and business administration. The overall qualification achievement rate (QAR) for apprenticeships was 70.3% (2022: 66.4%). This is an improvement on the previous year’s results from those apprentices whose progression was impacted and delayed with COVID successfully completing their apprenticeships. We did not achieve the core objective for apprenticeship recruitment targets which was mainly due to a fall in the number of suitable candidates applying for an apprenticeship combined with lower-than-expected employer demand for new apprentices.
Both strategic objectives were achieved. The human resource’s objective was to recruit and train human resources to meet functional and business requirements. This was achieved by recruiting new staff and supporting them to become effective additions to the organisation to replace those who departed during the financial year. The second objective was to minimise external risks and ensure high levels of compliance through enhanced process standardisation. This was achieved by focusing on three key areas of compliance and introducing operational an audit processes to ensure compliance with the ESFA funding rules applicable to those three key areas.
The ESFA subcontracting funding rules prohibits any more than 25% of a main providers apprenticeship funding being subcontracted. This requires Tyne North Training to secure and maintain its contractor cap exemption status, which was in place for 2022/23, and a successful application has already been granted for the forthcoming year 2023/24.
Page 4
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
## **Staff Matters**
After the loss of employees during 2022, staffing levels have stabilised with the company continuing to promote a good working relationship with personnel. Despite the strain, staff have continued to work well, completing all the required procedures and keeping sufficient and appropriate records to allow the company to maintain its high standards.
As disclosed in note 9, during the year the company reached a settlement agreement with the Chief Executive Officer. The settlement was to agree early termination of their employment contract. The agreement was reached in May 2023. Subsequent to the settlement agreement, the Chief Executive Officer stayed on under a new, short term employment contract to ensure a smooth transition.
## **External Factors Impacting Achievement**
The main external factors effecting the achievement of business objectives during 2022 - 2023 were:
- Excessive workload of staff for those learners due for completion in 2022/23 backed up from those learners with completion dates from 2021/22 who were impacted by the coronavirus pandemic;
- Timely completion of subcontracted delivery of qualifications enabling learners to proceed to End Point Assessment;
- The introduction of the new level 3 Machining Technician Standard. Extensive work undertaken by relevant staff to develop an appropriate deliverable programme; and
- Extensive management resource required to recruit and train incoming staff to replace those who had departed the business. These areas were specifically centred around engineering operations, administration and apprenticeship recruitment.
## **FINANCIAL REVIEW**
## **Investment Policy**
The investment policy of the trustees remains one of caution and with continuing cost rises across the board, close monitoring to ensure it achieves the best return is required. An initial £600,000 was invested with two investment managers during July 2018 which during 2022-23 returned a net unrealised loss of £6,579 (2021-22: £47,093 loss).
## **Financial Performance**
Income has decreased to £1,697,366 (2022: £1,741,225), the key movements being a reduction in learners that result in less funding from the ESFA offset by Investment income increasing due to the interest rates. The charitable activities expenditure has increased significantly to £2,058,798 (2022: £1,641,751) largely as a result if the settlement agreement payable to the former CEO (see staff matters section above). The charitable company achieved a deficit of £374,196 (2022: surplus of £45,805) on unrestricted funds, including a loss on investments.
## **Reserves Policy**
The level of unrestricted reserves at 31 July 2023 is £1,076,904. Charity reserves are held for a number of important reasons:
1. Fund business development and growth to remain competitive and to offer the charities services to a wider business community;
2. Support apprentices made redundant to continue to complete their apprenticeships with alternative employers;
3. Enable the charity to discharge all its commitments to existing apprentices and companies should government funding diminish or cease; and
4. Fund necessary activities to minimise risk to the charities ability to operate as a going concern.
Page 5
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
A designated capital fund of £348,796 was held at 31 July 2023 which is equal to the net book value of the property. The free reserves held at 31 July 2023 was £728,801.
## **Principle Funding Sources**
Principle funding sources and associated activities during 2022-23:
- ESFA – 100% government funding up to the apprenticeship standard funding cap for 16-18 apprentices to cover training costs when employed within a small company employing less than 50 employees with a payroll of less than £3 million, however there is a 5% employer funding contribution should they recruit a 19+ apprentice; 95% funding from the ESFA and 5% funding cost for an employer recruiting an apprentice who employs more than 50 employees but has a payroll of less than £3 million;
- Employers – large companies who employ more than 50 employees with a payroll in excess of £3 million fund Tyne North Training apprenticeships direct through their employer levy accounts; and
- Commercial income, investment income and interest – a small proportion of income is generated through the delivery of NVQs to existing adult employees working within apprenticeship employing companies, plus investment income held by two investment managers and interest received on reserves held.
## **Going Concern**
The board are in ongoing discussions over the future ownership and management structure of the entity. Although the board does not see any impact to the employees or apprentices, it is currently uncertain as to the future structure of the business and consequently its future funding streams. At the time of approval of these financial statements, the board considers that the going concern basis of accounting remains appropriate and therefore continue to prepare these financial statements on such basis. However given the inherent uncertainty over the current position and its potential impact on funding and delivery of training beyond July 2025, there is acknowledgement that the longer term future of the entity is in question.
## **PLANS FOR FUTURE PERIODS**
The company will continue to effectively manage external changes and challenging targets contained within the core objectives agreed each year, effectively capitalise on future growth opportunities and enhance quality delivery. The company is in the early stages of considering a form of partnership with other companies to improve the levels of training.
The charity will continue to focus on achieving its core objectives to:
- Continue to meet ESFA contractual obligations and maintain EAL and Pearson assessment centre status.
- Improve the quality of learning underpinned by effective training officer CPD.
- Focus on sustaining an improvement apprenticeship completion rate.
- Continue to be active in seeking to increase the number of apprenticeships and new employers through proactive business development supported with quality candidate attraction.
- Ensuring the curriculum design and delivery meets or exceeds both employer and apprentice needs and expectations.
The achievement of Tyne North Training’s strategic objectives will seek to safeguard effective, high quality subcontracted delivery and embed a proactive account management system across all business functions.
Management are in the process of assessing the current ownership, board and management structure of the charitable company. They are exploring ways to continue to meet the charitable objectives while ensuring the operations of the charity can continue for the medium to long term future. See the going concern seection of the trustees report and note 1.3 in the accounting policies.
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Governing Documents**
The charity is a charitable company limited by guarantee. It is governed by a Memorandum and Articles of Association.
Page 6
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
## **Organisational Structure and Trustee Induction Process**
Prospective trustees are nominated from member companies and elected onto the Board. Prior to election, wherever possible, prospective trustees attend ‘Executive Committee’ meetings, in an ex-officio capacity, to familiarise themselves with the workings of the charity. They are also provided with a copy of the Memorandum and Articles of Association; the Charity Commission’s ‘The Essential Trustee: What you need to know’; and the current Self-Assessment Report, Strategic and Operational Business Objectives and Quality Improvement Plan.
Members eligible for election must be an ordinary or representative member. An ordinary member is any person being an individual or corporate body who carries on business in the engineering industry or commerce. A representative member is a person nominated by the company, either a partnership or other unincorporated body which carries on business in the engineering industry or commerce.
Excluding the Chairman, the number of trustees must not exceed six nor be less than two. No external body or person is entitled to appoint a trustee to Tyne North Training Limited.
The induction includes a meeting with a member of the key management personnel during which any queries relating to the governance, structure or management of the charity and its aims and objectives would be addressed.
The trustees make strategic and policy decisions on behalf of the business and agree strategic and operational objectives with key management personnel. Financial expenditure is authorised by two signatories required, including the chairman.
Implementing the strategic and operational objectives and the day to day running of the company is delegated to the key management personnel.
## O **ganisation structure**
Until September 2024, the executive committee provided delegated authority to the Chief Executive Officer, who in turn lead the employees to operate the businesa and set the strategic direction. As noted in the Reference and administrative details section of the report, the Chief Executive Officer resigned on 30 September 2024. Since then, the Chair has taken on the role of the Chief Executive Officer until the future of the ownership, board, management structure is finalised.
## **Pay policy for senior staff**
The trustees and senior management team represent the key management of the charity with the trustees being responsible for strategy and directing the charity and the senior management team having responsibility for controlling and operating the charity on a day to day basis. All trustees give their time freely throughout the year without receiving any form of financial remuneration.
The pay of senior staff is reviewed annually by the board of Tyne North Training.
## **Risk Management**
The trustees have identified the following as major risks to which the charity is exposed: the loss or withdrawal of ESFA contracts; the removal of the charity from the ESFA Register of Apprenticeship Training Providers (RoATP) list; an inadequate Ofsted inspection; inadequate financial ESFA health grade leading to ESFA intervention; continual alignment to ESFA subcontracting rules and regulations and the successful retention of the subcontracting cap exemption status; and/or the loss of approval as an assessment centre for EAL and/or Pearson, all of which would render the business unable to deliver engineering manufacturing and business & administration apprenticeships.
The charity has put in place a number of policies, systems and procedures to mitigate these risks to ensure the quality and financial performance of the organisation does not give cause or concern for loss or withdrawal of these ESFA contracts; RoATP and/or approval centre status, as follows:
- Internal quality system designed in accordance with ESFA, Ofsted, EAL and Pearson requirements;
- • Board approved strategic and operational business objectives;
Page 7
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
- A sound financial base, exercising financial probity with a minimum financial ‘satisfactory’ rating from the ESFA;
- Performance figures and success rates consistently above national averages;
- Expert, highly qualified and committed staff who regularly undertake training and CPD activities;
- Continuous, close monitoring of ESFA funding rule changes, contractual requirements and minimum level performance criteria along with the need to continually align its operations to Ofsted, EIF requirements; and
- Ensuring reports are consistent and favourable from EAL external verifier and Pearson standards verifier audits
Additional to the above there are always competitive risks and pressures from other training providers as government funding, apprentice funding rate and the apprenticeship policy is continuously redefined within a financially and operationally competitive environment.
The company manages an effective working relationship with the local college, facilitated by contracts for service delivery and continues to recruit and retain a high number of apprentices whilst achieving completion rates in excess of National averages, all of which contribute towards mitigating risk.
Page 8
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Trustees' report (continued) Year ended 31 July 2023**
## **STATEMENT OF TRUSTEES’ RESPONSIBILITIES**
The trustees (who are also directors of Tyne North Training Limited for the purpose of company law) are responsible for preparing the Trustee’s Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the trustees to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure of the charitable company for the year. In preparing these financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently
- observe the methods and principles in the Charities SORP 2015 (FRS 102)
- make judgements and estimates that are reasonable and prudent
- state whether applicable UK Accounting Standards have been followed subject to any material departures disclosed and explained in the financial statements
- prepare financial statements on a ‘going concern’ basis, unless it is inappropriate to presume that the charitable company will continue in operation
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence taking reasonable steps for the prevention and detection of fraud and other irregularities.
In so far as the trustees are aware:
- there is no relevant audit information of which the charitable company’s auditor is unaware; and
- the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information.
Approved by order of the members of the board of trustees on 14 November 2024 and signed on their behalf by:
**T I Selkirk** Chairman
Page 9
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Independent auditor's report to the Members of Tyne North Training Limited**
## **Opinion**
We have audited the financial statements of Tyne North Training Limited (the 'charitable company') for the year ended 31 July 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and the related notes, 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:
- give a true and fair view of the state of the charitable company's affairs as at 31 July 2023 and of its incoming resources and application of resources, including its income and expenditure for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **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 United Kingdom, including the Financial Reporting Council'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.
## **Material uncertainty related to going concern**
We draw attention to note 1.3 in the financial statements, which indicates uncertainty over the future operations of the charitable company as a result of ongoing board discussions around the ownership and management structure of the entity, which may impact future funding. As stated in note 1.3, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the charitable company's ability to continue as a going concern for a period of at least 12 months from the date of this report. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
Page 10
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Independent auditor's report to the Members of Tyne North Training Limited (continued)**
## **Other information**
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
## **Opinion on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Trustees' report for the financial year for which the financial statements are prepared is consistent with the financial statements.
- the Trustees' report has been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' report.
We have nothing to report in respect of the following matters in relation to which Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Trustees' report and from the requirement to prepare a Strategic report.
Page 11
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Independent auditor's report to the Members of Tyne North Training Limited (continued)**
## **Responsibilities of trustees**
As explained more fully in the trustees' responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the charitable company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
## **Auditor's responsibilities for the audit of the financial statements**
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identified areas of law and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience and through discussions with the directors and other management (as required by Auditing Standards) and from inspection of the charity's legal correspondence and we discussed with the directors and other management the policies and procedures in place regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit.
Firstly, the charity is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the charity is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; health and safety, employment law, data protection, safeguarding, environmental law and certain aspects of company legislation, recognising the nature of the charity's activities. Auditing Standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance material to the financial statements.
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.
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Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Independent auditor's report to the Members of Tyne North Training Limited (continued)**
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 trustees, 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 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 charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.
## **Anne Hallowell BSc DChA FCA (Senior Statutory Auditor) for and on behalf of UNW LLP, Statutory Auditor**
Chartered Accountants Newcastle upon Tyne
14 November 2024
Page 13
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Statement of financial activities (incorporating income and expenditure account) Year ended 31 July 2023**
|**Note**
**Income from:**
Charitable activities
2
Other trading activities
Investments
3
**Total income**
**Expenditure on:**
Investment management costs
Charitable activities
4
**Total expenditure**
**Net (expenditure)/income before net losses on**
**investments**
Net losses on investments
**Net movement in funds**
**Reconciliation of funds:**
Total funds brought forward
Net movement in funds
**Total funds carried forward**|**Unrestricted**
**funds**
**2023**
**£**
**1,681,311**
**-**
**16,055**
**1,697,366**
**6,185**
**2,058,798**
**2,064,983**
**(367,617)**
**(6,579)**
**(374,196)**
**1,451,100**
**(374,196)**
**1,076,904**|**Total**
**funds**
**2023**
**£**
**1,681,311**
**-**
**16,055**
**1,697,366**
**6,185**
**2,058,798**
**2,064,983**
**(367,617)**
**(6,579)**
**(374,196)**
**1,451,100**
**(374,196)**
**1,076,904**|Total
funds
2022
£
1,726,127
4,194
10,904
1,741,225
6,576
1,641,751
1,648,327
92,898
(47,093)
45,805
1,405,295
45,805
1,451,100|
|---|---|---|---|
The statement of financial activities includes all gains and losses recognised in the year.
The notes on pages 17 to 28 form part of these financial statements.
Page 14
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Balance sheet At 31 July 2023**
||||**2023**|**2023**|2022|
|---|---|---|---|---|---|
||**Note**||**£**||£|
|**Fixed assets**||||||
|Tangible assets|7||**348,796**||358,296|
|Investments|8||**635,363**||636,340|
||||**984,159**||994,636|
|**Current assets**||||||
|Debtors|9|**194,677**||190,906||
|Cash at bank and in hand||**727,810**||451,037||
|||**922,487**||641,943||
|Creditors: amounts falling due within one||||||
|year|10|**(829,742)**||(185,479)||
|**Net current assets**|||**92,745**||456,464|
|**Total assets less current liabilities**|||**1,076,904**||1,451,100|
|**Total net assets**|||**1,076,904**||1,451,100|
|**Charity funds**||||||
|Unrestricted funds|11||**1,076,904**||1,451,100|
|**Total funds**|||**1,076,904**||1,451,100|
The trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.
The financial statements have been prepared in accordance with the provisions applicable to entities subject to the small companies regime.
The financial statements were approved and authorised for issue by the trustees on 14 November 2024 and signed on their behalf by:
**T I Selkirk** OC9286FEBAAD4CSY... Chairman
Company registered number: 00992831
The notes on pages 17 to 28 form part of these financial statements.
Page 15
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Statement of cash flows Year ended 31 July 2023**
|**Cash flows from operating activities**
Net cash used in operating activities
**Cash flows from investing activities**
Interest and dividends received
Purchase of tangible fixed assets
Proceeds from sale of investments
Purchase of investments
**Net cash provided by investing activities**
**Change in cash and cash equivalents in the year**
Cash and cash equivalents at the beginning of the year
**Cash and cash equivalents at the end of the year**|**2023**
**£**
**266,320**
**16,055**
**-**
**46,172**
**(51,774)**
**10,453**
**276,773**
**451,037**
**727,810**|2022
£
(266,430)
10,904
(1,660)
94,901
(87,837)
**16,308**
**(250,122)**
701,159
451,037|
|---|---|---|
The notes on pages 17 to 28 form part of these financial statements
Page 16
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **1. Accounting policies**
A summary of the principal accounting policies adopted (which have been applied consistently, except where noted), judgments and key sources of estimation uncertainty, is set out below.
## **1.1 Basis of preparation of financial statements**
The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.
Tyne North Training Limited meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.
The financial statements are preparedunder the historical cost convention, are presented in pounds sterling and rounded to the nearest £1.
## **1.2 Company status**
The company is a company limited by guarantee, incorporated and domiciled in United Kingdom and registered in England and Wales. The members of the company are the trustees named on page 1. In the event of the company being wound up, the liability in respect of the guarantee is limited to £20 per member of the company.
## **1.3 Going concern**
The company has financial reserves held in cash, investments and fixed assets. The company has strong free reserves (unrestricted reserves not tied up in tangible fixed assets) of £728,108. As a consequence, the trustees believe that the company is well placed to manage its business risks successfully despite the current uncertain economic outlook.
The board are in ongoing discussions over the future ownership and management structure of the entity. Although the board does not see any impact to the employees or apprentices, it is currently uncertain as to the future structure of the business and consequently its future funding streams. At the time of approval of these financial statements, the board considers that the going concern basis of accounting remains appropriate and therefore continue to prepare these financial statements on such basis. However given the inherent uncertainty over the current position and its potential impact on funding and delivery of training beyond July 2025, there is acknowledgement that the longer term future of the entity is in question.
## **1.4 Income**
All income is recognised once the company has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.
Page 17
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **1. Accounting policies (continued)**
## **1.5 Expenditure**
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.
Expenditure on raising funds includes all expenditure incurred by the company to raise funds for its charitable purposes.
Expenditure on charitable activities is incurred on directly undertaking the activities which further the company's objectives, as well as any associated support costs.
All expenditure is inclusive of irrecoverable VAT.
## **1.6 Interest receivable**
Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the company; this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited.
## **1.7 Tangible fixed assets and depreciation**
Tangible fixed assets are carried at cost, net of depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
- Freehold property over 50 years - Office equipment 15% straight-line
## **1.8 Investments**
Fixed asset investments are a form of financial instrument and are initially recognised at their transaction cost and subsequently measured at fair value at the balance sheet date, unless the value cannot be measured reliably in which case it is measured at cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as ‘Gains/(Losses) on investments’ in the statement of financial activities.
## **1.9 Debtors**
Trade and other debtors are recognised at the settlement amount. Prepayments are valued at the amount prepaid.
Page 18
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **1. Accounting policies (continued)**
## **1.10 Cash at bank and in hand**
Cash and cash equivalents includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
## **1.11 Liabilities and provisions**
Liabilities are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that the company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.
## **1.12 Financial instruments**
The company only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.
## **1.13 Operating leases**
Rentals paid under operating leases are charged to the Statement of Financial Activities on a straight line basis over the lease term.
## **1.14 Employee benefits**
## _**Short-term benefits**_
Short-term benefits, including other non-monetary benefits, are recognised as an expense in the period in which the service is received.
## _**Defined contribution pension plan**_
The company operates a defined contribution pension plan for its employees. Contributions are recognised as an expense when they fall due. Amounts due but not yet paid are included within creditors on the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
## **1.15 Fund accounting**
General funds are unrestricted funds which are available for use at the discretion of the trustees in furtherance of the general objectives of the company and which have not been designated for other purposes.
Designated funds comprise unrestricted funds that have been set aside by the trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.
Investment income, gains and losses are allocated to the appropriate fund.
Page 19
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **2. Income from charitable activities**
|**Unrestricted**
**funds**
**2023**
**£**
Education and Skills Funding Agency
1,652,249
Employer contributions
29,062
1,681,311
Unrestricted
funds
2022
£
Education and Skills Funding Agency
1,692,479
Employer contributions
26,616
Workforce development
7,032
1,726,127|**Total**
**funds**
**2023**
**£**
**1,652,249**
**29,062**
**1,681,311**|
|---|---|
||Total
funds
2022
£
1,692,479
26,616
7,032
1,726,127|
## **3. Investment income**
|**Unrestricted**
**funds**
**2023**
**£**
Income from investments
14,622
Interest receivable
1,433
16,055|**Total**
**funds**
**2023**
**£**
**14,622**
**1,433**
**16,055**|
|---|---|
Page 20
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **3. Investment income (continued)**
|Income from investments
Interest receivable|Unrestricted
funds
2022
£
10,877
27
10,904|Total
funds
2022
£
10,877
27
10,904|
|---|---|---|
## **4. Analysis of expenditure by activities**
|Charitable activities
Charitable activities|**Activities**
**undertaken**
**directly**
**2023**
**£**
1,483,690
Activities
undertaken
directly
2022
£
1,390,273|**Support**
**costs**
**2023**
**£**
575,108
Support
costs
2022
£
251,478|**Total**
**funds**
**2023**
**£**
**2,058,798**|
|---|---|---|---|
||||Total
funds
2022
£
1,641,751|
Page 21
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **4. Analysis of expenditure by activities (continued)**
## **Analysis of support costs**
|Staff costs
Premises expenses
Office costs
Motor costs
Bank charges
Subscriptions and professional fees (including auditors' remuneration)
Sundry costs
Depreciation
Equipment costs and repairs|**Total**
**funds**
**2023**
**£**
**384,814**
**31,344**
**36,766**
**49,714**
**152**
**49,088**
**10,680**
**9,500**
**3,050**
**575,108**|Total
funds
2022
£
42,471
31,481
28,615
49,725
1,599
62,891
17,255
11,318
6,123
251,478|
|---|---|---|
## **5. Auditor's remuneration**
The auditor's remuneration amounts to an auditor fee of £11,000 (2022: £6,500), and bookeeping services of £10,800 (2022: £7,258).
## **6. Staff costs**
|Wages and salaries
Social security costs
Pension costs|**2023**
**£**
**970,355**
**116,790**
**132,321**
**1,219,466**|2022
£
680,168
80,621
118,303|
|---|---|---|
|||879,092|
The average number of persons employed by the company during the year was as follows:
||**2023**|2022|
|---|---|---|
||**No.**|No.|
|Charitable activities|**14**|17|
Page 22
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **6. Staff costs (continued)**
The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:
|||**2023**|2022|
|---|---|---|---|
|||**No.**|No.|
|In the band £100,001|- £110,000|**-**|1|
|In the band £420,001|- £430,000|**1**|-|
No expenses were reimbursed to any trustees during the year (2022: £nil). No trustees received any remuneration.
The key management personnel of the charity comprise the senior management team (as listed on page 1), with total employee benefits (including pension costs) of £607,979 (2022: £297,874).
During the year, the company reached a settlement agreement with the Chief Executive Officer totalling £323,269. This amount was split between a payment to the individual of £263,269 and a payment to their pension fund of £60,000. The settlement was to agree early termination of their employment contract. The agreement was reached in May 2023 and paid post year end. In accordance with the chosen accounting policies, the settlement expense has been recognised in May 2023, being the date the obligation to pay the settlement arose. The balance is carried as a liability at 31 July 2023, included within accruals and deferred income. The charity continues to have sufficient unrestricted reserves to fund the settlement payment and continue to fund operations at the balance sheet date.
Page 23
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **7. Tangible fixed assets**
|**Cost**
At 1 August 2022
At 31 July 2023
**Depreciation**
At 1 August 2022
Charge for the year
At 31 July 2023
**Net book value**
At 31 July 2023
At 31 July 2022
**8.**
**Fixed asset investments**
**Cost or valuation**
At 1 August 2022
Additions
Disposals
Revaluations
At 31 July 2023
**Net book value**
At 31 July 2023
At 31 July 2022|**Freehold**
**property**
**£**
**400,000**
**400,000**
**43,204**
**8,000**
**51,204**
**348,796**
356,796|**Office**
**equipment**
**£**
**184,816**
**184,816**
**183,316**
**1,500**
**184,816**
**-**
1,500|**Total**
**£**
**584,816**
**584,816**
**226,520**
**9,500**
**236,020**
**348,796**
358,296
**Listed**
**investments**
**£**
**636,340**
**51,774**
**(46,977)**
**(5,774)**
**635,363**
**635,363**
636,340|
|---|---|---|---|
Page 24
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **9. Debtors**
|**Due within one year**
Trade debtors
Other debtors
Prepayments and accrued income|**2023**
**£**
**148,528**
**5,000**
**41,149**
**194,677**|2022
£
156,071
500
34,335|
|---|---|---|
|||190,906|
## **10. Creditors: amounts falling due within one year**
|Trade creditors
Other taxation and social security
Other creditors
Accruals and deferred income|**2023**
**£**
**344,902**
**35,549**
**6,500**
**442,791**
**829,742**|2022
£
141,331
11,845
7,000
25,303|
|---|---|---|
|||185,479|
Page 25
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **11. Statement of funds**
**Statement of funds - current year**
|**Balance at 1**
**August 2022**
**£**
**Unrestricted funds**
**Designated funds**
Property Fund
**356,796**
**General funds**
General Funds
**1,094,304**
**Total Unrestricted funds**
**1,451,100**|**Income**
**£**
**-**
**1,697,366**
**1,697,366**|**Expenditure**
**£**
**(8,000)**
**(2,056,983)**
**(2,064,983)**|**Gains/**
**(Losses)**
**£**
**Balance at**
**31 July 2023**
**£**
**-**
**348,796**
**(6,579)**
**728,108**
**(6,579)**
**1,076,904**|**Gains/**
**(Losses)**
**£**
**Balance at**
**31 July 2023**
**£**
**-**
**348,796**
**(6,579)**
**728,108**
**(6,579)**
**1,076,904**|
|---|---|---|---|---|
|||||**728,108**|
|||||**1,076,904**|
The designated property fund has a balance equal to the net book value of the freehold property which enables the non-liquid reserves to be easily identifiable.
Page 26
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **11. Statement of funds (continued)**
## **Statement of funds - prior year**
|**Unrestricted funds**
**Designated funds**
Property Fund
**General funds**
General Funds
**Total Unrestricted funds**|Balance at
1 August
2021
£
364,796
1,040,499
1,405,295|Income
£
-
1,741,225
1,741,225|Expenditure
£
(8,000)
(1,640,327)
(1,648,327)|Gains/
(Losses)
£
-
(47,093)
(47,093)|Balance at
31 July 2022
£
356,796|
|---|---|---|---|---|---|
||||||1,094,304|
||||||1,451,100|
## **12. Reconciliation of net movement in funds to net cash flow from operating activities**
|Net income/(expenditure) for the year (as per Statement of Financial
Activities)
**Adjustments for:**
Depreciation charges
Losses/(gains) on investments
Dividends, interests and rents from investments
(Increase)/decrease in debtors
Increase/(decrease) in creditors
**Net cash provided by/(used in) operating activities**|**2023**
**£**
**(374,196)**
**9,500**
**6,579**
**(16,055)**
**(3,771)**
**644,263**
**266,320**|2022
£
45,805|
|---|---|---|
|||11,440
47,093
(10,904)
2,399
(362,263)|
|||(266,430)|
Page 27
Docusign Envelope ID: 7DC867FF-F4DE-4CE9-A73C-8D5C755EFC2A
## **Tyne North Training Limited**
## **(A company limited by guarantee)**
## **Notes to the financial statements Year ended 31 July 2023**
## **13. Analysis of cash and cash equivalents**
|Cash in hand
**Analysis of changes in net debt**
**At 1 August**
**2022**
**£**
Cash at bank and in hand
**451,037**|**2023**
**£**
**727,810**
**Cash flows**
**£**
**276,773**|2022
£
451,037|
|---|---|---|
|||**At 31 July**
**2023**
**£**
**727,810**|
## **14. Analysis of changes in net debt**
## **15. Pension commitments**
The charity operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the charitable company which amounted to £192,321 (2022: £118,303).
## **16. Operating lease commitments**
At 31 July 2023 the company had commitments to make future minimum lease payments under noncancellable operating leases as follows:
|Not later than 1 year
Later than 1 year and not later than 5 years|**2023**
**£**
**27,763**
**-**
**27,763**|2022
£
39,568
26,717|
|---|---|---|
|||66,285|
## **17. Related party transactions**
The company has entered into a settlement agreement totaling £323,269 to the Chief Executive Officer in the year. The full amount was owing at 31 July 2023. See note 6 for further information.
Page 28