2025-08-31-accounts

Annual Report & Financial Statements For the year ending 31 August 2025

The Percy Hedley Foundation Charity Commission Registration Number: 515943 Registered Company in England & Wales: 01855026

Contents

Chair & CEO Introduction.................................................................................................................... 3	Chair & CEO Introduction.................................................................................................................... 3
Reference & Administrative Details.................................................................................................. 4
Trustees’ Annual Report (including Strategic & Directors’ Report)........................................... 5
About the Foundation - Purpose, Activities & Public Beneft..................................................... 6
Strategy & Objectives....................................................................................................................... 7
Achievements & Impact................................................................................................................... 9
Education.......................................................................................................................................	11
Health & Wellbeing.....................................................................................................................	13
Fundraising.......................................................................................................................................	15
Environment & Sustainability........................................................................................................	17
Our People.......................................................................................................................................	18
Safeguarding....................................................................................................................................	22
Risk Management & Principal Risks & Uncertainties.................................................................	23
Future Plans & Outlook..................................................................................................................	26
Structure, Governance & Management........................................................................................	28
Section 172 Statement...................................................................................................................	31
Financial Review..............................................................................................................................	33
Trustee Responsibilities Statement..............................................................................................	36
Independent Auditor’s Report..........................................................................................................	38
Financial Statements..........................................................................................................................	42

Note: The Trustees’ Annual Report incorporates the requirements of the Strategic Report & Directors’ Report

The Percy Hedley Foundation Annual Report & Financial Statements

Chair & CEO Introduction

Introductory Statement

We begin by recognising and thanking our staff, whose dedication, expertise and compassion make our work possible. Alongside our trustees (who also serve as the company directors), governors, families, carers and partners, they ensure that The Percy Hedley Foundation continues to deliver high quality care, support and education to our beneficiaries.

The quality of our education and care services was recognised externally during the year, with Percy Hedley School achieving ‘Outstanding’ across all areas under the former Ofsted inspection framework and Wansbeck House residential home rated ‘Good’ by the Care Quality Commission, reflecting the dedication of our staff and the progress of the people we support.

The 2024-25 reporting period has been a positive and defining year for the Foundation, characterised by stability, sound governance and clear strategic direction. This stability has enabled us to focus on delivery, improvement, modernisation and sustainable growth, underpinned by the launch of our providing happy futures strategy.

Our strategy places the people we support firmly at the heart of everything we do, including the shaping of our decisions, our investments and our ambitions. Central to delivering this ambition is our continued commitment to our workforce. During the year, we achieved and continue to maintain our real living wage accreditation and continued to review pay and rewards to remain competitive within challenging labour markets. We also strengthened our focus on wellbeing and inclusion, recognising that a supported, valued and diverse workforce is essential to delivering high-quality, person-centred services. This commitment will remain a priority in the years ahead.

Looking ahead, we have made clear commitments to continue modernising and strengthening our services. In the coming year, we will advance plans to expand key areas of provision, maintain a strong focus on continuous improvement and digitalisation and deepen engagement with our beneficiaries, their families and carers and our wider stakeholders and networks. Through listening, partnership and innovation, we will continue to provide the highest possible standards of care, support and education, helping individuals overcome barriers, achieve independence and thrive.

Whilst we celebrate our successes, we also recognise the considerable challenges facing the sectors in which we operate, including SEND reform, the ongoing cost of living environment, and continued recruitment and retention challenges across health and social care. We remain vigilant and proactive in responding to these risks to ensure the long term sustainability of our services.

During the year, we increased the number of students supported through additional school placements, including the opening of our early years provision. We also set plans in motion to further increase capacity across our services and estate.

As we reflect on a year of progress and renewed momentum, we do so with confidence. Our leadership is stable, our strategy is clear, and our purpose remains firmly focused on the people we support, guiding us as we continue to deliver services of which we can all be proud.

We were particularly proud of the successful transition of residents from one of our residential settings into more independent supported provision, enabling them to develop greater independence, confidence and life skills while participating more fully in their communities. At the same time, we developed plans to expand our day service provision in the year ahead, broadening opportunities and strengthening pathways to meaningful inclusion, personal development and long-term independence for the people who use this service.

The progress of the people who access our services continues to inspire us every day and their achievements reflect not only individual determination but also the effectiveness of the support, guidance and opportunities our services provide.

John Preston Chief Executive Officer

Janet Donnelly Chair of the Board

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• Reference & Administrative Details

Trustees (Non Executive): L Craig

F N V Craik (appointed 24 March 2025) J Donnelly P L Emerson

B Foreman (appointed 24 March 2025 & resigned 20 January 2026) P A Foreman

N C Hutchinson

L E Parker (resigned 7 November 2024)

N Procter (appointed 14 August 2025) C J Thompson E G Weir

Bankers: Barclays Bank Plc, Bank House, East Pilgrim St, Newcastle upon Tyne NE1 6QE

Solicitors: Womble Bond Dickinson (UK), The Spark, Draymans Way, Helix, Newcastle upon Tyne, NE4 5DE

Investment Managers:

Rathbones Investment Management, Earl Grey House, 75-85 Grey Street, Newcastle upon Tyne, NE1 6EF

RBC Brewin Dolphin, Time Central, Gallowgate, Newcastle upon Tyne, NE1 4SR

Charity Commission Registration Number: 515943

Key Management Personnel: Chief Executive Officer: John Preston

Company Number: 01855026

Company Secretary: Lynsey Dawson

Company Registered Name: The Percy Hedley Foundation

Registered Office: Hampeth Lodge, Station Road, Forest Hall, Newcastle Upon Tyne, NE12 8YY

The Charity is incorporated in England & Wales Company Secretary: L Dawson

Independent Auditors: Azets, Bulman House, Regent Centre, Gosforth, Newcastle upon Tyne, NE3 3LS

Director of Corporate Services: Alison Williams

Director of Education & Percy Hedley School Headteacher: John Steward

Director of Health & Wellbeing: Charlotte Jones

Director of Business Development (until 17 December 2024): Andrew McGreevy

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The Foundation at a Glance

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Health & Wellbeing
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10
100%
people supported within our independent
of our regulated & inspected
supported living service
services rated as ‘Good’ by CQC
52 188
people supported in our people supported in our
residential care adult day services
Employees
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Employees
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236

980 average number of employees 7.1 76% employee engagement employees participated in our index employee engagement survey

staff nominations received for the annual staff awards, recognising outstanding contributions 176

CPD opportunities accessed, including qualifications up to Master’s degree level

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Green & Environment
0.76%
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reduction in carbon emissions with greater improvements anticipated in response to our 2025-26 carbon reduction programme

Finance 9.9% increase in income from charitable activities

15% increase in the total value cash and investments held

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Health & Safety
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100%

services have completed our annual comprehensive internal health and safety audit 96%[95%] H&S training compliance IPC training compliance

Education 100% of our regulated and inspected services rated as a minimum of ‘Good’ by Ofsted 266 students supported in[79] students supported in our schools our college

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About the Foundation

Our Purpose & Principal Activities

The Percy Hedley Foundation is a charitable organisation based in the North East of England, dedicated to supporting children, young people and adults with complex disabilities and learning difficulties to achieve positive outcomes and live fulfilling lives.

We deliver this purpose through a business model providing specialist services including education, residential care, independent supported living and adult day services. Services are primarily funded through fees paid by UK wide local authority commissioners, supplemented by other charitable income. Resources are invested in our workforce, facilities and infrastructure to deliver high-quality, person-centred services. Our strategy is focused on reinvesting operating surplus to sustain services, improve quality and support future development and growth.

Each year our services support hundreds of individuals from across the UK, predominantly from the North East of England, delivering public benefit by enabling access to tailored, person-centred education, care and support.

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Day Services
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College
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Schools
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We have two schools
based in North Tyneside
and Newcastle upon Tyne,
providing specialist education
to young people aged 3 to 19.
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We deliver adult day services
in North Tyneside with services
delivered across three sites. The
day services provide purposeful
activities and enterprise.
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We have one college based in North
Tyneside with services delivered
across two sites, providing specialist
further education to young people
and adults aged 16 to 25.
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Residential Care
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Independent Supported Living (ISL)

We have three adult residential care homes providing specialist person-centred care within a safe and homely environment. Two residential care homes are based Newcastle upon Tyne and one residential care home is based in North Tyneside.

We currently deliver ISL services within North Tyneside, providing specialist person-centred support to enable those in our care to live fulfilling lives independently within their communities.

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Strategy & Objectives

Our Vision

To inspire and empower every individual to believe in their potential, achieve their dreams and realise their ambitions in an inclusive and supportive community.

Our Mission

To enhance the lives of people with disabilities and their families by delivering tailored education, unwavering support and compassionate care. We strive to inspire individuals to believe in their potential and achieve their goals. We are committed to improving quality of life through empowerment, inclusion and opportunity.

Our Values

PEOPLE WE DO THE WE WORK ARE AT THE WE HEART RIGHT WE CONTINUALLY TOGETHER INSPIRE OF EVERYTHING SEEK TO 1 TEAM WE DO OTHERS THING IMPROVE 1 FOUNDATION

Percy Hedley School student & staff member during PE

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Strategy & Objectives

Providing Happy Futures Strategy

Our providing happy futures strategy is aligned with our vision, mission and values, and with the Foundation’s purpose as outlined on page 7. It is focused on furthering our purpose in the interests of the people we support. Launched at the beginning of the reporting period, the strategy sets out a clear direction to become a sustainable employer delivering integrated, modernised and high-quality services for all our stakeholders, whilst generating an operating surplus for reinvestment and supporting incremental growth by late 2027.

The strategy is underpinned by five key strategic categories:

Growth

Employees Quality

Environmental, social and governance (ESG) Operating surplus

The diagram to the right outlines the aims and objectives aligned to each of these categories, which are monitored and measured throughout the life of the strategy. Progress against these strategic objectives during the reporting period is set out in the Achievements and Impact section on page 9.

At the time of writing, the Board and executive are actively considering the Foundation’s strategic direction and priorities beyond 2027, informed by ongoing review of performance against the current strategy. This work is part of the Foundation’s annual strategic review cycle.

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Achievements & Impact

The Foundation entered the year with a clear focus on furthering its charitable purposes for the people it supports and delivering public benefit, through the implementation of its three-year strategy as outlined on page 8.

During the year, the Foundation continued to provide high-quality services and delivered performance in line with the key ambitions and objectives set out in the previous annual report, which aligned to the strategy. The table below sets out these ambitions and objectives and summarises the achievements delivered during the year.

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Strategic Objective Objectives Achievement
Category(s)
Remain as a real living wage employer, make continued The Foundation retained its real living wage accreditation during the year, demonstrating its ongoing commitment to fair pay. Investment in people continued through the launch of a
investment in our people focusing on equity, diversity and new equity, diversity and inclusion (EDI) strategy, supported by dedicated resource, including the appointment of an engagement and inclusion manager. Health advocates were also
inclusion, and health and wellbeing. appointed across the organisation to promote employee health and wellbeing and support a more inclusive and supportive workplace culture.
Continue our commitment to positive behaviour support The Foundation continued its commitment to PBS during the year, with a focus on promoting safe and effective environments for the people it supports. Senior leaders participated
(PBS) promoting safe and effective environments to impact in the BILD senior leaders programme to strengthen strategic leadership and oversight of PBS. PBS capability was further enhanced through the alignment of PBS professionals to
the wellbeing of the people we support. services and the engagement with wider external PBS expertise and professional networks, supporting consistent and effective PBS practice and contributing to improved wellbeing
and safety for the people supported by the Foundation.
Open an early years class within the education service. Percy Hedley School increased its capacity for younger children with complex needs following the creation of additional specialist space, including a new early years provision.
This development supported seven additional learners, enabling access to education and specialist support at a crucial stage of development.
See incremental improvement across all our settings so we A continuous improvement approach was maintained across services during the year, supporting regulatory compliance and service quality. Two regulatory inspections were
retain or improve existing regulatory ratings. undertaken, providing external assurance on standards of care and education. One residential home was assessed under the new Care Quality Commission (CQC) assessment
framework and retained its ‘Good’ rating, while one school was inspected under the previous Ofsted framework and retained its ‘Outstanding’ rating, demonstrating sustained quality
and supporting positive outcomes for the people supported across these settings.
Develop plans with our teams and services to help reduce Plans to reduce the Foundation’s environmental impact were developed during the year, supported by the launch of a new environmental policy and environmental strategy, which
the environmental impact of the Foundation. together provide a clear framework for action across services. The Board also approved investment in a carbon reduction programme, establishing the foundations for measurable
environmental improvement, with delivery planned for 2025–26. Overall carbon emissions were maintained during the year. Further detail is set out in the environmental and
sustainability section on page 17.
Develop plans that help us increase admissions and Plans to increase admissions and demonstrate the contribution of therapies to learners’ access to education progressed during the year. Following a positive Ofsted inspection at one
continue to show the impact that therapies provide in of the Foundation’s schools in early 2024, student placements at that school increased steadily to full capacity within the reporting period, supporting access to education for a greater
enabling learners to accessing education. number of learners. The Board also approved investment to increase classroom capacity at one of the Foundation’s schools, strengthening the Foundation’s ability to accommodate
future growth in student placements and support the continued delivery of integrated therapeutic provision.
Develop plans that help us to increase and expand our Plans to increase and expand the Foundation’s health and wellbeing directorate progressed during the year. The Board approved investment in new adult day service premises,
health and wellbeing service to provide holistic support establishing the infrastructure required to support the planned expansion of the health and wellbeing directorate in 2025–26 and strengthening the Foundation’s capacity to provide
that empowers individuals to overcome barriers, achieve holistic support to individuals.
independence and thrive.
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Achievements & Impact

In addition to the performance ambitions set out above, the Foundation delivered the planned de-registration of one residential care home during the reporting period. This was a Board decision taken following careful consideration and aligned with the Foundation’s strategic focus on modernising services and improving quality of care, with the best interests of the people we support at the centre of decision-making.

All residents were supported to move on to alternative provision, with the majority transitioning to supported living in the community. This change supported greater independence and choice for individuals, consistent with the Foundation’s commitment to helping people overcome barriers, achieve greater independence and thrive. The Foundation worked constructively with commissioners throughout the process to support appropriate placement decisions and a smooth transition for affected individuals.

Employees affected by the de-registration were supported throughout the process, including assistance to identify suitable alternative employment opportunities within the Foundation, where appropriate.

Overall Impact of Achievements

Delivery against the Foundation’s objectives during the year strengthened its ability to provide high-quality, safe and inclusive support for the people it serves. Progress was made across workforce, service quality, education, health and wellbeing, and organisational sustainability, supporting public benefit and the delivery of the Foundation’s charitable purposes.

Investment in people and professional capability remained a key area of impact. Retention of real living wage accreditation, the launch of a new equity, diversity and inclusion strategy, and a continued focus on health and wellbeing supported a more inclusive and supportive working environment. Alongside this, enhanced leadership and professional capability in positive behaviour support (PBS), including engagement with external expertise and professional networks, strengthened the Foundation’s approach to promoting safe and effective environments that support the wellbeing of the people we support.

For people supported, impact was demonstrated through increased access to services and sustained quality. The opening of an early years provision within Percy Hedley School extended education to younger children with complex needs, while a positive Ofsted inspection at one of the Foundation’s schools was followed by a steady increase in student placements to full capacity during the year. During the year, the Foundation also delivered the planned, phased deregistration of one residential care home, supporting the transition of residents to alternative provision, with the majority moving to supported living in the community to promote greater independence and choice. Regulatory inspections across education and residential services provided external assurance of quality, with existing ratings retained, demonstrating continued compliance and confidence in the Foundation’s provision.

Progress was also made in building capacity for future impact. Board-approved investment to expand classroom capacity and to develop new adult day service premises strengthened the Foundation’s ability to respond to demand and support future growth in education and health and wellbeing services. In parallel, the launch of an environmental policy and strategy, alongside approval of investment in a carbon reduction programme, established a clear framework and governance for reducing the Foundation’s environmental impact over the medium term.

In several areas, impact remains at an early or enabling stage, with benefits expected to be realised as planned initiatives are implemented in 2025–26. Trustees consider that the year represented a period of consolidation and preparation, combining maintained quality and stability with targeted investment to support future improvement, sustainability and growth.

The wider impact of the Foundation’s day to day services is reported throughout this annual report, particularly within the people (pages 18 to 21), services (pages 11 to 14), environment and sustainability (page 17), and finance (pages 33 to 35) sections of the report.

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Education Services

During the year, the Foundation delivered specialist education services through Hedleys College, Northern Counties School and Percy Hedley School, supporting children and young people with disabilities across Newcastle upon Tyne, North Tyneside and surrounding areas. These services directly advanced the Foundation’s charitable object to promote the education, care, welfare, interest and advancement of our students.

All of the Foundation’s education services are subject to independent inspection by Ofsted and were rated good or better at their most recent inspections. These judgements provide external assurance of the quality, safeguarding and effectiveness of provision and underpin the positive outcomes achieved by students during the year.

Demand for the Foundation’s specialist education provision for children and young people with complex needs and disabilities remained strong, reflecting those whose needs could not be fully met within other educational settings. Compared to the previous year, the Foundation supported 23 additional students during the year, enabling increased access to specialist education tailored to individual educational, therapeutic and developmental needs.

The Foundation’s education model promotes inclusion by ensuring that students who face significant barriers in other settings are able to participate, achieve and thrive within environments designed around their needs and aspirations. Timely access to appropriate specialist placements supports improved attendance, stronger engagement in learning, enhanced communication and social development, and progress towards increased independence and positive educational outcomes. Alongside educational progress, the specialist support and stable learning environments contribute positively to student wellbeing, confidence and emotional readiness to learn.

During the year, Percy Hedley School increased its capacity for younger children with complex needs following the creation of additional specialist space, including a new early years provision, made possible through generous external funding received in the prior year. This development supported seven additional learners, enabling access to education and specialist support at a crucial stage of development. Early intervention plays a vital role in establishing strong foundations for future learning, inclusion and independence, contributing to improved longer term outcomes for pupils.

Alongside widening access, the Foundation remained focused on securing strong outcomes for students through academic progress, accredited achievement and preparation for adulthood. Students achieved a range of academic and vocational qualifications during the year, providing formal recognition of learning and supporting progression to appropriate next stage destinations. Individualised and ambitious targets were developed to reflect each learner’s needs and potential. Overall, 90% of students achieved their personalised targets and 99% of enrolled qualifications were achieved, including academic and vocational awards. We commend our students for their commitment and congratulate them on their achievements.

With the support of the Foundation’s staff, 46 leavers progressed successfully to appropriate next stage destinations in 2025, including further education, training and other pathways that support independence and adulthood. For many students, these outcomes represented significant personal milestones, recognising progress made within supportive specialist environments tailored to individual needs. By providing education designed around individual abilities, the Foundation supported students who might otherwise experience exclusion from education, enabling meaningful participation and achievement.

Strong partnership working with parents and carers remained central to delivery throughout the year. Parents’ and carers’ views are regularly and formally sought through structured engagement and feedback mechanisms, supporting shared understanding of students’ needs and aspirations. This collaborative approach improves consistency of support between home and education settings and informs the ongoing development of services, helping to shape future provision to meet the evolving needs of students.

During the year, a wide range of external awards, accreditations and recognitions were achieved across the Foundation’s education services. These included recognition of service quality, leadership and inclusive practice, alongside individual and collective achievements by students. Together, these demonstrate the breadth and impact of provision and the positive outcomes it supports for students.

Examples included the establishment of the Foundation’s third cohort of volunteer police cadets at college in partnership with Northumbria Police, providing young people with opportunities to learn about citizenship, social responsibility and community engagement while playing an active role within their communities. Recognition of service quality included Northern Counties School being awarded leadership team of the year at the National School Awards and achieving the British Council International School Award foundation certificate, reflecting exceptional work in international education and the development of cultural understanding.

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Education Services

At Percy Hedley School, achievement of MOVE Centre of Excellence status, a Rights Respecting Schools UNICEF Award and a School Games Platinum Mark Award reflected strong outcomes in physical development, independence, movement and participation for students with complex needs. Students also benefited from enriched cultural, creative and residential experiences, including trips to London and Keswick.

In addition, a group of young adults from college was recognised as community project of the year at the British Diversity Awards for their disability awareness training, demonstrating the positive contribution students can make as advocates and role models while supporting increased understanding and inclusion within the wider community.

Looking ahead, the Foundation will continue to build on the impact achieved during the year to further its charitable purpose and maximise positive outcomes for students. Strategic priorities include increasing capacity and coherence across education services to meet demand, making best use of the estate to support and expand high-quality provision, and strengthening specialist expertise, thought leadership and support in the community . Through this continued focus, the Foundation aims to extend access to specialist education, improve outcomes for current and future students, and contribute positively in the context of special educational needs and disabilities understanding and practice.

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Health & Wellbeing Services

During the year, the Foundation’s health and wellbeing directorate delivered adult residential care,

independent supported living and adult day services to people with complex disabilities across Newcastle upon Tyne and North Tyneside. These services directly advanced the Foundation’s charitable object to promote the care, welfare, interests and advancement of the people it supports.

The Foundation’s residential and independent supported living services are subject to independent inspection by the Care Quality Commission (CQC). Residential services are currently rated ‘Good’ and the supported living service is pending inspection. Where inspections have taken place, these independent judgements provide external assurance of the quality, safeguarding and effectiveness of provision, and underpin the positive outcomes achieved during the year.

This reporting period was characterised by collaboration, reflection and a clear focus on continuous improvement, reducing fragmentation between services and supporting more consistent, joined-up care.

During the reporting period, the Foundation strengthened its independent supported living offer, enabling more people to live ordinary lives in their own homes and communities. This resulted in the Foundation supporting an 11% increase in people living more independently, with greater choice, control and connection. This growth reflects a continued commitment to least restrictive support, promoting autonomy, active citizenship and enabling people to participate fully in everyday community life.

Plans have also been developed to support a further cohort of people currently living in residential care to

move into supported living in the coming year, aligned to their individual needs, aspirations and readiness. This next phase is expected to increase the number of people supported by the Foundation to live independently by a further 20%.

In line with the Foundation’s strategic objective to deliver modern, high-quality care services, the planned deregistration of one residential care home marked a significant period of transition. Through carefully planned, person-centred approaches, the majority of people, 85%, were supported to move into their own homes, with a smaller proportion, 15%, requiring a like-for-like service. For those involved, this represented a positive step towards greater independence, choice and improved quality of life. The Foundation is encouraged by how individuals, families and colleagues experienced this change, with a continued focus on long-term outcomes and supporting people to live with greater autonomy in their communities.

Across the health and wellbeing directorate, a strengthened focus on a quality of life framework, underpinned by positive behaviour support, trauma-informed practice and good support, has played a central role in improving everyday experiences. By understanding each person’s history, communication needs and what matters most to them, services have delivered support that is safer, more consistent and more respectful.

This approach has contributed to reduced distress and a decrease in the use of restrictive practices, whilst supporting stronger, more trusting relationships. Alongside this, strengthened systems and mechanisms have improved oversight, enabling earlier identification of emerging needs and more timely, proactive responses. Together, this has helped individuals feel more in control of their lives. By prioritising emotional safety and a shared understanding of what a good life looks like for each person, this approach creates the conditions for people to build confidence, make meaningful choices, participate in everyday life and move towards greater independence and inclusion.

Partnership working with families, carers and those closest to the people supported remained central. Regular engagement and shared planning supported a deeper understanding of individual histories, preferences and aspirations, contributing to more consistent and responsive support. This collaborative approach strengthened continuity of care, supported smoother transitions and ensured that support reflected what matters most to each person, enhancing confidence, wellbeing and quality of life.

At the beginning of the reporting period, adult day services were realigned within the health and wellbeing directorate. This brought greater coherence across services from a governance, leadership and systems perspective, supporting more joined-up working and consistency of practice. Improved alignment strengthened communication, enhanced oversight and supported a more holistic approach to meeting individual needs.

As part of this development, day services benefitted from enhanced quality frameworks and will, in the year ahead, benefit further from the digitalisation of care management systems. This will support consistency in recording, planning and review across the directorate. Improved digital systems will strengthen accuracy, governance oversight and the monitoring of outcomes. Collectively, these improvements enhance the Foundation’s ability to deliver safe, responsive and person-centred care.

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Health & Wellbeing Services

Building on this, the Foundation secured new premises to both relocate part of its existing day services and expand provision. The new service, scheduled to launch in the coming year, will support around 35 people to move into a more suitable environment aligned to their needs and aspirations, while also creating capacity for up to 15 additional people.

The service will provide modern, safe and inclusive spaces designed to meet a wide range of mobility, sensory and cognitive needs. Its person-centred design will promote independence and meaningful engagement, while the new location will strengthen community connections and partnerships, reducing isolation and supporting greater social inclusion.

Across the directorate, the Foundation remains committed to ensuring that every individual experiences dignity, choice and meaningful inclusion in all aspects of their lives.

Looking ahead, the directorate will continue to deliver its health and wellbeing strategy over the coming year, maintaining a focus on service modernisation, high-quality and person-centred care, and achieving meaningful outcomes. Priorities will remain centred on strengthening the workforce, enhancing quality and governance, embedding digital transformation, improving quality of life, and supporting sustainable service growth.

Together, this approach will enable the Foundation to build on progress and continue supporting people to live more independent, connected and fulfilling lives.

Hedley’s Horizons member and support worker out in the community

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Fundraising

The vast majority of the Foundation’s income is derived through statutory sources, for provision of education and highly specialised care, day services, residential and independent living services. Fundraising is utilised in two ways within the Foundation and that is to fund further specialist equipment that will have a dramatic impact on quality of life for the people we support and enhance their opportunities and everyday experiences. The second area is to fill the gaps in services often identified whilst delivering or piloting new work and methods of delivery. The reliance on fundraising income is increasingly important as the costs of providing our services increase, it also allows the Foundation to innovate, take managed risks and pilot new approaches in the field of disability care.

Our fundraising involves a number of events, community fundraising, gifts from trusts and foundations, and legacies. Thanks to the generosity of our supporters, we raised £394,085 during 2024-25. This was a decrease in the previous year’s support and was largely due to a number of changes within the team, a challenging fundraising environment and the loss of some key supporters. We have invested in fundraising to be able to grow this vital income stream for the Foundation and we have ambitious aims to increase our voluntary income over the next few years to a sustainable level which allows us to deliver additional added value over the statutory minimum to the people who need it most. If you can support us on this journey, please do reach out and get in touch.

The key areas that contributed to our voluntary income were:

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Trusts & Foundations
We received a total of
£67,630 in donations thanks
to generous support from
trusts and foundations.
raising £75,000; support for this event
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Great North Run
85 runners joined the fantastic Team Percy
Hedley and raised a total of £40,955 for the
Foundation by completing the landmark half
marathon, the Great North Run. We have also
trialled additional running events in the period.
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Golf Day
We built upon our
inaugural Percy
Hedley golf day from
last year doubling the
income in 2025.
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Legacies
£150,000 was kindly gifted to the Foundation
in legacies which, although lower than the
previous year, was a welcome source of
funding; more work will continue in this area.
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Percy Hedley Ball
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The Foundation’s annual ball was again
the highlight of the fundraising calendar
raising £75,000; support for this event
continues to be strong and we are already
looking forward to next year’s event.
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Fundraising

Corporate Support

We are very fortunate to work with a range of corporate supporters who sponsor events and dedicate funds towards certain pieces of essential equipment that the Foundation would otherwise struggle to afford. As we develop work in this area, we are looking to work with more local and regional businesses who are aligned to our work and can support through skilled and unskilled volunteering opportunities, Charity of the Year (COTY), corporate social responsibility (CSR) collaborations, give as you earn (GAYE) and event participation. We are again investing in this area as an important part of our development work.

Growing Our Community

We have continued to focus on growing our community across the North East and further afield, telling our story and increasing the number of people that know about the Foundation and our impact. This has resulted in increased support and collaboration leading to an increased income of £35,000 in this area.

Digital

Digital platforms continue to be a key way in which we share our stories, raise awareness of the work of the Foundation, build relationships and engage supporters. This year, our digital footprint increased across all areas in comparison to the previous year, helping us to reach new audiences and strengthen existing connections:

11.56% increase in website sessions

Increased social media audience by 15.4% across our channels 1,813,924 people reached across our social media

Corporate networking events undertaken to develop relationships with regional businesses

Fundraising Practices

We have a dedicated skilled and experienced fundraising team and hold ourselves to the highest standards about how we fundraise, communicate with supporters and the public as set out in our Supporter Promise. We are registered with the Fundraising Regulator and comply with all the relevant standards set out in the Code of Fundraising Practice. We have a customer relationship management (CRM) database in place to support our fundraising oversight, ongoing adherence to General Data Protection Regulation (GDPR), Privacy and Electronic Communication Regulations (PECR), financial record keeping, monitoring and evaluation. In 2024-25 there were no compliance issues raised about our fundraising by the Charity Commission, Fundraising Regulator or Information Commissioner’s Office.

In 2024-25 we did not engage any professional fundraisers or commercial participators, for example face-to-face or door-to-door fundraisers. Our complaints process is clear and easily accessible.

Complaints received are recorded and investigated in line with the Foundation’s complaints policy. In 2024-25, there were no complaints about fundraising activities carried out by the Foundation or someone on behalf of the Foundation. We make it as easy as possible for people to contact us to opt out of receiving communications from us, or to change the method of communication.

Thank You for Your Support

We are grateful to everyone who has chosen to support The Percy Hedley Foundation this year. Through your support, time and assistance we have together made a significant and lasting impact to the lives of young people with severe and complex multiple disabilities. We must meet the need and growing demand for our specialist support and ensure we have the right specialist facilities, equipment and people to enable our beneficiaries to enjoy their own measures of success. By raising awareness of the impact of our work, by working closely with supporters and by engaging new ones, we will achieve this in partnership. The Foundation would like to express its sincere thanks to all its supporters throughout the year.

Ambitions for the Year Ahead:

Developing the fundraising function through continued investment in the team.

Reviewing our strategy and approach that will support us to:

Increase public awareness of the Foundation, its work and impact across the North East and further afield

Increase our success within a dedicated number of fundraising verticals Increase our ability to pilot new and innovative work

Develop an enterprise model and trading income to further support outcomes for beneficiaries Grow our community of stakeholders, building engagement, support and deepening our understanding of the issues affecting the people we support

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Environment & Sustainability

The Percy Hedley Foundation remains committed in its vision to strive proactively to promote and operate

eco-friendly and ethical practices which protect and sustain the environment. Since the last report an environment and sustainability policy has been launched acknowledging the 2030 Agenda for Sustainable Development adopted by all United Nations Member States in 2015 and the 17 Sustainable Development Goals (SDGs) at its heart.

Whilst recognising the importance of all of these SDGs goals, the Foundation aligns to the following five goals in particular:

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3 GOOD HEALTHAND WELL-BEING 4 QUALITYEDUCATION 10 REDUCEDINEQUALITIES 12 RESPONSIBLECONSUMPTION 17 PARTNERSHIPFOR THE GOALS
AND PRODUCTION
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Environment representatives have been appointed at each of the Foundation’s locations feeding into the health, safety, quality and environment forum with the appointment of environment champions to follow. A mandatory staff training module was introduced to coincide with the launch of the policy to support in the development of environmentally friendly behaviours and values – compliance for completion of this module is increasing and sits at 89% at the end of the reporting period. The HSE manager and head of estates also regularly attend the Foundation’s people network to develop engagement and suggestions regarding environmental matters and a ‘marketplace’ hosted on Microsoft Teams to promote recycle and reuse suggested by this group is now in operation. In line with the new simpler recycling regulations that came into effect on 1 April 2025 we have also introduced additional internal and external recycling bins to support in the UK’s target of recycling 65% by 2035.

During the year, the Board approved a three-year sustainability and carbon reduction programme (CRP) designed to deliver operational efficiencies, manage operating costs and achieve meaningful environmental benefits across the Foundation’s estate. The programme aligns with the Foundation’s estates and environmental and sustainability strategies, and focuses on targeted investments in renewable energy, low emission transport, energy efficient infrastructure and improved monitoring and control of energy use across sites.

This programme is informed by relevant regulatory and reporting frameworks, including the UK Energy Savings Opportunity Scheme (ESOS) and the Streamlined Energy and Carbon Reporting (SECR). The

Foundation is working to secure external grant funding through sustainability and energy

efficiency funding schemes and delivery partners to support implementation of energy efficiency improvements across its estate during 2025-26.

We anticipate that by investing in these projects, the Foundation positions itself as a leader in sustainability while reducing long-term operating costs and contributing to the UK’s 2050 net-zero goals.

We have engaged the services of an external specialist to support the review and calculation of our carbon emissions reporting to ensure accuracy and consistency. As we continue to develop our environmental data capability with the use of software systems, this year’s report includes fleet business miles data and liquefied petroleum gas (LPG) in grounds maintenance.

In compliance with The Companies (Directors’ Report) and Limited Liability Partnerships (Amendment) Regulations 2018 (SI 2018/1155), the Foundation reports on greenhouse gas emissions and energy and fuel consumption. The methodology used for reporting of emissions was in line with Green House Gas (GHG) Conversion Factors for Company Reporting.

The environmental impact of the Foundation’s activities has reduced in the current reporting period with a reduction in carbon emissions of 0.76% and a reduced intensity ratio per employee, as per the table below.

UK Greenhouse gas emissions and energy use data for the year ended 31 August 2024 2024 Energy consumptions used to calculate emissions (kWh) Total energy and fuel consumption 6,842,375 2025 6,604,987	UK Greenhouse gas emissions and energy use data for the year ended 31 August 2024 2024 Energy consumptions used to calculate emissions (kWh) Total energy and fuel consumption 6,842,375 2025 6,604,987	UK Greenhouse gas emissions and energy use data for the year ended 31 August 2024 2024 Energy consumptions used to calculate emissions (kWh) Total energy and fuel consumption 6,842,375 2025 6,604,987
Total gross emissions in metric tonnes CO2e Scope 1 emissions in metric tonnes CO2e (gas and transport fuel) Total scope 1 Scope 2 emissions in metric tonnes CO2e (purchased electricity) Total scope 2 Scope 3 emissions in metric tonnes CO2e (business travel in employee owned vehicles) Total scope 3	1310 999 311 0	1300 1005 290 28
Total gross emissions in metric tonnes CO2e	1310	1300
Intensity ratio tonnes CO2e per employee	1.31	1.30

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Our People

Northern Counties School Outdoor Learning

The Foundation’s work is made possible by the skill, commitment and dedication of its employees, who are central to the delivery of its charitable purposes and strategy. The trustees place great importance on creating a working environment that supports positive wellbeing, development and engagement.

The respective roles of the trustees and the executive team in setting strategy and managing the charity are described in the governance section. How the trustees have regard to the interests of employees and promote staff engagement when making decisions is set out in the section 172 statement on page 31.

The average number of employees during the year was 980 (2024: 979). At the year end the Foundation had 937 employees, many of whom are part–time or term–time and representative of, and drawn from, the surrounding local communities.

Safer Recruitment & Employment

The Foundation maintains robust safer recruitment and safe working practices across all employment processes. External inspections by local and public authorities, Ofsted and the Care Quality Commission provide assurance that appropriate systems and controls are in place to safeguard the people the Foundation supports.

Equity, Diversity & Inclusion

The Foundation is committed to equity, diversity and inclusion across the workforce. Policies are in place to support the fair recruitment, continued employment and development of people with disabilities, including reasonable adjustments, training and opportunities for career progression.

The Foundation has an equity, diversity and inclusion (EDI) policy covering all current and prospective employees and remains compliant with statutory gender pay gap reporting requirements, with the most recent published on the website. EDI information voluntarily disclosed by employees is collected and monitored to better understand the composition of the workforce and to support an inclusive, positive working environment where everyone can achieve their full potential.

During the year, the Foundation increased its focus on EDI and this will remain a priority in the year ahead. EDI workforce data is presented on page 21.

The Percy Hedley Foundation Annual Report & Financial Statements

Percy Hedley Academy, Apprentice Networking Day

Our People

Learning, Development & Skills

The Foundation is committed to supporting employees to develop the skills and knowledge required to perform their roles effectively and to progress their careers. Through the Percy Hedley Academy, employees can access apprenticeship programmes across a range of frontline, leadership and professional support roles.

In addition, the Foundation provides a broad range of learning and development opportunities, including in-house training, external continuing professional development (CPD), professional qualifications, coaching, mentoring and postgraduate study. Learning and development includes mandatory safeguarding, health and safety, and regulatory training.

These learning routes support employees at all career stages and help ensure the workforce is equipped to deliver high-quality services that further the Foundation’s charitable purposes.

Employee Engagement, Culture & Wellbeing

The Foundation encourages employee voice and engagement through a range of formal and informal mechanisms, including joint consultative arrangements, staff networks and local forums. During the year, health advocate roles and a freedom to speak up guardian and trustee were introduced, complementing established whistleblowing procedures and further strengthening the Foundation’s approach to listening to and supporting employees.

Our regular Foundation-wide employee survey achieved a 76% response rate (2024: 75%), demonstrating improved strength in engagement, providing valuable insight to inform actions to support wellbeing, positive working relationships and a compassionate organisational culture. This year’s survey highlighted several strengths, particularly around inclusion and professional capabilities. Scores were notably positive for: respect regardless of background, having appropriate skills to support service users and dignified treatment from line managers.

Pay, Reward & Workforce Sustainability

The Foundation reviews its pay frameworks and benefits annually to ensure they remain fair, proportionate and competitive. During the year, the Foundation achieved accreditation as a real living wage employer, reinforcing its commitment to supporting employees with the cost of living. A range of benefits is also provided to support employee wellbeing and retention, which was further enhanced during the year.

It’s Never Too Late to Follow Your Passion

Kerry from our residential services completed her Level 3 Adult Care Worker apprenticeship and has also been recognised by her apprenticeship provider for her determination and approach to challenges during her qualification.

Her enthusiasm and passion for her work were evident throughout, and this contributed positively to the overall apprenticeship experience.

“Apprenticeships offer the chance to follow your passion at any stage of life. You’re never too old and it’s never too late to learn and grow and achieve something meaningful.”

Kerry, Residential Services

The Percy Hedley Foundation Annual Report & Financial Statements

Our People

Achieved Real Living Wage Accreditation

The Foundation operates in sectors facing recruitment and retention challenges. Through its people strategy, the Foundation focuses on compassionate leadership, career development, employee wellbeing and fair reward to attract and retain a skilled and committed workforce capable of developing high-quality services underpinned by a people first culture.

Achievements in the Year

During the year, the Foundation made progress against its people strategy. Key achievements included achieving accreditation as a real living wage employer, expanding apprenticeship opportunities through the Percy Hedley Academy, designing and strengthening career and development pathways within the health and wellbeing directorate, and reviewing and redesigning key pay frameworks to support attraction, retention and fairness.

The Foundation also enhanced its approach to employee wellbeing through the delivery of targeted health initiatives, the introduction of wellbeing and mental health first aiders within parts of the organisation, and the strengthening of its wellbeing-related policies and support. Employee voice and engagement were further supported through the introduction of health advocate roles, the appointment of a freedom to speak up guardian and trustee, and the launch of a staff awards programme. Strong engagement continued to be reflected in the Foundation-wide employee survey results.

Ambitions for the Year Ahead

In the year ahead, the Foundation will continue to focus on attracting, retaining and developing a skilled and committed workforce. Priorities include embedding compassionate leadership, implementing new career development pathways, enhancing Foundation-wide and service specific induction arrangements, and continuing to invest in apprenticeship opportunities.

The Foundation will also maintain a strong focus on employee wellbeing and inclusion, including the continued delivery of targeted health initiatives, an enhanced focus on equity, diversity and inclusion, including strengthened data capture and monitoring, and progress towards recognised people and wellbeing accreditations, including Shine accreditation. Pay and reward will continue to be reviewed to recognise cost of living pressures, alongside the launch of a staff loyalty scheme. Further priorities include strengthening health and safety and equality impact training for managers and delivering improvement actions informed by the Foundation-wide employee engagement survey.

The Percy Hedley Foundation Annual Report & Financial Statements

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Our People
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Equity, Diversity & Inclusion

EDI data is collected voluntarily from employees and may not capture the full workforce. Figures are indicative and used to inform our inclusion and diversity initiatives.

15.3%

of employees declared a disability (2024: 14%) 9.4%

of employees declared non-white British or black and minority ethnic (2024: 10%) 79% female (F) (2024: 79% F) 21% male (M) (2024: 21% M) employee average age has remained stable at 41.7

Learning, Development & Skills

395

in house face-to-face learning events provided

5,007

in house face-to-face delegate attendance

94 21

external CPD attendances

employees enrolled on apprenticeships

5

apprenticeships successfully completed

Safeguarding

Safeguarding is of paramount importance to the Foundation and is embedded within our culture, governance and everyday practice. The wellbeing, safety, dignity and voice of the people we support is a fundamental priority, alongside our commitment to providing a safe, trusted and supportive environment for our employees that promotes wellbeing and encourages an open speaking up culture for all.

Safeguarding is recognised as a strategic risk, supported by a robust framework of controls that are regularly reviewed (see page 24). The Board retains overall responsibility for safeguarding oversight and receives regular assurance through a structured governance framework.

Oversight is led by the Quality and Standards Committee, chaired by the safeguarding trustee, which receives regular safeguarding reports and monitors emerging risks, themes and compliance. The Audit and Risk Committee also oversees safeguarding risk to ensure alignment with risk management and internal control. Local assurance is strengthened through safeguarding visits by governors and regular trustee site visits across the Foundation’s services.

Operational safeguarding arrangements are supported by dedicated safeguarding and incident groups, which promote consistency of practice, oversee serious and reportable incidents, ensure compliance with statutory and regulatory reporting requirements, and enable shared learning. Designated safeguarding leads (DSLs) in every service lead safeguarding practice locally and liaise with external agencies, with clear escalation routes to senior leadership and regulators where required.

Safeguarding arrangements align with the regulatory standards including Ofsted, the Care Quality Commission (CQC), the Charity Commission and other relevant regulators. Regulatory assessments conducted through the year were retained at ‘Good’ or above, providing external assurance over the effectiveness of safeguarding arrangements.

Safeguarding training is delivered at all levels, with enhanced role-specific training for DSLs and safeguarding teams. Safer recruitment practices ensure the suitability of employees working with children, young people and adults at risk. The Foundation adheres to comprehensive safeguarding policies, includes safeguarding within its internal audit programme and works collaboratively with multi-disciplinary partners, internal and external professionals and networks.

Key Developments This Year

Throughout the year, we reviewed and strengthened our safeguarding arrangements to ensure that positive behaviour support (PBS) and restrictive practice remained an integral part of our operational enabling strategies, aligned with our strategic quality objective. Our PBS approach was further enhanced through participation in the BILD senior leaders programme and the appointment of an independent PBS partner within our education directorate. Regulatory assessment of one residential home and one school resulted in ‘Good’ and ‘Outstanding’ outcomes, reflecting the quality of care, education and safeguarding practice. To strengthen clinical governance and oversight, and manage risks associated with dysphagia, we appointed dedicated clinical and dysphagia lead professionals. We also implemented freedom to speak up (FTSU) processes, including the appointment of a guardian and trustee, to enhance our culture of openness and accountability. Digital investment has and continues to enhance the quality, accessibility and timeliness of safeguarding information for both the organisation and the Board.

Priorities for the Coming Year

In the year ahead, and in support of strengthening our safeguarding culture, our safeguarding community will build on the significant progress made to further enhance reporting and data-led insight across the Foundation and to the Board. This will strengthen safeguarding governance, Board assurance and risk management processes. We will continue to promote a strong speaking-up and learning culture and explore opportunities to develop this further. We will also conclude the BILD senior leaders programme and strengthen our positive behaviour support partnerships and networks. In addition, we will continue our digital transformation programme, as outlined on page 26, which will improve oversight, transparency, data quality and streamlined reporting.

Ewen Weir Safeguarding Trustee

We have established a culture that encourages and enables employees, people we support, families, carers, commissioners and others to raise any concerns about practice, conduct or organisational culture. This is supported through clear and accessible safeguarding information, opportunities for feedback and engagement, and a range of speaking-up mechanisms, including a whistleblowing helpline, the freedom to speak up (FTSU) guardian, the FTSU trustee and the safeguarding trustee.

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Risk Management & Principal Risks & Uncertainties

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Table Key:
Risk remained Risk Risk
stable decreased increased
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Our Approach to Risk Management

The trustees are responsible for ensuring that effective systems of risk management and internal control are in place to manage the risks to which the Foundation is exposed. This includes setting the Foundation’s

risk appetite and ensuring that appropriate policies and procedures are in place for the prevention and detection of significant risks, including fraud and other irregularities.

The Foundation recognises the importance of effective risk management in supporting the delivery of its strategy and charitable objectives. Risk management is embedded across the Foundation and operates through a risk management framework aligned to the Charity Governance Code. The framework sets out the processes used to identify, assess, monitor and manage risks, ensuring that risks are managed within the levels of risk the trustees are willing to accept. It is designed to manage, rather than eliminate, risk and provides reasonable assurance against material risks.

Operational business units monitor risks on an ongoing basis through their business assurance frameworks and established project management and governance arrangements. Significant risks are reviewed by the executive team on a monthly basis, including consideration of their potential impact on the Foundation’s strategic risks, ensuring that the strategic risk register remains current and responsive.

Strategic risks are reviewed by the Audit and Risk Committee on a quarterly basis, providing oversight and appropriate challenge to the effectiveness of mitigation actions and controls in line with the risk management framework. Strategic risks are also reported to the Board quarterly, enabling the trustees to maintain oversight and assurance that effective risk management processes remain in place. The Audit and Risk Committee has delegated responsibility for oversight of the Foundation’s risk management and Board assurance frameworks and provides assurance to the Board on their ongoing effectiveness.

The following table presents the principal strategic risks which are currently monitored closely by the trustees and executive team.

Risk & Impact

Primary Strategy Link Mitigation & Controls

IT Security and Resilience – failure to maintain appropriate IT capability, capacity and security controls could result in cyber or data security incidents, disruption to critical systems and information, and may adversely affect service delivery, financial sustainability and organisational reputation.

Regulatory and Statutory – failure to comply with requirements could result in harm to employees and/or the people we support and may adversely affect financial sustainability, operational effectiveness and organisational reputation.

Continued delivery against our technology strategic objectives focused on infrastructure modernisation, IT management optimisation, improving business intelligence and quality centric digital solutions. All employees receive appropriate information security training, systems training and data security and protection toolkit (DSPT) compliance is maintained. Appropriate and experienced personnel are employed and engaged in relation to systems, network and infrastructure security, records management and data protection including the appointment of a Caldicott guardian. Business continuity planning is placed firmly within the internal control framework, with a focus on regularly monitoring, reviewing and testing of plans. Appropriate insurance policies are maintained including cyber security.

Changes in legislation, regulation and sector guidance are actively monitored, supported by engagement in relevant regional and national professional networks. Structured assurance frameworks are in place, including audits, preventative maintenance and quality monitoring, to ensure statutory, regulatory and operational standards are met and emerging risks are identified and managed. Clear and effective internal reporting and escalation mechanisms are in place, including HR, health and safety, safeguarding, whistleblowing and freedom to speak up arrangements, underpinned by up to date policies and procedures. Appropriate, effective and adequate procedures in place, which are regularly reviewed to ensure compliance with statutory and regulatory obligations. A skilled and competent workforce is maintained through compliance with mandatory training, performance management and ongoing development as appropriate.

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Risk & Impact Primary Strategy Link Mitigation & Controls
Safeguarding our People – failure to maintain effective safeguarding Collaborative working with commissioners and partners manages safeguarding and quality risks where alternative provision is limited, with enhanced oversight
policies and practices could result in harm to employees and/or the people and escalation reflecting increased inherent risk.
we support, and may adversely affect financial sustainability, operational Workforce risks are mitigated through robust pre-employment vetting, including Disclosure and Barring Service (DBS) checks, supported by a skilled and
effectiveness and organisational reputation. competent workforce compliant with mandatory training, structured performance management, supervision and development.
Clear safeguarding, whistleblowing and freedom to speak up arrangements and policies are in place, with reporting, incident response, investigation and
This risk increased during the reporting period due to external factors. escalation mechanisms in place.
Appropriate controls were implemented to mitigate the risk and the risk is Governance and assurance arrangements support reflective practice, learning from incidents and continuous improvement, with oversight through established
anticipated to reduce early in 2025-26. management, committee and trustee reporting.
Quality of Care/Outcomes – failure to deliver the standard of care and Collaborative working with commissioners and partners manages safeguarding and quality risks where alternative provision is limited, with enhanced oversight
education to meet the needs of the people we support and enable positive and escalation reflecting increased inherent risk.
outcomes, could adversely affect financial sustainability, operational Standards of care and education are supported through robust quality, clinical and educational assurance frameworks, informed by digital systems, data and
performance, and organisational reputation. performance reporting.
Business continuity arrangements support the safe and consistent delivery of care and education.
This risk increased during the reporting period due to external factors. A sufficient and appropriate skilled and competent workforce is maintained and aligned with the Foundation’s strategy.
Appropriate controls were implemented to mitigate the risk and the risk is Governance and oversight arrangements monitor performance, compliance and outcomes for the people we support and learners.
anticipated to reduce early in 2025-26. Continued investments in enhancing digitalisation, data and reporting.
External Factors – failure to understand and respond effectively to changes The external environment is routinely monitored through horizon scanning, engagement with relevant sector networks and the maintenance of positive working
in the external operating environment, including funding pressures, relationships with key stakeholders to identify emerging risks, opportunities and changes.
commissioning arrangements and policy developments, could adversely The impact of external factors on operations, strategy and risk is regularly assessed and used to inform strategic planning and decision-making.
affect financial sustainability, operational effectiveness and organisational
reputation and may impact the long-term viability of the Foundation’s
services.
Our People – the inability to attract, develop and retain employees could A formal risk management framework operates within defined risk appetite and tolerance levels.
adversely affect service delivery and safety and may impact financial Codes of conduct, whistleblowing and freedom to speak up arrangements are in place and regularly reviewed.
sustainability and organisational reputation. Specialist expertise supports compliance across key areas, including safeguarding, health and safety, legal and HR.
Statutory, regulatory, contractual and supplier compliance is actively monitored.
Stakeholder communication and media management arrangements support effective engagement.
Environmental, Social and Governance (ESG) – inability to meet An up to date environmental policy and environmental strategy are in place and in delivery, providing a clear framework to meet stakeholder expectations and
stakeholder expectations and statutory and regulatory obligations could regulatory ESG obligations.
adversely affect financial sustainability and organisational reputation and A carbon reduction programme has been developed for delivery across the Foundation, with implementation of solar arrays, transition to electric vehicles and
may limit the Foundation’s ability to operate effectively. associated charging infrastructure, and energy efficient boiler replacement.
Governance and monitoring arrangements support oversight of environmental performance and compliance.
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Risk & Impact Primary Strategy Link Mitigation & Controls
Business and Finance Strategy – failure to deliver strategic objectives A three-year corporate strategy is in place, setting clear objectives and measures of success, and is regularly monitored and reviewed by the executive and Board
could adversely affect financial sustainability, operational performance and of Trustees, underpinned by enabling strategies.
organisational reputation, and may limit the Foundation’s ability to respond A three-year financial plan aligned to the corporate strategy is maintained, supported by robust annual budgeting, financial monitoring and reporting processes
to future challenges and opportunities. that enable timely and proportionate management action.
Financial resilience is supported through the maintenance of sufficient reserves in line with the reserves policy, which is regularly reviewed and approved by the
trustees.
Reputation – loss of public trust and confidence could adversely affect A formal risk management framework operates within defined risk appetite and tolerance levels.
financial sustainability and may impact the Foundation’s ability to deliver its Codes of conduct, whistleblowing and freedom to speak up arrangements are in place and regularly reviewed.
purposes over the longer term. Specialist expertise supports compliance across key areas, including safeguarding, health and safety, legal and HR.
Statutory, regulatory, contractual and supplier compliance is actively monitored.
Stakeholder communication and media management arrangements support effective engagement.
Cultural Maturity – a lack of cultural maturity could adversely affect Values, codes of conduct and expected behaviours are in place and regularly reviewed.
employee wellbeing, engagement and retention, weaken governance and A clear strategy is in place and has been communicated across the Foundation, supporting shared understanding of expectations, priorities and behaviours.
risk management, and impact service quality, organisational reputation and Leadership, supervision and performance management arrangements promote openness, accountability and learning.
long-term sustainability. Employee engagement, wellbeing and employee voice are actively monitored.
Whistleblowing and freedom to speak up arrangements operate to support safe escalation of concerns.
Learning from incidents and feedback informs continuous improvement, with oversight by senior management and trustees.
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Future Plans & Outlook

Over the coming year, the Foundation will continue to deliver its providing happy futures three-year strategy, launched at the start of the current reporting period and outlined on page 8.

Performance and achievements in the first year of the strategy were positive (see pages 9 to 10). The trustees anticipate continued progress over the coming year, while remaining mindful of the external environment and outlook as outlined on page 27 and the Foundation’s principal risks and uncertainties (pages 23 to 25).

In developing plans for the year ahead, the trustees have continued to focus on building a sustainable Foundation that can attract and support its workforce, modernise services, make effective use of its estate, and generate sustainable surpluses for reinvestment in furtherance of the Foundation’s charitable purposes and delivery of public benefit. The strategic priorities for the year ahead are set out below. These priorities are aligned to the Foundation’s five key strategic categories and support the delivery of its vision and mission.

Key Strategic Category(s)

Strategic Priorities

The Foundation will continue to prioritise its people, recognising that a skilled, engaged and supported workforce is critical to delivering high-quality services and public benefit. Sustaining real living wage accreditation. Continuing to strengthen employee engagement, equity, diversity, inclusion and wellbeing. Ensuring attraction and retention approaches remain competitive and sustainable. The Foundation will continue to strengthen quality and assurance across care, education and central services, supporting safe, effective and person-centred practice. Driving continuous improvement across all settings to maintain high standards of quality and regulatory assurance, while embedding the requirements of new regulatory frameworks. Continuing our commitment to positive behaviour support (PBS) and restraint reduction to promote safe, person-centred support and positive outcomes for the people we support. Continuing to support our learners to achieve outcomes across all areas of learning. Implementing and embedding effective digital solutions to enhance quality, consistency, safety and efficiency across services.

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Key Strategic Category(s) Strategic Priorities

The Foundation will focus on sustainable growth to further its charitable purpose by increasing capacity and extending its impact, while responding to demand and maintaining high standards of quality and support.

Optimising education spaces to enhance the delivery of education and meet demand for student placements.

Mobilising a new adult day service provision in North Tyneside, supporting expansion of the health and wellbeing directorate through delivery of holistic, person-centred support. Expanding the Foundation’s independent supported living services to meet identified need.

• The Foundation will continue to strengthen its environmental stewardship in support of its charitable purpose, focusing on reducing environmental impact and building long-term sustainability.

Delivering the Foundation’s 2025-26 carbon reduction programme, including investment in renewable energy, low emission transport and energy efficient infrastructure. Delivering and embedding environmental improvement plans across teams and services, while continuing to identify opportunities to reduce the Foundation’s environmental impact.

The Foundation will focus on maintaining strong financial sustainability to support the delivery of its charitable purpose, manage risk and enable continued investment in services.

Continuing targeted investment in new and existing services aligned to demand and need. Maintaining strong financial stewardship, including contingency planning in response to risks and challenges within the sectors in which the Foundation operates. Generating a sustainable surplus to support reinvestment and future resilience.

External Environment & Outlook

The trustees and executive recognise that the Foundation continues to operate within a challenging and evolving external environment. Ongoing pressures on adult social care funding, sustained budgetary constraints faced by local authorities, workforce challenges across the health and social care sector, and the impact of higher inflation and UK government policy changes affecting employment costs are expected to continue to influence the commissioning and delivery of services. In education, uncertainty associated with anticipated national education policy developments and reforms is also likely to impact the operating environment over the medium term.

The trustees, supported by the executive, actively monitor these external factors through established governance and risk management arrangements. This enables the Foundation to respond proportionately and adapt where required to mitigate potential impacts. Accordingly, the overall strategy and future plans described above have been developed with appropriate caution, recognising both the external challenges facing the Foundation and the associated risks, alongside the principal risks and uncertainties outlined on pages 23 to 25.

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• Structure, Governance & Management

The Percy Hedley Foundation was founded in 1953 and is a charitable company registered in England and

Wales (Charity Commission registration number 515943) and a company limited by guarantee registered in England (company number 01855026).

The Foundation is governed by its Articles of Association incorporated on 12 October 1984, adopted on 1 November 2005, and last amended on 8 November 2014. Northern Counties School, now an integrated part of the Foundation as a result of the merger in October 2005, was founded in 1838.

The Foundation’s charitable objects, as set out in the Articles of Association, are for the public benefit to promote the care, welfare, interest, education treatment and advancement of disabled persons.

The Board of Trustees & Governance Responsibilities

The Board of Trustees are both trustees of the charity and legal directors of the company in accordance with the Companies Act 2006. References in this report to trustees therefore include their role as directors. The trustees have overall responsibility for the strategic leadership, governance and long-term direction of the Foundation.

Each trustee agrees to contribute £1 in the event of the Foundation winding up.

Trustee recruitment and appointments are led by the Nomination and Remuneration Committee and appointments are approved by the Board. Trustees are appointed in accordance with the Articles of Association, typically serving a term of three years with the possibility of re-appointment for up to a further two terms.

New trustees are recruited through an open and transparent process, including public advertisement, interview and assessment against the trustee role profile and the Board competency framework. The framework aims to align with the Foundation’s strategic priorities and governance responsibilities and supports the appointment of trustees with a balanced and diverse range of skills, knowledge and experience, ensuring the Board remains effective and fit for purpose over the long-term.

The Articles of Association do not define a maximum number of trustees. Trustees in office during the

year and, up to the date of signing the financial statements, are set out on page 4.

In 2024-25, the Board aimed to appoint a minimum of two additional trustees in response to skills needs identified. With the support of an external recruitment specialist to enhance openness and transparency, three new trustees were successfully appointed, strengthening the Board’s overall capability.

New trustees are supported through a comprehensive induction programme, including tailored training, meetings with members of the executive team, and visits to operational sites to meet the people we support, employees and managers. Trustees are also provided with access to an electronic Board portal containing key documents relating to the Foundation’s constitution, governance arrangements, roles and responsibilities, and Board and committee business.

This induction process is designed to ensure trustees develop a strong understanding of the Foundation’s work, their duties and responsibilities, and opportunities for further engagement.

Trustees complete an annual self-assessment and participate in an appraisal with the chair of the Board to identify individual development and training needs. In addition, trustees undertake an annual reassessment against the Board competency framework, supporting the Nomination and Remuneration Committee to review the Board’s overall composition and effectiveness.

Governance & Committee Structure

The Board delegates specific responsibilities to a number of committees, each operating under Board approved terms of reference, as summarised on the next page. Committees are chaired by a trustee and comprise of trustee members with appropriate skills, knowledge and experience, in line with the Board competency framework. The Quality and Standards and the Audit and Risk Committees also include independent external members whose expertise is aligned to their respective remits.

In addition, the Foundation has three local educational advisory committees, each chaired by an individual independent of the Board and appointed by the Board. These committees contribute to the development of the Foundation’s policies, provide scrutiny and constructive challenge regarding the management of the Foundation’s schools and college, and offer assurance to the Board.

The executive team, led by the chief executive officer, has delegated responsibility for the day to day management of the Foundation’s operations, including management of employees, and for implementing the strategy approved by the Board. The Board holds the chief executive officer to account for the performance of the Foundation and its delivery of charitable purposes. Through this leadership structure, the executive team ensures that staff are supported to contribute effectively to the achievement of the Foundation’s mission and objectives.

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• Structure, Governance & Management

During the year, the interim chief executive officer was appointed on a permanent basis and a new vice

chair of the Board was duly elected following the retirement of the former vice chair.

Nomination & Remuneration Committee

Finance Committee

Oversees and monitors the Foundation’s financial affairs, including financial performance, budgeting, reserves, pensions, investments portfolio, capital expenditure and key financial policies.

The Nomination and Remuneration Committee oversees the composition of the Board and its committees and keeps this under review to ensure a balanced and diverse range of skills, knowledge and experience, supporting effective governance and Board performance. The committee is also responsible for setting, monitoring and reviewing executive pay policy and executive remuneration.

Audit & Risk Committee

Oversees financial reporting, internal and external audit and associated appointments, systems of internal control and risk management, compliance with laws and regulations and the Board’s assurance framework. The committee is responsible for a suite of key policies including the annual review of the Foundation’s whistleblowing and data protection policies.

Local Advisory Committees (x 3)

Oversee the leadership and governance of the Foundation’s educational establishments (Hedleys College, Northern Counties School, Percy Hedley School), ensuring that the establishments operate effectively, achieve high standards and delivers high-quality education, whilst in alignment with the strategy, values and governance expectations of the Foundation.

Quality & Standards Committee

Governance Activity

Oversees the quality and standards of the Foundation’s operations including safeguarding. The committee is responsible for a suite of key policies including the annual review of the Foundation’s core safeguarding policies.

The Board of Trustees meets at least four times annually and generally holds an annual away day to focus on strategic direction. Board committees meet regularly to support the effective discharge of delegated responsibilities.

People & Culture Committee

Oversees and monitors a range of objectives relating to the delivery of the people strategy and monitors the Foundation’s main terms and conditions, benefits, rewards, performance management framework and key people policies including the equity and diversity policy aligned with the equity and diversity strategy.

Key governance activities included the approval of the annual budget, review of strategic priorities, oversight of safeguarding and risk, and monitoring the Foundation’s financial performance.

All Board meetings held throughout the year were quorate and no member was absent for more than two meetings, demonstrating effective and active governance.

Trustees’ Indemnities

Trustee indemnity insurance up to the value of £5m is provided at an annual charge of £1,736 (2024: £1,736).

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• Structure, Governance & Management

Public Benefit

Modern Slavery & Human Trafficking Statement

Trustees have due regard to the Charity Commission’s guidance on public benefit in accordance with the Charities Act 2011, and the Board is satisfied that the Foundation complied with its public benefit duty in delivery of its services as summarised throughout this report, which are for the public benefit now and into the future.

Trustee Remuneration, Expenses & Conflicts of Interest

The trustees are volunteers who give their time freely and do not receive remuneration for their role. Trustees may claim reasonable expenses incurred in the course of their duties, in line with the trustees’ expenses policy. Details of trustee expenses reimbursed during the year are included in note 12 to the financial statements.

The Foundation operates a conflicts of interest policy and trustees are required to declare all relevant interests. A register of interests is maintained, reviewed annually and updated as necessary.

Procedures are in place to identify and manage conflicts of interest, ensuring that decisions are made objectively and in the best interests of the Foundation.

Executive Pay Policy

The executive team is considered as the key management personnel. Executive pay is set, monitored and reviewed annually by the Nomination and Remuneration Committee in accordance with the executive pay policy.

The trustees believe that remuneration should be sufficient to attract, retain and motivate suitably skilled and experienced executives, whilst remaining commensurate with the knowledge, skills, behaviours, performance and responsibilities required by each role. Executive pay is linked to a performance appraisal system and benchmarked against comparable roles in relevant job markets. The executive team is paid on the basis of a fixed salary.

Charity Governance Code

The trustees have regard to the principles of the Charity Governance Code when reviewing and updating the Foundation’s governance arrangements.

The Percy Hedley Foundation is committed to preventing modern slavery and the Foundation’s full statement can be found on the website at www.percyhedley.org.uk.

Risk Management

The trustees have responsibility for overseeing the management of risk and are satisfied that appropriate systems and controls are in place to identify, assess and manage the principal risks facing the Foundation. The trustees review the Foundation’s risk management arrangements through the work of the Audit and Risk Committee and regular reporting from the executive team.

The principal risks and uncertainties facing the Foundation, together with the key mitigation and controls in place, are set out on pages 23 to 25.

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Section 172(1) Statement

The trustees, as company directors of the charitable company for the purposes of company law, consider that they have individually and collectively acted in good faith and fairly with due regard to their duty under section 172 of the Companies Act 2006, to promote the success of the charity for the benefit of its members and in furtherance of its charitable purposes.

The trustees promote employee engagement through a range of mechanisms, including team meetings, employee supervisions, employee surveys, employee networks and groups, the freedom to speak up process and site visits, which provide valuable insight into employee experiences and inform decision-making at both operational and Board level.

In fulfilling this duty, trustees have due regard to the interests of the Foundation’s stakeholders

including the people we support, their families, their carers, our workforce, commissioners including local authorities, and our regulators. The following paragraphs are not intended to be exhaustive but are illustrative of how the trustees have fulfilled their duty.

Long-term Consequences of Decisions

The trustees consider the long-term sustainability of the Foundation when making strategic decisions, including the financial and operational impact of those decisions and the Foundation’s ability to achieve its charitable purposes in the interests of the people it supports. Decisions with potential long-term implications are considered by the Board and its committees, with major investments overseen by the Finance Committee and major investments and strategic decisions reviewed by the Audit and Risk Committee.

The providing happy futures strategy (page 8) provides focus for decision making and aims to ensure that the Foundation is a sustainable employer, able to modernise services, generate a surplus for future reinvestment, and further its charitable purposes in support of its vision and mission.

Both strategy and risk are fundamental to the Board’s long-term decision making and the Foundation’s risk management framework is described on pages 23 to 25.

The People and Culture Committee maintains oversight for the delivery of the Foundation’s people strategy and associated risks. Further information about the Foundation’s people is set out on pages 18 to 21.

Relationships with Funders, Suppliers, Customers & Others

The trustees recognise the importance of strong stakeholder relationships in promoting the long-term success of the Foundation. They value the views and interests of the Foundation’s funders, suppliers, customers and other partners, and work to maintain positive, transparent and effective relationships that support the delivery of quality services.

Engagement with stakeholders provides the trustees with insight into emerging trends, significant changes in the external environment and opportunities for future development. This informs the Foundation’s strategic direction, policies and objectives, helping to ensure that decision making is aligned with stakeholder interests and supports the Foundation’s long-term sustainability.

Further information on the Foundation’s approach to stakeholder engagement is evident throughout this annual report and on pages 11 to 14.

Impact on Community & Environment

Interests of Employees

The trustees recognise the Foundation’s workforce as its greatest asset and acknowledge the vital role that employees and volunteers play in the delivery of services and achieving the Foundation’s charitable purposes.

The delivery of positive outcomes for the people that the Foundation supports and the communities it serves is of paramount importance to the trustees. The Board considers the wider social and environmental impact of the Foundation’s activities, with environmental, social and governance (ESG) priorities forming a core objective within the current strategy. This ensures that the Foundation’s work continues to deliver meaningful and sustainable benefits for the people it supports and the wider community.

When making strategic and operational decisions, the trustees have regard to the impact on staff wellbeing, health and safety, development and working conditions, ensuring that people considerations are appropriately taken into account.

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Section 172(1) Statement

The Foundation plays an active role within the communities it serves, engaging with local people and organisations through its fundraising activity and service delivery. The trustees are committed to promoting inclusion for the people we support and ensuring that services reflect local needs. The Foundation also seeks to recruit and develop local people, contributing to community wellbeing and strengthening its long-term connection to the areas it serves.

Further information on the environment and sustainability can be found on page 17.

Maintaining High Standards of Conduct & Reputation

The trustees are committed to maintaining high standards of business conduct, underpinned by strong governance arrangements, including employee induction, effective systems, processes, policies, transparency and ethical practice. The Foundation operates in line with relevant regulatory requirements and sector standards, and the Board has a clearly defined risk appetite to guide decision-making.

Appropriate decision-making, reporting and escalation protocols are in place to ensure that the Board monitors reputational and compliance risks and is kept informed of emerging issues. This enables timely and proportionate mitigation action to be taken to maintain public trust and confidence in the Foundation.

Acting Fairly Between Members

In accordance with the Foundation’s governing document, the trustees are also the members of the charitable company. The Board is committed to ensuring that all members are treated fairly and that decision-making processes are transparent, consistent and in line with the Articles of Association.

Members have equal voting rights at general meetings. At Board level, appropriate procedures are in place to manage conflicts of interest, with trustees required to declare any actual or potential conflicts to ensure that decisions are taken in the best interests of the Foundation.

Barratt Homes & Percy Hedley Foundation Partnership

The Percy Hedley Foundation Annual Report & Financial Statements

Financial Review

During the year, the Foundation improved the financial performance whilst operating with the continued impacts of higher inflation and cost increases due to UK government policy impacting employment costs (wage and employer national insurance contribution increases effective from April 2025), both of which continue to impact in 2025-26. As reported previously, the improved performance at Northern Counties School, following a successful Ofsted inspection outcome in early 2024, made a significant, positive impact on the overall financial performance of the Foundation for the full year. Student numbers steadily increased at the school throughout the academic year to the point where 100% capacity was achieved. As a result, the school generated a small financial surplus. During the year, it was agreed that further investment at this particular site would be made to support the expansion in the number of classrooms by six, over the next three academic years. The first development phase of the additional classrooms will become available early in the 2025-26 academic year. The previously reported de-registration of the out-of-date residential care facility, Chipchase House, was completed in line with the target closure date of July 2025. All of the residents successfully moved on to new locations with the majority taking up their own tenancy agreements in community based supported living homes. The Foundation is currently looking at a variety of options for the future use of this asset. During the year, the Foundation signed a lease for a new day service centre located in North Shields; operations at this location will go live in early 2025-26.

In the year to 31 August 2025, the Foundation made a surplus of £2.861m (2024 : £0.538m surplus) before actuarial gains and losses. Total income increased by £3.669m on the previous year with expenditure, before gains/(losses) on investment assets, increasing by £1.202m. The underlying operational performance remains mixed. However, the impact of wage inflation and increased employer national insurance contributions were significant enough to hold back the financial performance post April 2025. The investment assets held by the Foundation generated a gain of £0.181m (2024 : £0.325m). The performance of the Foundation was also supported by an actuarial gain on the defined benefit pension scheme of £1.713m (2024 : £1.095m gain).

The surplus post actuarial adjustments was £4.574m (2024 : £1.633m) representing an improving underlying performance by the Foundation during the financial year. This resulted from the full year impacts of the previous turnaround action plan that was implemented to address key performance concerns, better cost management and the improved student numbers in education resulting from a clear three-year strategic plan being implemented during the period.

Income from charitable activities increased by a reasonable 10.28% year on year at £39.6m. Most of the funding is received from approximately 20 UK wide local authorities responsible for the education and care of the children, young people and adults that use the services which the Foundation provides. These fees fund the day to day running costs of the services and support some level of investment and

maintenance of the Foundations assets. The Foundation has a fundraising and engagement team, responsible for supplementing this income to help further improve facilities, the estate, enrich provision and support specific capital developments. Income from donations and legacies for 2025 was £0.291m, a reduction of 24.6% over 2024. During the period, a new head of fundraising was appointed to support the growth ambitions of the Foundation.

One key area of focus during the period was to further improve the cash position. The trade debtor balance, which has seen excellent reductions in the previous year, increased slightly during the period leaving the value of gross trade debtors at £3.299m (2024 : £3.132m). This increased by 5.33% versus an income increase of 10.28%. This increase in trade debtors also includes an element of VAT that the Foundation is now required to charge on school fees, effective from January 2025, due to their status as non-maintained special schools. In the year, some of the previous historic bad debt provision was released as well as being used to write off uncollectable debts, reducing from 2024 : £0.954m to 2025 : £0.877m. The provision for doubtful debts at the 2025 year end remains higher than target and remains a focus for 2025-26. As a result of the improving trading performance over the last two years, additional funds were allocated in relation to fixed asset investments. The outcome of this was that the level of capital expenditure for the year increased to £1.168m (2024 : £0.954m). Additionally, in order to achieve the holding of the funds required as per the reserves policy with the two investment managers, a one-off transfer of £1.400m was made from cash reserves during the period into the two investment portfolios. The cash generated from operations totalled £2.839m. As a result, the closing cash position at £11.704m increased over the prior year (2024 : £11.211m).

The consistency and stability of the chief executive officer and executive team during the year allowed for an evolution on the previously agreed three-year strategic plan, effective September 2025. This plan remains broadly the same and focuses on generating additional capacity to meet the demands for our current services through modernisation and improved utilisation of the existing estate, expansion and addition of, where appropriate, new locations, investing in enhanced terms and conditions for all employees and investing in our IT team, systems and security.

The 2025 UK government budget has added further financial pressures to the Foundation for 2025-26 in particular relating to wage inflation. A key part of attracting people to work at the Foundation is being a real living wage employer. In order to maintain this enhanced pay rate over the national living wage, the Foundation is requesting fee uplifts from commissioners that are sufficient to cover the wage increase and associated on costs as well as general inflationary increases. We understand the impact on our commissioners’ budgets where there is continued pressure to obtain increased value for money.

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Financial Review

Pension Schemes

The Percy Hedley Pension Scheme provides benefits on a final salary or defined benefit basis. It is closed to new members, with members’ salaries frozen as at 31 March 2019 but open to future accrual of benefits for its active members. The actuarial deficit has been revalued, in accordance with FRS102, using up to date assumptions over discount rate, the rate of inflation and mortality rates. This revaluation has resulted in a decrease in the actuarial deficit by £2.380m from the previous year to £1.925m (2024 : £4.305m) which reflects the investment choices made by the pension trustees and market conditions. This positive movement has been credited against the operating deficit with £0.667m being posted into charitable activities’ expenditure, leaving £1.713m shown as the actuarial gain for the period. The trustees of both the Foundation and the Percy Hedley Pension Scheme are acutely aware of the need to balance the interests of the members of the pension scheme with those of the current and future beneficiaries that the Foundation supports. Following the output from the actuarial valuation that was undertaken effective 31 March 2024, the Foundation agreed to make an additional ad hoc payment of £0.500m in the period. The pension scheme continues to perform well against the targets.

The Foundation also contributes to a defined benefit pension scheme in relation to teaching employees, which is the Teachers’ Pension Scheme. The employer contribution rate increased from 22.8% to 28.6% effective as required from 1 April 2024. The next valuation result is due to be implemented from 1 April 2027.

Balance Sheet

The Foundation has total funds of £28.575m (2024 : £24.001m). The increase of £4.574m primarily relates to an increase in the investment values, cash balance and reductions in both the pension scheme liability and long-term loan liability. The free reserves available increased to £10.235m (2024 : £9.489m). The increase resulted from the increased cash balance and trade debtors and a small reduction in creditors. The balance sheet highlights a reduction in net book value of tangible fixed assets to £16.556m (2024 : £17.006m) due to the reduced capital expenditure versus the depreciation charged. The capital investments in the year totalling £1.168m (2024 : £0.954m), the majority of which related to development of the estates and purchase of new operational and IT equipment. Depreciation was slightly higher than the prior year at £1.618m (an increase of £0.133m).

The value of restricted funds increased slightly to £88k (2024 : £74k). Restricted funds are those from funds raised from legacies and small donations along with fundraising carried out within a particular service and are used throughout the year to provide ‘added extras’ to enrich service provision.

The Foundation holds £nil (2024 : £nil) of designated funds at the period end. Designated funds have historically been the amounts set aside by the trustees to be spent during the following year. In 2024-25 these funds are incorporated as part of the budget approved by trustees and included in the unrestricted funds. In 2025-26, the trustees have agreed to designate £2.000m of funds to support the estates strategy, including the expansion of six additional classrooms at Northern Counties School and £1.000m of funds allocated against the carbon reduction programme. This is in addition to the usual annual capital expenditure requirement.

Investment Policy

The Foundation has implemented a strategy for investments which ties in with the reserves policy whereby the investments held in the two investment manager portfolios will be equivalent to the funds required under the reserves policy (see next page). During the financial year 2024-25, the net value of the investments increased from £3.376m to £5.082m which included an additional cash transfer of £1.400m. This strategy allows for midterm reserves to be held in liquid assets until they are needed for specific projects and for an element of reserves to be held for the longterm in the event of future unknown uncertainties. It is the intention that the Foundation will add free cash in order to achieve the target value of investments by 31 August 2025 should the growth in the funds be insufficient. The longer-term strategy is to add to the investments at a similar rate to which Foundation itself grows. The trustees appoint investment managers to whom they delegate responsibility for managing the investment assets in accordance with an agreed policy statement. This statement sets out the trustees’ aim, to produce the best financial return within an acceptable level of risk and includes the manner in which these assets may be ethically invested to ensure that they do not conflict with the aims of the Foundation. The investment policy statements are reviewed annually.

Going Concern

After making appropriate enquiries, including evaluating any impact with the continued and ongoing effects of the cost of living crisis, the impact of the October 2025 UK government budget and reviewing forecasts into 2025-26, the trustees have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the accounting policies on page 46.

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Financial Review

Percy Hedley College Student

Reserves Policy

The trustees consider that the Foundation should invest unrestricted and undesignated reserves equivalent of between 13% and 16% of operating expenditure, excluding non-cash and significant one-off items, to allow for the Foundation to react to unforeseen circumstances, whilst providing sufficient flexibility to operate on a day to day basis and take any appropriate decisions to further the Foundation’s strategic development. These funds are to be specifically held in the long-term investment portfolios managed by the two investment managers rather than bank accounts, as outlined in the investment policy section above.

The lower end of this range is equivalent to basically two months’ employee costs for the Foundation and the higher end reflects the Foundation’s aim to build a fund that will enable the modernisation of our services for the children, young people and adults for whom they are designed.

During the last few years, reserves have been built in line with the lower end of this policy. These are now reviewed annually as part of the corporate strategy with the intention to increase the value of the investments towards to the higher end of the range over the next three years. This will support targeted improvements to the estate and services provided, which is primarily funded through current cash balances. Currently the Foundation’s free reserves are sufficient given the ongoing managed capital expenditure improvement programme. For 2025-26, the trustees have allocated £3.000m of designated funds to support the strategic plan. These are outlined above and sit outside of the normal capital expenditure programme.

The Percy Hedley Foundation Annual Report & Financial Statements

• Trustee Responsibilities Statement

The trustees (who are also the directors of the charitable company for the purposes of company law)

are responsible for preparing the combined Trustees’, Strategic and Directors’ Report and the financial statements in accordance with applicable law and regulations, the United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 – The Financial Reporting Standard applicable in the UK and Republic of Ireland and the Charities SORP.

Company law requires the trustees to prepare financial statements for each financial year. Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the incoming and expenditure of the charitable company for that period. In preparing these financial statements, the trustees are required to:

The Trustees’ Report, which incorporates the requirements of the strategic report and the

directors’ report as set out in the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, was approved by the Board of Trustees in their capacity as trustees and company directors and signed on its behalf by:

Janet Donnelly Chair – Trustee

Select suitable accounting policies and then apply them consistently

Observe methods and principles in the Charities Statement of Recommended Practice (SORP) Make reasonable and prudent judgements and accounting estimates

State whether applicable UK accounting standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business

The trustees are responsible for maintaining adequate accounting records that are sufficient to show and explain the charitable company’s transactions and 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 for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Azets Audit Services continued in their role as external auditors in accordance with a resolution of the members passed at a general meeting in March 2025.

In so far as each of the trustees of the Foundation is aware, at the date of approval of this report, there is no relevant audit information needed by the Foundation’s auditor in connection with preparing the audit report of which the Foundation’s auditor is unaware. Each trustee has taken all of the necessary steps in order to make themselves aware of any relevant audit information and to establish that the Foundation’s auditor is aware of that information.

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• THE PERCY HEDLEY FOUNDATION ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2025

Charity registration number 515943 (England & Wales) Company registration number 01855026

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Independent Auditor’s Report to the Members of The Percy Hedley Foundation

Opinion

We have audited the financial statements of The Percy Hedley Foundation (the ‘charity’) for the year ended 31 August 2025 which comprise the statement of financial activities, the statement of financial position, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

• give a true and fair view of the state of the charitable company's affairs as at 31 August 2025 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 charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

The 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.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the trustees' report for the financial year for which the financial statements are prepared, which includes the directors' report prepared for the purposes of company law, is consistent with the financial statements; and

• the directors' report included within the trustees' report has been prepared in accordance with applicable legal requirements.

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The Percy Hedley Foundation Annual Report & Financial Statements

Independent Auditor’s Report to the Members of The Percy Hedley Foundation

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report included within the trustees' report.

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

• 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.

Responsibilities of trustees

As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose 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 charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the 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.

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

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The Percy Hedley Foundation Annual Report & Financial Statements

Independent Auditor’s Report to the Members of The Percy Hedley Foundation

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

We identified the following applicable laws and regulations as those most likely to have a material impact on the financial statements: Care Quality Commission, Ofsted, Health and Safety; employment law; and compliance with both the UK Companies Act and the UK Charities Act.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;

• Reviewing minutes of meetings of those charged with governance;

• Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;

• • Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

• Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.

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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

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

40

The Percy Hedley Foundation Annual Report & Financial Statements

Independent Auditor’s Report to the Members of The Percy Hedley Foundation

Simon Brown BA ACA DChA (Senior Statutory Auditor) For and on behalf of Azets Audit Services, Statutory Auditor Chartered Accountants

Bulman House Regent Centre Gosforth Newcastle upon Tyne NE3 3LS Date: .........................

The Percy Hedley Foundation Annual Report & Financial Statements

41

Statement of Financial Activities Including Income and Expenditure Account For the Year Ended 31 August 2025

Current fnancial year Notes Unrestricted funds 2025 £'000 Restricted funds 2025 £'000 Income and endowments from: Donations and legacies 3 226 65 Charitable activities 4 39,453 - Other trading activities 5 144 1 Investments 6 519 - Other income 7 75 - Total income 40,417 66 Expenditure on: Charitable activities 8 37,751 52 Total expenditure 37,751 52 Net gains/(losses) on investments 14 181 - Net income 2,847 14 Other recognised gains and losses: 1,713 - Actuarial gains on defned beneft pension schemes Net movement in funds 10 4,560 14 Reconciliation of funds: Fund balances at 1 September 2024 23,927 74 Fund balances at 31 August 2025 28,487 88	Total 2025 £'000 291 39,453 145 519 75 40,483 37,803 37,803 181 2,861 1,713 4,574 24,001 28,575	Total 2024 £'000 386 35,911 90 447 131
		36,965 36,752
		36,752 325
		538 1,095
		1,633 22,368
		24,001

The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.

42

The Percy Hedley Foundation Annual Report & Financial Statements

Statement of Financial Activities Including Income and Expenditure Account For the Year Ended 31 August 2025

Prior fnancial year Notes Unrestricted funds 2024 £'000 Restricted funds 2024 £'000 Income and endowments from: Donations and legacies 3 242 144 Charitable activities 4 35,911 - Other trading activities 5 90 - Investments 6 447 - Other income 7 131 - Total income 36,821 144 Expenditure on: Charitable activities 8 36,606 146 Total expenditure 36,606 146 Net gains/(losses) on investments 14 325 - Net income/(expenditure) 540 (2) Other recognised gains and losses: Actuarial gains on defned beneft pension schemes 1,095 - Net movement in funds 10 1,635 (2) Reconciliation of funds: Fund balances at 1 September 2023 22,292 76 Fund balances at 31 August 2024 23,927 74

Total 2024 £'000 386 35,911 90 447 131 36,965 36,752 36,752 325 538 1,095 1,633 22,368 24,001

43

The Percy Hedley Foundation Annual Report & Financial Statements

Statement of Financial Position

As at 31 August 2025

2025 2024 Notes £'000 £'000 £'000 Fixed assets Tangible assets 16 16,556 Investments 17 5,082 21,638 Current assets Debtors 18 3,201 3,063 Cash at bank and in hand 11,704 11,211 14,905 14,274 Creditors: amounts falling due within one year 20 (4,670) (4,785) Net current assets 10,235 Total assets less current liabilities 31,873 Creditors: amounts falling due after more than one year 21 (1,373) Defned beneft pension liability 23 (1,925) Net assets 28,575 The funds of the charity Restricted income funds 24 88 Unrestricted funds 28,487 28,575	£'000 17,006 3,376
	20,382 9,489
	29,871 (1,565) (4,305)
	24,001
	74 23,927
	24,001

The financial statements were approved by the trustees on .........................

..............................

Trustee - Janet Donnelly

Company registration number 01855026 (England and Wales)

The Percy Hedley Foundation Annual Report & Financial Statements

44

Statement of Cash Flows

For the Year Ended 31 August 2025

2025 Notes £'000 £'000 Cash fows from operating activities Cash generated from operations 29 2,849 Investing activities Purchase of tangible fxed assets (1,168) Purchase of investments (1,859) Proceeds from disposal of investments 334 Investment income received 519 Net cash used in investing activities (2,174) Financing activities Repayment of bank loans (182) Net cash used in fnancing activities (182) Net increase in cash and cash equivalents 493 Cash and cash equivalents at beginning of year 11,211 Cash and cash equivalents at end of year 11,704	2024 £'000 (954) (534) 439 447 (173)	£'000 2,763 (602) (173)
		1,988 9,223
		11,211

The Percy Hedley Foundation Annual Report & Financial Statements

45

Notes to the Financial Statements

For the Year Ended 31 August 2025

1 Accounting policies

Charity information

The Percy Hedley Foundation is a private company limited by guarantee incorporated in England and Wales. The registered office is Hampeth Lodge, Station Road, Forest Hall, Newcastle upon Tyne, Tyne & Wear, NE12 8YY.

1.1 Accounting convention

The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "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 charity is a Public Benefit Entity as defined by FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £'000.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2 Going concern

At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3 Charitable funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.

Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.

Endowment funds are subject to specific conditions by donors that the capital must be maintained by the charity.

1.4 Income

Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.

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 bank.

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The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

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 are allocated on the portion of the asset’s use.

1.6

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings	40-100 years
Leasehold land and buildings	100 years or length of lease if less
Fixtures and fttings	3 years
Equipment, therapy, offce and computer equipment	3 years
Motor vehicles	3 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.

1.7 Fixed asset investments

Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.

1.8 Impairment of fixed assets

At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

1.9 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.

The Percy Hedley Foundation Annual Report & Financial Statements

47

Notes to the Financial Statements

For the Year Ended 31 August 2025

1 Accounting policies

(Continued)

1.10 Financial instruments

The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities

Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.

1.11 Taxation

The charity is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

1.12

Employee benefits

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

1 Accounting policies

Retirement benefits

1.13

(Continued)

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Other retirement benefits to employees of the Charity are provided by the Teacher’s Pension Scheme (TPS), and the Percy Hedley Pension Scheme (PHPS). These are defined benefit schemes, which are funded, with the assets being held separately from the charity. The PHPS is closed to new members, being replaced with a defined contribution scheme.

Contributions to the TPS are charged to the income and expenditure account as the amount paid or payable in the year. The contributions to all two schemes are determined by qualified actuaries on the basis of triennial valuations using the projected unit method for the PHPS and quinquennial valuations using a prospective benefit method for the TPS.

The assets of the PHPS are measured using fair value. PHPS liabilities are measured using the projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability. The increase in present value of the liabilities of the scheme expected to arise from employee service in the period is charged to the operating surplus.

The expected return on the scheme’s assets and the increase during the period in the present value of the scheme’s liabilities, arising from the passage of time, are included in pension finance costs.

Actuarial gains and losses are recognised within the Statement of Financial Activities.

2 Critical accounting estimates and judgements

In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The present value of the defined benefit liability depends on a number of factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of the pension liability.

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The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

3 Donations and legacies

Unrestricted funds Restricted funds 2025 £'000 2025 £'000 Legacies receivable 137 10 Grants including capital Grants 89 55 226 65	Total Unrestricted funds Restricted funds 2025 2024 2024 £'000 £'000 £'000 147 183 2 144 59 142 291 242 144	Total 2024 £'000 185 201 386

50

The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

4 Charitable activities

	Education	Adult	Total	Education	Adult	Total
	Services	Residential/	2025	Services	Residential/	2024
		ISL & Day			ISL & Day
		Services			Services
	2025	2025		2024	2024
	£'000	£'000	£'000	£'000	£'000	£'000
Sale of goods	24,921	14,532	39,453	21,243	14,668	35,911

5 Income from other trading activities

	Unrestricted	Restricted	Total	Unrestricted	Restricted	Total
	funds	funds		funds	funds
	2025	2025	2025	2024	2024	2024
	£'000	£'000	£'000	£'000	£'000	£'000
Fundraising events	144	1	145	90	-	90

6 Investments

	**Unrestricted **	Unrestricted
	funds	funds
	2025	2024
	£'000	£'000
Dividends	62	59
Interest receivable	457	388
	519	447

7 Other income

	Unrestricted	Unrestricted
	funds	funds
	2025	2024
	£'000	£'000
Other income	-	61
External Hires	75	70
	75	131

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51

Notes to the Financial Statements

For the Year Ended 31 August 2025

8 Charitable activities

Education Services Adult residential/ ISL & Day Services 2025 £'000 2025 £'000 Staff costs 15,383 10,195 Direct charitable costs 3,531 2,007 18,914 12,202 Share of support costs (see note 9) 3,987 2,572 Share of governance costs (see note 9) 78 50 22,979 14,824 Analysis by fund Unrestricted funds 22,927 14,824 Restricted funds 52 - 22,979 14,824	Total 2025 Education Services Adult residential/ ISL & Day Services £’000 2024 £'000 2024 £'000 25,578 19,549 6,137 5,538 4,008 1,029 31,116 23,557 7,166 6,559 4,484 1,419 128 122 4 37,803 28,163 8,589 37,751 28,017 8,589 52 146 - 37,803 28,163 8,589	Total 2024 £'000 25,686 5,037
		30,723 5,903 126
		36,752
		36,606 146
		36,752

52

The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

9 Support costs allocated to activities

Staff costs Depreciation Professional cost Other Direct Costs Facilities Costs IT Costs Maintenance Costs Investment fees Interest Governance costs Analysed between: Educational Services Adult Residential/ ISL & Day Services Governance costs comprise: Audit fees Legal and professional Net movement in funds 10 The net movement in funds is stated after charging/(crediting): Depreciation of owned tangible fxed assets 11 Auditor's remuneration Fees payable to the charity's auditor and associates: For audit services Audit of the fnancial statements of the charity	2025 £'000 3,755 1,618 354 111 1 583 29 24 84 128 6,687 4,065 2,622 6,687 2025 £'000 21 107 128 2025 £'000 1,618 2025 £'000 21	2024 £'000 3,569 1,485 145 22 6 515 67 94 126 -
		6,029
		4,606 1,423
		6,029
		2024 £'000 19 107
		126
		2024 £'000 1,485
		2024 £'000 19

12 Trustees

None of the trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year.

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The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

13 Employees

The average FTE monthly number of employees during the year was:

	2025	2024
	Number	Number
Direct staff	780	797
Admin and Support	171	187
Management	6	6
Total	957	990
Employment costs	2025	2024
	£'000	£'000
Wages and salaries	25,158	25,180
Social security costs	2,380	2,085
Other pension costs	1,795	1,990
	29,333	29,255

The total employee benefits of the key management personnel of the charity were £1,007,772 (2024 - £1,070,738).

The number of employees whose annual remuneration was more than £60,000 is as follows:

s as follows:
	2025	2024
	Number	Number
£60,001-£70,000	5	7
£70,001- £80,000	4	4
£80,001-£90,000	2	2
£90,001-£100,000	1	1
£100,001- £110,000	2	3
£110,001-£120,000	-	1
£130,001-£140,000	1	-
£160,001-£170,000	-	1

14 Gains and losses on investments

	Unrestricted	Unrestricted
	funds	funds
	2025	2024
Gains/(losses) arising on:	£'000	£'000
Sale of investments	181	325

The Percy Hedley Foundation Annual Report & Financial Statements

54

Notes to the Financial Statements For the Year Ended 31 August 2025

15 Taxation

The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.

16 Tangible fixed assets

Tangible fxed assets
Freehold land and buildings Leasehold land and buildings Fixtures and fttings Equipment, therapy, ofce and computer equipment Motor vehicles £'000 £'000 £'000 £'000 £'000 Cost At 1 September 2024 2,725 22,740 2,091 2,887 468 Additions 490 72 542 64 At 31 August 2025 2,725 23,230 2,163 3,429 532 Depreciation and impairment At 1 September 2024 1,037 8,394 1,578 2,483 413 Depreciation charged in the year 23 1,202 148 235 10 At 31 August 2025 1,060 9,596 1,726 2,718 423 Carrying amount 109 At 31 August 2025 1,665 13,634 437 711 At 31 August 2024 1,688 14,346 513 404 55 -	Total £'000 30,911 1,168
	32,079
	13,905 1,618
	15,523
	16,556
	17,006

17 Fixed asset investments

Listed investments £'000 Cash in portfolio £'000 Cost or valuation At 1 September 2024 3,376 Additions 1,859 2,348 Valuation changes 181 Disposals (798) (1,884) At 31 August 2025 4,618 464 Carrying amount At 31 August 2025 4,618 464 At 31 August 2024 3,376 - - -	Total £'000 3,376 4,207 181 (2,682)
	5,082
	5,082
	3,376

Fixed asset investments revalued

The historical cost of listed investments at 31 August 2025 is £4,584,777 (2024: £2,872,966).

The Percy Hedley Foundation Annual Report & Financial Statements

55

Notes to the Financial Statements For the Year Ended 31 August 2025

17 Fixed asset investments

(Continued)

The Charity SORP requires disclosure of any individual investment of more than 5% of the total portfolio value. The charity holds the following investments with a value of more than 5%:

• Institutional Cash Series PLC BrR ICS Sterling-£511,709

18 Debtors

Debtors
Amounts falling due within one year: Trade debtors Other debtors Prepayments and accrued income	2025 £'000 2,422 64 715 3,201	2024 £'000 2,178 57 828
		3,063

Trade debtors includes a bad debt provision of £877,067 (2024: £954,212).

19 Loans and overdrafts

Bank loans Payable within one year Payable after one year	2025 £'000 1,565 192 1,373	2024 £'000 1,747
		182 1,565

The Foundation has a single loan with Barclays Bank plc which was renegotiated In July 2022 and is secured by way of a legal charge over the property at Station Road Forest Hall Newcastle Upon Tyne, West Lane Killingworth Newcastle Upon Tyne, Great North Road Jesmond Newcastle Upon Tyne all in favour of Barclays Bank plc and a Debenture granted by The Percy Hedley Foundation in favour of Barclays Bank plc. The loan is due for repayment by July 2027 with interest charged at 5.01% per annum. The ratio of the loan to the value of assets secured is 13%.

20 Creditors: amounts falling due within one year

Notes Bank loans 19 Other taxation and social security Deferred income 22 Trade creditors Other creditors Accruals	2025 £'000 192 920 1,502 1,053 357 646 4,670	2024 £'000 182 626 1,832 1,018 304 823
		4,785

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The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

21	Creditors: amounts falling due after more than one year
			2025	2024
		Notes	£'000	£'000
	Bank loans	19	1,373	1,565
22	Deferred income
			2025	2024
			£'000	£'000
	Other deferred income		1,502	1,832
	Deferred income is included in the fnancial statements as follows:
			2025	2024
			£'000	£'000
	Deferred income is included within:
	Current liabilities		1,502	1,832
	Movements in the year:
	Deferred income at 1 September 2024		1,832	1,471
	Released from previous periods		(1,832)	(1,471)
	Resources deferred in the year		1,502	1,832
	Deferred income at 31 August 2025		1,502	1,832

23 Retirement benefit schemes

Defined contribution schemes

The charity operates two defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund with AEGON and Peoples Pension.

The charge to profit or loss in respect of defined contribution schemes was £1,795k (2024 - £1,990k).

The Percy Hedley Foundation Annual Report & Financial Statements

57

Notes to the Financial Statements

For the Year Ended 31 August 2025

• 23 Retirement benefit schemes

(Continued)

Defined benefit schemes

The two defined benefit pension schemes are: The Teachers’ Pension Scheme England and Wales (“TPS”); and the Percy Hedley Pension Scheme (“PHPS”). The PHPS was closed to new members in 2012.

Percy Hedley Pension Scheme

The PHPS is a funded defined benefit pension scheme, with the assets held in separate trustee administered funds. The total contribution made for the year ended 31 August 2025 was £1,019,000 (2024 - £544,000), of which employer’s contributions totalled £942,000 (2024 - £487,000) and employees' contributions totalled £77,000 (2024 - £57,000).

The pensions cost is assessed every three years in accordance with the advice of a qualified independent actuary. The assumptions and other data that have the most significant effect on the determination of the contribution levels are as follows:

• Latest actuarial valuation: 31 August 2025

• Annuity rate of interest: 4.9%

• Discount rate: 4.8%

• Fair value of assets at date of last valuation: £20.18million

• Present value of liabilities at date of the valuation: £22.1 million

• Life expectancy at age 65: men - 21.3 years, women - 23.8 years

• Life expectancy at age 65 for members currently aged 50: men - 22.2 years, women - 24.9 years

The group operates a defined benefit scheme in the UK. A full actuarial valuation of the Percy Hedley Pension Scheme was carried out as at 31 August 2025 by a qualified independent actuary. As required by FRS 102 the defined benefit liabilities have been measured using the projected unit method. The scheme is closed to new entrants and further benefit accrual.

Key assumptions

Key assumptions
	2025	2024
	%	%
Discount rate	5.8	4.8
Expected rate of increase of pensions in payment	3.4	3.25
Expected rate of salary increases	2.8	2.55

Mortality assumptions

The assumed life expectations on retirement at age 65 are:

2025 Years Retiring today - Males 21 - Females 24 Retiring in 20 years - Males 22 - Females 25	2024 Years 21 24
	23 25

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The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

23 Retirement benefit schemes

(Continued)

Amounts recognised in the income statement:

Amounts recognised in the income statement:
	2025	2024
	£'000	£'000
Current service cost	85	-
Net interest on defned beneft liability/(asset)	190	267
Other costs and income	-	138
Total costs	275	405
Amounts taken to other comprehensive income:
	2025	2024
	£'000	£'000
Actual return on scheme assets	121	(1,905)
Less: calculated interest element	970	942
Return on scheme assets excluding interest income	1,091	(963)
Actuarial changes related to obligations	(2,804)	703
The amounts included in the statement of fnancial position arising from the charity's obligations in respect of defned beneft plans are as follows:
	2025	2024
	£'000	£'000
Present value of defined beneft obligations	22,091	24,437
Fair value of plan assets	(20,166)	(20,132)
Defcit in scheme	1,925	4,305
Movements in the present value of defned beneft obligations:
		2025
		£'000
Liabilities at 1 September 2024		24,437
Current service cost		85
Benefts paid		(864)
Contributions from scheme members		77
Actuarial gains and losses		(2,804)
Interest cost		1,160
At 31 August 2025		22,091

59

The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

The defned beneft obligations arise from plans funded as follows: Movements in the fair value of plan assets: The actual return on plan assets was £121k (2024 - £1,905k). The fair value of plan assets at the reporting period end was as follows: Wholly unfunded obligations Wholly or partly funded obligations Fair value of assets at 1 September 2024 Interest income Return on plan assets (excluding amounts included in net interest) Benefts paid Contributions by the employer Contributions by scheme members At 31 August 2025 Equity instruments Property Retirement beneft schemes 23

(Continued) 2025 £'000 22,091 22,091 2025 £'000 20,132 970 (1,091) (864) 942 77 20,166 2025 £'000 2024 £'000 96 20,166 20,036 20,166 20,132 - -

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The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

23 Retirement benefit schemes

(Continued)

Other long term benefits Teachers’ Pension Scheme

Introduction

The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme, governed by the Teachers’ Pension Scheme Regulations 2023. Membership is automatic for teachers in academy trusts. All teachers have the option to opt out of the TPS following enrolment.

The TPS is an unfunded scheme to which both the member and the employer make contributions, as a percentage of salary. These contributions are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament.

Valuation of the Teachers’ Pension Scheme

The Government Actuary, using normal actuarial principles, conducts a formal actuarial review of the TPS in accordance with the Public Service Pensions, (Valuations and Employer Cost Cap) Directions 2014 published by HM Treasury every 4 years. The aim of the review is to specify the level of future contributions. Actuarial scheme valuations are dependent on assumptions about the value of future costs, design of benefits and many other factors. The latest actuarial valuation of the TPS was carried out as at 31 March 2020. The valuation report was published by the Department for Education on 30 October 2023.

Scheme Changes

In December 2018, the Court of Appeal held that transitional protection provisions contained in the reformed judicial and firefighter pension schemes, introduced as part of public service pension reforms in 2015, gave rise to direct age discrimination and were therefore unlawful. The Supreme Court, in a decision made in June 2019, rejected the Government’s application for permission to appeal the Court of Appeal’s ruling and subsequently referred the case to an Employment Tribunal to determine a remedy which will need to be offered to those members of the two schemes who were subject of the age discrimination.

The key elements of the valuation and subsequent consultation are:

• employer contribution rates set at 28.68% of pensionable pay (including a 0.08% employer administration charge)

• total scheme liabilities (pensions currently in payment and the estimated cost of future benefits) forservice to the effective date of £262,000 million, and notional assets (estimated future contributions together with the notional investments held at the valuation date) of £222,200 million giving a notional past service deficit of £39,800 million.

• the SCAPE discount rate, set by HMT, is used to determine the notional investment return. Thecurrent SCAPE rate is 1.7% above the rate of CPI and is based on the Office for Budget Responsibility's forecast for long-term GDP growth.

The next valuation result is due to be implemented from 1 April 2027.

The employer’s pension costs paid to TPS in the period amounted to £737,000 (2024 - £529,000)

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The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements For the Year Ended 31 August 2025

24 Restricted funds

The restricted funds of the charity comprise the unexpended balances of donations and grants held on trust subject to specific conditions by donors as to how they may be used.

	At 1	Incoming	Resources	Resources	Transfers	At	31 August
	September	resources	expended				2025
	2024
	£'000	£'000	£'000		£'000		£'000
Education	67	66	(52)		3		84
Adult residential	7	-		-	(3)		4
	74	66	(52)		-		88
Previous year:
	At 1	Incoming	Resources		Transfers	At 31 August
	September	resources	expended				2024
	2023
	£'000	£'000	£'000		£'000		£'000
Education	40	142	(115)		-		67
Adult Day Services	6	-	(6)		-		-
Adult residential	30	2	(25)		-		7
	76	144	(146)		-		74

Education

Percy Hedley School, Northern Counties School and Percy Hedley college receive income from the Education Skills Funding Agency (ESFA) towards the education of our children and young people including grants that are set aside specifically for new sports equipment and for building maintenance improvements.

We also receive donations from Fundraising and Legacies that are restricted to a specific site or specific purpose.

Adult Day Services

Various small donations for use in our Adult Day Services.

Adult Residential

Various small donations for use in our Residential Services.

62

The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements For the Year Ended 31 August 2025

25 Analysis of net assets between funds

Unrestricted funds 2025 £'000 Restricted funds 2025 £'000 At 31 August 2025: Tangible assets 16,556 Investments 5,082 Current assets/(liabilities) 10,147 88 Long term liabilities (1,373) Provisions and pensions (1,925) 28,487 88 Unrestricted funds 2024 £'000 Restricted funds 2024 £'000 At 31 August 2024: Tangible assets 17,006 Investments 3,376 Current assets/(liabilities) 9,415 74 Long term liabilities (1,565) Provisions and pensions (4,305) 23,927 74 - - - - - - - -	Total 2025 £'000 16,556 5,082 10,235 (1,373) (1,925)
	28,575
	Total 2024 £'000 17,006 3,376 9,489 (1,565) (4,305)
	24,001

26 Operating lease commitments

Lessee

At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Within one year Between two and fve years In over fve years	2025 £'000 125 457 1,785 2,367	2024 £'000 47 81 465
		593

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The Percy Hedley Foundation Annual Report & Financial Statements

Notes to the Financial Statements

For the Year Ended 31 August 2025

27	Capital commitments		2025	2024
			£'000	£'000
	Amounts contracted for but not provided in the financial statements:
			2025	2024
			£'000	£'000
	Acquisition of property, plant and equipment		161	34
28	Related party transactions
	There were no disclosable related party transactions during the year (2024 - none).
29	Cash generated from operations		2025	2024
			£'000	£'000
	Surplus for the year		2,861	538
	Adjustments for:
	Investment income recognised in statement of fnancial activities		(519)	(447)
	Gain on disposal of investments		(181)	(325)
	Depreciation and impairment of tangible fxed assets		1,618	1,485
	Difference between pension charge and cash contributions		(667)	-
	Movements in working capital:
	(Increase)/decrease in debtors		(138)	1,597
	Increase/(decrease) in creditors		205	(446)
	(Decrease)/increase in deferred income		(330)	361
	Cash generated from operations		2,849	2,763
30	Analysis of changes in net funds
	At	1 September	Cash fows	At 31 August
		2024		2025
		£'000	£'000	£'000
	Cash at bank and in hand	11,211	493	11,704
	Loans falling due within one year	(182)	(10)	(192)
	Loans falling due after more than one year	(1,565)	192	(1,373)
		9,464	675	10,139

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The Percy Hedley Foundation Annual Report & Financial Statements