Annual Report and Financial Statements
Year ended 31 July 2023
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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
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Contents
Key Management Personnel, Board of Governors and Professional Advisers
3
Strategic Report
4
Statement of Corporate Governance and Internal Control
15
Statement of Regularity, Propriety and Compliance
23
Statement of Responsibilities of the Members of the Corporation
24
Independent Auditor’s Report on the Financial Statements
25
Consolidated and College Statements of Comprehensive Income and
Expenditure
28
Consolidated and College Balance Sheets
29
Consolidated and College Statement of Changes in Reserves
30
Consolidated Statement of Cash Flows
31
Notes to the Financial Statements
32 to 55
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Reference and Administrative Details
Key Management Personnel, Board of Governors and Professional Advisers
Board of Governors
Paul Jackson, Chair of Board of Governors, Started February 2023
Martin Cumella, Chair of Board of Governors, Resigned January 2023
A full list of Governors is given on pages 15-16
Clerk to the Corporation
Judith Nelson
Key Management Personnel
Key management personnel are defined as members of the College Executive Team and were
represented by the following:
Paul Stephen
Principal and Accounting Officer & CEO
Judith Abbott
Chief Operating Officer
Jamie Purser
Deputy CEO
Principal and Registered Office
East Ham Campus
High Street South
London E6 6ER
Professional Advisors
Financial statements auditors and
reporting accountants
RSM UK Audit LLP,
25 Farringdon Street
London EC4 4AB
Internal Auditors
Scrutton Bland
Fitzroy House, Crown Street, Ipswich, Suffolk IP1 3LG
Bankers
Barclays Bank PLC
1 Churchill Place
London E14 5HP
Solicitors
Eversheds Sutherland Ltd
Two New Bailey, 6 Stanley Street
Manchester M3 5GX
Irwin Mitchell Solicitors
Riverside East
2 Millsands
Sheffield S3 8DT
Actuaries
Barnett Waddingham LLP
London Wall Place, 2, 123 London Wall,
London EC2Y 5AU
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STRATEGIC REPORT
OBJECTIVES AND STRATEGY
The governing body present their annual report together with the financial statements and auditor’s
report for Newham College for the year ended 31 July 2023.
Legal status
The Corporation was established under the Further and Higher Education Act 1992 for the purpose of
conducting Newham College of Further Education. The college is an exempt charity for the purposes
of Part 3 of the Charities Act 2011.
Mission, Vision, Strategy and Objectives
College mission statement
The mission of the College is to develop the skills, confidence and qualifications for local people to
lead rich lives and build great careers.
College values
Newham College is a values-driven organisation, committed to a culture of integrity and living by the
Nolan Principles of Public Life: selflessness, integrity, objectivity, accountability, openness, honesty
and leadership.
In consultation with staff and students we have articulated our values around aspiration.
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College strategy
The College has an approved strategic plan for 2022-2027. There are four commitments within it – the
key building blocks - that Newham College will develop over the duration of the plan:
1. As a strong anchor institution, we will play a prominent role in supporting our local
communities to thrive
2. We will create pathways to great careers in Newham and East London through expert
teaching of a modern, relevant curriculum focused on the strongest opportunities for
sustainable employment
3. We will actively pursue local, regional and national collaboration to meet London’s social
and economic challenges
4. We will run the college efficiently to deliver financial sustainability and investment in our
staff, physical and virtual infrastructure
Strategic KPIs for the year, and progress, were as follows:
Anchor Institution:
1. Build the College’s standing and external reputation through senior representation and influence on
key external stakeholder groups
2. Continue the FE Climate Roadmap journey to embed “Established” level of maturity in our approach
to sustainability and develop a costed decarbonisation plan
3. Design, develop and deliver a programme of tailored training, support and mentoring to progress the
EDI leadership targets of 40% ethnic minority representation in senior leadership and 50% leadership
/management roles by 2030
Pathways to Great Careers:
1. Meet Y1 recruitment and progression targets for L4 digital programmes
2. Complete the “bespoke consultation” process and join the OfS register
3. Successful delivery of Y1 IoT business plan, and co-creation of Y2 plan with employers
4. Develop and embed methodologies for increasing the capture of student destinations, including the
formation of an alumni group
Collaboration:
1. Deliver training programmes to at least 750 learners in collaboration with employer partners, with at
least 300 securing employment following their training
2. Create an employer engagement/local skills strategy and set up/join employer advisory boards for
priority sectors (health, digital, engineering)
Financial sustainability and Investment:
1. Become an employer of choice, recognised for fairness, equality of opportunity, and purpose –
measured by GLA Good Work Standard accreditation; early acceptance of a sustainable pay award;
retention of key staff; impact of CPD programme on promoting whole College FE literacy; and staff
satisfaction
2. Implement phase 1 EHC and SC campus redevelopment and T Level projects on programme and to
budget, whilst bidding for further phase funding as available.
3. Grow and retain 16-18 students beyond contract, and where appropriate, seek in year funding
Resources
The college employs 438 people, of whom 180 are teaching staff.
The college enrolled approximately 8,840 students. The college’s student population included 1,715
16-to-18-year-old students, 210 apprentices, 134 pre16 students and 6,781 adult learners.
The college has £39.1 million (2022: £32.3 million) of net assets excluding £nil defined benefit
pension asset (2022: £3.8 million liability) and long-term debt of £21.4 million (2022: £16.6 million).
Tangible resources include the 2 main college sites, East Ham Campus and Stratford Campus together
with a £28 m state of the art Institute of Technology at London City Island, a joint venture with Queen
Mary University, which fully opened in September 2023 after partially opening in 2022. The college also
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holds £14,250k cash at bank as at 31 July 2023 (2022: £13,017k), much of which is earmarked for
investment in long-overdue improvement works on the two main campuses.
The college has a good reputation locally and nationally. In its most recent Ofsted Inspection in October
2022, it was rated Good and was the first college nationally to be assessed as making a strong
contribution to meeting skills needs (the highest possible rating for this new area of assessment).
Stakeholders
The College has many stakeholders including:
• its current, future and past students
• its staff and their trade unions such as UCU & GMB. The senior management team are
named on page 3.
• the local employers it works with, such as BARTS National Health Trust
• Queen Mary University (QMU), with whom it is partnering on an Institute of Technology
• London Borough of Newham
• The Newham Chamber of Commerce
• Greater London Authority (GLA)
• Education and Skills Funding Agency (ESFA)
The College recognises the importance of the relationships with its stakeholders and is in regular
communication with them through the College internet site and by meetings.
Public benefit
Newham College is an exempt charity under the Part 3 of the Charities Act 2011 and is regulated by
the Secretary of State for Education. The members of the Governing Body, who are trustees of the
charity, are disclosed on pages 15 and 16. In setting and reviewing the college’s strategic objectives,
the Governing Body has had due regard for the Charity Commission’s guidance on public benefit and
particularly upon its supplementary guidance on the advancement of education.
In delivering its mission, the college provides identifiable public benefits through the advancement of
education to approximately 8,840 students, including 198 students with high needs. The college
provides courses without charge to young people, to those who are unemployed and adults taking
English and maths courses. The college adjusts its courses to meet the needs of local employers and
provides training to 210 apprentices.
The college is committed to providing information, advice and guidance to the students it enrols and
to finding suitable courses for as many students as possible regardless of their educational
background.
DEVELOPMENT AND PERFORMANCE
Financial Review
The group generated a surplus of £1,841k (2022: deficit of £640k). This includes a one-off donation of
£776k from former subsidiary Newtec to the College following its winding-up. Excluding this and other
non-cash items, the College’s operating performance was £3,524k.
The group received 78% of its total income for 2022/23 of £39,023k (2022: £36,056k) from grants from
funding bodies, most notably from the Greater London Authority for adult provision and the Education
and Skills Funding Agency for 16-18 provision. The increase in performance from the prior year was
primarily due to better delivery of the GLA AEB budget combined with additional education contract
funding for SEND learners. In 2022/23 expenditure of £37,232k increased by £472k (2022: £36,760k)
mainly due to increased staffing costs because of teaching staff grade increases and increased utility
costs.
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The group’s financial health for 2022/23 has been assessed as ‘Outstanding’ versus a target of ‘Good’.
The group posted a positive EBITDA, has low bank borrowings and a strong cash balance.
At the balance sheet date, the group held net current assets of £6,069k (2022: £5,301k) and net assets
of £43,896k (2022: £37,164), which excludes a defined benefit pension asset of £nil (2022: £3,793k
pension liability).
At £3,522k, (2022: £4,779k) net cash inflow generated from operations remained strong. The decrease
in net cash flow from the prior year is primarily due to the College’s energy contracts coming due for
renewal at the peak of the energy cost crises increasing utility cost and increased pay costs due to the
College increasing its teaching pay scales to ensure they are in line with London Colleges so that the
College is well placed to attract good teaching staff.
During the year the college continued its capital investment programme to address estate and IT capital
maintenance concerns arising from many years of underinvestment. Capital expenditures of £9,192k
(2022: £15,518k) were met by various capital grants match funded from college reserves. These
included two T Levels Capital Fund Wave 4 projects, to refurbish engineering and motor vehicle
workshops and create state of the art digital technology classrooms at Stratford Campus (£3.4m
including £1.4m match funding) and to establish a Business and Management facility at East Ham
Campus (£711k with £291k match funding).
The College has also secured two FE Capital Transformation Fund grants, with one to refurbish
elements of the main 8-storey building at East Ham campus (£6.3m with £1.9m match funding) now
well under way. Windows have now been replaced on several floors together with refurbishment of
toilets on four floors. Work on this project will continue in 2023/24 with a completion date scheduled for
May 2024. The second FECTF project is to replace an end of life building at Stratford Campus. This
is currently at Stage 4 design with main contractor tender responses due in November 2023 and
awaiting discharge of planning conditions. Most of the expenditure will be incurred in 2024.
Various additional capital allocations were received from the DfE during 2023 which have been utilised
as match funding for the above programmes and for other smaller capital building works on both
campuses. The College also received a £100k capital grant from London Borough of Newham towards
a café to be run by our SEND students as real-life work experience, which is due to open in November
2023.
The College has also invested in a new website due to go live at end-November 2023 and is in the
process of replacing its current HR and payroll system (which is obsolete and end of life) with iTrent,
due to go live in February 2024.
Following substantial investment in upgrading its IT infrastructure, the College successfully achieved
Cyber Essentials Plus accreditation in October 2023.
Overall, tangible, and intangible fixed asset additions during the year amounted to £9,327k. This was
split between buildings improvements of £2,917k, equipment purchases of £1,260k and assets during
construction of £5,150k.
The College’s total borrowings are low, comprising a small commercial loan from Lloyds Bank and an
interest free loan from Salix Finance. The cost of servicing the commercial debt was £21k in interest
payments.
The group has accumulated reserves of £43,896k (2022: £37,164k) and cash and short-term
investment balances (cash) of £14,283k (2022: £13,058k). The group wishes to continue to accumulate
reserves and cash balances to create a contingency fund to meet future capital requirements including
match funding for capital grant-funded projects currently under way and for future capital grant
applications.
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Group Companies
As at 31 July 2023 balance sheet date, the College had 3 subsidiary companies:
• Learning Revolution Trust – recorded a deficit of £11.7k (2022: surplus of £6.0k) against income
generated of £20.9k (2022: £33.8k)
• Newham Foundation – recorded a breakeven position (2022: breakeven position)
• The Fashion & Textile Museum – did not trade (2022: did not trade)
FUTURE PROSPECTS
Future developments
The major capital investment programme the College started in 2021-22 to improve its run-down estate
will continue into 2023-24 and beyond. The College is planning to invest £17m in its overall estate
during 2023-24 of which £10.4m is funded by capital grants and during 2024-25 a further spend of £11m
is planned which will be funded by £7.1m of grants secured. The College is match-funding this
investment programme from its current and future general cash reserves. This substantial investment
has been long overdue to address some of the considerable capital maintenance backlogs and continue
the journey of estates transformation.
The FECTF projects will continue in 2023/24, with the new building at Stratford Campus (£12.3m of
which £4.6m match funding) due for completion in February 2025. The College secured a Public Sector
Decarbonisation Scheme grant (£834k with £349k match funding) in 2023 to replace end of life fossil
fuel boilers serving two buildings at Stratford Campus with air source heat pumps, as part of its journey
to Net Zero Carbon. This project is due for completion in December 2023.
In 2023, the College was successful in securing its Office for Students registration and will be
developing its curriculum offer at Level 4 and above to include Higher Technical Qualifications in
Construction, Healthcare and Engineering. Following substantial investment in green technology it is
also planning to add courses in electrical vehicles and solar cells.
Financial Plan
The college governors approved a financial plan in July 2023 which sets the following objectives for the
period to July 2024. The college/group aims to achieve:
• a financial health rating of ‘Good’ and 230 points;
• EBITDA of £2.2 million / 6% of income and a small operating surplus;
• 73 cash days in hand at balance sheet date;
• staff costs at or below 60% of income generated.
• Adjusted current ratio 1.82
Adult education main grant budget in 2023/24 is in line with the 2022/23 grant allocation. Funded learner
numbers for 16-19 are up in 2023/24 compared against 2022/23 from 1,802 to 1,934.
Treasury policies and objectives
The college has treasury management arrangements in place to manage cash flow, banking
arrangements and the risks associated with those activities. Where it has cash reserves in excess of
immediate need, the College transfers funds to higher interest deposit accounts. As part of its
environmental sustainability initiatives, the College retains part of its funds in excess of immediate need
in a 65-day Barclays Green Deposit account which is earmarked by them to promote environmental
benefits.
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Reserves policy
The college has no formal Reserves Policy but recognises the importance of reserves in the financial
stability of any organisation and ensures that there are adequate reserves to support the college’s core
activities. The college group’s reserves include £nil (2022: £nil) held as restricted reserves. As at the
balance sheet date the Income and Expenditure reserve stands at £17,285k (2022: £10,553k). It is the
Corporation’s intention to increase reserves over the life of the strategic plan through the generation of
annual operating surpluses.
PRINCIPAL RISKS AND UNCERTAINTIES
The college has well developed strategies for managing risk and strives to embed risk management in
all that it does. Risk management processes are designed to protect its assets, reputation and financial
stability. The governing body has overall responsibility for risk management and its approach to
managing risks and internal controls is explained in the Statement on Corporate Governance.
A risk register is maintained at the college level which is reviewed at every meeting by the Audit & Risk
Committee and more frequently where necessary. The risk register identifies the key risks, the likelihood
of those risks occurring, their potential impact on the college and the actions being taken to reduce and
mitigate the risks. Risks are prioritised using a consistent scoring system.
The main risk factors affecting the college are outlined below along with the action taken to minimise
them. Not all the factors are within the college’s control. Other factors besides those listed below may
also adversely affect the college.
Risk
No.
Risk
Control / Mitigating Actions
1
Failure to manage timely transition from
Software for People (obsolete in March 2024)
to iTrent for HR and payroll, and to optimise HR
reporting metrics
Project manager appointed on fixed
term contract.
Appointed Payroll Consultant
Appointing Senior Payroll Officer
Utilising RSM to make LGPS
submissions until transfer to iTrent is
completed
2
Failure to make progress toward medium to
long term estate regeneration including
mitigation of inflationary pressures on capital
projects and journey towards net zero carbon
FE Capital Transformation Fund
projects to replace Y Block (by January
2025) at Stratford and replace
windows, roofs etc at East Ham (by
May 2024).
Public Sector Decarbonisation project
to replace gas boilers with air source
heat pumps for A and YPA blocks at
Stratford campus.
3
Failure to implement effective safeguarding
practices and keep our learners safe from
harm
Strong DSO and Safeguarding team
supported by Security, Duty Managers,
pastoral care tutors and mental health
counsellor
Regular training of staff and
compliance with KCSIE, Safer
Recruitment, SEND code of practice
Good relationship with PCSO and other
agencies in the Borough
Timely marking of registers
Strong H&S ethos including
maintenance/compliance testing, up-to-
date risk assessments, trained First
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Risk
No.
Risk
Control / Mitigating Actions
Aiders, reporting of incidents and near
misses
Barracuda and Impero software in
place to mitigate cyber risks and pick
up early warnings of unsafe online
behaviour
4
Failure to harness, adopt and embed
technologies that have the potential to
overhaul business and learning practices
Appoint a Digital Transformation lead
Upskill staff
5
Failure to build an effective partnership with
LB Newham around Newham Sparks, the
Newham Foundation and adult skills
Identify clear expectations of what we
need from LBN and communicate
these effectively.
Seek pathways from LBN community
education to college and plan to reduce
reliance on ESOL, in which there is
strong competition from LBN.
Develop ideal strategy for community
assets and then negotiate with LBN
future tenure and resolve future of
Newham Foundation.
KEY PERFORMANCE INDICATORS
The college group’s key performance indicators, targets and result are set out below.
Key performance indicator
Measure / Target
Actual for 2022/23
Operating surplus*
£286k or above
£3,488k
Adjusted Current Ratio
1.54 : 1.00
1.93 : 1.00
EBITDA as % of income
6.02%
9.66%
Cash Days
96
161
Health Ratio
Good
Outstanding
Ofsted Rating
Good
Good
*Before pension adjustment
Student achievements
Students continue to prosper at the college. Achievement rates remained high in 2022/23 with 16-18
achievement 0.5 percentage points above national average (up 0.3% year on year), adult achievement
4.2% above national average and overall achievement at 88.7%. Students moved into employment,
further or higher education after they completed college.
Payment performance
The Late Payment of Commercial Debts (Interest) Act 1998, in the absence of agreement to the
contrary, requires organisations to make payments to suppliers within 30 days. During the accounting
period 1 August 2022 to 31 July 2023, the College paid 96 per cent of its invoices within 30 days. The
College incurred no interest charges in respect of late payment for this period.
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Streamlined Energy and Carbon Reporting
The college is committed to reducing its carbon emissions and has taken the following measures in the
year to improve energy efficiency:
• Replacement of single-glazed 1960’s Crittall windows in the main 8-storey building at East Ham
Campus with triple glazing – a phased programme of work that will continue until May 2024
• Installed a new Building Management System to give greater control over heating and gas
usage across all campuses
• Commenced installation of new double glazing to replace single glazing in workshops at
Stratford Campus (completed in 2023/24 academic year)
• Secured an £833k Public Sector Decarbonisation Scheme grant to replace fossil fuel boilers
with air source heat pumps in two buildings at Stratford Campus – work commenced in the year
ended July 2023 and will be completed by November 2023
The College’s greenhouse gas emissions and energy use for the period calculated in line with the 2019
HM Government Environmental Reporting Guidelines, the GHG Reporting Protocol – Corporate
Standard and the 2021 UK Government’s Conversion Factors for Company Reporting are as follows:
UK Greenhouse gas emissions and energy use data for the
period
1 August 2022 to
31 July 2023
1 August 2021 to
31 July 2022
Energy consumption used to calculate emissions (kWh)
5,727,696
7,872,640
Scope 1 emissions in metric tonnes CO2e
Gas consumption
Owned transport
Total
637
0
637
1,031
0
1,031
Scope 2 emissions in metric tonnes CO2e
Purchased electricity*
466
431
Scope 3 emissions in metric tonnes CO2e
Business travel in employee owned vehicles
Electricity distribution/transmission
0
40
0
39
Total gross emissions in metric tonnes CO2e
*Location - based method (this is zero under market – based
method since the College has a zero-carbon electricity tariff)
1,143
1,501
Intensity ratio
Metric tonnes CO2e per £m revenue
18.29
29.72
Intensity ratio
The chosen intensity measurement ratio is tCO
2
e per £1m revenue
Trade union facility time
The Trade Union (Facility Time Publication Requirements) Regulations 2017 require the college to
publish information on facility time arrangements for trade union officials at the college.
Relevant union officials
Numbers of employees who were relevant union officials
during the period
FTE employee number
4
0.40
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Percentage of time
Number of employees
0%
-
1-50%
4
51-99%
-
100%
-
Total cost of facility time £20,964
Total pay bill £18,865k
Percentage of total bill spent on facility time 0.11%
EQUALITY AND DIVERSITY
Equality
The college is committed to ensuring equality of opportunity for all who learn and work here. We respect
and value positively differences in race, gender, sexual orientation, disability, religion or belief and age.
We strive vigorously to remove conditions which place people at a disadvantage, and we will actively
combat bigotry. This policy is resourced, implemented and monitored on a planned basis. The college’s
Equality Policy is published on the college’s Intranet site. The college publishes an Annual Equality
Report and Equality Objectives to ensure compliance with all relevant equality legislation including the
Equality Act 2010.
The College has recently been reassessed and continues to meet the Investors in People accreditation
standard. It is also working towards the Investors in Diversity accreditation.
The College has committed to the principles and objectives of the Disability Confident standard. The
college considers all employment applications from disabled persons, bearing in mind the aptitudes of
the individuals concerned, and guarantees an interview to any disabled applicant who meets the
essential criteria for the post. Where an existing employee becomes disabled, every effort is made to
ensure that employment with the college continues via support through specialist services and making
reasonable workplace adjustments where possible. The college's policy is to provide training, career
development and opportunities for promotion which, as far as possible, provide identical opportunities
to those of non-disabled employees. It also conducts regular Equality & Diversity training for all staff.
Refresher training and training for new starters is carried out on an ongoing basis.
The College is a Living Wage Foundation accredited employer and has implemented recommended
rates as soon as increases have been announced. This has improved the wages of staff in the lowest
quartile of the pay range.
Time spent on paid trade union activities as a
percentage of total paid facility time
100%
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Gender pay gap reporting
Our goal is to reduce the gender pay gap further, with the aim of being able to demonstrate that
gender has no impact on pay and reward.
Year ending 31 March 2023
Mean gender pay gap
11.49%
Median gender pay gap
3.34%
Mean bonus gender pay gap
5.21%
Median gender bonus gap
0%
Proportion of males/females receiving a bonus
100%
The proportion of males and females in each quartile of the pay distribution are:
Males
Females
1. Lower quartile
37.2%
62.8%
2. Lower middle quartile
29.8%
70.2%
3. Upper middle quartile
45.2%
54.8%
4. Upper quartile
50.0%
50.0%
The College publishes its annual gender pay gap report on its website.
Disability statement
The College seeks to achieve the objectives set down in the Equality Act 2010:
a) As part of its accommodation strategy the college will take every opportunity to improve access.
b) The college has appointed an individual responsible for assessing and meeting access and
inclusion needs, who provides information, advice and arranges support where necessary for
students with disabilities.
c) There is a list of specialist equipment which the college can make available for use by students
and a range of assistive technology is available from the Additional Learning Support team.
d) The college admits all learners regardless of disability if it can meet their needs. Appeals
against a decision not to offer a place are dealt with under the complaints policy.
e) The college has made a significant investment in the appointment of specialist lecturers to
support students with learning difficulties and/or disabilities. There are several student support
assistants who can provide a variety of support for learning. There is a continuing review of
changing needs to ensure the provision of a high level of appropriate support for students who
have learning difficulties and/or disabilities.
f) Specialist programmes are described on college website/in college prospectuses, and
achievements and destinations are recorded and published in the standard college format.
g) Signposting to counselling and welfare services is included in the College Induction and Student
Handbook.
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GOING CONCERN
The Corporation is not aware of any material uncertainties relating to events or conditions that may cast
significant doubt upon the College’s ability to continue as a going concern.
In reaching this conclusion the Corporation has made an assessment of the College’s ability to continue
as a going concern and has taken into account all available information about the future, including the
2 year Financial Plan submitted to the ESFA on 31
st
July 2023.
After making appropriate enquiries, the Corporation considers that the college has adequate resources
to continue in operational existence for the foreseeable future. For this reason, it continues to adopt the
going concern basis in preparing the financial statements.
DISCLOSURE OF INFORMATION TO AUDITORS
The members who held office at the date of approval of this report confirm that, so far as they are each
aware, there is no relevant audit information of which the College’s auditors are unaware; and each
member has taken all the steps that he or she ought to have taken to be aware of any relevant audit
information and to establish that the College’s auditors are aware of that information.
Approved by order of the Members of the Corporation on 13 December 2023 and signed on its
behalf by:
Paul Jackson
CHAIR OF THE BOARD
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STATEMENT OF CORPORATE GOVERNANCE AND INTERNAL CONTROL
The following statement is provided to enable readers of the annual report and accounts of the College
to obtain a better understanding of its governance and legal structure. This statement covers the period
from 1 August 2022 to 31 July 2023 and up to the date of approval of the annual report and financial
statements.
The college endeavours to conduct its business:
1. in accordance with the seven principles identified by the Committee on Standards in Public Life
(selflessness, integrity, objectivity, accountability, openness, honesty and leadership);
2. in full accordance with the guidance to colleges from the Association of Colleges in The Code
of Good Governance for English Colleges (“the Code”)
The Governing Body recognises that, as a body entrusted with both public and private funds, it has a
particular duty to observe the highest standards of corporate governance at all times.
In carrying out its responsibilities, it takes full account of The Code of Good Governance for English
Colleges issued by the Association of Colleges, which it formally adopted on September 2016. In the
opinion of the Governors, the College complies with all the provisions of the Code, and it has
complied throughout the year ended 31 July 2023.
The College has commissioned an independent consultant to undertake an external review of
governance. The Chair, Principal and Committee Chairs have provided their feedback on a
prioritisation framework to the Clerk and have a planning and review meeting with the consultant of
Education & Skills in December, to discuss the outcome of the framework and agree next steps. The
outcome will be ratified by the Corporation on 13 December 2023, with a proposal to commence the
external governance review in January 2024
THE CORPORATION
Members of the Corporation
The members who served on the Corporation during the year and up to the date of signature of this
report were as listed in the table below.
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 16 of 57
Name
Date of
appointment
Term of
office
Date of
resignation
Status of appointment
Committees Served
Board
Attendance
2022/23
Mubin Ahmed
October 2018
2
nd
Term
5 years
-
Staff Governor
100%
Lalage Clay
March 2023
1
st
Term
-
Independent Governor
• Member: Audit & Risk Committee
100%
Martin Cumella
February 2014
3
rd
Term
9 years
31/01/2023
Independent Governor
• Corporation Board Chair
• Chair: Search / Remuneration Committees
• Member: Finance & Resources Committee
100%
Tom Flynn
March 2023
1
st
Term
-
Independent Governor
• Member: Audit & Risk Committee
100%
Paul Jackson
February 2023
1
st
Term
-
Independent Governor
• Corporation Board Chair
• Chair: Search / Remuneration Committees
• Member: Finance & Resources Committee
100%
Derwent Jaconelli
March 2023
1
st
Term
-
Independent Governor
25%
Lloyd Johnson
September 2017
2
nd
Term
6 years
-
Independent Governor
• Member: Finance & Resources Committee
25%
Gurjit Kahlon
December 2021
1
st
Term
1 year
01/12/2022
Independent Governor
• Member: Audit & Risk Committee
0%
Michael Magbagbeola
March 2023
1
st
Term
-
Independent Governor
100%
Geoffrey Makstutis
December 2021
1
st
Term
2 years
-
Independent Governor
• Member: Curriculum & Quality Committee
• Member: HE Oversight Board
100%
John McMahon
March 2023
1
st
Term
-
Independent Governor
• Member: Curriculum & Quality Committee
100%
Femi Olatidoye
December 2021
1
st
Term
2 years
-
Independent Governor
• Member: Finance & Resources Committee
75%
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 17 of 57
Judith Nelson operates as Clerk to the Corporation.
The Governance framework
It is the Corporation’s responsibility to bring independent judgement to bear on issues of strategy, performance, resources and standards of conduct.
The Corporation is provided with regular and timely information on the overall financial performance of the college together with other information such as
performance against funding targets, proposed capital expenditure, quality matters and personnel-related matters such as health and safety and environmental
issues. The Corporation meets four times per annum plus a residential conference
Name
Date of
appointment
Term of
office
Date of
resignation
Status of appointment
Committees Served
Board
Attendance
2022/23
Danny Ridgeway
December 2020
1
st
Term
3 years
-
Independent Governor
• Corporation Board Vice Chair
• Chair: Curriculum & Quality Committee
• Chair: HE Oversight Board
• Member: Finance & Resources Committee
100%
Pam Rowe
December 2020
1
st
Term
3 years
-
Independent Governor
• Chair: Audit & Risk Committee
• Safeguarding Lead Governor
75%
Joanne Roxburgh
December 2020
1
st
Term
3 years
-
Independent Governor
• Member: Curriculum & Quality Committee
• Member: HE Oversight Board
100%
Trina Sarkar
December 2020
1
st
Term
1 year
01/01/2023
Independent Governor
• Member: Curriculum & Quality Committee
25%
Paul Stephen
July 2017
-
-
Principal & CEO / Accounting
Officer
100%
Sarah Thomas
May 2022
1
st
Term
1 year
-
Independent Governor
• Member: Finance & Resources Committee
100%
Irfan Umarji
March 2019
2
nd
Term
4 years
-
Independent Governor
• Chair: Finance and Resources Committee
100%
Grant Wilson
December 2022
1
st
Term
1 year
-
Student Governor
100%
Suhud Yekini
December 2022
1
st
Term
1 year
-
Student Governor
100%
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 18 of 57
The Corporation conducts its business through a number of committees. Each committee has terms of
reference, which have been approved by the Corporation. These committees are Search Committee;
Remuneration Committee; Audit & Risk Committee; Finance & Resources Committee; Curriculum &
Quality Committee.
The Clerk to the Corporation maintains a register of financial and personal interests of the governors.
The register is available for inspection at the college’s registered address.
All governors are able to take independent professional advice in furtherance of their duties at the
college’s expense and have access to the clerk to the Corporation, who is responsible to the Board for
ensuring that all applicable procedures and regulations are complied with. The appointment, evaluation
and removal of the clerk are matters for the Corporation as a whole.
Formal agendas, papers and reports are supplied to governors in a timely manner, prior to Board
meetings. Briefings are provided on an ad hoc basis.
The Corporation has a strong and independent non-executive element and no individual or group
dominates its decision-making process. The corporation considers that each of its non-executive
members is independent of management and free from any business or other relationship which could
materially interfere with the exercise of their independent judgement.
There is a clear division of responsibility in that the roles of the Chair and Accounting Officer are
separate.
Appointments to the Corporation
Any new member appointments to the corporation are a matter for the consideration of the corporation
as a whole. The Corporation has a search committee, consisting of three members of the corporation,
which is responsible for the selection and recommendation of any new member for the corporation’s
consideration. The Corporation is responsible for ensuring that appropriate training is provided as
required.
Members of the Corporation are appointed for a term of office not exceeding three years and a
maximum of three terms.
Corporation performance
The Corporation will carry out a self-assessment of its own performance which will be undertaken by
an external reviewer. This review will form part of the external governance process, which will
commence in January 2024.
Corporation performance is reviewed regularly and includes Financial Performance Reviews, Quality
and Teaching training, Self-Assessment Report (SAR), Annual Self-Assessment. A considerable focus
on Corporate Performance has ensured College Performance has been significantly improved across
a number of key areas within the College. This focus will continue during 2023/24 following the last
‘Good’ Ofsted inspection as the college continues the journey to achieve OFSTED ‘Outstanding’
performance.
Remuneration Committee
Throughout the year ending 31 July 2023 the college’s Remuneration Committee comprised three
members of the corporation. The Committee’s responsibilities are to make recommendations to the
Board on the remuneration and benefits of the Accounting Officer and other key management
personnel.
Details of remuneration for the year ended 31 July 2023 are set out in note 8 to the financial statements.
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 19 of 57
Audit & Risk Committee
The Audit & Risk Committee comprises four members of the corporation (excluding the Accounting
Officer and Chair) and a co-optee. The Committee operates in accordance with written terms of
reference approved by the Corporation.
The Audit & Risk Committee meets on a termly basis and provides a forum for reporting by the college’s
internal auditors, reporting accountants and financial statements auditors, who have access to the
Committee for independent discussion without the presence of college management. The Committee
also receives and considers reports from the main FE funding bodies as they affect the college’s
business.
The college’s internal auditors review the systems of internal control, risk management controls and
governance processes in accordance with an agreed plan of input and report their findings to
management and the Audit & Risk Committee.
Management is responsible for the implementation of agreed audit recommendations and internal audit
undertakes periodic follow-up reviews to ensure such recommendations have been implemented.
The Audit & Risk Committee also advises the corporation on the appointment of internal auditors,
reporting accountants and financial statements auditors and their remuneration for audit and non-audit
work as well as reporting annually to the corporation.
The Audit & Risk Committee met three times in the year to 31 July 2023. The members of the committee
and their attendance records are shown below:
Committee member
Meetings attended
Pam Rowe
3
Tom Flynn
1
Lalage Clay
0
Gurjit Kahlon (resigned 01/12/22)
1
Joanne Roxburgh (in attendance as
a Corporation member to ensure
quoracy)
2
John Turnbull (external co-opted
member)
3
Search Committee
The Search Committee meets three times a year, or as required, to consider and make
recommendations concerning the filling of any vacancy on the Board or its committees. It also considers
and makes recommendations to the Board on the Board’s composition in terms of skills, experience
and balance. It has a membership of up to seven: Chair, Accounting Officer, 2 Board members and up
to 3 co-opted members.
Finance & Resources Committee
The Finance & Resources Committee is required, by agreement, to consider the College’s
accommodation strategy and capital programme and make recommendations to the Board, on
appointments, procurement strategy, contracts and progress. Its membership consists of six
corporation members and up to two co-optees.
Curriculum & Quality Committee
The Curriculum & Quality Committee meets three times a year with the purpose of considering quality
improvement strategies, including the setting of targets for student retention, achievement and forms
views about how best to achieve the College’s strategy of meeting the needs of Newham residents. Its
membership consists of four Governors and one co-opted member.
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 20 of 57
INTERNAL CONTROL
Scope of responsibility
The corporation is ultimately responsible for the College’s system of internal control and for reviewing
its effectiveness. However, such a system is designed to manage rather than eliminate the risk of failure
to achieve business objectives, and can provide only reasonable and not absolute assurance against
material misstatement or loss.
The corporation has delegated the day-to-day responsibility to the Principal, as Accounting Officer, for
maintaining a sound system of internal control that supports the achievement of the College’s policies,
aims and objectives, whilst safeguarding the public funds and assets for which he is personally
responsible, in accordance with the responsibilities assigned to him in the Funding Agreement between
Newham College and the funding bodies, and the OfS registration conditions. He is also responsible
for reporting to the corporation any material weaknesses or breakdowns in internal control.
The purpose of the system of internal control
The system of internal control is based on an ongoing process designed to identify and prioritise the
risks to the achievement of College policies, aims and objectives, to evaluate the likelihood of those
risks being realised and the impact should they be realised, and to manage them efficiently, effectively
and economically. The system of internal control has been in place in Newham College for the year
ended 31 July 2023 and up to the date of approval of the annual report and accounts.
Capacity to handle risk
The corporation has reviewed the key risks to which the College is exposed together with the operating,
financial and compliance controls and arrangements for compliance with legal and regulatory matters
including those relating to the regularity and propriety of the use of public funding that have been
implemented to mitigate those risks. The corporation is of the view that there is a formal ongoing process
for identifying, evaluating and managing the College's significant risks that has been in place for the
period ending 31 July 2023 and up to the date of approval of the annual report and accounts. This
process is regularly reviewed by the corporation.
The risk and control framework
The system of internal control is based on a framework of regular management information,
administrative procedures including the segregation of duties, and a system of delegation and
accountability. In particular, it includes:
• comprehensive budgeting systems with an annual budget, which is reviewed and agreed by
the governing body
• regular reviews by the governing body of periodic and annual financial reports which indicate
financial performance against forecasts
• setting targets to measure financial and other performance
• clearly defined capital investment control guidelines
• the adoption of formal project management disciplines, where appropriate.
The College has an internal audit service, which operates in accordance with the requirements of the
ESFA’s Post 16 Audit Code of Practice. The work of the internal audit service is informed by an analysis
of the risks to which the College is exposed, and annual internal audit plans are based on this analysis.
The analysis of risks and the internal audit plans are endorsed by the corporation on the
recommendation of the audit & risk committee. At minimum, annually, the Head of Internal Audit (HIA)
provides the governing body with a report on internal audit activity in the College. The report includes
the HIA’s independent opinion on the adequacy and effectiveness of the College’s system of risk
management, controls and governance processes.
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 21 of 57
Risks faced by the College
The corporation has undertaken further work during the year to develop and embed the system of
internal control, including financial, operational and risk management which is designed to protect the
College's assets and reputation by identifying, evaluating and managing risk in order to judge the
materiality of the impact these could pose on key operations.
Based on the strategic plan, the Executive Board undertakes a comprehensive review of the risks to
which the College is exposed. The Executive Board identifies systems and procedures, including
specific preventable actions to mitigate any potential impact on the College. The internal controls are
implemented and the subsequent year's appraisal reviews their effectiveness and progress against risk
mitigation actions.
Control weakness identified
The internal auditors did not identify any significant financial control weaknesses or failures during the
2022/23 audit programme.
Responsibilities under funding agreements
The Department for Education end Education and Skills Funding Agency introduced new controls for
the college on 29 November 2022 on the day that the Office for National Statistics reclassified college
as public sector organisations in the national accounts. The ESFA chief executive communicated these
changes to all college accounting officers and explained plans to introduce a college financial handbook
in 2024. The College has reviewed it policies, procedures and approval process in line with these new
requirements to ensure there are systems in place to identify and handle any transactions for which DfE
approval is required.
The College has met its statutory responsibilities by utilising its assets to deliver teaching and learning
as laid out earlier in the Strategic Report, and its contractual obligations by doing so in line with all
prevailing funding guidance. It submitted its Managing Public Money return in April 2023 confirming
compliance with new requirements following reclassification of colleges as public sector organisations
and continues to meet all requirements contained therein.
Statement from the Audit & Risk Committee
The Audit & Risk committee has advised the board of governors that the corporation has an effective
framework for governance and risk management in place. The Audit & Risk Committee believes the
corporation has effective internal controls in place.
The specific areas of work undertaken by the Audit & Risk Committee in 2022/23 and up to the date of
the approval of the financial statements are:
• Internal audits conducted by Scrutton Bland:
o Income and Debtors – Significant Assurance
o Human Resources – Limited Assurance
o Curriculum, Planning and Lecturer Utilisation – Significant Assurance
o Student Recruitment and Retention - Significant Assurance
o Student Mental Health and Wellbeing – Significant Assurance
o Subcontracting Standard
• Specialist cyber security audits and penetration testing by JISC
• Internal Funding Audit and Compliance Manager in-depth reviews (Adult Education funding;
Advanced Loan funding; Learner Attendance; Awarding Body registrations; Conditions of
funding; Free school meals; High needs learners and EHCPs; ILR outcomes and grades; and
Study Programmes)
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 22 of 57
Review of effectiveness
As Accounting Officer, the Principal has responsibility for reviewing the effectiveness of the system of
internal control. His review of the effectiveness of the system of internal control is informed by:
• the work of the internal auditors
• the work of the executive managers within the college who have responsibility for the
development and maintenance of the internal control framework
• comments made by the college’s financial statements auditors, the reporting accountant for
regularity assurance, the appointed funding auditors (for colleges subject to funding audit) in
their management letters and other reports.
The Accounting Officer has been advised on the implications of the result of their review of the
effectiveness of the system of internal control by the Audit & Risk Committee, which oversees the work
of the internal auditor and other sources of assurance, and a plan to address weaknesses and ensure
continuous improvement of the system is in place.
The senior management team receives reports setting out key performance and risk indicators and
considers possible control issues brought to their attention by early warning mechanisms, which are
embedded within the departments and reinforced by risk awareness training. The senior management
team and the Audit & Risk Committee also receive regular reports from internal audit and other sources
of assurance, which include recommendations for improvement.
The Audit & Risk Committee's role in this area is confined to a high-level review of the arrangements
for internal control. The corporation's agenda includes a regular item for consideration of risk and control
and receives reports thereon from the senior management team and the Audit & Risk Committee. The
emphasis is on obtaining the relevant degree of assurance and not merely reporting by exception. At
its October 2023 meeting, the corporation carried out the annual assessment for the year ended 31 July
2023 by considering documentation from the senior management team and internal audit and taking
account of events since 31 July 2023.
Based on the advice of the Audit & Risk Committee and the Accounting Officer, the corporation is of
the opinion that the college has an adequate and effective framework for governance, risk
management and control, and has fulfilled its statutory responsibility for “the effective and efficient use
of resources, the solvency of the institution and the body and the safeguarding of their assets”.
Approved by order of the members of the Corporation on 13 December 2023 and signed on its
behalf by:
Paul Jackson
CHAIR OF THE BOARD
Paul Stephen
ACCOUNTING OFFICER
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 23 of 57
Statement on the College’s regularity, propriety and compliance
As accounting officer I confirm that the corporation has had due regard to the framework of authorities
governing regularity, priority and compliance, and the requirements of grant funding agreements and
contracts with ESFA and has considered its responsibility to notify ESFA of material irregularity,
impropriety and non-compliance with those authorities and conditions of funding.
I confirm, on behalf of the Corporation, that after due enquiry, and to the best of my knowledge, I am
able to identify any material irregular or improper use of funds by the Corporation, or material
non-compliance with the framework of authorities and the terms and conditions of funding under the
Corporation’s grant funding agreements and contracts with the ESFA or any other public funder. This
includes the elements outlined in the ‘’Dear Accounting Officer’’ letter of 29 November 2022 and
ESFA’s bite size guides.
I confirm that no instances of material irregularity, impropriety, funding non-compliance or non-
compliance with the framework of authorities have been discovered to date. If any instances are
identified after the date of this statement, these will be notified to the ESFA.
Paul Stephen
Accounting Officer
13 December 2023
Statement of the chair of governors
On behalf of the corporation, I confirm that the accounting officer has discussed their statement of
regularity, propriety and compliance with the board and that I am content that it is materially accurate.
Paul Jackson
Chair of the Board
13 December 2023
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 24 of 57
STATEMENT OF RESPONSIBILITIES OF THE MEMBERS OF THE CORPORATION
The members of the Corporation who act as trustees for the charitable activities of the College are
required to present audited financial statements for each financial year.
Within the terms and conditions of the corporation’s grant funding agreements and contracts with ESFA
and Office for Students, the corporation is required to prepare financial statements which give a true and
fair view of the financial performance and position of the corporation for the relevant period. Corporations
must also prepare a strategic report which includes an operating and financial review for the year. The
bases for the preparation of the financial statements and strategic report are the Statement of
Recommended Practice – Accounting for Further and Higher Education, ESFA’s College Accounts
Direction and the UK’s Generally Accepted Accounting Practice.
In preparing the financial statements, the corporation is required to:
• select suitable accounting policies and apply them consistently
• make judgements and estimates that are reasonable and prudent
• state whether applicable UK Accounting Standards have been followed, subject to any material
departures disclosed and explained in the financial statements
• assess whether the corporation is a going concern, noting the key supporting assumptions
qualifications or mitigating actions as appropriate
• prepare financial statements on the going concern basis, unless it is inappropriate to assume
that the College will continue in operation.
The corporation is also required to prepare a strategic report, in accordance with paragraphs 3.23 to 3.27
of the FE and HE SORP, that describes what it is trying to do and how it is going about it, including
information about the legal and administrative status of the corporation.
The Corporation is responsible for keeping proper accounting records which disclose with reasonable
accuracy, at any time, the financial position of the college and which enable it to ensure that the financial
statements are prepared in accordance relevant legislation including the Further Education Act 1992 and
Charities Act 2011, and relevant accounting standards. It is responsible for taking steps that are
reasonably open to it to safeguard its assets and to prevent and detect fraud and other irregularities.
The Corporation is responsible for the maintenance and integrity of its website; the work carried out by
auditors does not involve consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the financial statements since they were initially
presented on the website. Legislation in the United Kingdom governing the preparation of financial
statements may differ from legislation in other jurisdictions.
Members of the corporation are responsible for ensuring that expenditure and income are applied for the
purposes intended and that the financial transactions conform to the authorities that govern them. In
addition, they are responsible for ensuring that funds from ESFA, and any other public funds, are used
only in accordance with ESFA’s grant funding agreements and contracts and any other conditions, that
may be prescribed from time to time by ESFA, or any other public funder, including that any transactions
entered into by the corporation are within the delegated authorities set out in the “Dear accounting officer”
letter of 29 November 2022 and ESFA’s bite size guides. Members of the corporation must ensure that
there are appropriate financial and management controls in place to safeguard public and other funds
and ensure they are used properly. In addition, members of the corporation are responsible for securing
economic, efficient and effective management of the corporation’s resources and expenditure so that the
benefits that should be derived from the application of public funds from ESFA and other public bodies
are not put at risk.
Approved by order of the members of the corporation on 13 December 2023 and signed on its
behalf by:
Paul Jackson
CHAIR OF THE BOARD
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 25 of 57
INDEPENDENT AUDITOR’S REPORT TO THE CORPORATION OF NEWHAM COLLEGE OF
FURTHER EDUCATION
Opinion
We have audited the financial statements of Newham College of Further Education (the “College”) and
its subsidiaries (the “Group”) for the year ended 31 July 2023 which comprise the consolidated and
College statement of comprehensive income, the consolidated and College balance sheets, the
consolidated and College statement of changes in reserves, the consolidated 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 United Kingdom Accounting Standards,
including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”
(United Kingdom Generally Accepted Accounting Practice and the Accounts Direction 2022 to 2023
issued by the Education and Skills Funding Agency).
In our opinion the financial statements:
• give a true and fair view of the state of the Group’s and of the College’s affairs as at 31 July
2023 and of the Group’s and the College’s surplus of income over expenditure for the year then
ended; and
• have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice.
• have been prepared in accordance with the Accounts Direction 2022 to 2023 issued by the
Education and Skills Funding Agency.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the
group and college 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 governors’ 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 Group’s or the
college’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 governors 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 Report and Financial Statements other
than the financial statements and our auditor’s report thereon. The governors are responsible for the
other information contained within the Report and Financial Statements. Our opinion on the financial
statements does not cover the other information and 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.
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 26 of 57
INDEPENDENT AUDITOR’S REPORT TO THE CORPORATION OF NEWHAM COLLEGE OF FURTHER
EDUCATION
Opinion on other matters prescribed by the Office for Students’ Accounts Direction
In our opinion, in all material respects:
• funds from whatever source administered by the college for specific purposes have been properly
applied to those purposes and managed in accordance with relevant legislation;
• funds provided by the Office for Students, UK Research and Innovation (including Research
England), the Education and Skills Funding Agency and Department for Education have been
applied in accordance with the relevant terms and conditions; and
• the requirements of the Office for Students’ accounts direction for the relevant year’s financial
statements have been met.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Post-16 Audit Code of Practice
2022 to 2023 issued by the Education and Skills Funding Agency requires us to report to you if, in our
opinion:
• adequate accounting records have not been kept;
• the financial statements are not in agreement with the accounting records; or
• we have not received all the information and explanations required for our audit.
We have nothing to report in respect of the following matters where the Office for Students’ Accounts
Direction requires us to report to you if:
• the College’s grant and fee income, as disclosed in the note 2 to the accounts, has been materially
misstated.
Responsibilities of the Corporation of Newham College of Further Education
As explained more fully in the Statement of the Corporation’s Responsibilities set out on page 23 the
Corporation is responsible for the preparation of financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the Corporation 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 Corporation is responsible for assessing the Group’s and the
College’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 Corporation either intend to liquidate the Group
or the College or to cease operations, or have no realistic alternative but to do so.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to
obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct
effect on the determination of material amounts and disclosures in the financial statements, to perform audit
procedures to help identify instances of non-compliance with other laws and regulations that may have a
material effect on the financial statements, and to respond appropriately to identified or suspected non-
compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of
the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed
risks of material misstatement due to fraud through designing and implementing appropriate responses and
to respond appropriately to fraud or suspected fraud identified during the audit. However, it is the primary
responsibility of management, with the oversight of those charged with governance, to ensure that the entity's
operations are conducted in accordance with the provisions of laws and regulations and for the prevention
and detection of fraud.
NEWHAM COLLEGE OF FURTHER EDUCATION
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2023
Page 27 of 57
INDEPENDENT AUDITOR’S REPORT TO THE CORPORATION OF NEWHAM COLLEGE OF FURTHER
EDUCATION
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the
group audit engagement team:
• obtained an understanding of the nature of the sector, including the legal and regulatory frameworks
that the group and College operate in and how the group and college are complying with the legal
and regulatory frameworks;
• inquired of management, and those charged with governance, about their own identification and
assessment of the risks of irregularities, including any known actual, suspected or alleged instances
of fraud;
• discussed matters about non-compliance with laws and regulations and how fraud might occur
including assessment of how and where the financial statements may be susceptible to fraud.
As a result of these procedures, we consider the most significant laws and regulations that have a direct
impact on the financial statements are FRS 102, Further and Higher Education SORP, the College Accounts
Direction published by the Education and Skills Funding Agency, Regulatory Advice 9: Accounts Direction
published by the Office for Students and tax compliance regulations. We performed audit procedures to
detect non-compliances which may have a material impact on the financial statements which included
reviewing financial statement disclosures.
The most significant laws and regulations that have an indirect impact on the financial statements are those
which are in relation to the Education Inspection Framework under the Education and Inspections Act 2006,
Keeping Children Safe in Education under the Education Act 2002 and the UK General Data Protection
Regulation (UK GDPR) and the Data Protection Act 2018. We performed audit procedures to inquire of
management and those charged with governance whether the college is in compliance with these law and
regulations and inspected correspondence with licensing or regulatory authorities.
The group audit engagement team identified the risk of management override of controls and revenue
recognition as the area where the financial statements were most susceptible to material misstatement due
to fraud. Audit procedures performed included but were not limited to testing manual journal entries and
other adjustments and evaluating the business rationale in relation to significant, unusual transactions and
transactions entered into outside the normal course of business and challenging judgments and estimates,
review of accounting policies and sample testing revenue.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at http://www.frc.org.uk/auditorsresponsibilities. This description forms part of
our auditor’s report.
Use of our report
This report is made solely to the Corporation, as a body, in accordance with the Funding Agreement
published by the Education and Skills Funding Agency and our engagement letter dated 20 September 2022.
Our audit work has been undertaken so that we might state to the Corporation, as a body, those matters we
are engaged 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 Corporation, as a body, for our
audit work, for this report, or for the opinions we have formed.
RSM UK AUDIT LLP
Chartered Accountants
25 Farringdon Street
London EC4A 4AB
Date:
15th December 2023
Page 28 of 57
NEWHAM COLLEGE OF FURTHER EDUCATION
STATEMENT OF COMPREHENSIVE INCOME AND EXPENDITURE
AS AT 31 JULY 2023
Notes Group College Group College
£'000 £'000 £'000 £'000
Income
Funding body grants 2 30,445 30,430 29,626 29,611
Tuition fees and education contracts 3 3,627 3,627 3,290 3,290
Other grants and contracts 4 881 881 813 813
Other income 5 3,086 2,250 2,289 1,507
Investment income 6 181 181 3 3
Donations and Endowments 7 803 803 35 35
Total Income 39,023 38,172 36,056 35,259
Expenditure
Staff costs 8 20,243 20,166 19,801 19,728
Other operating expenses 9 13,714 13,444 13,876 13,673
Depreciation and amortisation 11 3,038 2,523 2,473 1,958
Interest and other finance costs 10 237 237 610 610
Total Expenditure 37,232 36,370 36,760 35,969
Surplus / (Deficit) before other gains and losses 1,791 1,802 (704) (710)
Profit on disposal of tangible fixed assets 50 50 64 64
Surplus / (Deficit) before tax 1,841 1,852 (640) (646)
Taxation - - - -
Surplus / (Deficit) for the year 1,841 1,852 (640) (646)
Re-measurement of net defined benefit pension liability 21 4,891 4,891 32,096 32,096
Other Comprehensive income for the year 4,891 4,891 32,096 32,096
Total Comprehensive income for the year 6,732 6,743 31,456 31,450
2023
2022
Page 29 of 57
NEWHAM COLLEGE OF FURTHER EDUCATION
CONSOLIDATED AND COLLEGE BALANCE SHEETS
AS AT 31 JULY 2023
The financial statements on pages 27 to 54 were approved and authorised for issue by the corporation
on 13 December 2023 and were signed on its behalf on that date by:
Paul Jackson Paul Stephen
CHAIR OF THE BOARD ACCOUNTING OFFICER
Notes Group College Group College
£'000 £'000 £'000 £'000
Fixed assets
Intangible assets 11 172 172 87 87
Tangible assets 11 62,476 54,217 56,272 47,498
Investments 12 - 966 0 1,089
62,648 55,355 56,359 48,674
Current assets
Debtors 13 1,840 1,880 1,336 1,348
Cash at bank and in hand 14,283 14,250 13,058 13,017
16,123 16,130 14,394 14,365
Current liabilities
Creditors - amounts falling due within one
year
14 10,054 9,621 9,093 8,661
Net current assets 6,069 6,509 5,301 5,704
Total assets less current liabilities 68,717 61,864 61,660 54,378
Creditors - amounts falling due after one
year
15 23,369 21,358 19,006 16,578
Provisions for liabilities
Defined benefit pension scheme 17 0 0 3,793 3,793
Other provisions 17 1,452 1,452 1,697 1,697
Total net assets 43,896 39,054 37,164 32,310
Unrestricted reserves
Income and Expenditure reserve 17,285 16,943 10,553 10,199
Revaluation reserve 26,611 22,111 26,611 22,111
Total Reserves 43,896 39,054 37,164 32,310
2023
2022
NEWHAM COLLEGE OF FURTHER EDUCATION
CONSOLIDATED AND COLLEGE STATEMENTS OF CHANGES IN RESERVES FOR THE YEAR
ENDED 31 JULY 2023
Page 30 of 57
Income and
expenditure
reserves
Revaluation
reserve
Total
£'000 £'000 £'000
Group
Balance at 1 August 2021 (20,903) 26,611 5,708
Deficit for the year (640) - (640)
Other comprehensive income 32,096 - 32,096
Total comprehensive income for the year 31,456 - 31,456
Balance at 31 July 2022 10,553 26,611 37,164
Surplus for the year 1,841 - 1,841
Other comprehensive income 4,891 - 4,891
Total comprehensive income for the year 6,732 - 6,732
Balance at 31 July 2023 17,285 26,611 43,896
College
Balance at 1 August 2021 (21,251) 22,111 860
Deficit for the year (646) - (646)
Other comprehensive income 32,096 - 32,096
Total comprehensive income for the year 31,450 - 31,450
Balance at 31 July 2022 10,199 22,111 32,310
Surplus for the year 1,852 - 1,852
Other comprehensive income 4,891 - 4,891
Total comprehensive income for the year 6,743 - 6,743
Balance at 31 July 2023 16,943 22,111 39,054
NEWHAM COLLEGE OF FURTHER EDUCATION
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 JULY 2023
Page 31 of 57
Notes 2023 2022
£'000 £'000
Operating activities
Cash generated from operations 18 3,522 4,779
Net cash generated from operations 3,522 4,779
Investing activities
Interest received 181 3
Capital grants received 6,983 1,015
Proceeds from sale of fixed assets 50 2,431
Purchase of tangible and intangible fixed assets (9,206) (3,787)
(1,992) (338)
Financing activities
Interest paid (21) (7)
Repayments of borrowings (284) (398)
(305) (405)
Increase in cash and cash equivalents in the year 1,225 4,036
Cash and cash equivalents at beginning of the year 13,058 9,022
Cash and cash equivalents at end of the year 14,283 13,058
Net debt reconciliation
1 August
2022
Cash flow
Other non cash
movement
31 July
2023
£'000 £'000 £'000 £'000
Cash at bank and in hand
13,058
1,225 - 14,283
Bank loans 285
(284)
284 285
Debt due within one year 285 (284) 284 285
Bank loans 759 -
(284)
475
Debt due after one year 759 - (284) 475
Total 12,014 1,509 - 13,523
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 32 of 57
1. STATEMENT OF ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES
The following accounting policies have been applied consistently in dealing with items which are
considered material in relation to the financial statements.
Basis of accounting
These financial statements have been prepared in accordance with the Statement of Recommended
Practice: Accounting for Further and Higher Education 2019 (the 2019 FE HE SORP), the College
Accounts Direction for 2022/23 and in accordance with Financial Reporting Standard 102 – “The
Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland” (FRS 102).
The college is a public benefit entity and has therefore applied the relevant public benefit requirements
of FRS 102.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical
accounting estimates. It also requires management to exercise judgement in applying the college's
accounting policies.
The financial statements are prepared in accordance with the historical cost convention.
The principal accounting policies applied in the preparation of these consolidated and separate financial
statements are set out below. These policies have been applied consistently to both years.
The consolidated financial statements are presented in sterling which is also the functional currency of
the College.
Monetary amounts in these financial statements are rounded to the nearest whole £1,000, except where
otherwise indicated.
Basis of consolidation
The consolidated financial statements include the College and its subsidiaries Newham Foundation and
The Learning Revolution Trust, controlled by the Group. Control is achieved where the Group has the
power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. Under the purchase method of accounting, the results of subsidiary and associated
undertakings acquired or disposed of during the year are included in the consolidated income and
expenditure account from or up to the date on which control of the undertaking passes. Intra-group
sales and profits are eliminated fully on consolidation.
In accordance with FRS 102, the activities of the student union, of which there were none in 2023, have
not been consolidated because the college does not control those activities.
All financial statements are made up to 31 July 2023.
A subsidiary is no longer consolidated when control is lost. The difference between any disposal proceeds
and the carrying amount of the subsidiary’s net assets (including related goodwill where relevant) is
recognised income and expenditure as a gain or loss on disposal.
Reduced disclosures
The College has taken advantage of the exemption from disclosing the following information in its college
only accounts, as permitted by the reduced disclosure regime within FRS102:
• Section 7 ‘Statement of Cash Flows’ – Presentation of a Statement of Cash Flows and related
notes and disclosures.
Going concern
The activities of the Group and College, together with the factors likely to affect its future development
and performance are set out in the Strategic Report. The financial position of the group and college, its
cashflow, liquidity and borrowings are presented in the Financial Statements and accompanying Notes.
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 33 of 57
The group and college currently has £760k of loans outstanding with banker and Salix. The terms of
the existing loans are for another 4 years. The Group and College’s forecasts and financial projections
indicate that it will be able to operate within this existing facility and covenants for the foreseeable future.
The financial position of the Group and College remains sound and all known factors affecting the
forward year (including ability to repay loans and manage pensions deficit) were taken into account
within the budget setting process for 2024. This is expected to enable the Group and College to return
a surplus position in 2024 and achieve ‘good’ financial health (Outstanding in 2023), whilst meeting its
bank covenants. Consequently, the Corporation is confident that the College will have sufficient funds
to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the
financial statements and have therefore prepared these statements on a going concern basis.
Recognition of income
Revenue grant funding
Government revenue grants include funding body recurrent grants and other grants and are accounted
for under the accrual model as permitted by FRS 102. Funding body recurrent grants are measured in
line with best estimates for the period of what is receivable and depend on the particular income stream
involved. The final grant income is normally determined with the conclusion of the year end
reconciliation process with the funding body following the year end, and the results of any funding
audits. 16-18 funding is not subject to reconciliation and is therefore not subject to contract adjustments.
Where part of a government grant is deferred, the deferred element is recognised as deferred income
within creditors and allocated between creditors due within one year and creditors due after more than
one year as appropriate.
Grants (including research grants) from non-government sources are recognised in income when the
college is entitled to the income and performance related conditions have been met. Income received
in advance of performance related conditions being met is recognised as deferred income within
creditors on the balance sheet and released to income as the conditions are met.
Capital grant funding
Government capital grants for assets are capitalised, held as deferred income and recognised in income
over the expected useful life of the asset, under the accrual model as permitted by FRS 102. Other,
non-governmental, capital grants are recognised in income when the college is entitled to the funds
subject to any performance related conditions being met. Income received in advance of performance
related conditions being met is recognised as deferred income within creditors on the Balance Sheet
and released to income as conditions are met.
Fee income
Income from tuition fees is stated gross of any expenditure which is not a discount and is recognised
in the period for which it is received.
Investment income
All income from short-term deposits is credited to the statement of comprehensive income in the
period in which it is earned on a receivable basis.
Agency arrangements
The college acts as an agent in the collection and payment of certain discretionary support funds and
any other arrangements. Related payments received from the funding bodies and subsequent
disbursements to students are excluded from the income and expenditure of the college where the
college is exposed to minimal risk or enjoys minimal economic benefit related to the transaction.
Accounting for Retirement benefits
Retirement benefits to employees of the college are principally provided by the Teachers’ Pension
Scheme (TPS) and the Local Government Pension Scheme (LGPS). These are multi-employer defined
benefit plans, which are externally funded and contracted out of the State Second Pension.
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 34 of 57
Teachers’ Pension Scheme (TPS)
The TPS is an unfunded scheme. Contributions to the TPS are calculated so as to spread the cost of
pensions over employees’ working lives with the college in such a way that the pension cost is a
substantially level percentage of current and future pensionable payroll. The contributions are
determined by the qualified actuaries on the basis of valuations using a prospective benefit method.
The TPS is a multi-employer scheme and there is insufficient information available to use defined
benefit accounting. The TPS is therefore treated as a defined contribution plan and the contributions
recognised as an expense in the income statement in the periods during which services are rendered
by employees.
London Borough of Newham Pension Fund (LGPS)
The LGPS is a funded scheme, and the assets of the scheme are held separately. Pension schemes
are measured at fair value and liabilities are measured on an actuarial basis using the projected unit
credit method. The actuarial valuations are obtained at least triennially and are updated at each balance
sheet date. The amounts charged to operating surplus are the current service costs and the costs of
scheme introductions, benefit changes, settlements and curtailments. They are included as part of staff
costs. The net interest cost on the net defined benefit liability/asset is charged to comprehensive income
and included within finance costs. Re-measurement comprising actuarial gains and losses, the effect
of the asset ceiling and the return on scheme assets (excluding amounts include in net interest on the
net defined benefit liability) are recognised immediately in other comprehensive income.
The LGPS assets are managed by the scheme trustees at scheme level, and the determination /
allocation of assets to each individual employer in the scheme is managed by the scheme actuary. The
assets are allocated to each employer for accounting purposes based on the valuation of the assets at
the latest triennial valuation as adjusted for subsequent contributions received from the employer, asset
returns and benefit payments made (either on a cash basis or actuarial basis).
The retirement benefit obligation recognised represents the deficit or surplus in the defined benefit
plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits
available in the form of refunds from the plans or reductions in future contributions to the plans.
Short term Employment benefits
Short term employment benefits such as salaries and compensated absences (holiday pay) are
recognised as an expense in the year in which the employees render service to the college.
Any unused benefits are accrued and measured as the additional amount the college expects to pay
as a result of the unused entitlement.
Enhanced Pensions
The actual cost of any enhanced ongoing pension to a former member of staff is paid by a college
annually. An estimate of the expected future cost of any enhancement to the ongoing pension of a
former member of staff is charged in full to the college’s income in the year that the member of staff
retires. In subsequent years a charge is made to provisions in the balance sheet.
Tangible fixed assets
Tangible fixed assets are stated at cost/deemed cost less accumulated depreciation and accumulated
impairment losses. Certain items of fixed assets that had been revalued to fair value on or prior to the
date of transition to the FE HE SORP, are measured on the basis of deemed cost, being the revalued
amount at the date of that revaluation.
Where parts of a fixed asset have different useful lives, they are accounted for as separate items of
fixed assets.
Land and buildings
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 35 of 57
Land and buildings are stated at cost or deemed cost for buildings held at valuation at the date of
transition to FRS 102, less accumulated depreciation and accumulated impairment losses.
Freehold land is not depreciated as it is considered to have an infinite useful life.
Assets under construction
Assets under construction are accounted for at cost, based on the value of architects’ certificates and
other direct costs, incurred to 31 July. They are not depreciated until they are brought into use.
Equipment
Equipment costing less than £1,000 per individual item or set of items acquired together is recognised
as expenditure in the period of acquisition. All other equipment is capitalised and recognised at cost
less accumulated depreciation and accumulated impairment losses.
Depreciation and residual values
Depreciation on other assets is calculated, using the straight-line basis, to write off the cost of each
asset to its estimated residual value over its expected useful lives, as follows:
Freehold buildings and improvements – 15 to 30 years
Long Leasehold land and buildings – the remaining lease term
Furniture and equipment – 7 years
Computer equipment – 5 years
Motor vehicles – 5 years
Residual value is calculated on prices prevailing at the reporting date, after estimated costs of disposal,
for the asset as if it were at the age and in the condition expected at the end of its useful life.
Subsequent costs, including replacement parts, are only capitalised when it is probable that such costs
will generate future economic benefits. Any replaced parts are then derecognised. All other costs of
repairs and maintenance are expenses as incurred.
A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate
that the carrying value of any fixed asset may not be recoverable. Shortfalls between the carrying value
of fixed assets and their recoverable amounts are recognised as impairments. Impairment losses are
recognised in the Statement of Comprehensive Income.
Intangible assets
Intangible assets are initially recognised at cost and are subsequently measured at cost less
accumulated amortisation and accumulated impairment losses. Intangible assets are amortised to
Statement of Comprehensive income on a straight-line basis over their useful lives, and for purchased
computer software this is 5 years.
Borrowing costs
Borrowing costs are recognised as expenditure in the period in which they are incurred.
Leased assets
Costs in respect of operating leases are charged on a straight-line basis over the lease term to the
Statement of Comprehensive Income and Expenditure. Any lease premiums or incentives relating to
leases signed after 1
st
August 2014 are spread over the minimum lease term.
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 36 of 57
Leasing agreements which transfer to the college substantially all the benefits and risks of ownership
of an asset are treated as finance leases.
Assets held under finance leases are recognised initially at the fair value of the leased asset (or, if lower,
the present value minimum lease payments) at the inception of the lease.
The corresponding liability to the lessor is included in the balance sheet as an obligation under finance
leases. Assets held under finance leases are included in tangible fixed assets and depreciated and
assessed for impairment losses in the same way as owned assets.
Minimum lease payments are apportioned between the finance charge and the reduction of the
outstanding liability. The finance charges are allocated over the period of the lease in proportion to the
capital element outstanding.
Investments
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost less impairment in the individual financial
statements.
Financial instruments
The Group has chosen to adopt Sections 11 and 12 of FRS 102 in full in respect of financial instruments.
Financial assets and liabilities
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provision of the instrument.
Financial liabilities and equity are classified according to the substance of the financial instrument’s
contractual obligations, rather than the financial instrument’s legal form.
All financial assets and liabilities are initially measured at transaction price (including transaction costs),
except for those financial assets measured at fair value through the profit or loss, which are initially
measured at fair value (which is normally the transaction price excluding transaction costs), unless
arrangement constitutes a financing transaction. A financial asset or financial liability that is payable or
receivable within one year is measured at the undiscounted amount expected to be received or paid
net of impairment, unless it is a financing transaction. If an arrangement constitutes a financing
transaction, the financial asset or financial liability is measured at the present value of the future
payments discounted at a market rate of interest for a similar debt instrument.
Taxation
The College is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and
therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly,
the College is potentially exempt from taxation in respect of income or capital gains received within
categories covered by sections 478-488 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.
The College is partially exempt in respect of Value Added Tax, so that it can only recover around 3%
of the VAT charged on its inputs. Irrecoverable VAT on inputs is included in the costs of such inputs
and added to the cost of tangible fixed assets as appropriate, where the inputs themselves are tangible
fixed assets by nature.
One of the College’s subsidiary companies is subject to corporation tax and VAT in the same way as
any commercial organisation.
Provisions and contingent liabilities
Provisions are recognised when
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 37 of 57
• the college has a present legal or constructive obligation as a result of a past event
• it is probable that a transfer of economic benefit will be required to settle the obligation and
• a reliable estimate can be made of the amount of the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the
obligation is recognised at present value using a pre-tax discount rate that reflects the risks specific to the
liability. The unwinding of the discount is recognised as a finance cost in the statement of comprehensive
income in the period it arises.
A contingent liability arises from a past event that gives the college a possible obligation whose existence
will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the
control of the college. Contingent liabilities also arise in circumstances where a provision would otherwise
be made but either it is not probable that an outflow of resources will be required, or the amount of the
obligation cannot be measured reliably.
Contingent liabilities are not recognised in the balance sheet but are disclosed in the notes to the financial
statements.
JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances.
Judgements in applying accounting policies
In preparing these financial statements, management have made the following judgements:
• Determine whether leases entered into by the group either as a lessor or a lessee are operating
or finance leases. These decisions depend on an assessment of whether the risks and rewards of
ownership have been transferred from the lessor to the lessee on a lease by lease basis.
• Determine whether there are indicators of impairment of the group’s tangible assets. Factors taken
into consideration in reaching such decision include the economic viability and expected future
financial performance of the asset and where it is a component of a larger cash-generating unit,
the viability and expected future performance of that unit.
Other key sources of estimation uncertainty
• Tangible fixed assets
Tangible fixed assets, other than investment properties, are depreciated over their useful lives
taking into account residual values, where appropriate. The actual lives of the assets and residual
values are assessed annually and may vary depending on a number of factors. In re-assessing
asset lives, factors such as technological innovation and maintenance programmes are taken into
account. Residual value assessments consider issues such as future market conditions, the
remaining life of the asset and projected disposal values.
• Local Government Pension Scheme
The present value of the Local Government Pension Scheme defined benefit obligation 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, which are disclosed in note 21, will impact the carrying amount
of the pension liability. The actuary has used a roll forward approach which projects results from
the latest full actuarial valuation performed at 31 March 2022 has been used by the actuary in
valuing the pensions obligation at 31 July 2023. Any differences between the figures derived from
the roll forward approach and a full actuarial valuation would impact on the carrying amount of the
pension obligation.
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 38 of 57
2. FUNDING BODY GRANTS
3. TUITION FEES AND EDUCATION CONTRACTS
4. OTHER GRANTS AND CONTRACTS
Group College Group College
£'000 £'000 £'000 £'000
Recurrent Grants
Greater London Authority - adult education
budget
15,515 15,515 14,716 14,716
Education & Skills Funding Agency - adult
education budget
1,075 1,075 986 986
Education & Skills Funding Agency - 16-18 13,311 13,311 13,464 13,464
Specific Grants
Teacher Pension Scheme contribution grant 453 453 376 376
Release of Government Capital Grants 91 76 84 69
Total 30,445 30,430 29,626 29,611
2023
2022
Group College Group College
£'000 £'000 £'000 £'000
Adult Education Fees 103 103 206 206
Fees for FE Loan Supported Courses 463 463 622 622
Fees for OfS Loan Supported Courses - - 31 31
566 566 859 859
Education Contracts 3,061 3,061 2,431 2,431
Total 3,627 3,627 3,290 3,290
2023
2022
Group College Group College
£'000 £'000 £'000 £'000
European Commission 339 339 411 411
Other grants and contracts 542 542 402 402
881 881 813 813
2023
2022
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 39 of 57
5. OTHER INCOME
6. INVESTMENT INCOME
7. DONATIONS
Newtec Donation: a one-off donation of £776k from former subsidiary Newtec to the College following
its winding-up.
Group College Group College
£'000 £'000 £'000 £'000
Rent receivable 112 112 89 89
Retail income 843 843 710 710
Release from deferred capital grants (non ESFA) 1,627 1,102 1,018 493
Miscellaneous income 504 193 472 215
3,086 2,250 2,289 1,507
2023
2022
Group College Group College
£'000 £'000 £'000 £'000
Other interest receivable 181 181 3 3
181 181 3 3
2023
2022
Group College Group College
£'000 £'000 £'000 £'000
Unrestricted donations 27 27 35 35
Newtec donation 776 776 - -
803 803 35 35
2023
2022
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 40 of 57
8.
STAFF COSTS - GROUP AND COLLEGE
The average number of persons (including key management personnel) employed by the Group and
College during the year, expressed as average headcount and calculated on a monthly basis, was:
The corporation does not have any salary sacrifice arrangements in place.
GROUP 2023 2022
No. No.
Teaching Staff 180 184
Non-teaching Staff 259 259
439 443
COLLEGE 2023 2022
No. No.
Teaching Staff 180 184
Non-teaching Staff 258 258
438 442
2023 2022
Group College Group College
£'000 £'000 £'000 £'000
Wages and salaries 14,389 14,312 13,236 13,163
Social security costs 1,437 1,437 1,376 1,376
Other pension costs 3,136 3,136 4,209 4,209
Payroll sub-total 18,962 18,885 18,821 18,748
Contracted out staffing costs 879 879 699 699
19,841 19,764 19,520 19,447
Restructuring costs
- Contractual 386 386 281 281
- Non-contractual 16 16 - -
Total staff costs 20,243 20,166 19,801 19,728
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 41 of 57
8
STAFF COSTS – GROUP AND COLLEGE (continued)
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning
directing and controlling the activities of the College and are represented the Executive Team
which comprises the Principal and other senior post-holders, please see page 3 for details.
Emoluments of key management personnel, Accounting Officer and other higher paid
staff
The number of other staff who received annual emoluments, excluding pension contributions
but including benefits in kind, in the following ranges was:
There were no amounts due to key management personnel that were waived in the year, nor
any salary sacrifice arrangements in place.
2023 2022
No. No.
3 4
The number of key management personnel including the
Accounting Officer was:
2023 2022 2023 2022
No. No. No. No.
£60,001 to £65,000 - - 1 4
£65,001 to £70,000 - - 1 -
£70,001 to £75,000 - - 1 -
£75,001 to £80,000 - - 5
£80,001 to £85,000 - - 6 4
£85,001 to £90,000 - - 4 3
£95,001 to £100,000 - - 1 2
£100,001 to £105,000 - - 1 -
£110,001 to £115,000 - 1 - -
£120,001 to £125,000 - 1 - -
£125,001 to £130,000 2 1 - -
£170,001 to £175,000 - - - -
£175,001 to £180,000 1 1 - -
3 4 15 18
Key Management
personnel
Other Staff
Key management personnel (including the Accounting
Officer) emoluments are made up as follows:
2023 2022
£'000 £'000
Basic Salary 418 478
National Insurance 55 63
473 541
Pension contributions 71 69
Total emoluments 544 610
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 42 of 57
8
STAFF COSTS – GROUP AND COLLEGE (continued)
The above compensation includes amounts paid to the Principal and Chief Executive who is the
Accounting Officer and who is also the highest paid member of staff. His pay and remuneration
are as follows:
The remuneration of the Accounting Officer was determined on 17 July 2018 by the College’s
Remuneration Committee. The Accounting Officer was not involved in setting their remuneration.
The factors taken into account by the Committee in determining the Accounting Officer’s
remuneration for the year to 31 July 2023 included pay increases for other staff, performance
against personal objectives; performance of the organisation; sector data on pay of accounting
officers and benchmarking comparison to the broader market.
A similar approach was used to determine the remuneration of other key management personnel.
The relationship between the accounting officer’s emoluments, expressed as a multiple of all
other employees based on full-time equivalents, is set out below for both basic salary and total
remuneration.
Members of the Corporation remuneration
The Accounting Officer and the staff members only receive remuneration in respect of services
they provide undertaking their roles of Principal and staff members under contracts of
employment and not in respect of their roles as governors. The other members of the Corporation
did not receive any payments from the College in respect of their roles as Governors.
No expenses were paid to Governors (2022: £nil).
2023 2022
£'000 £'000
Salaries 178 175
Pension contributions 26 26
Total 204 201
2023 2022
No No
Basic salary as a multiple of median basic salary of staff 5.0 5.4
Total remuneration as a multiple of median total remuneration
of staff
4.5 4.8
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 43 of 57
9. OTHER OPERATING EXPENSES
10. INTEREST PAYABLE AND OTHER FINANCE COSTS
Group College Group College
£'000 £'000 £'000 £'000
Teaching costs 6,683 6,683 8,451 8,451
Non teaching costs 3,063 2,991 2,779 2,718
Premises costs 3,968 3,770 2,645 2,504
Total 13,714 13,444 13,875 13,673
2023
2022
Deficit is stated after charging: Group College Group College
£'000 £'000 £'000 £'000
Auditors' remuneration:
Financial statements audit:
- Audit of Group/ College 92 92 84 84
- Audit of Subsidiaries 9 - 8 -
- Non-Audit Services 10 10 27 27
Internal audit 26 26 24 24
Operating lease rentals 252 252 252 252
2023
2022
Group College Group College
£'000 £'000 £'000 £'000
Bank loans, overdrafts and other loans 21 21 7 7
Unwinding of discounts in relation to enhanced pensions 56 56 34 34
Net interest on defined pension liability (note 21) 160 160 569 569
237 237 610 610
2023
2022
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 44 of 57
11. INTANGIBLE FIXED ASSETS (GROUP AND COLLEGE)
11. TANGIBLE FIXED ASSETS (GROUP)
Included above is land with a value of £29,500,000 (2022: £29,500,000).
If the land was stated at the historical cost amount it would be included at a value of £4,956,000
(2022: £5,595,000).
Software &
website costs
Assets in the
course of
construction
Total
£'000 £'000 £'000
Cost
At 1 August 2022 499 - 499
Additions 15 120 135
Disposals (46) - (46)
At 31 July 2023 468 120 588
Amortisation
At 1 August 2022 412 - 412
Charge for year 50 - 50
Eliminated in respect of disposals (46) - (46)
At 31 July 2023 416 - 416
Net book value
At 31 July 2023 52 120 172
Net book value
At 31 July 2022 87 - 87
Group and College
Furniture &
Equipment
Computer
Equipment
Assets in the
course of
construction
Total
Freehold
Long
Leasehold
£'000 £'000 £'000 £'000 £'000 £'000
Cost or Valuation
At 1 August 2022 94,109 11,857 2,671 3,544 170 112,351
Additions 1,697 1,220 821 439 5,015 9,192
Disposals - - (53) (357) - (410)
At 31 July 2023 95,806 13,077 3,439 3,626 5,185 121,133
Depreciation
At 1 August 2022 53,253 - 1,124 1,702 - 56,079
Charge for year 1,639 393 272 684 - 2,988
Eliminated in respect of disposals - - (53) (357) - (410)
At 31 July 2023 54,892 393 1,343 2,029 - 58,657
Net book value
At 31 July 2023 40,914 12,684 2,096 1,597 5,185 62,476
Net book value
At 31 July 2022 40,856 11,857 1,547 1,842 170 56,272
Land & Buildings
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 45 of 57
11. TANGIBLE FIXED ASSETS (COLLEGE ONLY)
On transition to FRS 102 land with a carrying value of £24,000k was revalued to fair value and the fair
value has been treated as deemed cost at that date. If the land was stated at the historical cost amount
it would be included at a carrying value of £1,889k.
Buildings with a net book value of £29,784k were impaired at 31 July 2014 by £15,984k. £7,615k of this
impairment was written off to the Revaluation Reserve with the remaining £8,369k being debited to the
income and expenditure reserve. On a historical cost basis these assets would have been included at
a cost of £53,449k with accumulated depreciation of £27,043k.
Land and buildings with a net book value of £3,064k (2022: 3,703k) have been funded and inherited
from local authority sources.
Included in the tangible fixed assets is £2,592k (2022: £2,794k) net book value for items funded by
Government and European capital grants. Should these assets be sold, the College would either have
to surrender the sale proceeds to the Education and Skills Funding Agency or use them in accordance
with the financial memorandum with the Education and Skills Funding Agency.
If inherited land and buildings had not been revalued, they would have been included at the following
historical cost amounts:
Furniture &
Equipment
Computer
Equipment
Assets in the
course of
construction
Total
Freehold
Long
Leasehold
£'000 £'000 £'000 £'000 £'000 £'000
Cost or Valuation
At 1 August 2022 76,743 11,857 2,205 3,418 171 94,394
Additions 1,697 1,220 821 439 5,015 9,192
Disposals - - (53) (357) - (410)
At 31 July 2023 78,440 13,077 2,973 3,500 5,186 103,176
Depreciation
At 1 August 2022 44,662 - 660 1,574 - 46,896
Charge for year 1,125 393 271 684 - 2,473
Eliminated in respect of disposals - - (53) (357) - (410)
At 31 July 2023 45,787 393 878 1,901 - 48,959
Net book value
At 31 July 2023 32,653 12,684 2,095 1,599 5,186 54,217
Net book value
At 31 July 2022 32,081 11,857 1,545 1,844 171 47,498
Land & Buildings
£'000
Cost 28,050
Aggregate depreciation based on cost 23,094
Net book value based on cost 4,956
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 46 of 57
12. FIXED ASSET INVESTMENTS
The College has an interest in 3 companies namely, Newham Foundation, Learning Revolution Trust
and The Fashion and Textile Museum.
• The registered office of Newham Foundation, Learning Revolution Trust and The Fashion
and Textile Museum is Newham College of Further Education, East Ham Campus, High
Street South, London E6 6ER.
• Newham Foundation is an educational/facilities provider charitable company limited by
guarantee, incorporated in England and Wales, jointly controlled by the College (80%) and
the London Borough of Newham (20%).
• Learning Revolution Trust is a company limited by guarantee without share capital,
incorporated in England and Wales on 7 November 2011 and registered as a charity on 24
October 2012.
• The Fashion and Textile Museum is a company limited by guarantee without share capital
and incorporated in England and Wales on 11 July 1996 but did not trade during the period
of these accounts.
Of the three companies mentioned above only two are consolidated within the Group financial
statements because one did not trade.
Group College Group College
£'000 £'000 £'000 £'000
Shares in subsidiary undertakings - - - -
Other assets in subsidiary undertakings - 966 - 1,089
- 966 - 1,089
2023
2022
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 47 of 57
13 TRADE DEBTORS AND OTHER RECEIVABLES
14 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
`
15 CREDITORS: AMOUNTS FALLING DUE AFTER ONE YEAR
Government grants (capital) of £22,894k includes a grant of £13,539k which is included in fixed
assets being 50% of the IoT assets capitalised in the year with the remaining 50% being recognised
by QMU.
Group College Group College
£'000 £'000 £'000 £'000
Amounts falling due within one year:
Trade debtors 465 465 352 352
Amounts owed by subsidiary undertakings - 39 - 12
Prepayments and accrued income 1,372 1,372 960 960
Amounts owed by ESFA - - 20 20
Other debtors 3 4 4 4
Total 1,840 1,880 1,336 1,348
2023
2022
Group College Group College
£'000 £'000 £'000 £'000
Bank loans and overdrafts 285 285 285 285
Trade creditors 1,595 1,580 893 878
Other taxation and social security 664 664 634 634
Accruals and deferred income 5,790 5,790 6,174 6,174
Government grants (capital) 1,719 1,301 1,102 684
Other creditors 1 1 5 5
Total 10,054 9,621 9,093 8,661
2023
2022
Group College Group College
£'000 £'000 £'000 £'000
Bank loans 475 475 759 759
Government grants (capital) 22,894 20,883 18,247 15,819
Total 23,369 21,358 19,006 16,578
2023
2022
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 48 of 57
16 MATURITY OF DEBT
Bank loans and overdrafts
Bank loans and overdrafts are repayable as follows:
Interest on the bank loan is charged at rates varying between 2.0% above bank prime rate
and 6% fixed rate and the loan is repayable by instalments falling due between 1 August
2020 and 31 July 2027 totalling £760k, and is secured on a portion of the freehold land and
buildings of the Group. The Salix loan is interest free.
Group College Group College
£'000 £'000 £'000 £'000
In one year or less 248 248 285 285
Between one and two years 418 418 495 495
Between two and five years 94 94 264 264
760 760 1,044 1,044
2023
2022
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 49 of 57
17 PROVISIONS FOR LIABILITIES
Group and College
Defined
benefit
obligations
Enhanced
pensions
Total
£'000
£'000
£'000
At August 2022
3,793
1,697
5,490
Amount utilised
(4,891)
(154)
(5,045)
Additional provisions in the year
1,098
-
1,098
Unwinding of discount
-
56
56
Released unused provisions
-
(147)
(147)
At 31 July 2023
-
1,452
(8,432)
Defined benefit obligations relate to the assets under the college’s membership of the Local
Government Pension Scheme. Further details are given in note 21.
The enhanced pension provision relates to the cost of staff who have already left the college’s employ
and commitments for reorganisation costs from which the college cannot reasonably withdraw at the
balance sheet date. The provision has been calculated in accordance with guidance issued by the
funding bodies.
The principal assumptions for this calculation are: 2023 2022
Price Inflation 2.8% 2.9%
Net interest rate 5.0% 3.3%
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 50 of 57
18 NOTES TO STATEMENT OF CASH FLOWS
2023
2022
£'000
£'000
Surplus / (Deficit) after tax for the year
1,841
(640)
Adjustment for:
Depreciation
2,988
2,411
Amortisation
50
62
Investment income
(181)
(3)
Interest payable
21
7
Decrease in provisions
(244)
(428)
Pensions costs less contributions payable
1,049
2,943
Operating cash flow before movements in working capital
5,524
4,352
(Increase) / decrease in debtors
(504)
203
(Decrease) / Increase in creditors
(1,498)
224
Cash generated from operations
3,522
4,779
19 CAPITAL COMMITMENTS
20 COMMITMENTS UNDER OPERATING LEASES
As at 31 July the college had total future minimum lease payments under non-cancellable
operating leases as follows:
2023 2022
£'000 £'000
Commitments contracted for at 31 July 3,093 2,638
Group and College
Group College Group College
£'000 £'000 £'000 £'000
Payments due
Not later than one year 237 237 252 252
Later than one year and not later than five years 273 273 510 510
510 510 762 762
2023
2022
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 51 of 57
21 DEFINED BENEFIT OBLIGATIONS
The College’s employees belong to two principal post-employment benefit plans: the Teachers’
Pension Scheme England and Wales (TPS) for academic and related staff; and the Local
Government Pension Scheme (LGPS) for non-teaching staff, which is managed by the London
Pension Funds Authority. Both are multi-employer defined-benefit plans.
The pension costs are assessed in accordance with the advice of independent qualified
actuaries. The latest formal actuarial valuation of the TPS was 31 March 2020 and of the LGPS
31 March 2022. Contributions amounting to £1,281,000 (2022 £1,125,000) were payable to the
scheme at 31 July and are included within creditors.
Teachers’ Pension Scheme
The Teachers' Pension Scheme (TPS) is a statutory, contributory, defined benefit scheme,
governed by the Teachers’ Pension Scheme Regulations 2014. The TPS is an unfunded
scheme and members contribute on a ’pay as you go' basis – these contributions, along with
those made by employers, are credited to the Exchequer. The TPS is a multi-employer pension
plan and there is insufficient information to account for the scheme on as a defined benefit plan
so it is accounted for as a defined contribution plan.
Valuation of the Teachers’ Pension Scheme
Not less than every four years the Government Actuary (“GA”), using normal actuarial
principles, conducts a formal actuarial review of the TPS. 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 was carried out as at 31 March 2020 and in accordance with The Public Service
Pensions (Valuations and Employer Cost Cap) Directions 2023 and the Employer Contribution
Rate was assessed using agreed assumptions in line with the Directions and was accepted at
the original assessed rate as there was no cost control mechanism breach.
The valuation report was published on 26 October 2023. The key results of the valuation are:
- Total scheme liabilities for service (the capital sum needed at 31 March 2020 to meet
the stream of future cash flows in respect of benefits earned) of £262 billion
- Value of notional assets (estimated future contributions together with the proceeds from
the notional investments held at the valuation date) of £222 billion
2023 2022
£'000 £'000
Total pension cost for the year
Teachers' Pension Scheme: contributions paid 1,281 1,125
Local Government Pension Scheme:
Contributions paid 1,064 973
FRS 102 (28) charge 735 2,077
Charge to the Statement of Comprehensive Income 1,799 3,050
Enhanced pension charge to Statement of Comprehensive
Income
56 34
Total Pension cost for Year within staff costs 3,136 4,209
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 52 of 57
21 DEFINED BENEFITS OBLIGATIONS (continued)
- Notional past service deficit of £39.8 billion (2016 £22 billion)
- Discount rate is 1.7% in excess of CPI (2016 2.4% in excess of CPI (this change has
had the greatest financial significance)
As a result of the valuation, new employer contribution rates were set at 28.6% of pensionable
pay from 1 April 2024 until 31 March 2027 (compared to 23.68% under the previous valuation
including a 0.08% administration levy). DfE agreed to pay a Teachers Pensions employer
contribution grant to cover the additional costs during the 2021-22 academic year, and currently
through to July 2024. The pension costs paid to TPS in year amounted to £1,281,000 (2022:
£1,125,000)
Local Government Pension Scheme
The LGPS is a funded defined-benefit plan, with the assets held in separate funds administered
by London Pension Funds Authority. The total contributions made for the year ended 31 July
2023 were £1,501k, of which employer’s contributions totalled £1,064k and employees’
contributions totalled £437k. The agreed contribution rates for future years are 17.3% for
employers and range from 5.5% to 12.5% for employees, depending on salary according to a
national scale.
Principal Actuarial Assumptions
The following information is based upon a full actuarial valuation of the fund at 31 March 2022
updated to 31 July 2023 by a qualified independent actuary.
The current mortality assumptions include sufficient allowance for future improvements in
mortality rates. Although the inflation assumption is significantly lower than the Group’s current
experience of inflation, it is appropriate as it reflects the expected indexation rate that will be
applied to future pensions.
At 31 July At 31 July
2023 2022
% per annum % per annum
Price increases - RPI 2.80% 2.80%
Price increases - CPI 0.35% 0.35%
Salary increases 2016/17 1.00% 1.00%
Salary increases after 2016/17 3.85% 3.75%
Pension increases 2.85% 2.75%
Discount rate 5.15% 3.40%
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 53 of 57
21 DEFINED BENEFITS OBLIGATIONS (continued)
The assumed life expectations on retirement age 65 are:
The College’s share of the assets in the plan at the balance sheet date and expected rates of
return were:
The amount included in the balance sheet in respect of the defined benefit pension
plan and enhanced pension benefits is as follows:
The value of the college’s share of net assets has been restricted due to the effect of the asset
ceiling being the maximum value of the present of the economic benefits available in the form
of the unconditional right to reduced contributions from the plan. A corresponding charge has
been made to other comprehensive income in the period.
At 31 July At 31 July
2023 2022
Years Years
Retiring today
Males 19.6 21.1
Females 23.0 23.9
Retiring in 20 years
Males 21.0 22.5
Females 24.5 25.4
At 31 July At 31 July
2023 2022
£'000 £'000
Equity instruments 32,209 31,120
Gilts 11 3,715
Property 5,564 8,646
Cash 1,252 2,770
Other (Alternative assets & Other Bonds) 13,091 6,765
Total fair value of plan assets 52,127 53,016
Actual return on plan assets 934 3,468
Fair Value of assets
2023 2022
£'000 £'000
Present value of the defined benefit obligation 41,879 56,319
Fair value of Fund assets (bid value) 52,127 53,016
(Net asset) / Liability (10,248) 3,303
Present value of unfunded obligations 364 490
Restriction to level of asset ceiling 9,884 -
Net (asset) / Liability recognised in the balance sheet - 3,793
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 54 of 57
21 DEFINED BENEFITS OBLIGATIONS (continued)
Amounts recognised in the Statement of Comprehensive Income in respect of the plan
are as follows:
22 RELATED PARTY TRANSACTIONS
There have been no related party transactions in the year.
Key management compensation disclosure is given in note 8.
Advantage has been taken of the exemption provided by FRS102 section 33 from reporting
transactions with other wholly owned group companies and controlled companies.
2023 2022
£'000 £'000
Amounts included in staff costs
Current service cost 2,002 3,397
Net interest on the net defined benefit pension liability 111 519
Loss on curtailments - -
Total 2,113 3,916
2023
£'000
Changes in the present value of defined benefit obligations
Defined benefit obligations at start of period 56,809
Current service cost 2,002
Interest cost 1,903
Contributions by scheme participants 437
Actuarial gains (14,511)
Benefits paid (2,114)
Change in demographic assumptions (2,843)
Experience loss/(gain) on defined benefit obligation 595
Unfunded pension payments (35)
Defined benefit obligations at end of period 42,243
Changes in fair value of plan assets
Fair value of plan assets at start of period 53,016
Interest income 1,792
Other actuarial losses (1,126)
Return on plan assets (excluding net interest on the net defined
benefit liability)
(858)
Employer contributions 1,064
Contributions by scheme participants 437
Benefits paid (2,149)
Fair value of plan assets at end of period 52,176
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 55 of 57
23 AMOUNTS DISBURSED AS AGENT-LEARNER SUPPORT FUNDS
Funding body grants are available solely for students. In the majority of instances, the College
only acts as a paying agent. In these circumstances, the grants and related disbursements are
therefore excluded from the Statement of Comprehensive Income.
Funding body grants are available solely for students. In the majority of instances, the college
only acts as a paying agent. In these circumstances, the grants and related disbursements are
therefore excluded from the Statement of Comprehensive Income.
24 EVENTS AFTER THE REPORTING PERIOD
There are no events after the reporting period.
2023 2022
£'000 £'000
Funding body grants - 16 - 19 bursary 256 251
Funding body grants - childcare 33 47
Interest earned 2 2
291 300
Disbursed to students (276) (281)
Administration costs (13) (15)
Balance unspent at 31 July, included in creditors 2 4
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 56 of 57
INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON REGULARITY TO THE
CORPORATION OF NEWHAM COLLEGE OF FURTHER EDUCATION AND THE SECRETARY OF
STATE FOR EDUCATION ACTING THROUGH EDUCATION AND SKILLS FUNDING AGENCY
Conclusion
We have carried out an engagement, in accordance with the terms of our engagement letter dated 20
September 2022 and further to the requirements of the grant funding agreements and contracts with
the Education and Skills Funding Agency (the “ESFA”) or those of any other public funder, to obtain
limited assurance about whether the expenditure disbursed and income received by Newham College
of Further Education during the period 1 August 2022 to 31 July 2023 have been applied to the purposes
identified by Parliament and the financial transactions conform to the authorities which govern them.
In the course of our work, nothing has come to our attention which suggests that in all material respects
the expenditure disbursed and income received during the period 1 August 2022 to 31 July 2023 have
not been applied to purposes intended by Parliament and the financial transactions do not conform to
the authorities which govern them.
Basis for conclusion
The framework that has been applied is set out in the Post-16 Audit Code of Practice (the Code) issued
by the ESFA and in any relevant conditions of funding concerning adult education notified by a relevant
funder.
We have complied with the independence and other ethical requirements of the FRC’s Ethical Standard
and the ethical pronouncements of the ICAEW. We also apply International Standard on Quality
Management (UK) 1 Quality Management for Firms that Perform Audits or Reviews of Financial
Statements, or Other Assurance or Related Services Engagements and accordingly maintain
comprehensive systems of continuing quality management.
Responsibilities of Corporation of Newham College of Further Education for regularity
The Corporation of Newham College of Further Education is responsible, under the grant funding
agreements and contracts with the ESFA and the requirements of the Further & Higher Education Act
1992, subsequent legislation and related regulations and guidance, for ensuring that expenditure
disbursed and income received are applied for the purposes intended by Parliament and the financial
transactions conform to the authorities which govern them. The Corporation of Newham College of
Further Education is also responsible for preparing the Governing Body's Statement of Regularity,
Propriety and Compliance.
Reporting accountant’s responsibilities for reporting on regularity
Our responsibilities for this engagement are established in the United Kingdom by our profession’s
ethical guidance and are to obtain limited assurance and report in accordance with our engagement
letter and the requirements of the Code.
The objective of a limited assurance engagement is to perform such procedures as to obtain information
and explanations in order to provide us with sufficient appropriate evidence to express a negative
conclusion on regularity. A limited assurance engagement is more limited in scope than a reasonable
assurance engagement and the procedures performed vary in nature and timing from, and are less in
extent than for a reasonable assurance engagement; consequently a limited assurance engagement
does not enable us to obtain assurance that we would become aware of all significant matters that
might be identified in a reasonable assurance engagement. Accordingly, we do not express a positive
opinion.
We report to you whether anything has come to our attention in carrying out our work which suggests
that in all material respects, expenditure disbursed and income received during the period 1 August
2022 to 31 July 2023 have not been applied to purposes intended by Parliament or that the financial
transactions do not conform to the authorities which govern them.
Our work included identification and assessment of the design and operational effectiveness of the
controls, policies and procedures that have been implemented to ensure compliance with the framework
of authorities including the specific requirements of the grant funding agreements and contracts with
NEWHAM COLLEGE OF FURTHER EDUCATION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
Page 57 of 57
the ESFA and those of any other public funder and high level financial control areas where we identified
a material irregularity is likely to arise. We undertook detailed testing, on a sample basis, on the
identified areas where a material irregularity is likely to arise where such areas are in respect of controls,
policies and procedures that apply to classes of transactions.
This work was integrated with our audit of the financial statements and evidence was also derived from
the conduct of that audit to the extent it supports the regularity conclusion.
Use of our report
This report is made solely to the Corporation of Newham College of Further Education and the Secretary
of State for Education acting through the ESFA in accordance with the terms of our engagement letter.
Our work has been undertaken so that we might state to the Corporation of Newham College of Further
Education and the Secretary of State for Education acting through the ESFA those matters we are
required to state in a 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 Corporation of Newham College of Further
Education and the Secretary of State for Education acting through the ESFA for our work, for this report,
or for the conclusion we have formed.
RSM UK AUDIT LLP
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
15th December 2023
