derwen college...derwen college contents page reference and administrative details of the college,...

Registered number: 08615826Charity number: 1153280

DERWEN COLLEGE

GOVERNORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

DERWEN COLLEGE

CONTENTS

Page

Reference and administrative details of the College, its Governors and advisers 1 - 2

Governors' report 3 - 25

Independent auditors' report on the financial statements 26 - 28

Statement of financial activities 29

Balance sheet 30

Notes to the financial statements 31 - 51

DERWEN COLLEGE

REFERENCE AND ADMINISTRATIVE DETAILS OF THE COLLEGE, ITS GOVERNORS AND ADVISERSFOR THE YEAR ENDED 31 DECEMBER 2019

Governors Mrs K Kimber, Chair

Cllr K L Childs, Wrexham Council Nominee

Mrs B L Court

Mr M Cowan

Mrs H V Cox

Mr D P Evison

Mr P D Jones (resigned 12 March 2020)

Lord L Kenyon (resigned 16 May 2019)

Cllr D P Milner, Shopshire Council Nominee

Mr J Morten (resigned 16 May 2019)

Mrs H C Owens

Mrs G P Richards (resigned 25 April 2020)

Mrs H Smith

Mr J E Ward, Vice Chair

Company registered number

08615826

Charity registered number

1153280

Registered office

Derwen College, Whittington Road, Gobowen, Oswestry, Shropshire, SY11 3JA

Telephone : 01691 661234

Website : www.derwen.ac.uk

Principal operating office

Whittington Road, Gobowen, Oswestry, Shropshire, SY11 3JA

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DERWEN COLLEGE

REFERENCE AND ADMINISTRATIVE DETAILS OF THE COLLEGE, ITS GOVERNORS AND ADVISERS(CONTINUED)


Patron

H.R.H. The Duchess of Kent

Independent auditors

Whittingham Riddell LLP, Belmont House, Shrewsbury Business Park, Shrewsbury, Shropshire, SY2 6LG

Bankers

LLoyds plc, 28 Regent Street, Wrexham, Clywd, LL11 1SE

Solicitors

Lanyon Bowdler, 39-41 Church Street, Oswestry, SY11 2SZ

Clerk to Governors and Company Secretary

Mrs C Thompson

Senior management team

Mrs M Green, PrincipalMrs N Bellis, Director Human Resources and EstatesMrs K George, Director Clinical, Care and TherapyMr A Smith, Director Business and FinanceMrs R Thomas, part time Strategic Advisor (resigned October 2019)

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GOVERNORS' REPORT


The Trustees (governors), who are also the directors, present their annual report together with the auditedfinancial statements of the College for the year 1 January 2019 to 31 December 2019.

The Annual report serves the purposes of both a Governors' report and a directors' report under company law.The Governors confirm that the Annual report and financial statements of the charitable company comply withthe current statutory requirements, the requirements of the charitable company's governing document and theprovisions of the Statement of Recommended Practice (SORP) applicable to charities preparing their accountsin accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102)(effective 1 January 2015) as amended by Update Bulletin 1 (effective January 2015).

Carol Thompson Clerk to the Board of Governors During the year:• John Morten resigned on 16 May 2019 as he moved from the area.• Lord Lloyd Kenyon stood down on 16 May 2019 for health reasons.• Jackie Ridge co-opted to Business & Finance and Estates committees resigned on 10 October 2019 • Kay Eaton was co-opted to Standards and Effectiveness Committee from 4 April 2019

We record our thanks to all governors and co-opted members for their commitment and work. We particularlyacknowledge the enormous contribution made by John Morten, who has left the area, and extend our sympathyto the family of Lord Lloyd Kenyon following his death.

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DERWEN COLLEGE

GOVERNORS' REPORT (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER 2019

Objectives and activities

a. Policies and objectives

The objectives of Derwen College – where learning comes to life.

The College is a specialist residential college. It is a nationally renowned centre of excellence for the trainingand development of students with learning difficulties and disabilities.

Our Mission: To educate, inspire and empower young adults to lead the lives they choose – transforming lives.

Our Vision: A world without barriers for people with SEND

The current context and challenges

The unprecedented challenges of recent years continued throughout 2019. The College recognises that theprincipal risks and uncertainties facing the charity concern the regulatory frameworks within which the Collegeoperates. The impact of reductions in public spending are being felt across further education and have certainlyhad a significant impact on national specialist colleges. Funding constraints in England and Wales are bothtighter and more unpredictable than ever before. Decision making by local authorities means that students arefrequently finding it harder to secure residential placements, as increasingly cash-strapped authorities areseeking to keep people in their home area. This has resulted in a continued reduction in the number ofresidential students in the College, with the number of day students not fully compensating for this loss.

However, after three years of significant decline in numbers the probability of a little more stability is perceivedas the next group of leavers will come from a smaller intake cohort.

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Objectives and activities (continued)

There is no lack of interest or applications. The Admissions Team are handling contact with 140 familieslooking for 2020 and 2021 entry. The residential recruitment target for 2020 is 35. These trends have been fullyrecognised and have been the main catalyst in the strategic planning undertaken. However it is evident thatnationally the focus is on limiting the development and training of students with learning difficulties anddisabilities to their home area.

The Children and Families Act, the SEND Reforms and the SEN Code of Practice are still being implementedwith varying and inconsistent patterns of practice and procedure across the country. Provision for people withhigh need learning difficulties and disabilities is not as easily secured as the legislation intended. Considerabletime is spent lobbying. The College remains at the leading edge of discussions about specialist provision

In setting objectives and planning for activities, the Governors have given due consideration to general guidancepublished by the Charity Commission relating to public benefit, including the guidance 'Public benefit: running acharity (PB2)'.

b. Employee involvement, employment of the disabled and volunteers

Employees have been consulted on issues of concern to them by means of the Staff Forum, staff meetings anda confidential & anonymous web-site link. They have been kept informed on specific matters directly bymanagement and through the regular Staff Newsletter. The College carries out exit interviews for all leaving theorganisation, carries out an annual staff survey and has adopted a procedure of upward feedback for theGovernors and 360? feedback for senior managers. A specific focus on staff well-being continues tocharacterise much of the work and the implementation of the Staff Engagement Plan is closely monitored.

The Gender Pay Gap return and the review and production of policies have been discussed in detail bygovernors. The changes necessitated by the General Data Protection Regulations have been rigorouslyenforced.

Detailed policies in relation to all aspects of personnel matters have included:- Additional payments policy- Staff well-being policy- Eye test policy

and there has been a particular focus on professional development and qualifications and a FUN Fund hasbeen set up, for activities by teams of staff.

In accordance with the College's Equal opportunities policy, the College has long established fair employmentpractices in the recruitment, selection, retention and training of disabled staff. Full details of these policies are available from the College.

Volunteers contribute to the College’s operation and receive an induction process and are DBS checked.

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Objectives and activities (continued)

c. Main activities undertaken to further the College's purposes for the public benefit

The Objects of the charity are:

- to provide education, training and work experience to people with learning difficulties and/or disabilities;- to obtain or provide employment for people with learning difficulties and/or disabilities;- to provide accommodation for people with learning difficulties and/or disabilities (with or without their

immediate family or dependents)

And who are in need of such services because of their learning difficulties and/or disabilities.

The achievement of these objects is reviewed annually through the College Self-assessment process andsubsequent report and Quality Improvement Plan, and through the Governors’ Annual Report and the annualstatutory accounts. The Self-Assessment Report is available to Ofsted and CQC. The Governors’ reports arepublished on the College web-site and to the Charity Commission and Companies’ House. There are nowregular news letters to parents/carers and stakeholders’ surveys.

The quality of provision is inspected by Ofsted and the Care Quality Commission. The successes of formerstudents continue to demonstrate that College programmes provide students with the skills, inspiration andmotivation to achieve in their transition from College. The high level of staff expertise is a key element of theCollege’s management of learning, student support and innovation. The Board believes that the Collegeprovides excellent value for money to the public purse and that student outcomes mean they can be lessdependent on benefits throughout the rest of their lives.

The Governors are committed to necessary capital spending to maintain and enhance the College's facilitiesand to meet the legal and regulatory requirements. During 2019 there has been significant up grading of someof the residential accommodation, the establishment of the business hub, the construction of the hydro-therapypool, the establishment of Hotel 751, short breaks provision, and the evaluation of the development of acaravan park. A major appeal for £1,000,000 was launched to fund the further development of the Agnes Huntbungalow properties. Business plans for other projects will be drawn up as agreed.

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Strategic report

Achievements and performance

a. Main achievements of the College during 2019

Provision overview

The curriculum recognises the increasing complexity of the students’ range of learning difficulties anddisabilities and maximises opportunities for development leading to access to work and meaningful activity.Analysis of destination data and regular review underpin the provision.

The College’s specialism continues to be the provision of real experiences of work in customer-facing settings.The ‘Work Skills Pathway’ is designed for those not ready for a purely vocational route and for those for whomdevelopment of employability skills is not the primary learning outcome.

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Strategic report (continued)

Achievements and performance (continued)

A learner’s programme is specific to his or her needs and aspirations. The development of specificunderstanding and skills which will be invaluable in the workplace, is underpinned by functional skills and workexperience. It becomes more rounded and transferable through creative activity and independencedevelopment. Health and well-being, personal care programmes, and sport and leisure activities contribute to astudent’s ability to act and live independently. Access to all provision is enabled through appropriate speechand language, physiotherapy, occupational therapy and counselling services provided as appropriate for eachindividual by the specialist staff team. Personal tutors and the Transition team help students set and monitordemanding targets and offer advice and guidance to support decision making for the future. Impact: Students’ progress towards independent living developed during a two or three year residential periodcontinues to amaze those who knew them on arrival. From the parent of a local day student:

X learnt to travel between College and home and back again safely. Once this was established, X workedwith staff to learn how to travel by bus and then walk to his work placement at Premier Inn in Oswestry. X now has a paid job on leaving College. X also excelled at his independence skills, cooking, cleaning and laundry, and has gained a place within a supported living house locally, which he will move into soon.

b. Key performance indicators

Outstanding performance and quality

The College continues to benefit from considerable analysis and judgement of its performance! Internally it hasa well established, thorough and transparent self assessment system. Quality and the achievement ofImprovement Plan targets are monitored throughout the year and the formal departmental evaluations ofperformance and outcomes are moderated in the autumn by panels which include governors. These rigorousself-assessment procedures led the College to grade its performance 2018-19 as good.

The Self-assessment Report for 18-19, scrutinised and approved at Board level, included the following:

Strengths:- Good governance, leadership and management of the College – - Robust curriculum, very suitable provision designed to meet the needs of the cohort and reflect realistic destinations.- Highly relevant Care, Independence, Health and Wellbeing provision- Strong performance management- Strong working relationships with local and national employers- Very strong anti-bullying ethos and safeguarding policy and procedure in place- Highly responsive Careers programme, including innovative CV app development- Very effective use of industry champions- Exceptional and diverse sports, leisure and wellbeing programme offer- Impressive learner voice activity which drives national policy and inclusion- Highly effective clinical and therapies team

However, as before, we have identified specific areas for attention:

- Review and strengthen the risk management process across the College- Further develop and refine delivery of the vocational curriculum- Monitor the current tracking and recording of independence skills- Standardise the approach to staff professional development- Implement the staff wellbeing strategy

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Public recognition and inspection

In March the College reached the short-list in the tes (Times Educational Supplement) FE awards 2019, in theSpecialist Provider of the Year category and a group of staff and employer partners enjoyed the formal dinner inLondon. At the time of writing the College has just learnt that it is short-listed in the 2020 FE Awards Support forStudents category.

Although there was no Ofsted inspection in 2019, the College is determined to strive to exceed previousperformance (Ofsted – Outstanding) when next inspected and briefings and training relevant to the new Ofstedinspection framework have taken place. Performance management, evaluation and analysis reflect publicinspection frameworks: Ofsted and CQC - safe, caring, effective, responsive and well-led, and Ofsted.

The Care Quality Commission carried out an inspection in May, resulting in an overall grading of requiresimprovement as were Safe, Caring and Well led. Effective and responsive were graded good. The main areasof concern focused on risk assessments and the perceived risks in some of the bungalow accommodation. Avery detailed action plan was immediately commenced and completed by the end of the year. The RegisteredManagers established Scrutiny Panels which now monitor progress and activity. A £200,000 upgrade ofkitchens and bathrooms in key bungalows was implemented during the summer, ahead of the £1,000,000existing development plan for the bungalow site. Comments from the Report included:

- People's outcomes were consistently good, and people's feedback confirmed this.- People's needs, and choices were assessed prior to them being offered a place. The college arranged

people's timetables to ensure people had the opportunity to achieve [their] goals.- The college carried out further assessments of people's care needs throughout the duration of their stay

which were overseen by clinical leads. For example, moving and handling, self-medication, and communication style. This meant any changes in someone's needs were identified and the care provided was amended appropriately.

- The provider also arranged bespoke training for people with specific needs and equipment.- People had access to healthcare services within the college setting. The college had a dedicated

wellness centre and employed nurses and dedicated therapists such as physiotherapists and speech andlanguage therapists. The nurses and various therapists supported the management team with the set up and development of care and support plans for people with complex needs. We reviewed a plan belonging to one person and could see that as a result of the plan being followed that admissions to hospital had reduced.

- People told us it was "good", "fun", and "exciting" living at Derwen College.- People told us that they were well treated by staff and there was always someone around to support

them.- People told us that they knew about their care plan and worked with their assigned keyworker to ensure

it was correct. People also told us how their care had been changed in line with what they wanted. One person told us, "I wanted to move to the bungalows and this was sorted out for me." Another person told us, "I asked to go out on my own more and staff are helping me do that."

- People were encouraged to participate in student union activities and have an active voice in decisions made by the organisation.

- We saw that complaints received were investigated and responses were sent out including any action taken.

- People's needs were met through good organisation and delivery.- Feedback was sourced on a regular basis from various stakeholders via events, questionnaires and

newsletters. We saw evidence that any feedback received was analysed, shared with the relevant persons and any actions were clearly defined. The majority of the feedback viewed was positive.

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In September the College was short-listed in two categories of the National SEND (Special Educational Needsand Disability) Awards: Inclusion in Further and Higher Education, and Inclusion in Employment, and won thelatter. A Gold Outstanding Award for the Walled Garden was received from the Royal Horticultural Society asan In Your Neighbourhood Award. In October it was short-listed in the National Association of SpecialEducational Needs 16-25 Provision category. It was commended in three categories of the Association ofColleges’ Beacon Awards, the only specialist college to be commended, in the Pears Award for Social Actionand Student Engagement, the Jisc Award for Effective Use of Digital Technology, and the City and GuildsAward for College Engagement with Employers. It was the winner in the Lawn Tennis Association’s DisabilityProgramme of the Year. In November the College was short-listed in Programme Initiative of the Year/Networkof the Year in the World Skills UK Diversity and Inclusion Heroes Awards; the winners have yet to beannounced.

Close and frequent attention is given by governors to the scrutiny of any causes for concern through a specificsession of governors from the Standards and Effectiveness Committee with relevant staff. However it isheartening for all to read the many tributes received from parents, carers and stakeholders.

In the Parent/Carer Stakeholder survey:96% rated the support their young person received on starting college as good or better.92% rated the progress made by their young person as good or better during their time at college.

A key area of strength identified: Annual review was a very good, inclusive process.Close personal support / staff excellent

- and a very practical suggestion from the parent of a student at a satellite:Provide cooking menus used by students to reinforce at home

Perhaps the final word should go to the learners, the focus of our work. From their goodbye messages:

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c. Review of activities

Work experience

Work experience is an integral part of programmes. A particular strength of the College are the excellent realwork opportunities provided within the dc Shopping and Leisure commercial outlets on the College perimeter.The Orangery restaurant and the Garden Café have regular clientele as well as passing trade. The GardenCentre and its transformed shop offer real competition to local outlets. In the Food Centre students producechutneys, jams, bread and cakes which others then sell in the Garden Centre Shop, where the products ofstudents’ creative talents are also on display – and for sale. The Print Centre offers a range of services to localpeople. This leads to access to the wide range of external work placements with local and national employers.

The College was the first Natspec college to achieve the Gold standard of the Work Experience QualityStandards, a standard reaccredited in the summer 18. Staff work systematically to strengthen the links withlocal employers and also with national chains, such as Premier Inn, Sainsbury’s and Tesco. This leads to linkswith branches in a student’s home area. Locally students have worked with Nightingale’s charity shop (retailand upcycling)e; Spar; Moreton Hall school for food preparation in the kitchen area; external groundsmaintenance work; local markets at Wrexham, Oswestry and Llangollen; Oswestry Cemetery; and Gobowenplay group. There is a well developed range of local community projects and partnerships, such as attendanceat Farmers’ Markets, running the café at Gobowen railway station (another award-winning initiative), andproducing hanging baskets for Llangollen Town Council. Bespoke placements in Wales are sought for ourWelsh learners.

Work at Derwen@Walford, Coleg Derwen@Ashdale and Derwen@Craven Arms continues to develop, witheach developing its own identity and focus, while still maintaining the strong focus on independencedevelopment and vocational and project activity. Of particular note is the gardening team at Walford, Leaf It ToUs, whose services are much sought after by local groups and householders.

Impact: 98% of learners access 30 external placements. Destination data (100% return) shows that 52% of17-18 leavers progressed into employment (21% paid, 31% voluntary) up from 23% in 16-17. The nationalaverage for paid employment for adults with SEND is 6%. 20% of leavers went into further education andtraining. 98% of students accessed external work experience.

Independence and personal development

Of particular note has been the continued significant emphasis on the development of independence andpersonal skills. Modules include relationships, rights and cultures, on-line safety, drugs and alcohol awareness.Development and review have led to further modules on mate, hate and knife crime, all with an emphasis onpersonal well-being and living in today’s society.

All student meals are prepared and taken within their residences. Students are taught about managing theirmedication. Each student now has a dedicated link nurse and issues of well-being, mental health andmedication are being approached sensitively and actively. Rigorous attention has been paid to developingtravel skills with a ‘dusk walker’ assessment for learners wanting to access the community in the eveningintroduced this year. Significantly improved day-student facilities to aid independence development have beenput in place.

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A major investment has been training for all staff by the British Institute of Learning Difficulties (BILD) tostrengthen positive behaviour support (PBS) and practice. 16 coaches and 9 functional assessors now workacross the College. PBS is a person-centred framework for providing long-term support to students who maybe at risk of developing behaviours which challenge. It is a blend of person-centred values and of behaviouralscience, and uses evidence to inform decision making which in turn improves the quality of life for all.

Becoming active citizensStudents are skilfully encouraged to become active citizens. The elections to the Student Union Board developan understanding of the democratic process and involvement in the Union enables them to play a significantpart in planning and influencing College life. The officers fulfil many important roles, including being membersof the groups with oversight of Safeguarding, Prevent, Equality, diversity and inclusion, Health and safety andInfection prevention and control. In addition they are involved in staff interview panels. However, governorshave particularly sought to recognise and applaud the outstanding work the Union officers undertake locally andnationally to raise awareness of disability and support those addressing disability issues. Students haverepresented the College at the National Union Of Students’ Conference, at its disabled students’ conferenceand also at Learning Disability Wales’ Conference.

Community involvementStudents have performed in various community activities. Derwen on Tour, the dance group, were invited on tothe main stage as part of the Llangollen Eisteddfod Inclusion project. Local primary schools attend matineeperformances of the College Shows.

Impact: 42% of leavers progressed into independent or supported living.

Feedback from learners:Being able to travel more freely feels fulfillingI like cooking meals for my peers and I enjoy going into the communityI am able to go on my own to work experienceI manage my anger and build and maintain relationships

Feedback from parents/carers:X’s sociability has markedly improved. At the Christmas dinner I had 15 guests and she did not disappear upstairs like she used to. She laughed, chatted and took part in the games with all the guests and it was lovely to see.

X Has grown so much … She is so much more confident in her social interactions and her self-belief. She is able to manage some of the emotions that used to overwhelm her. She has learnt to articulate feelings, sustain friendships, have pride in her work but most of all have pride in herself.

PBS impact is already evident through a significant reduction in behavioural incidents.

Sport and leisure activities

Sport and leisure activities are of critical importance to students’ well-being and development. The range ofevening and weekend clubs and activities is impressive and the drive of the staff to involve and challengestudents is noteworthy. In addition students participated in local park runs, external tennis tournaments, cricket,canoeing, golf, weight lifting and football sessions.

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Year on year the numbers involved in the Duke of Edinburgh Award Scheme and theirachievements amaze. For each award participation in four categories is required: volunteering, physicalexercise, skills development and expedition. In 18-19 there were : Bronze Award: 18 students Silver Award: 21 students Gold Award: 6 studentsThe Gold Awards are formally presented at either Buckingham or St James’s Palace.

At the conclusion of the College Award Celebration on 6 July, attended by some 200 people, there was aparticularly moving moment when the staff received a spontaneous standing ovation for all they had done andthe encouragement they had given students.

“I cannot recommend the DofE enough and urge any specialist organisation that is worried about the work, thecommitment, and the logistics involved, to consider the end benefit to students and staff. The memories madefar outweigh any obstacles along the journey.”

Stephen EvansDofE Co-ordinator, Derwen College

From: Duke of Edinburgh Awards: Additional Needs, December 2019.

Functional Skills

Numeracy, literacy and digital technology are embedded throughout the curriculum as well as being delivered indiscrete sessions. BYOD, Bring your own device, helps to develop learners’ confidence with technology and on-line safety has a very high priority. Over 90 learners joined in World Book Day activities, including a book coverdesign competition, creating bookmarks, dressing as their favourite characters and attending a puppets andpoetry workshop with a local writer. The College was recognised as National Numeracy Day Champions, with astrong social media profile and positive praise from Rachel Riley (Countdown) and sector professionals.

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A very successful Natspec Maths Week, saw many imaginative and enjoyable ways of developing skills, asreported in Able magazine:

Therapies and support

All students have access to the care, support and therapies needed to enable them to maximise theirdevelopment and access learning. Students' needs for speech and language therapy, physiotherapy,occupational therapy and counselling are met by College staff. The College is a Makaton centre of excellence.Nursing staff oversee the use of medication and train care staff in supporting students, as appropriate, tomanage their own medication.

Competition activity

The College has a strong national profile for its work on inclusive skills competitions, which increase learners’skills and confidence. 2019 saw the introduction of the first ever ‘Derwen Skills Live’ competition week. TheCollege hosted this large scale event, providing opportunities for learners from Derwen and other specialist andmainstream providers to compete against one another in a supportive environment and to show case their skillsto a range of employers, who acted as judges. This activity will continue.

Health and safety

Action plans, including that drawn up following the College commissioned British Safety Council audit, havebeen actioned and monitored. A Food Safety Co-ordinator and a Health and Safety Manager have beenappointed. Environmental Health awarded College the highest Food Hygiene rating, no mean feat as learnersare preparing their own meals.

The College has worked particularly closely with learners around issues of feeling safe and knowing what to doif they wish to raise a concern. Of particular note is the support and training for on-line safety. Creativeapproaches are employed to develop learners’ safe access to social media. Where issues are identifiedbespoke strategies are put in place.

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Development projects and the College sites

An invaluable initiative with a local employer has been the development of some apps which aid both learning,for example a house-keeping app which takes the learner through a bedroom cleaning routine, and alsotransition, with a c.v. app.

The facilities at the College remain outstanding and the satellite provision is under review to ensure it bestmeets the needs of the students they serve. Following its review of all properties and land, the governors’Estates Committee has been implementing decisions to release and adapt properties, land and buildings. Thefour Twmpath Cottages were put up for sale, as their distance from College and state of repair meant they wereno longer suitable for student related activity. The same considerations applied to Walnut Croft, a pair of semi-detached bungalows, and after securing outline planning permission for a building plot in the garden to the rear,these properties were also put on the market. Outline planning permission for the development of 3.5 acres ofland off Southland Avenue was obtained and the land put up for sale. Sales for all but one of the Walnut Croftbungalows are either finalised or in the hands of the solicitors.

Phase 1 of the Therapy and Fitness Centre project, the reroofing of the swimming pool and installation of a newheating system, was completed in 2018 and in September 2019 Phase 2, a new hydro-therapy pool, wascompleted ahead of schedule and within budget. Phase 3 has been put on hold while the need for a modifiedFitness Centre is reviewed.

In the spring 2019 the Derwen School for children with learning difficulties and disabilities opened in a group ofbuildings surplus to the College’s needs. The School, Ofsted registered, and its operation are completelyseparate from Derwen College. Other projects are being pursued, including work with a new partner toestablish a significant satellite elsewhere. The current plan is that the facility should become operational inSeptember 2020.

The focus on establishing detailed maintenance and improvement plans for the College’s buildings andresidential accommodation continues and upgrading and refurbishment are very high on the priority list.Following the roof replacement programme for all the bungalows, adaptations to some kitchens and bathroomswere undertaken in the summer of 2019 and plans for the major development project for the 28 bungalows ofthe Agnes Hunt Village formally launched.

To help meet the needs of the Government’s localism agenda, the College purchased and leased property inWales, ColegDerwen@Ashdale, at Walford College, Derwen@Walford, and in the south of the county,Derwen@CravenArms. All three have fully staffed teams and are open five days a week. As the studentcohorts have developed and each formed its own identity, it has become imperative to review the provision toensure it is appropriate and sufficiently large.

The former Premier Inn facility has been turned into Hotel 751 and is receiving guests. It offers an excellenttraining resource for students. Residential accommodation is now being used for Short Breaks @ Derwen.Guests stay in bright, modern residences with single, en-suite rooms. They have full use of a communalkitchen and lounge with TV and WiFi. Meals are bespoke to the individual’s preferences and needs.Experienced care staff are on hand to provide support.

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d. Fundraising activities and income generation

The hydro-therapy pool was opened ahead of schedule and on budget in September 2019. This year theCollege organised a Sponsored Walk and Fun Run on 31 March and a Summer Fete in June, as well as other,smaller events. Legacies and events held by local groups and individuals also brought in much appreciatedincome. The major project: the development of the Agnes Hunt Village, was further pursed. £300,000 hasbeen spent on new roofs on the 28 bungalows. In the summer 2019 £200,000 was spent on the initialrefurbishment of some kitchens and bathrooms and in November the £1,000,000 appeal was formally launched.This will see the transformation of the bungalows into modern supported living units.

e. Investment policy and performance

The College takes a prudent, low risk approach to investments, placing cash surpluses on deposit to attract areturn, although this is not especially attractive with the current level of interest rates. This is principally becausethe reserves may need to be utilised during the short to medium term for cash flow and for capital projects

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Financial review

a. Going concern

After making appropriate enquiries, the Governors have a reasonable expectation that the College hasadequate resources to continue in operational existence for the foreseeable future. For this reason, theycontinue to adopt the going concern basis in preparing the financial statements. Further details regarding theadoption of the going concern basis can be found in the accounting policies.

The audited and approved annual accounts are submitted by the due dates to both the Charity Commission andCompanies’ House. After making all appropriate enquiries, very thorough consideration of draft budgets andcash flow up to 2021, and having taken key strategic decisions, the Governors expect the charity to haveadequate resources to continue in operational existence for the foreseeable future. For this reason theycontinue to adopt the going concern basis in preparing financial statements.

Coronovirus (COVID-19) Consideration

The Central Governments and Local Authority commitment to continue to pay the College Fees will mimimisethe financial impact of Covid -19 for the summer term. However, the income generated from the trading outletsand the short break provision will stop. This reduction in income is anticipated to be offset by a reduction incollege expenditure.

The revised forecasts that take account of these factors give confidence to the Governing body that there will besufficient funds available to support the Charitable objectives , throughout the pandemic and beyond.

b. Reserves policy

The note to the accounts show the assets and liabilities attributable to the various funds by type, and summarisethe year's movement on each fund.

The total funds of the Charity were £4,431,125 (2018: £7,510,455) of which restricted funds were £641,945(2018: £750,471) and endowment £2,580,101 (2018: £2,580,101).

Disregarding the notional pension funding surplus calculated under FRS 102, the unrestricted funds amountedto £1,209,079 (2018: £1,602,885) of which there is a surplus of £607,526 (2018 £991,923) relating to freereserves. The policy followed by the Governors is to maintain free reserves up to a maximum of 50 days ofexpenditure, currently 22 days (2018: 32 days).

Reserves may need to be utilised during the short to medium term for cash flow and for capital projects. TheGovernors consider this to be judicious and appropriate especially in the current climate of uncertaintysurrounding funding approvals and budgetary restraint.

In the year the FRS102 defined benefit pension scheme has closed to new members and future accrualtherefore currently has no active members. As a result, the pension asset is no longer included within theCharity's balance sheet (2018 £2,577,000).

The Board accepts that the current reserves are below the target level. This is due to expenditure on Collegeproperties that was required, and was made in advance of income receipts from the sale of surplus properties.

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Financial review (continued)

c. Principal risks and uncertainties

The Governors regularly examine the principal areas of the College's operations and consider the major risksfaced in each. There are established resources and review systems which, under normal conditions, shouldallow any risk to be managed to an acceptable level in the College’s day to day operation. College riskmanagement has two distinct tiers: strategic and operational. The operational level is reviewed on a ‘real time’basis and deals with individual departments, students, functions and duties. At the strategic level the SeniorLeadership Team reviews the risk assessment register monthly and it is reviewed at least termly as part of theCollege quality improvement plan and presented to the Business and Finance Committee where issues aredebated and reported to the Board. This includes College pension arrangements, insurances and Governorresponsibilities to ensure these remain in line with current legislation and operational factors.

The College’s spacious campus is open to visitors and customers in the public areas and is imaginatively andpurposefully managed to enable students to interact with staff and members of the public appropriately andsafely. However, the openplan nature of the campus and the heightened staff awareness of potential hazardsnecessitate regular reviews. During 2014 gates were erected at strategic points on the campus enabling asecure area for students, away from the public areas, to be closed off at 9 p.m. each evening. During 2017 thecentral area of the College became pedestrianised. Departmental operational risk management encompassesall locations and individuals. During 2019 there was a major programme of installation of CCTV monitoringequipment.

Site safety is reviewed through the Health and Safety Committee, which includes governor membership, isaudited by specialist advisors and monitored by external agencies. During 2019 a full-time Health and SafetyManager was appointed and the scrutiny of all aspects of H&S is now rigorously pursued.The College providesa safe and supportive environment for learners to access the internet, including social networking sites. Staffgive a high priority to providing support in the safe use of personal technology, such as mobile phones andcomputers. This is an extremely important area of the College’s operation, being led by a team of 12 staff.

d. Financial risk management objectives and policies

The Board has adopted the Charity Code of Governance (for larger charities) and adheres to the principles itlays out.

e. Principal funding

The main source of income is generated from student and client fees paid for by local and central Governmentand amounts to 88% of the total. All the £10,176,808 income raised during 2019 has been used to enable theCollege to meet its charitable objectives.

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Financial review (continued)

Structure, governance and management

a. Constitution

Derwen College is registered as a charitable company limited by guarantee and was set up by a Trust deed.

Governance

The development of the Charity

Derwen College charity has a long pedigree. It was founded in 1927 by Dame Agnes Hunt and was originallybased at the Orthopaedic Hospital in Gobowen. The Derwen Estate was purchased in 1928 and the first trustdeed was established on 3rd August 1932. It was varied or affected by schemes of the Charity Commissiondated 25th January 1968 and 18th August 1972, and then consolidated in the Deed of 29th November 1988.

An incorporated charity was established on 1st July 2014, Derwen College (Charity number 1153280,Companies House number 8615826). The former charity remains in existence as Derwen College Trust(charity number 208745) with the sole purpose of managing the permanently endowed property. It appointed asits Governor the new Derwen College charity. The solicitors drew up a uniting directive which allows a single setof accounts to be drawn up, as the two entities have the same financial reporting period. “Linked” financialstatements for both Companies House and the Charity Commission are submitted annually for reportingpurposes.

The regulatory framework of the charity

Under the agreed Articles of Association to which the College is now working there are:

At least seven and not more than twelve coopted Governors, appointed by resolution of the Board conforming toany criteria the Board determines, and five nominated Governors, one from each of five local authorities invitedfrom time to time to nominate as determined by the Board.

The term of office of all Governors is five years, with an expectation that usually after three terms of office theGovernor shall be eligible for reelection only after a year has elapsed. Currently only the Chair and one othergovernor have served for more than nine years.

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Structure, governance and management (continued)

Governors’ activity in 2019

It is noteworthy that much of the detailed analysis and scrutiny of the College’s operation is managed by thecommittees, of which there are now five. The Standards and Effectiveness Committee has given focusedattention to a range of issues concerning care and clinical services, the outcome of the CQC inspection andteaching and learning. The Business and Finance Committee focuses on very detailed scrutiny of finances andbudget, as well as the wider matters of corporate activity, business developments and the pension scheme.The Human Resources Committee has spent much time on the analysis of HR data and the outcomes of thestaff survey and staff wellbeing. The Estates Committee works tirelessly to support directors in the review oftenancies, the establishment of detailed maintenance and refurbishment programmes, and, following the reviewof the College’s properties and estate, the sale and change in use of some buildings and land. The SearchCommittee monitors the range of expertise and the profile of the Board and the quality of governance.

The Board works closely with the Senior Leadership Team. A very positive working relationship has beendeveloped, which recognises the need for governors to provide effective challenge as well as active support.

The key decisions and areas of activity during 2019 concerned

- Positive Behaviour Support and training from BILD (British Institute of Learning Difficulties)

- the building of a free standing hydro-therapy pool as part of the Fitness Centre project

- developing short break and independence training provision, monitoring the development of the Derwen School and Hotel 751

- the disposal of those properties and land in Gobowen off the campus which are no longer fit for purpose and the realisation of some assets

- the constant monitoring and analysis of the financial performance of the College

- the closure of the Derwen College defined benefit pension scheme and the opening of the defined contribution scheme

- negotiations with the Charity Commission and the adaptation of the terms of the Derwen College Trust charity.

- strategic planning

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- reviewing the outcomes of the CQC report and monitoring the action plan

- authorisation of the development of a business plan with a very significant new partner.

The Board continues to refine and sharpen its procedures and activity. It has been decided that all governors,not just one or two nominated governors, should visit the satellites each year. The review and evaluation of theStrategic Plan will be more rigorous, starting in February 2020. The pairing of each governor with a director orsenior manager will be continued and lead to yet further understanding of the College’s operation. The Board isdrawing considerably on the much more structured Principal’s report, which provides, under three headings:Cohort, Quality and Impact, key data, headlines, matters for consideration and information about looking ahead.

The Board reviews and evaluates its performance annually through feedback from each individual governor,analysis by the chairs of all the committees working together, the presentation of a formal, graded self-assessment (SAR) report to the SAR Panel in the autumn, which is moderated by the Panel and feedbackgiven.

b. Methods of appointment or election of Governors

The control of the Charity, its property and funds is in the hands of the Trustees (governors), who are also thecompany directors, and who are appointed in line with the Articles of Association.

All potential Governors undertake a formal interview process which includes a fit and proper person’sassessment. Governors’ appointments are approved at Board level. Regular Governor training takes place.The Board’s Search and Governance Committee formally reviews the characteristics of the members and theSenior Leadership Team annually, including diversity. There have been few appointments to the Board in 2019and none to the SLT.

c. Organisational structure and decision-making policies

Much time has been spent on establishing staffing levels and expertise as the College has moved towardsfewer students, with more complex needs, and introduced new activities. All changes are the subject ofappropriate consultation, reflection and discussion at Board and senior management level. By the end of theyear we had moved to a Leadership Team headed by Meryl Green, the Principal, and had said goodbye to RuthThomas, who had recently worked as our part-time Strategic Adviser. We wish to place on record our mostsincere thanks to Ruth Thomas who, from her appointment as CEO, led the College through times of changeand huge development and kept the emphasis on high quality provision and performance. The current team offour constitute a committed and able team, with whom Governors work particularly closely. They ensure quality,provide real drive and challenge and are supported by increasingly highly competent senior managers.

d. Policies adopted for the induction and training of Governors

Governors are often appointed from the ranks of Committee co-optees. These positions enable people tobecome familiar with the College, its operations, and the governance system and processes. The Board hasadopted the Charity Code of Governance, which includes this section:

Governors receive an appropriately resourced induction when they join the board. This includes meetings withsenior management and covers all areas of the charity’s work. Governors are given the opportunity to haveongoing learning and development.

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e. Pay policy for key management personnel

A sub-group of the Board, comprising the Chair, Vice Chair and Committee Chairs, meets to consider theperformance of the Senior Leadership Team, and to make proposals for the pay rates and terms andconditions. It takes into account external benchmarking information from a range of sources, to assess againstthe particular circumstances of the College. The proposals are put as recommendations to the Board for itsdecision.

f. Related party relationships

No governor supplies goods and/or services to the College. One related party relationship was the subject offormal Board approval. The remuneration of the four members of the Senior Leadership Team is discussedand agreed by the Board of Governors, see note 11 of the financial statements.

g. Financial risk management

The Governors have assessed the major risks to which the College is exposed, in particular those related to theoperations and finances of the College, and are satisfied that systems and procedures are in place to mitigateexposure to the major risks.

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Plans for future periods

Looking ahead

Building the sustainable future

Transforming the lives of young people with complex Learning Difficulties and Disabilities by maximising theirpotential for independence is, axiomatically, a ‘good thing’. To do this in a way which focusses on enabling theirdevelopment through customer facing, real-work activity and being as self-sufficient as possible is bothinnovative and challenging. It requires a truly holistic approach, in which learning is augmented, facilitated andenriched by care, therapies, and clinical support. The outcomes amaze.

This will continue to be the goal of this charity, working with full-time and part-time residential and day students.It will also focus on transforming the lives of those using the short-breaks provision and the diverse satellites.This requires clarity about the future strategic direction and priorities of the College and continued rigorousfinancial management. The Board and Senior Leadership Team have this as their focus and work to ensureevery decision underpins high quality and sustainability. The College continues to keep the beneficiaries of thecharity as its focus. It will continue to strive to deliver outstanding value for money, and believes it can, andunequivocally does, demonstrate excellence in comparison with recently developed, local provision.

We are seeking new funding streams and opportunities to ensure that we maximise our income. Provision willbe further and regularly reviewed to explore, develop and drive ahead the agreed projects, new developmentsand opportunities. The creation of a new satellite, the further development of the curriculum, particularly forthose with profound and multiple learning difficulties and the continued transformation of our accommodationinto 21st century supported living standards will be our immediate priorities.

The importance of marketing and providing information, advice and guidance in the current climate is veryevident. There is much misrepresentation and the term ‘local offer’ is misinterpreted. For many families andyoung people access to reliable, objective and comprehensive information is well-nigh impossible. The gapbetween the intention of recent legislation and the effects of its implementation remains huge; the Governorsare committed to working with total integrity in the interests of people with learning difficulties and disabilities.The Admissions procedure is yet more rigorous and thorough, in order to ensure that the needs and aspirationsof incoming students are identified as precisely and accurately as possible.

The College is committed to working to industry standards where ever possible and seeks to develop further itspartnerships with national and local companies and organisations. It has extended partnership working innursing, therapies and care, ensuring that the College’s operation remains cutting edge. Keele University usesthe College for its placements for student nurses specialising in the care of those with learning disabilities. Italso has links with the College’s physiotherapists. Students of nursing from Glyndwr University also haveplacements at the College and students of psychology from Chester University volunteer here. Speech andlanguage specialists work with Cardiff University and the College has support from the Shropshire LearningDisability Team.

- the final word

Most learners are funded to come to the College because their needs cannot be provided for adequately andsufficiently in a nonresidential, local further education college, nor can their potential be maximised. Thecommitment of both staff and Governors is to ensure our provision remains of high quality and holistic, withinthe culture of constant improvement which has been recognised to characterise the College’s operation.

Members' liability

The Members of the College guarantee to contribute an amount not exceeding £1 to the assets of the College inthe event of winding up.

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Employee involvement and employment of the disabled

Employees have been consulted on issues of concern to them by means of regular consultative committee andstaff meetings and have been kept informed on specific matters directly by management. The College carriesout exit interviews for all staff leaving the organisation and has adopted a procedure of upward feedback forsenior management and the Governors.

The College has implemented a number of detailed policies in relation to all aspects of personnel mattersincluding:

Equal opportunities policy

Volunteers' policy

Health & safety policy

In accordance with the College's equal opportunities policy, the College has long-established fair employmentpractices in the recruitment, selection, retention and training of disabled staff.

Full details of these policies are available from the College's offices.

Statement of Governors' responsibilities

The Governors (who are also the directors of the College for the purposes of company law) are responsible forpreparing the Governors' report including the Strategic report and the financial statements in accordance withapplicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted AccountingPractice).

Company law requires the Governors to prepare financial statements for each financial year. Under companylaw the Governors must not approve the financial statements unless they are satisfied that they give a true andfair view of the state of affairs of the College and of its incoming resources and application of resources,including its income and expenditure, for that period. In preparing these financial statements, the Governors arerequired to:

select suitable accounting policies and then apply them consistently;

observe the methods and principles of the Charities SORP (FRS 102);

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards (FRS 102) have been followed, subject to any

material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the

College will continue in business.

The Governors are responsible for keeping adequate accounting records that are sufficient to show and explainthe College's transactions and disclose with reasonable accuracy at any time the financial position of theCollege and enable them to ensure that the financial statements comply with the Companies Act 2006. They arealso responsible for safeguarding the assets of the College and hence for taking reasonable steps for theprevention and detection of fraud and other irregularities.

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Disclosure of information to auditors

Each of the persons who are Governors at the time when this Governors' report is approved has confirmed that:

so far as that Governor is aware, there is no relevant audit information of which the charity's auditors are

unaware, and

that Governor has taken all the steps that ought to have been taken as a Governor in order to be aware

of any relevant audit information and to establish that the charity's auditors are aware of that information.

Auditors

The auditors, Whittingham Riddell LLP, have indicated their willingness to continue in office. The designatedGovernors will propose a motion reappointing the auditors at a meeting of the Governors.

Approved by order of the members of the board of Governors on and signed on their behalf by:

___________________________Mrs K KimberChairDate:

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18 May 2020

DERWEN COLLEGE

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DERWEN COLLEGE

Opinion

We have audited the financial statements of Derwen College (the 'college') for the year ended 31 December2019 which comprise the Statement of Financial Activities, the Balance sheet, the Statement of cash flows andthe related notes, including a summary of significant accounting policies. The financial reporting framework thathas been applied in their preparation is applicable law and United Kingdom Accounting Standards, includingFinancial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic ofIreland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the charitable company's affairs as at 31 December 2019 and of

its incoming resources and application of resources, including its income and expenditure for the year

then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting

Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicablelaw. Our responsibilities under those standards are further described in the Auditors' responsibilities for the auditof the financial statements section of our report. We are independent of the charitable company in accordancewith the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom,including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us toreport to you where:

the Governors' use of the going concern basis of accounting in the preparation of the financial statements

is not appropriate; or

the Governors have not disclosed in the financial statements any identified material uncertainties that

may cast significant doubt about the charitable company's ability to continue to adopt the going concern

basis of accounting for a period of at least twelve months from the date when the financial statements are

authorised for issue.

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DERWEN COLLEGE (CONTINUED)

Other information

The Governors are responsible for the other information. The other information comprises the informationincluded in the Annual report, other than the financial statements and our Auditors' report thereon. Our opinionon the financial statements does not cover the other information and, except to the extent otherwise explicitlystated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, indoing so, consider whether the other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such materialinconsistencies or apparent material misstatements, we are required to determine whether there is a materialmisstatement in the financial statements or a material misstatement of the other information. If, based on thework we have performed, we conclude that there is a material misstatement of this other information, we arerequired to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

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

the information given in the Governors' Report including the Strategic Report for the financial year for

which the financial statements are prepared is consistent with the financial statements.

the Governors' Report and the Strategic Report have been prepared in accordance with applicable legal

requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the charitable company and its environment obtained in thecourse of the audit, we have not identified material misstatements in the Governors' Report including theStrategic Report.

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

adequate accounting records have not been kept, or returns adequate for our audit have not been

received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of Governors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DERWEN COLLEGE (CONTINUED)

Responsibilities of trustees

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

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

Auditors' responsibilities for the audit of the financial statements

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

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

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 ofPart 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to thecharitable company's members those matters we are required to state to them in an Auditors' report and for noother purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone otherthan the charitable company and its members, as a body, for our audit work, for this report, or for the opinionswe have formed.

Andrew Malpass BSc FCA (Senior statutory auditor)for and on behalf ofWhittingham Riddell LLPChartered AccountantsStatutory AuditorsBelmont HouseShrewsbury Business ParkShrewsburyShropshireSY2 6LG

Date:

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STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING INCOME AND EXPENDITURE ACCOUNT)FOR THE YEAR ENDED 31 DECEMBER 2019

Unrestrictedfunds2019

Restrictedfunds2019

Endowmentfunds2019

Totalfunds2019

Totalfunds2018

Note £ £ £ £ £

Income andendowments from:

Donations andlegacies 3 257,208 161,004 - 418,212 961,426

Charitable activities 4 9,314,294 - - 9,314,294 10,223,713

Other trading activities 5 442,775 - - 442,775 442,425

Investments 6 1,527 - - 1,527 1,242

Total income andendowments 10,015,804 161,004 - 10,176,808 11,628,806

Expenditure on:

Raising funds 7 570,103 - - 570,103 650,506

Charitable activities 9,365,505 269,530 - 9,635,035 10,649,042

Total expenditure 9,935,608 269,530 - 10,205,138 11,299,548

Net movement infunds before otherrecognisedgains/(losses) 80,196 (108,526) - (28,330) 329,258

Other recognisedgains/(losses):

Unrecognised surpluson defined benefitpension scheme 22 (3,001,000) - - (3,001,000) (82,000)

(Losses) / gains ondefined benefitpension scheme 22 (50,000) - - (50,000) 1,239,000

Net movement infunds

(2,970,804) (108,526) - (3,079,330) 1,486,258

Reconciliation offunds:

Total funds broughtforward 4,179,883 750,471 2,580,101 7,510,455 6,024,197

Net movement infunds (2,970,804) (108,526) - (3,079,330) 1,486,258

Total funds carriedforward

1,209,079 641,945 2,580,101 4,431,125 7,510,455

The Statement of Financial Activities includes all gains and losses recognised in the year. The subsequentnotes form part of these financial statements.

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DERWEN COLLEGEREGISTERED NUMBER: 08615826

BALANCE SHEETAS AT 31 DECEMBER 2019

2019 2018Note £ £

Fixed assets

Tangible assets 12 3,845,624 3,267,115

3,845,624 3,267,115

Current assets

Stocks 13 26,885 22,563

Debtors 14 296,182 570,750

Cash at bank and in hand 907,244 2,224,060

1,230,311 2,817,373

Creditors: amounts due within one year 15 (644,810) (1,151,033)

Net current assets 585,501 1,666,340

Total assets less current liabilities 4,431,125 4,933,455

Net assets excluding pension asset 4,431,125 4,933,455

Defined benefit pension scheme asset 22 - 2,577,000

Total net assets 4,431,125 7,510,455

Charity funds

Endowment funds 16 2,580,101 2,580,101

Restricted funds 16 641,945 750,471

Unrestricted funds

Unrestricted funds excluding pension asset 16 1,209,079 1,602,883

Pension reserve 16 - 2,577,000

Total unrestricted funds 16 1,209,079 4,179,883

Total funds 4,431,125 7,510,455

The Governors acknowledge their responsibilities for complying with the requirements of the Act with respect toaccounting records and preparation of financial statements. The financial statements were approved andauthorised for issue by the Trustees on and signed on their behalf by:

Mrs K Kimber - Chair Date:

The notes on pages 31-51 form part of these financial statements.

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18 May 2020

DERWEN COLLEGE

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2019

1. Accounting policies

1.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) -Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charitiespreparing their accounts in accordance with the Financial Reporting Standard applicable in the UKand Republic of Ireland (FRS 102) (effective 1 January 2015), the Financial Reporting Standardapplicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The College has elected to apply all amendments to FRS 102, as set out in the Financial ReportingCouncil's triennial review published in December 2017, and included in Update Bulletin 2 to theCharities SORP (FRS 102), prior to mandatory adoption for accounting periods beginning on or after1 January 2019.

Derwen College meets the definition of a public benefit entity under FRS 102. Assets and liabilitiesare initially recognised at historical cost or transaction value unless otherwise stated in the relevantaccounting policy.

1.2 Company status

The College is a company limited by guarantee. The members of the company are the Governorsnamed on page 1. In the event of the College being wound up, the liability in respect of theguarantee is limited to £1 per member of the College.

1.3 Going concern

At 31 December 2019 no material uncertainties existed that would impact the going concern basisthat these financial statements are prepared upon.

As referred to in the Gorvernors Report, the Governors have also assessed the potential impact onthe future operations of the Charity with regard to the Covid-19 outbreak. The Charity is consideredto be well positioned given the current environment with no impact on the going concern basis of thefinancial statements.

1.4 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Governors infurtherance of the general objectives of the College and which have not been designated for otherpurposes.

Designated funds comprise unrestricted funds that have been set aside by the Governors forparticular purposes. The aim and use of each designated fund is set out in the notes to the financialstatements.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed bydonors or which have been raised by the College for particular purposes. The costs of raising andadministering such funds are charged against the specific fund. The aim and use of each restrictedfund is set out in the notes to the financial statements.

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1. Accounting policies (continued)

1.5 Income

All income is recognised once the College has entitlement to the income, it is probable that theincome will be received and the amount of income receivable can be measured reliably.

Grants are included in the Statement of financial activities on a receivable basis. The balance ofincome received for specific purposes but not expended during the period is shown in the relevantfunds on the Balance sheet. Where income is received in advance of entitlement of receipt, itsrecognition is deferred and included in creditors as deferred income. Where entitlement occursbefore income is received, the income is accrued.

1.6 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economicbenefit to a third party, it is probable that a transfer of economic benefits will be required insettlement and the amount of the obligation can be measured reliably. Expenditure is classified byactivity. The costs of each activity are made up of the total of direct costs and shared costs,including support costs involved in undertaking each activity. Direct costs attributable to a singleactivity are allocated directly to that activity. Shared costs which contribute to more than one activityand support costs which are not attributable to a single activity are apportioned between thoseactivities on a basis consistent with the use of resources. Central staff costs are allocated on thebasis of time spent, and depreciation charges allocated on the portion of the asset’s use.

Expenditure on charitable activities is incurred on directly undertaking the activities which further theCollege's objectives, as well as any associated support costs.

1.7 Tangible fixed assets and depreciation

Tangible fixed assets are initially recognised at cost. After recognition, under the cost model,tangible fixed assets are measured at cost less accumulated depreciation and any accumulatedimpairment losses. All costs incurred to bring a tangible fixed asset into its intended workingcondition should be included in the measurement of cost.

Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual valueover their estimated useful lives, using the straight-line method.

Depreciation is provided on the following bases:

Leasehold property - 2% on a straight line basisPlant and machinery - 14% on a straight line basisMotor vehicles - 25% on a straight line basis

1.8 Interest receivable

Interest on funds held on deposit is included when receivable and the amount can be measuredreliably by the College; this is normally upon notification of the interest paid or payable by theinstitution with whom the funds are deposited.

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1. Accounting policies (continued)

1.9 Stocks

Stocks are valued at the lower of cost and net realisable value after making due allowance forobsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion offixed and variable overheads.

1.10 Debtors

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

1.11 Cash at bank and in hand

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

1.12 Liabilities and provisions

Liabilities are recognised when there is an obligation at the Balance sheet date as a result of a pastevent, it is probable that a transfer of economic benefit will be required in settlement, and theamount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the College anticipates it will pay to settle the debt or theamount it has received as advanced payments for the goods or services it must provide.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Wherethe effect of the time value of money is material, the provision is based on the present value of thoseamounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. Theunwinding of the discount is recognised in the Statement of financial activities as a finance cost.

1.13 Financial instruments

The College only has financial assets and financial liabilities of a kind that qualify as basic financialinstruments. Basic financial instruments are initially recognised at transaction value andsubsequently measured at their settlement value with the exception of bank loans which aresubsequently measured at amortised cost using the effective interest method.

1.14 Pensions

The College operates a defined contribution pension scheme, the pension charge represents theamounts payable by the College to the fund in the year.

In the year the FRS102 defined benefit pension scheme has closed to new members and futureaccrual therefore currently has no active members. As a result, the pension asset is no longerincluded within the Charity's balance sheet.

1.15 Operating leases

Rentals paid under operating leases are charged to the Statement of financial activities on a straightline basis over the lease term.

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2. Critical accounting estimates and areas of judgment

Estimates and judgments are continually evaluated and are based on historical experience and otherfactors, including expectations of future events that are believed to be reasonable under thecircumstances.

Critical accounting estimates and assumptions:

The College makes estimates and assumptions concerning the future. The resulting accountingestimates and assumptions will, by definition, seldom equal the related actual results.

3. Income from donations and legacies


Restrictedfunds2019

Totalfunds2019

Totalfunds2018

£ £ £ £

Donations 177,468 161,004 338,472 443,854

Grants 79,740 - 79,740 517,572

257,208 161,004 418,212 961,426

Total 2018 56,469 904,957 961,426

4. Income from charitable activities


Totalfunds2019

Totalfunds2018

£ £ £

Training Fees 8,913,908 8,913,908 9,985,985

Miscellaneous Income 24,157 24,157 45,331

Sale of Assets 47,354 47,354 117,225

School Income 48,582 48,582 -

Short Breaks Income 188,840 188,840 -

Rental Income 91,453 91,453 75,172

Total 2019 9,314,294 9,314,294 10,223,713

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5. Income from other trading activities

Income from fundraising events


Totalfunds2019

Totalfunds2018

£ £ £

Retail 195,976 195,976 215,004

Eating 246,799 246,799 227,421

442,775 442,775 442,425

6. Investment income


Totalfunds2019

Totalfunds2018

£ £ £

Interest Receivable 1,527 1,527 1,242

7. Expenditure on raising funds

Other trading expenses


Totalfunds2019

Totalfunds2018

£ £ £

Retail and Eating Expenditure 341,344 341,344 296,916

Retail and Eating Staff Costs 228,759 228,759 353,590

570,103 570,103 650,506

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8. Analysis of expenditure by activities

Activitiesundertaken

directly2019

Supportcosts2019

Totalfunds2019

As restatedTotalfunds2018

£ £ £ £

Education 3,119,900 - 3,119,900 3,157,523

Care 3,541,195 - 3,541,195 3,551,864

Admin 352,114 837,648 1,189,762 1,825,206

Campus & Estates 1,257,657 526,521 1,784,178 2,114,449

8,270,866 1,364,169 9,635,035 10,649,042

Total 2018 as restated 9,240,371 1,408,671 10,649,042

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8. Analysis of expenditure by activities (continued)

Analysis of direct costs

Education2019

Care2019

Admin2019

Campus &Estates

2019

Totalfunds2019


£ £ £ £ £ £

Staff costs 2,938,409 3,308,193 (474,000) - 5,772,602 6,200,914

Depreciation - - 67,915 - 67,915 21,711

Premises &Ground Costs 11,322 871 17,837 1,033,845 1,063,875 1,224,932

EquipmentRepairs andMaintenance 25,454 25,069 57,661 75,447 183,631 246,861

Licences &Subscriptions 4,112 18,711 43,109 2,334 68,266 101,417

Legal ,Professional &ConsultationCosts 5,283 23,167 185,801 5,814 220,065 264,206

Cleaning andConsumables 20,750 116,187 19,430 91,870 248,237 265,690

Marketing andAdvertising 1,341 - 30,986 - 32,327 20,122

LearningEquipment andStudentActivities 57,551 14,237 59,718 8,075 139,581 102,121

PrintingStationery andComputingConsumables 15,849 1,851 143,067 1,259 162,026 517,984

CollegeTransport 37,094 7,480 76,761 614 121,949 129,875

ExternalContractors andAgency Staff - 5,332 70,452 37,080 112,864 133,599

Miscellaneous 2,735 20,097 53,377 1,319 77,528 10,939

3,119,900 3,541,195 352,114 1,257,657 8,270,866 9,240,371

Total 2018 asrestated 3,157,523 3,551,864 1,047,327 1,483,657 9,240,371

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8. Analysis of expenditure by activities (continued)

Analysis of support costs

Admin2019

Campus &Estates

2019

Totalfunds2019


£ £ £ £

Staff costs 837,648 526,521 1,364,169 1,408,671

Total 2018 as restated 777,879 630,792 1,408,671

During the year the College has reviewed it's chart of accounting and reporting and cost allocation. To beconsistent, this has also been applied to the prior year with the prior year figures being restated.

9. Auditors' remuneration

2019 2018£ £

Fees payable to the College's auditor for the audit of the College's annualaccounts 8,200 7,900

Fees payable to the College's auditor in respect of:

All non-audit services not included above 1,600 1,550

10. Staff costs

2019 2018£ £

Wages and salaries 6,947,118 7,107,215

Social security costs 568,151 536,404

Pension costs (149,739) 319,556

7,365,530 7,963,175

Included in the above pension costs is a gain on curtailment of £397,000 from the defined pensionscheme. Refer to note 22.

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10. Staff costs (continued)

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

2019 2018No. No.

Teaching 86 93

Welfare 191 180

Ancillary and Administration 86 106

363 379

The number of employees whose employee benefits (excluding employer pension costs) exceeded£60,000 was:

2019 2018No. No.

In the band £60,001 - £70,000 3 1

In the band £70,001 - £80,000 1 -

The key management personnel of the College comprise of the senior management team as listed onpage 2. The total remuneration of the key management personnel during the year was £271,187 (2018:£294,664). Pay and remuneration of the key management personnel are set by the Governors throughdiscussion at the Human Resources Committee and then proposal and ratification at Board Meetings.

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11. Governors' remuneration and expenses

During the year, no Governors received any remuneration or other benefits (2018 - £NIL).

During the year ended 31 December 2019, no Governor expenses have been incurred (2018 - £NIL).

12. Tangible fixed assets

Freeholdproperty

Leaseholdproperty

Plant andmachinery

Motorvehicles Total

£ £ £ £ £

Cost or valuation

At 1 January 2019 12,943,807 391,322 373,795 265,253 13,974,177

Additions 421,405 - 180,147 44,872 646,424

Disposals - - - (22,515) (22,515)

At 31 December 2019 13,365,212 391,322 553,942 287,610 14,598,086

Depreciation

At 1 January 2019 9,971,637 217,035 253,137 265,253 10,707,062

Charge for the year - 10,852 45,845 11,218 67,915

On disposals - - - (22,515) (22,515)

At 31 December 2019 9,971,637 227,887 298,982 253,956 10,752,462

Net book value

At 31 December 2019 3,393,575 163,435 254,960 33,654 3,845,624

At 31 December 2018 2,972,170 174,287 120,658 - 3,267,115

Included in freehold property is land at a cost of £124,168 (2018: £124,168).

13. Stocks

2019 2018£ £

Finished goods and goods for resale 26,885 22,563

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14. Debtors

2019 2018£ £

Due within one year

Trade debtors 179,439 414,751

Other debtors 620 36,673

Prepayments and accrued income 116,123 119,326

296,182 570,750

15. Creditors: Amounts falling due within one year

2019 2018£ £

Payments received on account 148,704 632,153

Trade creditors 180,505 192,229

Other taxation and social security 136,431 140,652

Other creditors 30,853 39,345

Accruals and deferred income 148,317 146,654

644,810 1,151,033

2019 2018£ £

Resources deferred during the year 9,457 -

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16. Statement of funds

Statement of funds - current year

Balance at 1January 2019

£Income

£Expenditure

£

Transfersin/out

£

Gains/(Losses)

£

Balance at 31December

2019£

Unrestrictedfunds

Designatedfunds

PropertyUpgrade Fund 610,962 247,635 (257,044) (601,553) - -

General funds

General Funds- all funds 991,921 9,768,169 (10,152,564) - - 607,526

Property Fund - - - 601,553 - 601,553

Pensionreserve 2,577,000 - 474,000 - (3,051,000) -

3,568,921 9,768,169 (9,678,564) 601,553 (3,051,000) 1,209,079

TotalUnrestrictedfunds 4,179,883 10,015,804 (9,935,608) - (3,051,000) 1,209,079

Endowmentfunds

Big LotteryFund –CeramicsBuilding 190,000 - - - - 190,000

Big LotteryFund – TheAcorns 300,000 - - - - 300,000

Otherpermanentfunds 2,090,101 - - - - 2,090,101

2,580,101 - - - - 2,580,101

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16. Statement of funds (continued)

Statement of funds - current year (continued)

Balance at 1January 2019

£Income

£Expenditure

£

Transfersin/out

£

Gains/(Losses)

£

Balance at 31December

2019£

Restrictedfunds

RestrictedFunds - allfunds 750,471 161,004 (269,530) - - 641,945

Total of funds 7,510,455 10,176,808 (10,205,138) - (3,051,000) 4,431,125

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16. Statement of funds (continued)

Statement of funds - prior year

Balance at1 January

2018£

Income£

Expenditure£

Balance at31

December2018

£Unrestricted funds

Designated funds

Property Upgrade Fund 610,962 - - 610,962

General funds

General Funds - all funds 872,233 10,723,849 (10,604,161) 991,921

Pension Reserve 1,403,000 - 17,000 2,577,000

2,275,233 10,723,849 (10,587,161) 3,568,921

Total Unrestricted funds 2,886,195 10,723,849 (10,587,161) 4,179,883

Endowment funds

Big Lottery Fund - Ceramics Building 190,000 - - 190,000

Bog Lottery Fund - The Acorns 300,000 - - 300,000

Other Permanent Funds 2,090,101 - - 2,090,101

2,580,101 - - 2,580,101

Restricted funds

Restricted Funds - all funds 557,901 904,957 (712,387) 750,471

Total of funds 6,024,197 11,628,806 (11,299,548) 7,510,455

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17. Funds

Designated Funds

The property upgrade fund had been designated for the purpose of refurbishing and upgrading existingaccommodation and infrastructure. These works were completed in 2019 and £601,553 of these costshave been capitalised and transferred to an unrestricted property fund. The remaining expenditure wasfor repair works which have been expensed in the year.

Endowment Funds

Endowment funds represent land and buildings of the college, with the exception of those held withinrestricted funds (see below). The endowed land and buildings are held on trust for Derwen College Trust,Charity Number 1153280-1.

Included within the Endowment funds are grants received from the Big Lottery Fund in respect of theDerwen Enterprises ceramics buildings and the residential building, The Acorns. The grants arerepayable in the event of the college ceasing its activities, and the college may not dispose of thebuildings or use them as security for a loan without prior written provision of the Big Lottery Fund, suchrestrictions to be in place for 80 years from 1997 and 2003 respectively when the grants were received.

Restricted Funds

The restricted income is grant income received.

The restricted fund brought forward and remaining balance carried forward relates to the net book valueof the properties at Craven Arms and Walford College, which are considered to be restricted assets.

18. Analysis of net assets between funds

Analysis of net assets between funds - current year


Restrictedfunds2019

Endowmentfunds2019

Totalfunds2019

£ £ £ £

Tangible fixed assets 601,553 663,970 2,580,101 3,845,624

Current assets 1,230,311 - - 1,230,311

Creditors due within one year (622,785) (22,025) - (644,810)

Total 1,209,079 641,945 2,580,101 4,431,125

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18. Analysis of net assets between funds (continued)

Analysis of net assets between funds - prior year


Restrictedfunds2018

Endowmentfunds2018

Totalfunds2018

£ £ £ £

Tangible fixed assets - 687,014 2,580,101 3,267,115

Current assets 2,753,916 63,457 - 2,817,373

Creditors due within one year (1,151,033) - - (1,151,033)

Provisions for liabilities and charges 2,577,000 - - 2,577,000

Total 4,179,883 750,471 2,580,101 7,510,455

19. Reconciliation of net movement in funds to net cash flow from operating activities

2019 2018£ £

Net income for the year (as per Statement of Financial Activities) (28,330) 329,258

Adjustments for:

Depreciation charges 67,915 21,712

Returns on investments and servicing of finance (1,527) (1,242)

Profit on the sale of fixed assets (47,354) (117,225)

Decrease/(increase) in stocks (4,322) 17,180

Decrease in debtors 274,568 942,756

Decrease in creditors (506,223) (278,986)

Defined benefit pension scheme cost less contributions payable (4,000) 7,000

Defined benefit pension scheme finance cost (73,000) (24,000)

Defined benefit pension gain on curtailment (397,000) -

Net cash provided by/(used in) operating activities (719,273) 896,453

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20. Analysis of cash and cash equivalents

2019 2018£ £

Cash in hand 907,244 2,224,060

Total cash and cash equivalents 907,244 2,224,060

21. Analysis of Net Debt

At 1 January2019 Cash flows

At 31December

2019

££ £

Cash at bank and in hand 2,224,060 (1,316,816) 907,244

2,224,060 (1,316,816) 907,244

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22. Pension commitments

Auto - Enrolment Pension Scheme

The College now operates two defined contribution pension schemes. The assets of the scheme are heldseparately from those of the College in independently administered fund. One of these schemes wasintroduced from 1 June 2019 with staff being given the option to migrate over from the closed definedbenefit scheme (see below).

The pension cost charge represents contributions payable by the College to the fund and amounted to£231,738 (2018: £85,272).

College Scheme

The College operates a defined benefit pension scheme.

The scheme was closed to new members and future accrual in the year. All active members were giventhe option to migrate to a new defined contribution scheme that was setup from 1 June 2019. The definedbenefit scheme remains open as a de-risking exercise is being completed in preparation to be in aposition to a future buy out. There are currently no active members. All members are classed as deferredor pensionable as at 31 December 2019.

The amounts in the financial statements for the year ended 31 December 2019 relating to pensions arebased on a full actuarial valuation dated 31 December 2017 and updated to 31 December 2019 by aqualified actuary, independent of the scheme's sponsoring employer.

Principal actuarial assumptions at the Balance sheet date (expressed as weighted averages):

At 31December

2019

At 31December

2018% %

Discount rate 2.10 2.80

Future salary increases 2.90 3.40

Inflation (RPI) 2.90 3.40

Inflation (CPI) 2.10 2.40

At 31December

2019

At 31December

2018Years Years

Mortality rates (in years)

- for a male aged 65 now 21.8 21.9

- at 65 for a male aged 45 now 23.6 23.3

- for a female aged 65 now 23.6 23.3

- at 65 for a female aged 45 now 25.2 25.4

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22. Pension commitments (continued)

The College's share of the assets in the scheme was:

At 31December

2019

At 31December

2018£ £

UK Equities 1,641,000 1,452,000

Overseas Equities 2,731,000 2,273,000

Corporate bonds 3,796,000 6,316,000

Fixed Interest Government Bonds 5,759,000 5,214,000

International Bonds 2,247,000 -

Cash and Others 395,000 200,000

Total fair value of assets 16,569,000 15,455,000

The actual return on scheme assets was £1,558,000 (2018 - £-196,000).

The amounts recognised in the Statement of Financial Activities are as follows:

2019 2018£ £

Current service cost (87,000) (226,000)

Expenses - (11,000)

Interest cost 72,000 35,000

Benefit changes, gain/(loss) on curtailment and gain/(loss) on settlement 397,000 -

Total amount recognised in the Statement of Financial Activities 382,000 (202,000)

Movements in the present value of the defined benefit obligation were as follows:

2019£

Opening defined benefit obligation 12,796,000

Contributions by scheme participants 47,000

Actuarial losses/(gains) 1,183,000

Current service cost 87,000

Losses on curtailments (397,000)

Interest cost 352,000

Benefits paid (582,000)

Closing defined benefit obligation 13,486,000

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22. Pension commitments (continued)

Movements in the fair value of the College's share of scheme assets were as follows:

2019£

Opening fair value of scheme assets 15,373,000

Interest income 425,000

Actuarial gains/(losses) 1,133,000

Contributions by employer 91,000

Contributions by scheme participants 47,000

Benefits paid (582,000)

Previously unrecognised surplus 82,000

Closing fair value of scheme assets 16,569,000

The College has an unrecognised surplus of £3,001,000 (2018 - £82,000) in respect of its defined benefitpension scheme as it does not expect to recover the plan surplus either through reduced contributions inthe future or through refunds from the plan.

23. Operating lease commitments

At 31 December 2019 the College had commitments to make future minimum lease payments undernon-cancellable operating leases as follows:

2019 2018£ £

Not later than 1 year 26,876 10,379

Later than 1 year and not later than 5 years 48,650 32,596

75,526 42,975

The following lease payments have been recognised as an expense in the Statement of financialactivities:

2019 2018£ £

Operating lease rentals 15,447 18,182

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24. Related party transactions

The part time Strategic Advisor of the College is a Director of Natspec to which purchases were made atarm’s length during the year of £13,800 (2018: £7,179). The amounts owing to company at the year endwas £240 (2018: £nil).

25. Post balance sheet events

Post year end the College has received offers for land and buildings. The offer amounts will signifcantlyincrease the net assets position of the College.

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