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2021-08-31-accounts

Company No. 2042309 Registered in England and Wales Charity No. 518009

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED (A Company Limited by Guarantee)

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2021

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS

Contents Page
Governors, Directors and Advisors 1
Annual Report of the Directors 3
Strategic Report 7
Statement of Accounting and Reporting Responsibilities 10
Independent Auditor’s Report 11
Statement of Financial Activities 14
Balance Sheet 15
Cash flow statement 16
Notes to the Financial Statements 18
Income and expenditure account 32

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED GOVERNORS, OFFICERS AND ADVISERS YEAR ENDED 31 AUGUST 2021

GOVERNORS, DIRECTORS AND CHARITY TRUSTEES

The Governors of Priory School Edgbaston Trustees Limited are the School’s charity trustees under charity law and they are the directors of the charitable company. Members of the Governing Body (Governing Council) who served in office as Governors during the year and subsequently are detailed below.

(1) (2) (3)
Ms H Somerfield(Chair) X X
Ms D Mattison(Vice Chair) X
Mr M Hunt Resigned 21 May 2021 X
Mr V Naik X
Mr S M Q Gilmore Resigned 21 May2021 X
Mr T J P Ryan X
Sister M Matthews X
Dr T Wood
Mrs A Cleary X

During the year certain activities of the Governing Body were carried out through three committees, being the following

Membership of Committees is shown above for each Governor.

Post Year- end Appointments to Governing Council

1

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED GOVERNORS, OFFICERS AND ADVISERS (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

ADVISORS

OFFICERS (currently and throughout the year)

Mr J Cramb BA Hons, PGCE, MEd Headmaster

Mr P Murphy LIB

Finance Director and Company Secretary

Registered Office

Priory School, 39 Sir Harry’s Road, Edgbaston, Birmingham, B15 2UR

Auditors

Crowe U.K. LLP, Rounds Green Road, Oldbury, West Midlands, B69 2DG

Bankers

Handelsbanken, 55 Calthorpe Road, Edgbaston, Birmingham B15 1TH

and

Barclays Bank, Birmingham Business Centre, 15 Colmore Row, Birmingham, B3 2EP

Website

www.prioryschool.net

2

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED DIRECTORS’ REPORT FOR THE YEAR ENDED 31 AUGUST 2021

The members of the Priory School Governing Body present their Annual Report for the year ended 31 August 2021 under the Charities Act 2011, including the Directors’ and Strategic Reports, under the Companies Act 2006, together with the audited financial statements for the year.

REFERENCE AND ADMINISTRATIVE INFORMATION

Priory School Edgbaston Trustees Limited is constituted as a company limited by guarantee registered in England, No. 2042309, and is registered with the Charity Commission under Charity No. 518009.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing documents

The School is governed by its Memorandum of Association and Articles of Association, as altered by special resolutions passed 29[th] May 2002 and 30[th] July 2002.

Governing Body

The Governing Council is the Governing Body. Council members are elected at a general meeting and must be proposed by a member qualified to attend and vote at such meetings, in accordance with the Memorandum and Articles of Association. The number of Council members in office should not be more than 16 and not less than 8, as provided in the Memorandum and Articles of Association.

Recruitment and training of Directors

New Directors (Members of the Governing Council) are introduced to the workings of the School, including Governing Council policy and procedures, by the Governor Nomination and Selection Committee. Directors also attend specialist external courses from time to time, for example on Safeguarding Training.

Organisational management

The Council members meet as a Board at least four times per annum to determine the general policy of the company and to review its overall management and control, for which they are legally responsible.

The Council members delegate day to day management of the School to the Headmaster and his senior management team, comprising the Finance Director, the Facilities Manager and the Deputy Heads and Assistant Heads of the Preparatory and Senior Schools. Together, this group are the key management personnel.

The Council operates a number of Committees with delegated responsibilities in specific areas. These include the Finance and General Purposes Committee, the Risk and Compliance Committee and the Governor Nomination and Selection Committee. The Head and Finance Director attend meetings of the Governing Council’s Committees. In addition, certain members of the Council have specific governance responsibilities in key areas such as Early Years, Child Protection, Marketing and Special Educational Needs.

The Finance and General Purposes Committee meets shortly before each meeting of the full Governing Council, specifically to review financial performance, budgets and management accounts. Responsibilities of this Committee also include Marketing, Facilities, Fundraising and Infrastructural Development projects. The Committee makes recommendations to Governing Council on the annual reviews of School Fee tariffs and Staff Salary scales.

3

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED DIRECTORS’ REPORT

FOR THE YEAR ENDED 31 AUGUST 2021

Employment policy

Delivery of the School’s charitable vision and purpose is primarily dependent on its key management personnel, and staff costs are the largest single element of charitable expenditure.

Remuneration policy is set by the Headmaster and Finance Director, subject to board (Council) approval, with the objective of providing appropriate incentives to encourage optimal performance and of rewarding individual contributions to the School’s success fairly and responsibly.

The appropriateness and relevance of remuneration policy is reviewed annually. While reviews include reference to conditions in the education sector generally, the School is free to set its pay scales independently. Here the objective is to ensure that the School remains sensitive to the broader issues of pay and employment conditions elsewhere, while adapting to local budgetary conditions

The School is an equal opportunities employer. Full and fair consideration is given to job applications from disabled persons and due attention is given to their training and employment needs.

Communication with employees continues through normal management channels, in particular through the Daily Bulletin in which staff are apprised of current issues and of key decisions affecting the school. Whole staff meetings, which are held termly, include briefings from the Headmaster, Finance Director, and other members of the senior management team.

Key Relationships

The School is a member of ISA (Independent Schools Association), AGBIS (Association of Governing Bodies of Independent Schools), and ISBA (Independent Schools Bursars’ Association).

Locally, the School is a member of the Birmingham Catholic Schools Partnership.

In recognition of its heritage, the School maintains links with the Society of the Holy Child Jesus and with sister schools in Ireland, Europe and North America.

We cooperate with a number of local organisations in our ongoing endeavours to widen public access to the schooling that we can provide, to optimise the use of our cultural and sporting facilities and to develop in our pupils an awareness of the social context of the education that they receive at the School. We are also involved in the Erasmus “Big Outdoors” project for Early Years children with schools in Sweden, Germany, Iceland and Austria.

The School also benefits from the generosity of its parents’ association, the Friends of Priory School, whose close support we greatly appreciate and gladly acknowledge.

OBJECTS, AIMS, OBJECTIVES AND ACTIVITIES

The company is established to advance education by running a School in the United Kingdom as a registered charity for the education of children of both sexes and all denominations.

The company’s principal activity remains the provision of independent education for children from Early Years to Sixth Form.

Strategic Aim

Priory School is a Catholic school which welcomes pupils of all faiths and abilities and is committed to delivering success for every child in its care, complementing academic life with performing arts, sports, and other extra-curricular activities designed to develop self-confident and well-rounded individuals.

Our aim is encapsulated in the following extract from our Mission Statement:

‘In partnership with parents or guardians, we provide a caring community with high standards of teaching and learning, enabling all pupils to achieve success .’

4

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED DIRECTORS’ REPORT FOR THE YEAR ENDED 31 AUGUST 2021

Principal activity

The company’s principal activity remains the provision of independent education for children from nursery to sixth form.

Serving the public benefit

In setting our objectives and planning our activities the Trustees have given careful consideration to the Charity Commission’s general guidance on public benefit. In particular, the School has continued to support the widening of access to our school by pupils from lower income families through the provision of Scholarships and Supported Places. However, as the School has no endowment fund, we have had to maintain a careful balance between fee paying parents and those benefiting from the awards, in order to ensure our ongoing financial viability and to support further development of the School

The Scholarship scheme offers access to our School for bright pupils who excel academically or in areas such as sport, art, music or drama. During the 2020/2021 academic year we have again complemented the Scholarship scheme with Supported Place awards, which have been means-tested and which have further supplemented the Scholarship award in appropriate cases.

The Council views our Scholarship and Supported Places awards as essential in helping to ensure that children from families who would otherwise not be able to afford the fees can access the education that we offer. Additionally, awards of Bursaries are made on the basis of parental means or to relieve financial hardship where an existing pupil’s place might otherwise be at risk. To underline the value that we place on continuity for families, we continue to offer sibling discounts where parents have more than one child at the School.

The Trustees achieve the wider public benefit aim by providing use of the school’s facilities for a range of community events and activities, including car parking for major sporting events at Edgbaston Priory Club (tennis tournaments) and at Edgbaston Stadium (cricket test matches).

Other beneficiaries of this policy this year included

The School continues to play an active part in seeking to extend its charitable activities to the general public and is willing to assist and support in areas of need. We encourage our pupils to be good team players who are able to think independently and lead when required and we seek to foster a strong sense of the pupils’ place in their local community and wider society.

We play a key role in the Catholic Partnership, which consists mainly of state schools, by hosting sports events and by opening our acclaimed Forest School to Partnership pupils. Our pupils also serve the community by entertaining residents of Sunrise Senior Living Care Home in Edgbaston and residents of the Little Sisters of the Poor Care Home in Harborne with singing and music. Our pupils also serve the community by suggesting charities to support and by actively engaging in fund raising activities in support of worthy causes, including

5

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED DIRECTORS’ REPORT FOR THE YEAR ENDED 31 AUGUST 2021

STRATEGIC REPORT

FINANCIAL REVIEW

Results for the year

The School had reported a deficit of £476k in the year ending 31 August 2020. This followed many years of satisfactory surplus outcomes. The unfortunate reverse in our fortunes was largely attributed to the devastating effects of the Coronavirus pandemic which inevitably entailed a severe drop in in school fee revenue. Total potential loss had been partially mitigated by the extensive use of the government’s job retention (furlough) scheme.

The effects of the pandemic continued to be felt in the year under report, during which the Governing Council again oversaw the implementation of appropriate changes in operational practices and procedures. The teaching and support staff continued to show extraordinary commitment, and the remote learning arrangements were further developed prior to the full resumption of in - school teaching. The extensive support thus provided to pupils and parents was the subject of much favourable comment.

Other factors which may have contributed to a continuing drop in Pupil numbers and school fee revenue over the last two years include the changes made by the School to meet the exacting ‘Section 48’ inspection requirements of the Catholic Archdiocese of Birmingham. These changes were not universally welcomed by an increasingly diverse multi – faith cohort of pupils and parents. This issue will be addressed by the Governing Council in 2022 following widespread consultation.

The final result for the year ended 31 August 2021 was a deficit of £217k, an improvement of some £259k on the previous year. This reflected active ongoing credit control and significant reductions in costs, which were carefully managed to ensure that the quality of our educational product was not impaired.

The control of staff costs, our biggest expense, was a particular focus of management. For the duration of the pandemic, with the associated pressure on the School’s financial position, the Priory teacher salary scale has not been in force. Teachers, however, welcomed the Board’s approval of a general 1.00% increase in their salaries from 1 March 2021, while salaries of hourly paid staff were adjusted in line with annual changes in the National Living Wage. Cost savings were also secured through certain voluntary reductions in contracted working hours and by non - replacement of departing staff where possible. This latter initiative required further changes in working practices and was affected with the understanding and cooperation of the affected personnel.

Total school fees receivable increased year on year by £228k (2019/20 £1,181k decrease), after taking into account

and

The 2019/20 decrease in school fees was influenced by the variety of measures taken during the COVID outbreak. These included partial School closures, and deep discounts offered to assist parents. These measures were not repeated in 2020/21.

Average pupil numbers were 395 for the year (2019/20 - 411). Senior School numbers, including Sixth Form, at 210 reduced by 5 while Prep School numbers reduced by 17 to 112. Numbers in Poppets (including Nursery) increased by 6 to 73.

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PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED DIRECTORS’ REPORT FOR THE YEAR ENDED 31 AUGUST 2021

In furtherance of our aim to widen access to the School, we have made means-tested awards to 66 pupils (2019/20 – 39 pupils) with a total value of £212k for the year (2019/20 - £194k). This represents 4.20% of our gross tuition fee income.

Teaching staff numbers reduced slightly, being 84 at August 2021 (88 in August 2020), while teaching staff costs reduced by some £250k, partly reflecting the offsetting effect of the remaining furlough receipts and the absence of the normal annual pay awards as well as lower numbers – a planned reduction achieved through non replacement of some departing teachers.

Reserves Level and Policy and Financial Viability

The school’s total reserves were £1,429,850 at the year - end. £1,147,103 of this represented the net book value of fixed assets, leaving free reserves of £282,747 (2020 £286,776) against a policy of £503k. There was no restricted income.

The Council’s continuing policy is to seek to have free reserves at a level sufficient to enable the School to withstand consequential pupil losses of up to 10%. The target level of free resources on this basis is approximately £503k. There is, therefore, a shortfall of £220k against the desired reserve level as a consequence of the financial outcomes mentioned above.

The Council has reviewed financial projections for the future. These projections reflect the School’s aim to return to growth in pupil numbers throughout the school and to increase net income through modest annual increases in school fee tariffs while continuing the policy of providing judiciously for scholarships, supported places and bursaries. Combined with continued attention to credit control and costs, achievement of this strategic objective should deliver future surpluses and enable the School to restore its free reserves to the target level over the medium term. In the short term, however, it will take some further time to recover from the financial effects of the downturn.

The Council expects to progress towards break even in 2021/202, with growing surpluses in the following years. The cash position has remained positive through the crisis years and should sustain the school through any foreseeable further short-term reverse in revenues for the immediate future. On this basis the going concern status is considered appropriate.

PRINCIPAL RISKS AND UNCERTAINTIES

The Council continues to keep under review the School’s activities, the risks that may arise from them and the internal controls, systems and procedures established to manage them.

Detailed consideration of risk is delegated to the Risk and Compliance Committee, which meets three times a year and reports formally to the Governing Body. The structure of the Committee comprises two members of the Governing Council, assisted by Senior Management.

The risk management process adopted by the Risk and Compliance Committee identifies major risks, assesses their impact and likelihood and, where necessary, recommends controls to mitigate and monitor those risks that are assessed as high. Mitigation measures include ensuring that appropriate insurance cover is in place to cover any insurable risks identified.

The key risks and actions to mitigate those areas are as follows:

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PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED DIRECTORS’ REPORT FOR THE YEAR ENDED 31 AUGUST 2021

Risk identified Mitigation
Damage to reputation
from fraud, accident,
unsatisfactory inspection
reports or adverse media
coverage		 Careful financial management by Governing Council, supported by a
Finance and General Purposes Committee and by the Finance
Director;
A Risk and Compliance Committee of the Board with specific
delegated responsibility for Health & Safety meets three times a year
and reviews policy, practice, and any incidents requiring Board level
attention.
Continuous programme of campus security improvements in place
All external and parent communications channelled through senior
management for immediate attention;
Detailed risk register maintained by the Facilities Manager
Reduction in pupil
numbers		 Heavy emphasis on and continuing investment in marketing;
Close involvement of senior management in pupil recruitment process;
Increased focus on improving the academic achievement of pupils

Other risk aspects:

The Trustees consider the affordability of fees by parents across the independent sector to be the principal financial risk faced by the School, especially as local competition from other independent schools remains intense. In recognition of these factors, and the particular circumstances of the pandemic, the Governing Council decided on this occasion to forego the usual annual increase in school fee tariffs.

Health and Safety is always a significant area for risk management. The risks generally range from fire and infrastructure to personal risks (most notably when away from the campus on trips and expeditions). The level and breadth of activity at the School is impressive and the risks associated with all activities are minimised by thorough planning and risk assessment. A particular concern in the year under review was the management of the public health risks associated with the pandemic outbreak. This risk was mitigated by strict adherence to government guidelines and by some judicious changes in the internal and external infrastructure of the School to facilitate the maintenance of social distancing

The generic controls used by the School to minimise risk include:

8

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED DIRECTORS’ REPORT

FOR THE YEAR ENDED 31 AUGUST 2021

FUTURE PLANS

2021/2022 will be another challenging year for Priory School, in which we shall seek to contain the impact of the pandemic and to start growing pupil numbers again.

Plans include:

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PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED DIRECTORS’ REPORT FOR THE YEAR ENDED 31 AUGUST 2021

STATEMENT OF ACCOUNTING AND REPORTING RESPONSIBILITIES

The trustees (who are also the directors of Priory School for the purposes of company law) are responsible for preparing the Annual Report and the financial statements with applicable law and United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards).

Company law requires the trustees to prepare financial statements for each financial year. Under that law the trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards) and applicable law.

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 resources and application of resources for that period. In preparing these financial statements, the Governing Body members are required to:

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions, 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 and the provisions of the charity’s constitution. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Relevant Audit Information

Insofar as each of the Directors, as members of the Governing Body, at the date of approval of this report is aware there is no relevant audit information (information needed by the Company’s auditor in connection with preparing the audit report) of which the Company’s auditor is unaware. Each member of the Governing Body has taken all the steps that he or she should have taken as a member of the Governing Body in order to make himself or herself aware of the relevant audit information and to establish that the Company’s auditor is aware of that information.

Approved by the Governing Council of Priory School Edgbaston on 2 March 2022 including, in their capacity as company directors, approving the Directors’ and Strategic Reports contained herein, and signed on its behalf by:

H Somerfield

H Somerfield

Chair of Governing Council

10

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 AUGUST 2021

Opinion

We have audited the financial statements of Priory School Edgbaston Trustees Limited for the year ended 31 August 2021 which comprise the Statement of Financial Activities, the Balance sheet, the Statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

The 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 or 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.

11

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 AUGUST 2021

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ Report including the Strategic 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:

Responsibilities of trustees

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

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

Auditor’s responsibilities for the audit of the financial statements

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

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

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

12

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 AUGUST 2021

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

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

We obtained an understanding of the legal and regulatory frameworks within which the charitable company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, taxation legislation, together with the Charities SORP (FRS 102). We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items.

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

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and other management and inspection of regulatory and legal correspondence, if any. We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing of recognition of donation and ancillary income, procurement processes for significant capital projects and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management, and the Finance & General Purposes Committee about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals, reviewing accounting estimates for biases, reviewing regulatory correspondence with the Charity Commission, Independent Schools Inspectorate, Ofsted and reading minutes of meetings of those charged with governance.

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

13

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31 AUGUST 2021

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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.

Helen Drew (Senior statutory auditor)

For and on behalf of

Crowe U.K. LLP

Statutory Auditor

Black Country House Rounds Green Road Oldbury West Midlands B69 2DG Date: 14 March 2022

14

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED STATEMENT OF FINANCIAL ACTIVITIES

(INCORPORATING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 AUGUST 2021

Note
Unrestricted
Funds
£
Income from:
Charitable activities
School fees receivable
2
4,207,764
Ancillary trading income
3
169,009
Other trading activities
4
9,973
Investments
5
19
Donations and legacies
6
-
Other income
7
20,311
Total incoming resources
4,403,576
Expenditure on:
Raising funds
Financing costs
8
(8,340)

Charitable activities
Education
9
4,629,362

Total expenditure
4,621,022
Net incoming funds from operations before
transfers
(217,446)

Net movement in funds for the year
(217,446)
Fund balances at 1 September 2020
1,647,296
Fund balances at 31 August 2021
1,429,850		 2021
Total
£
4,207,764
169,009
9,973
19
-
20,311
4,403,576
(8,340)
4,629,362
4,621,022
(217,446)
(217,446)
1,647,296
1,429,850		 2020
Total
£
3,873,241
197,766
7,240
3,977
1,000
439,605
4,522,829
164,705
4,395,270
4,559,975
(476,121)
(476,121)
2,123,417
1,647,296

The notes on pages 18 to 31 form part of these financial statements

15

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED BALANCE SHEET

AS AT 31 AUGUST 2021

Note
FIXED ASSETS
Tangible assets
11
CURRENT ASSETS
Debtors
12
Cash and deposits
CURRENT LIABILITIES
Creditors payable within one year
13
NET CURRENT ASSETS
NET ASSETS
REPRESENTED BY:
UNRESTRICTED FUNDS
General Reserve
17		 2021
£
1,147,103
344,109
744,179
1,088,288
(805,541)
282,747
1,429,850
1,429,850		 2020
£
1,360,520
466,275
420,770
887,045
(600,269)
286,776
1,647,296
1,647,296

These financial statements were approved by the Governing Body and signed on its behalf by:

H Somerfield

H Somerfield (Chair) Date: 2 March 2022

The notes on pages 18 to 31 form part of these financial statements

16

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED

CASH FLOW STATEMENT

AS AT 31 AUGUST 2021

Net cash outflow from operations
Net cash provided by operating activities
Cash flows from investing activities:
Payments for tangible fixed assets
Investment income and bank interest received
Net cash used in by investing activities
Cash flows from financing activities:
Finance costs paid
Repayment of borrowings
Net cash provided by financing activities
Change in cash and cash equivalents in the period
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period		 2021
2020
£
£
£
£
326,517
(227,141)
(11,467)
(34,747)
19
3,977
(11,448)
(30,770)
8,340
(164,705)
-
-
8,340
(164,705)
323,409
(422,616)
420,770
843,386
744,179
420,770

The notes on pages 18 to 31 form part of these financial statements

17

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED NOTES TO THE CASH FLOW STATEMENT AS AT 31 AUGUST 2021

(i)
Reconciliation of net income to net cash flow from operating activities
2021
£
Net incoming resources
(217,446)
Elimination of non-operating cash flows:
- Investment income
(19)
- Finance costs
(8,340)
Depreciation charge
224,884
Decrease/(Increase) in debtors
122,166
Increase/(Decrease) in creditors (excluding fees
in advance and deposit)
76,641
Increase/(Decrease) in fees in advance scheme
creditors
136,681
(Decrease) in parents’ deposits
(8,050)
Net cash inflow/(outflow) from operations
326,517
(ii)
Analysis of cash and cash equivalents
Cash at bank
744,179
(iii) Analysis of changes in net debt
At 1
September
2020
Cash
flows
Other
non-cash
changes
£
£
£
Cash at bank and in hand
420,770
323,409
-		 2020
£
(476,121)
(3,977)
164,705
225,405
(41,432)
(87,720)
(6,806)
(1,195)
(227,141)
420,770
At 31
August
2021
£
744,179

18

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 AUGUST 2021

1. ACCOUNTING POLICIES

1.1 Basis

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The functional currency of the School is considered to be sterling because that is the currency of the primary economic environment in which the School operates.

The Trustees have a reasonable expectation that Priory School Edgbaston Trustees Limited has adequate resources to continue in operational existence for the foreseeable future. There are no material uncertainties about the School’s ability to continue and therefore the Trustees adopt the going concern basis of accounting in preparing the financial statements.

The School is a Public Benefit Entity registered as a charity in England and Wales and a company limited by guarantee. It was incorporated on 30 July 1986 (company number: 2042309) and registered as a charity on 6 October 1986 (charity number: 518009). The registered office and principal place of business is 39 Sir Harry’s Road, Edgbaston, Birmingham, B15 2UR.

1.2 Critical accounting judgements and key sources of estimation uncertainty

In the view of the trustees, no assumptions concerning the future or estimation uncertainty affecting assets or liabilities at the balance sheet date are likely to result in a material adjustment to their carrying amounts in the next financial year.

1.3 Fees and similar earned income

Fees receivable and charges for services and use of the premises, less any allowances, scholarships, bursaries granted by the School against those fees, but including contributions received from restricted funds, are accounted for in the period in which the service is provided.

Fees received in advance of education to be provided in future years are treated as deferred income and included within creditors.

1.4 Donations, legacies, grants and other voluntary incoming resources

Voluntary incoming resources are accounted for as and when entitlement arises, the amount can be reliably quantified and the economic benefit to the School is considered probable.

Voluntary income for the School’s general purposes is accounted for as unrestricted and is credited to the General Reserve. Where the donor or an appeal has imposed trust law restrictions, voluntary income is credited to the relevant restricted fund.

19

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

ACCOUNTING POLICIES (continued)

1.5 Expenditure

Expenditure is accrued as soon as a liability is considered probable, discounted to present value for longer-term liabilities. Expenditure attributable to more than one cost category in the SoFA is apportioned to them on the basis of the estimated amount attributable to each activity in the year, either by reference to staff time or the use made of the underlying assets, as appropriate. Irrecoverable VAT is included with the item of expenditure to which it relates.

Grants awarded are expensed as soon as they become legal or operational commitments.

Governance costs comprise the costs of complying with constitutional and statutory requirements.

1.6 Tangible fixed assets

Fixed assets are stated at historical cost less accumulated depreciation. Depreciation is provided on all tangible fixed assets at rates calculated to write each asset down to its estimated residual value, evenly over its expected useful life, as follows:

Depreciation is provided in full in the year of acquisition.

Expenditure of a capital nature below £500 are not capitalised.

1.7 Debtors

Trade and other debtors are recognised at the settlement amount after any trade discounts offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

1.8 Creditors and provisions

Creditors and provisions are recognised where the School has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

1.9 Fund accounting

The charitable trust funds of the School are accounted for as unrestricted or restricted income

Unrestricted income belongs to the Schools’ corporate reserves, spendable at the discretion of the Trustees either to further the School’s Objects or to benefit the School itself. Where the Trustees decide to set aside any part of these funds to be used in future for some specific purpose, this is accounted for by transfer to the appropriate designated fund.

Restricted income comprises gifts, legacies and grants where there is no capital retention obligation or power but only a trust law restriction to some specific purpose intended by the donor.

20

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

ACCOUNTING POLICIES (continued)

1.10 Pension costs

Retirement benefits to employees of the School who are teachers are provided through a defined benefit scheme. The pension costs charged in the Statement of Financial Activities are determined as follows:

The Teachers’ Pension Scheme - This scheme is a multi-employer pension scheme. It is not possible to identify the Schools’ share of the underlying assets and liabilities of the Teachers’ Pension Scheme on a consistent and reasonable basis and therefore, as required by FRS102, accounts for the scheme as if it were a defined contribution scheme. The Schools’ contributions, which are in accordance with the recommendations of the Government Actuary, are charged in the period in which the salaries to which they relate are payable.

1.11 Operating leases

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

1.12 Financial instruments

Basic financial instruments are initially recognised at transaction value and subsequently measured at amortised cost. Financial assets held at amortised cost comprise cash at bank and in hand, together with trade and other debtors. A specific provision is made for debts for which recoverability is in doubt. Financial liabilities held at amortised cost comprise all creditors except social security and other taxes and provisions.

1.13 Cash at Bank and in hand

Cash at bank and in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

2. CHARITABLE ACTIVITIES – FEES RECEIVABLE

Fees receivable consist of:
School fees
Less: total scholarships and bursaries		 2021
£
5,027,130
(819,366)
4,207,764		 2020
£
4,799,294
(926,053)
3,873,241

Scholarships, bursaries and other awards were paid to 209 pupils ( 2020: 188 ). Within this meanstested bursaries totalling £212,284 were paid to 66 pupils ( 2020: £193,537 to 60 pupils ).

21

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

3.
CHARITABLE ACTIVITIES – OTHER INCOME
Extras
Entrance and registration fees
Excursions
Commissions and other income
4.
OTHER TRADING ACTIVITIES
Other activities
Lettings
Other
5.
INVESTMENTS
Bank interest
6.
DONATIONS AND LEGACIES
Other donations
7. OTHER INCOME
Government grant		 2021
£
125,050
36,653
-
3,806
165,509
2021
£
3,500
6,473
9,973
Total
2021
£
19
Total
2021
£
-
Total
2021
£
20,311		 2020
£
147,496
40,756
-
9,514
197,766
2020
£
1,920
5,320
7,240
Total
2020
£
3,977
Total
2020
£
1,000
Total
2020
£
439,605

The government grant received during the year related to the Coronavirus Job Retention Scheme.

22

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

8.
ANALYSIS OF EXPENDITURE
(a) Total expenditure
Staff costs
Depreciation
(note 10)
(note 11)
£
£
Costs of generating funds
Financing costs (note 9)
-
-
Total
costs
of
generating
funds
-
-
Charitable expenditure
Education
Teaching
2,864,561
-
Welfare
-
-
Premises
317,649
224,884
Support costs and governance
301,968
-
Total charitable expenditure
3,484,178
224,884
Total expended
3,484,178
224,884
Total expenditure comparative
Staff costs
Depreciation
(note 10)
(note 11)
£
£
Costs of generating funds
Financing costs (note 9)
-
-
Total costs of generating funds
-
-
Charitable expenditure
Education
Teaching
2,864,561
-
Welfare
-
-
Premises
327,613
225,405
Support costs and governance
231,685
-
Total charitable expenditure
3,266,534
225,405
Total expended
3,266,534
225,405		 Other
£
(8,340)
(8,340)
148,460
324,455
266,861
180,524
920,300
911,960
Other
£
164,705
164,705
254,328
219,764
361,969
67,270
903,331
1,068,036		 Total
2021
£
(8,340)
(8,340)
3,013,021
324,455
809,394
482,492
4,629,362
4,621,022
Total
2020
£
164,705
164,705
2,961,564
219,764
914,987
298,955
4,395,270
4,559,975		 Total
2020
£
164,705
164,705
2,961,564
219,764
914,987
298,955
4,395,270
4,559,975
Total
2019
£
96,123
96,123
3,249,008
254,880
906,641
621,449
5,031,978
5,128,101

23

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

8.
ANALYSIS OF EXPENDITURE (CONTINUED)
(b)
Governance included in support costs:
Remuneration paid to auditor for audit services
Other governance costs
9.
FINANCE AND OTHER COSTS
Bank charges
Bad and doubtful debts
10.
STAFF COSTS
The aggregate payroll costs for the year were as follows:
Wages and salaries
Social security costs
Other pension costs
Supply staff costs
Staff restructuring costs		 2021
£
11,490
57,217
68,707
2021
£
9,434
(17,774)
(8,340)
2021
£
2,772,528
259,195
428,063
3,459,786
24,392
-
3,484,178		 2020
£
13,547
66,090
79,637
2020
£
8,317
156,388
164,705
2020
£
2,552,619
251,759
460,976
3,265,354
1,180
-
3,266,534

None of the members of the governing body received any remuneration or other benefits from Priory School or from any connected body.

Travel expenses reclaimed by members of the governing body – Nil (2020: Nil) .

Aggregate employee-benefits of key management personnel

647,217 534,157

24

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

10.
STAFF COSTS (CONTINUED)
Number of higher paid employees in taxable emoluments bands of:
£120,001 to £130,000
The number with retirement benefits accruing
- in Defined Benefit schemes was
of which contributions amounted to		 2021
1
1
29,941		 2020
1
1
£29,792

The average number of persons employed by the School during the year was as follows:

2021 2020
Teaching 83 88
Other activities 24 25
107 113

25

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

11. TANGIBLE FIXED ASSETS

Leasehold
Fixtures,
Fittings &
Improvements
Equipment
£
£
Cost
At 1 September 2020
2,035,975
690,057
Additions
1,951
9,516
Disposals
-
-
At 31 August 2021
2,037,926
699,573
Depreciation
At 1 September 2020
798,840
566,672
Charge for the year
173,268
51,616
Disposals
-
-
972,108
618,288
At 31 August 2021
Net book value
At 31 August 2021
1,065,818
81,285
At 31 August 2020
1,237,135
123,385		 Total
£
2,726,032
11,467
-
2,737,499
1,365,512
224,884
-
1,590,396
1,147,103
1,360,520

12. DEBTORS

Trade debtors
Other debtors
Prepayments and accrued income		 2021
£
225,912
16,967
101,230
344,109		 2020
£
269,833
17,977
178,465
466,275

An impairment gain of £17,774 (2020: Loss of £156,387) was recognised against the School Fees debtors during the year.

26

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

13. CREDITORS: amounts falling due within one year

Deposits from parents
Deferred income
Trade creditors
Taxes and Social Security Cost
Accruals and other creditors		 2021
£
(130,336)
(425,796)
(86,843)
(62,314)
(100,252)
(805,541)		 2020
£
(138,386)
(289,115)
1,968
(63,710)
(111,026)
(600,269)

The Governors have reviewed the contract terms under which Pupil fee deposits are held by the school. Although under normal circumstances these will be repaid over future years when the pupils complete their education at the school, pupils can leave at earlier dates. The school does not therefore have an unconditional right to retain the individual deposits for at least 12 months after the balance sheet date and, in line with the requirements in FRS 102, the balance of the deposits held at 31 August 2021 have been included within current liabilities. The prior year Pupil fee deposits balance has been similarly represented.

14. DEFERRED INCOME

Summary of movements in liability £
Balance at 1 September 2020 289,904
Amounts released to incoming resources (289,904)
Amounts deferred in the year 425,796
Balance at 31 August 2021 425,796

Deferred income comprises school fees received in advance and trip monies received in advance.

27

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

15. FINANCIAL INSTRUMENTS

Investment income for financial assets measured at fair value through income and expenditure amounted to £19 (2020: £3,977).

16. OPERATING LEASES

The commitments due over the life of the leases, under non-cancellable operating leases are analysed as follows:

< 1 year
2 – 5 years
> 5 years
Total		 2021
17,872
38,468
171,000
227,340		 2020
23,482
43,326
175,500
242,308

The operating lease expense charged in the year was £18,185 ( 2020: £ 23,756 ).

28

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

17. STATEMENT OF FUNDS

Balance at 1
September
2020
£
Unrestricted funds
General funds
1,647,296
Total Funds
1,647,296
STATEMENT OF FUNDS – PRIOR YEAR
Balance at 1
September
2019
£
Unrestricted funds
General funds
2,123,417
Total Funds
2,123,417
SUMMARY OF FUNDS
At 1
September
2020
£
Unrestricted funds
1,647,296
Total Funds
1,647,296
SUMMARY OF FUNDS – PRIOR YEAR
At 1
September
2019
£
Unrestricted funds
2,123,417
Total Funds
2,123,417		 Incoming
resources
Resources
expended
Transfers
between
funds
Balance at
31 August
2021
£
£
£
£
4,403,576
(4,621,022)
-
1,429,850
4,403,576
(4,621,022)
-
1,429,850
Incoming
resources
Resources
expended
Transfers
between
funds
Balance at
31 August
2020
£
£
£
£
4,083,854
(4,559,975)
-
1,647,296
4,083,854
(4,559,975)
-
1,647,296
Incoming
Resources
At 31
resources
expended
Transfers
August
2021
£
£
£
£
-
(217,446)
-
1,429,850
-
(217,446)
1,429,850
Incoming
Resources
At 31
resources
expended
Transfers
August
2020
£
£
£
£
-
(476,121)
-
1,647,296
-
(476,121)
-
1,647,296

29

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

18. ANALYSIS OF NET ASSETS BETWEEN FUNDS

Unrestricted
Fund balances at 31 August 2021 are represented by:
£
Tangible fixed assets
1,147,103
Current assets
1,088,288
Current liabilities
(805,541)
1,429,850		 Total
£
1,147,103
1,088,288
(805,541)
1,429,850

ANALYSIS OF NET ASSETS BETWEEN FUNDS – PRIOR YEAR

Unrestricted
Fund balances at 31 August 2020 are represented by:
£
Tangible fixed assets
1,360,520
Current assets
887,045
Current liabilities
(600,269)
1,647,296		 Total
£
1,360,520
887,045
(600,269)
1,647,296

19. PENSION SCHEMES

Teachers’ Pension Scheme

The School participates in the Teachers’ Pension Scheme (England and Wales) (“the TPS”) for its teaching staff. The pension charge for the year includes contributions payable to the TPS of £428,063 (2020: £400,027) and at the year-end £33,751 (2020: £36,117) was accrued in respect of contributions to this scheme.

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

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

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

30

PRIORY SCHOOL EDGBASTON TRUSTEES LIMITED INCOME AND EXPENDITURE ACCOUNT (CONTINUED) FOR THE YEAR ENDED 31 AUGUST 2021

19. PENSION SCHEMES (CONTINUED)

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

The TPS is subject to a cost cap mechanism which was put in place to protect taxpayers against unforeseen changes in scheme costs. The Chief Secretary to the Treasury, having in 2018 announced that there would be a review of this cost cap mechanism, in January 2019 announced a pause to the cost cap mechanism following the Court of Appeal’s ruling in the McCloud/Sargeant case and until there is certainty about the value of pensions to employees from April 2015 onwards. The pause was lifted in July 2020, and a consultation was launched on 24 June on proposed changes to the cost control mechanism following a review by the Government Actuary. The consultation closed to response on 19 August 2021 and the Government is currently analysing the responses.

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

20. RELATED PARTY TRANSACTIONS

There were no related party transactions in the year.

31