annual report 2009-10 - newcastle college · who visited newcastle college ... company from a local...

A N N U A L R E P O R T

2009-10

THIS DOCUMENT IS AVAILABLE IN ALTERNATIVE FORMATS AND LARGE PRINT. TELEPHONE 0191 200 4000.

NCG welcomes diversity in its student population – valuing differences in race, gender, sexual orientation, disability, religion or belief, class and age. We actively oppose discrimination, aim to remove all conditions that put people at a disadvantage, strive to improve access and to provide outstanding support.

We are committed to providing an inclusive learning environment. We have produced a Valuing Diversity Policy, a Race Equality Statement, a Disability Equality Scheme and a Gender Equality Scheme which set out our response to statutory obligations and our approach to the active promotion of equality and diversity.

N C G A N N U A L R E P O R T 2 0 0 9 - 1 0

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IntroductIon 03ForewordFromthechaIroFGovernors 05ForewordFromthechIeFexecutIvencG 07ourGroupdIrectors 08ourGroupdIvIsIons 10unrIvalledprovIsIonthatmeetstheneedsoFourcustomersandcommunItIes 16InvestInGInourorGanIsatIontomeetmarketdemand 31corporatesocIalresponsIbIlIty 34boardoFGovernors 36ncGlocatIons 38equalItyanddIversIty 40newcastlecolleGereportandFInancIalstatements 43

Contents

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With a turnover of more than £150million NCG’s three divisions form one of the largest educational, training and employability organisations in the UK.

mIssIonstatement• Put the needs of the learner and customer first

• Innovate and support excellence in learning

and employability

• Promote diversity and social mobility

• Value, involve and invest in our staff

• Foster strong relationships with employers,

partners and communities

• Secure our future through strategic investment

and profitability

We aim to develop people through learning

and achievement for the benefit of themselves,

society and the economy.

Our focus is on meeting national and regional

education, skills and employability needs for

individuals and the needs of employers in line

with Government priorities.

We deliver quality education, training,

employability and work-based learning solutions

to thousands of organisations and learners

throughout England, Scotland, Wales and

Northern Ireland. These include Government

funded and commercial skills training and

education, bespoke professional courses,

employability services and national training

contract management.

We continue to develop unrivalled

provision and innovative solutions to meet

the needs of our customers, people and

communities, through fostering outstanding

client relationships.



0404

JamIemartIn,obe

Chair of the Board of Governors


05

ForewordFrom Jamie Martin Chair of Governors

Strong and responsive

education, skills and

employability training sits

at the heart of NCG and, we

believe, places us at the centre

of a successful education and

training sector in the UK.

2009-10 has been a year of

significant change as well as

success for the Group. A tough

economic climate and a change

in Government have presented

us with many challenges but

also opportunities to diversify

our offer. This has ensured that

we continue to make a valuable

contribution to the economy

in the many communities we

serve and that we are at the

forefront of Government and

employer priorities.

We have continued to

build upon previous years’

achievements across the

Group, such as a recent

accolade for Intraining, which

was highlighted in a report

from Ofsted as one of twelve

outstanding work-based

learning providers across the

UK, that excel at providing

apprenticeships, NVQs and

other vocational qualifications

for young people and adults.

We remain members of

organisations which give

education and training

providers greater influence

over national policy, such as

the 157 Group, Association

of Colleges (AoC) and the

Employment Related Services

Association (ERSA).

We have had many high

profile visits across the Group

this year, including Deputy

Prime Minister, Nick Clegg,

who visited Newcastle College

for a special meet the people

event as part of a series of

Question and Answer sessions

held across the country, and

John Hayes, Minister of State

for Further Education, Skills

and Lifelong Learning, who

met with apprentices and

saw first-hand how we are

meeting the national skills

agenda and supporting

employers through education,

training and skills.

During a visit from David

Willets, Minister of State for

Universities and Science, we

demonstrated how we are

responding to the Science

Technology Engineering

and Mathematics (STEM)

agenda, through our work

with employers to ensure that

learners leave with the skills

as set out by the Regional

Economic Strategy.

My thanks, once again, to

my fellow Governors, who

have worked with great

enthusiasm and dedication

to the Group over the last

year. In particular to Steven

Broomhead, who made an

invaluable contribution during

his three years as Chair of the

Skelmersdale and Ormskirk

College Advisory Committee. A

welcome also to Les Abernethy

who took over the role as

Chair of the Skelmersdale and

Ormskirk College Advisory

Committee in May 2010 and

who, I am delighted to say,

has joined the Corporation as

a Governor following Steven’s

departure. Thanks also to all

our staff and learners for their

hard work and continued

commitment to the success

of NCG.

The coming year will bring both

challenges and opportunities

but I am confident that we will

continue to build on our success

and strengthen the Group.

JaimemartinChair of Governors


06

dameJackIeFIsher

Chief Executive NCG

06


07

ForewordFrom Dame Jackie Fisher Chief Executive NCG

2009-10 has been another

rewarding year for NCG,

demonstrating the resilience

of the Group through difficult

times. 2009-10 has been about

leading the business through

the recession without losing

sight of our long term plans to

develop the organisation.

We are committed to

providing first-class skills and

employability training across

the UK through delivering

operational excellence and a

wide range of course choices

for learners.

We have built a strong platform

for growth. We listen and

respond to our customers,

clients and the Government’s

changing needs. We manage

our costs prudently, share

expertise and most importantly,

keep focused on our learners.

This year we have further

improved our quality and I was

delighted to see that, following

its Grade One “outstanding”

Ofsted Inspection last

year, Intraining was again

recognised by Ofsted as an

outstanding provider of work-

based learning. This is further

testimony to the staff

expertise and excellent

provision Intraining offer.

In West Lancashire, the

redevelopment of our new

Skelmersdale & Ormskirk

College campus is well

underway and scheduled

to open in September 2011.

The new campus is set to

become the lynchpin for the

regeneration of Skelmersdale’s

town centre, providing fantastic

education and training

opportunities for local people

and a much needed boost to

the local economy.

Newcastle College was

ranked best performing

general Further Education

College for 16-18 year old

achievement and attainment

at Level 3 in England.

Also, in 2009, more Newcastle

College students gained

places in higher education

than any other institution

in the Tyne and Wear and

Northumberland areas.

Significant progress was also

made with our application for

Foundation Degree Awarding

Powers. This is recognition of

the good work and continued

growth we have seen in Higher

Education over the past

several years.

This is just a taste of the

many achievements over

the past year which would

not be possible without the

huge contribution made by

our learners, staff, Governors,

customers and partners.

My thanks go to all staff for

their continued hard work

and dedication in making

NCG one of the largest

educational, training, and

employability providers in

the UK. I look forward to the

opportunities that lie ahead

in the coming year to further

strengthen NCG.

dameJackieFisherChief Executive NCG


08

phIlbonellGroup Director, Business Development

Phil Bonell joined NCG in 2009 as Group Director of Business Development

to lead and develop business growth opportunities across all Divisions of the

Group. He has worked in the sector since 1985. In his previous role, he was Chief

Executive of TWL Training Ltd, where he helped to successfully develop the

company from a local to national provider of training and employability skills.

Our Group Directors

lIndamooreGroup Director, HR and Corporate Services

Linda joined Newcastle College in 1994. Prior to this, she worked in Careers

Services in London and the north east and for Newcastle City Council. She is

responsible for Human Resources and Corporate Services within the Group and

currently represents FE Colleges on the Regional IAG Strategic Board and is a

member of the Children’s Trust Board in Newcastle.

chrIspayneGroup Director, Planning and Performance

Chris Payne joined NCG in February 2010 and leads on management information,

performance monitoring, planning and e-learning. Chris has worked in Further

Education since 1998. He joined NCG having previously worked as Funding Director at a

large general further education college in Nottingham. Chris also represents the sector

on the Young People’s Learning Agency/Skills Funding Agency External Advisory

Board and is a member of the 157 Group of Colleges Policy Forum.

esmewInchGroup Director, Finance

Esme Winch previously enjoyed an entrepreneurial career in retailing. She joined

Newcastle College in 2001. In 1996 she was part of a small management buyout

team that targeted and acquired Paperchase from WH Smith backed by venture

capital. She was also European Financial Controller for Polo Ralph Lauren and has

held senior finance posts for Laura Ashley, Timberland and Athena.


0909


10


Our Group Divisions

newcastlecolleGeGroupturnover2009-10

Intraining £54.3m

Newcastle College £84.5m

Skelmersdale & Ormskirk College £12.2m

total£151m

IntraInInGIntraining previously operated via the

subdivisions of Employability, Workforce

Development, Consulting, Managed Services

and Brokerage.

To further improve market responsiveness,

plans to streamline Intraining’s services were

progressed. As part of this process Intraining

restructured and created a new division called

Commercial Services.

It now operates under three divisions which

enable Intraining to provide a complete solution

to its customer and client needs.

• Employability – The majority of its focus is

around the Coalition Government’s plans

for Employment Related Support Services

including the Work Programme.

• Workforce Development – drives

significant growth in the number of

16-18 year old apprentices.

• Commercial Services – brings Brokerage,

Managed Services and Consulting under

one banner offering a real strength to its

customer offer.

Newcastle College £84.5m

Intraining £54.3m

Skelmersdale & Ormskirk College £12.2m

11


During the year 2009-10 Intraining worked

with 48,000 individual learners on 150 different

programme routes, more than 37,000 learners on

Department for Work and Pensions programmes and

over 11,000 employer-responsive learners, resulting in

a job being secured for a learner every 16 minutes.

Intraining has 1,100 staff and works with over

20,000 small and medium sized employers

nationally. Sectors include retail, travel and tourism,

utilities, early years, health and social care.

Following last year’s Ofsted report where it was

judged a Grade One “outstanding” provider

in all areas, Intraining was further highlighted

by Ofsted as one of twelve outstanding

work-based learning providers that excel at

providing Apprenticeships, NVQs and other

vocational qualifications for young people and

adults. Inspectors praised Intraining for being

particularly responsive and flexible in meeting

employers’ needs with exceptional strategies to

involve employers in learning.

Her Majesty’s Chief Inspector, Christine Gilbert said:

“These providers display a real drive to inspire,

challenge, and support young people and adult

learners. They have each made an important

contribution to addressing the critical issue

of developing skills for employment, while

also helping employers to compete in a tough

economic environment.”

newcastlecolleGeBev Robinson is Principal of Newcastle College

and leads this division of NCG.

During 2009-10 Newcastle College taught more

than 32,000 learners; with over 18,000 Further

Education students, more than 7,000 work-

based learners and over 3,000 Higher Education

students. The college had a turnover of more

than £84 million.

National School and College Achievement and

Attainment Tables, from the former Department

for Children, Schools and Families (DCSF) ranked

Newcastle College as the best performing general

further education college for 16-18 year olds at Level

3 in England. (Excludes independent schools).

Already graded outstanding by Ofsted as a LSIS

Beacon college, Newcastle College has consistently

performed in the top 10% of all general further

education colleges in the country.

12


The National Skills Academy for Hospitality

endorsed Newcastle College for excellence in the

content and delivery of its Professional Cookery

Diploma. The college is one of only eight

colleges nationally to hold this accolade.

In December 2009, Advanced Performing Arts

student Joe McElderry was announced winner of

ITV’s The X Factor. Joe successfully completed

his course in the summer of 2010.

The International Office continued to

recruit learners from more than 44 countries

around the world and exceeded income targets

by 12%, achieving an income of £2.9million.

New countries visited included Nepal, Qatar

and Bahrain.

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14


skelmersdale&ormskIrkcolleGeLouise Dawson is Principal of Skelmersdale &

Ormskirk College and leads this division of NCG.

During 2009-10, over 5,000 further education

students, work-based learners and HE learners

enrolled at Skelmersdale & Ormskirk College. The

college had a turnover of £12.2million.

In October 2009 work began on a new

£42.8million scheme to redevelop

Skelmersdale & Ormskirk College. The new

campus is on schedule to open in September

2011 and marks the start of the regeneration

of Skelmersdale’s town centre, providing

fantastic education and training opportunities

for local people and a much needed boost to

the local economy.

The college was also commended by Ofsted

Inspectors as being one of the best colleges

for the partnership provision it delivers for

the University of Central Lancashire (UCLan).

Amongst the strengths reported by the

inspectors was the high quality of provision,

excellent achievement rates and experienced,

dedicated and effective tutors.

The college nursery was also highly commended

under the Lancashire Quality Award scheme for

its high standards of childcare.


15

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Unrivalled provisionthat meets the needsof our customers, clientsand communities

apprentIceshIps

IntraInInG• Intraining beat nine other providers to be

ranked as the top Apprenticeship Vacancies

provider in the East of England by the National

Apprenticeship Service.

• The National Apprenticeship Service

commended staff at Intraining for their work on

Apprenticeships citing them as “the provider

other providers should contact to share best

practice and emulate successful processes.”

• Intraining exceeded the national success rates

in delivery of Apprenticeships at 85-90% on all

levels of programmes.

• Intraining was showcased in an Ofsted report

as one of twelve outstanding work-

based learning providers across the UK that

excel at providing apprenticeships, NVQs

and other vocational qualifications for young

people and adults.

newcastlecolleGe• Newcastle College delivered courses and

Apprenticeships in the workplace to over

7,000 learners.

• In 2009-10 Newcastle College became the

largest provider of apprenticeship

frameworks in the north east, offering

over 35 apprenticeship frameworks.

• The National Construction Academy introduced

a new Apprenticeship Employer placement

scheme – a highly flexible model that allows

businesses to take on specialist staff as and

when required. The scheme has been designed

in response to the downturn in the construction

industry where employers have been reluctant

or unable to employ new starters.

skelmersdale&ormskIrkcolleGe• The college worked collaboratively with the

Young People’s Service and the head teachers

of the local secondary schools to develop new

provision to meet curriculum priorities and

current demand. This resulted in the introduction

of three new Young Apprenticeships in

Hairdressing, Social Care and Sports.

Meeting and exceeding the needs and aspirations of our learners and our customers is at the heart of everything we do. We have embraced new Government initiatives to offer the latest education, training and employability solutions.


17

claIreGrahamAge 25

18


claIreGraham,25,southshIeldsAdvanced Apprenticeship in Electrotechnical Services

Newcastle College

Claire has worked as a Maintenance Officer at Tyne Tunnel

operator, TT2 for the past four years. She is the first female

Apprentice for the company.

TT2 has supported Claire throughout her studies giving her time

off to attend college. The experience of working and studying in

a traditionally male environment has been a positive one for

Claire, who would like to encourage more women to consider

the wide range of subject areas open to females looking to start

an Apprenticeship.

Claire said: “I was working in retail and did some office work, but

I felt that I wanted to go further and find a career, rather than just

a job. I struggled to access training in the job I was in and I really

wanted to find something that I was interested in.”

Claire added: “Electrotechnical Services is a traditionally male

dominated area, but I can honestly say that I have never felt

intimidated. Newcastle College and TT2 have been nothing but

supportive and I would encourage other young people to follow

the Apprenticeship route as a means to progressing their career.”

lauracook,18,nottInGhamNVQ Level 3 Travel and Tourism, Intraining

Laura Cook from Nottingham won the travel industry’s top award

‘Young Agent of the Year’.

Having worked for two years as travel apprentice with Midlands

Co-op, Laura had already gained a great deal of experience

and achieved an NVQ Level 2 in Travel and Tourism two months

early. As a result, she won the Midlands Co-op 2008-2009 Travel

Apprentice of the Year Award. She decided she wanted to

progress further and studied for her Level 3 NVQ in Travel and

Tourism with Intraining which enabled her to achieve the Young

Agent of the Year award.

Laura said “I’m really glad that my apprenticeship was

run through Intraining, it has been very supportive. The

apprenticeship and winning Young Agent of the Year has made

a big difference to my life. It has given me more confidence

and has made me realise that I want to pursue a career in the

travel industry. It’s my dream job and I cannot think of working

anywhere else.”

“Newcastle College have been a great

partner in delivering training to our workforce and

have provided very good levels of support. We

receive regular feedback which ensures we can

monitor and evaluate the progress of staff whilst

they’re being trained.

“The staff feel more valued knowing that we

are investing in their professional development

and their enhanced knowledge means they can

provide an even better level of service to the

users of our homes.”

stephcallaGhan,traInInGco-ordInatorhelenmcardlecareGroup,newcastleupontyne

19


20


FurthereducatIon

newcastlecolleGe• Newcastle College taught more than 18,000

FE students.

• Learner responsive success rate was 85%,

placing the college in the top 10% of all

general further education colleges nationally

for the fourth consecutive year.

• In summer 2010, A2 pass rates were the

best results to date at 96%. 35 learners also

received the new highest A* grade for

A2 Levels.

skelmersdale&ormskIrkcolleGe• Skelmersdale and Ormskirk College taught

over 3,000 FE students.

• Learner satisfaction levels were above national

benchmarks at 98%.

• The college led on the development and

successful approval of five 14-19 Diplomas in

collaboration with West Lancashire high schools.

21

GrantrIdleyAge 18


22


GrantrIdley,18International Baccalaureate, (IB,) Newcastle College

Grant is one of a select group of students across the UK to be

accepted into the National Enterprise Academy – the brain child

of Peter Jones of BBC Television’s Dragons Den fame.

Grant will be one of the first to put his entrepreneurial business

skills to the test at a new centre in Manchester, which follows

the successful launch of the first centre in south east England

last year.

Grant said: “I am really looking forward to joining the Academy.

I’m sure the extracurricular elements of my IB course helped me

to impress the interviewers. I would definitely recommend the IB

to other people because it opens up opportunities that you would

not normally have had with A Levels.”

helenmurray,29NVQ Level 3, Nail Services, Skelmersdale & Ormskirk College

Helen was crowned with the national title of UK World Skills

Advanced Nails Technique Winner. The long journey to the final for

the 29 year old mother began back in the Nail Technician studio at

Skelmersdale & Ormskirk College, in which a classroom competition

allowed the winner to compete in the regional competition for UK

World Skills Advanced Nail Techniques. Following her success Helen

is now setting up her own nail studio in Skelmersdale.

Helen said: “I really lacked confidence before I joined the Nails

course. The college tutors were amazing. They really gave me the

self-belief I needed to succeed. I am now a much more confident

person. Since leaving college I have set up my own business which

is going really well. I would never have even considered having my

own business in the past and I really appreciate what the course

and my tutors have done for me”.

23

“From the start I felt like Intraining were listening.

They went the extra mile to get me to interview

level. I can’t thank them enough, as I have been

out of work for a while and the job I have gained

is more than just a job, it’s a vocation, which is

something I haven’t had for a very long time.”

andychapmancustomer,leIcester


24


hIGhereducatIon

newcastlecolleGe• Newcastle College became the largest

provider of Higher Education in Further

Education in the country offering more than

85 Foundation Degrees and Honours Degrees

in a wide range of subjects.

• Several new Foundation Degrees were

introduced for the science and technology

sector in response to skills shortages across

the UK including: Biotechnology, Analytical

Chemistry, Applied Laboratory Techniques,

Process Engineering, Renewable Energies and

Subsea Engineering.

• NCG worked with the Quality Assurance

Agency as part of its process towards gaining

Foundation Degree Awarding Powers. Gaining

Foundation Degree Awarding Powers will

give the Group more flexibility in designing

its HE curriculum and in providing vocational

Foundation Degree courses that offer new

opportunities to learners currently under-

represented in HE.

• The inspection by the Quality Assurance

Agency for Higher Education was very

positive. The team of QAA reviewers gave

Newcastle College the best possible ratings

for academic standards and the quality of the

student learning experience.

skelmersdale&ormskIrkcolleGe• In response to local demand from existing

learners and employers, Skelmersdale

& Ormskirk College introduced three

Foundation Degrees in Computing, Business

Information Systems and Social Care. The first

cohort of learners graduated in June 2010.

25


steveowensmIth,38FdSc Electrical and Electronic Engineering, Newcastle College

Steve joined Newcastle College as a mature student whilst

working for the Royal Air Force (RAF).

Steve said: “I came to Newcastle College for the specialist course

that was offered and the qualification I could achieve. I work

for the RAF in an electronic engineering capacity and I felt this

course could help my role. My managers were extremely keen for

me to follow this route and both the RAF and the college were

very supportive.

It was challenging working and studying at the same time, but it is

something that will help me to further my career. The best part of

the course was working with specific industry experts, which I would

not have had the chance to do if I had not studied this course.”

andreaFowler,38FdA Children & Young Persons Year 2, Skelmersdale & Ormskirk College

Andrea works as a part-time Teaching Assistant in a local primary

school in Skelmersdale. After completing an NVQ Level 3 in

Supporting Teaching and Learning, Andrea decided she wanted to

take her education to a higher level.

Andrea said: “The course is great, I have learnt so much that I can

apply to my current role, particularly around child psychology

and how children learn. It has made a real difference to the way I

work with the children in my school. The support I receive from

the tutors is excellent, I particularly like the way they draw on their

own industry experience to enhance the course”.

In the future, Andrea would like to become a Learning Mentor

in a high school or work with disadvantaged children. After

completing her foundation degree she hopes to top up to a full

Honours Degree.

26


employabIlIty

IntraInInG• Across its Employability contracts, Intraining

delivered 1,000 qualifications and found

employment for 4,844 people. Many young

people and adults who arrived lacking

confidence, with complex, social and emotional

problems were provided with personalised

advice, guidance and support, which lead to

high rates of sustainable employment.

• The Range of Projects programme, a European

Social Fund (ESF) funded programme for

disadvantaged adults in Lancashire and

Cumbria worked with 4,491 young people

and generated 3,371 community placements

and projects. 317 learners also moved into

sustainable employment.

newcastlecolleGe• Newcastle College continued to support the

Government’s priority of improving adult

literacy and numeracy as a means to gaining

long term sustainable employment.

• Newcastle College implemented The Bridge

Programme, which aims to re-engage young

people who are the responsibility of the Youth

Offending Team (YOT). On completion of the

programme, learners have the opportunity to

progress to mainstream programmes, onto

vocational programmes or into employment or

Apprenticeships. Since its inception, YOT have

noted a significant decrease in re-offending.

27


samuelmarkFInlaySteps to Work Programme, TWL Northern Ireland, part of Intraining

Samuel Mark Finlay went from being unemployed to a Chef at the

stylish Ten Square Hotel in Belfast. Samuel was a Core Gateway

learner and entered the programme without having a CV. Having

had unsuccessful interviews he lacked confidence and felt

negative about his future prospects.

The Core Gateway programme helped Samuel regain his

confidence and motivate him to start his job search activities.

When he was finally ready to face potential employers again he

worked hard to secure interviews with several different companies,

one of which was the Ten Square Hotel situated right in the heart

of Belfast City and a favourite amongst a number of celebrities.

“I’ve learnt a lot since I started at the hotel and I am extremely

grateful to TWL for all the help, support and advice because I don’t

think I would have managed to get a job like this without them”.

andrewbooth,46Skills for Life (now part of the Employability Skills

Programme), Intraining

Andrew couldn’t read, write or perform simple calculations when

he enrolled on the Skills for Life programme. Now he is Craft

Gardener with Leicestershire City Council in the Department of

Regeneration & Culture.

After completing the Skills for Life course, Andrew struggled with job

searching and kept returning to class. It was clear that he still needed

a lot of assistance and help. Reading newspaper adverts and using a

computer still proved very challenging. His Adviser and Employment

Trainer, therefore agreed to give him the extra help he needed.

As a result of their help and his own sheer determination, Andrew

learned to read and achieved the Entry Level 1 qualification; he then

went on to achieve an Entry Level 1 Numeracy Qualification, resulting

in a successful job search and his appointment at the City Council.

After only four months in his role with the council Andrew was

promoted. The commitment and encouragement that Andrew

received from his Advisers gave him the motivation and, more

importantly, the skills he needed to progress and build a better future.

“I can’t believe how much my life has changed. There’s no way

I could’ve done it without the help I got from Intraining. I loved

every minute of the Skills for Life course. I would recommend that

course to anyone because it’s completely changed my life.”

28


brokeraGe

Intraining’s Brokerage service in Scotland and

Wales celebrated another successful year.

walesbrokeraGe• Increased its contract value from £1.3 million

to £2.4 million for Apprenticeships and Skill

build programmes.

• Overall success rates for Level 2 and 3

Apprenticeships were 71% and 79% respectively.

• Its Cardiff offices were awarded the Green

Dragon Environmental standard for their

commitment to Sustainable and Environmental

practices within its operations.

• Kwik Fit (GB) took on its first Welsh

Apprentices. They undertook the IMI Vehicle

Maintenance & Repair and Vehicle Fitting

Apprenticeship across all Kwik Fit garages in

Wales. Kwik Fit secured the funding to provide

the training through Intraining Brokerage.

scotlandbrokeraGe• Increased its learner numbers and contract

value from £1.7 million to £1.9 million by

engaging in the Scottish Government

Employer Incentive scheme.

• Scotland Brokerage continued to work

with funding bodies and subcontractors in

achieving government targets related to

work-based learning priorities. It significantly

increased its numbers in the 16-19 year old

Apprenticeship market.

• It received excellent feedback from customer

satisfaction surveys highlighting Brokerage as

an excellent service. 61% of customers rated

communication as very good.

• S&B Academy, one of the Brokerage

automotive subcontractors had four

Apprentices shortlisted for the annual

Outstanding Achievers event, organised by

IMI Awards to celebrate the achievements

of automotive learners from across the UK.

The learners were personally congratulated

by HRH Prince Michael of Kent, who is the

Patron of IMI.

29

“Newcastle College proved the

perfect partner for us. Together we have built

a strong Apprenticeship programme which is

just beginning its third year, and are now

rolling out an additional training programme

throughout the UK.”

keIthrIchardson,dIrectoroFpeopledevelopmenteaGa,newcastleupontyne



30

“Skelmersdale and Ormskirk College is

important not only for the future education

of our borough’s young people, but also for

the town of Skelmersdale itself.

“By having a first-class college in

West Lancashire we can help equip our

young people with the skills they require

in the 21st Century and help improve the

wider community.”

councIllorIanGrantleaderoFwestlancashIreborouGhcouncIl,ormskIrk

31


Investing in ourorganisation to meetmarket demand

maJorInvestmentSkelmersdale & Ormskirk College completed the

first phase of its new £42.8m college campus.

The new college will open its doors to learners

in September 2011 and is the lynchpin in the

redevelopment of Skelmerdale town centre.

The National Construction Academy invested

£200,000 in its new Leicester facility. This

included the building of new classrooms, new

practical rigs and installing Smart Boards.

At Liverpool facilities were improved with

the creation of a new 5-a-side football pitch

to enable the delivery of more foundation

programmes. It is also working closely with

Intraining to deliver a significant E2E programme.

Intraining opened 14 new offices to

accommodate delivery of new and existing

contracts from the North West to the South

coast of England and Northern Ireland including

Sheffield, Birmingham and Southampton.

sharedservIcesUnderpinning NCG’s successful development

has been the significant investment in creating

a strong infrastructure which is shared across

all parts of the Group. Our Shared Services

approach ensures that each Division is

supported from NCG’s Head Office by skilled

and experienced teams of staff who provide

outstanding Financial, HR, MIS, IT and

Estates support.

This enables us to maximise our use of the

resources available, minimise duplication and

capitalise on the size and reach of the Group.

tenderInG/newbusInessThe NCG Business Development team lead on

competitive submissions including bids, tenders,

proposals, pre-qualifying questionnaires and

frameworks on behalf of all divisions in NCG

to protect existing business activity and

pursue new business, inline with business

growth strategies.

During 2009-10 the team submitted over 110

submissions to an array of funders including the

Department for Work and Pensions, Learning

Skills Council (now Skills Funding Agency),

Regional Development Agencies, National

Offender Management Service, Learning and

Skills Improvement Service, Higher Education

Funding Council for England, and various Local

Authorities throughout the UK.

The team generated over £25.5 million for

NCG’s divisions. Key wins included DWP

Community Taskforce Phase 1 awards for

Intraining in South Yorkshire and Derbyshire,

Birmingham and Solihull, and North East

Yorkshire and the Humber with Tees Valley.

These contracts saw Intraining establish

infrastructure in new strategic geographical

areas including Birmingham and Sheffield.

We aim to proactively anticipate market demand and embrace creativity and innovation to position the Group at the forefront of learning and training.

32


Whilst Newcastle College, secured valuable

One North East funding to provide higher level

skills in the Offshore Wind Industry.

employerenGaGementIntraining worked with over 7,000 employers

in 2009-10, nurturing its existing long-standing

relationships with a wide range of blue-chip

clients and public sector employers at a local,

regional and national level, as well as building

new relationships.

Inline with the Government’s intention to

rebalance and grow the economy and provide

funds to support additional Apprenticeship

places, Intraining improved its quality of

provision to offer the best and most cost-

effective ways to raise skills levels nationally.

Santander chose Intraining to pilot a new

programme involving staff in Bradford. Its staff

worked towards qualifications designed to

enhance their skills in business administration

and call centre operations.

Impressed by how it saw its staff ‘inspired’ to

succeed, Santander’s management agreed to roll

out the programme to another 200 of its staff.

Intraining also worked closely with Job Centre Plus

and established relationships with clients such as

Sainsbury’s and Tesco to deliver pre-recruitment

training courses tailored specifically to meet the

needs of the employer and offer the long-term

unemployed the chance to gain employment.

Newcastle College worked with over 500

employers to deliver a range of courses from

bespoke professional qualifications to Train

to Gain and Apprenticeships. In a survey of

employers who had worked with Newcastle

College, 91% agreed the training which the

college delivered achieved the business

improvements they identified prior to training.

In 2009-10 Newcastle College made key links

with some of the Top 250 companies in the

north east. These include Shepherd Offshore and

Clipper Windpower as well as Fenwick on a range

of training initiatives from hospitality to retail.

Hairdressing facilities at Newcastle College’s

Sandyford Building were designated a Wella

Professionals Centre for Excellence in recognition

of their outstanding teaching environments and

exceptional standards of industry training. The

college is now one of only a few nationally to

receive this award.

Skelmersdale & Ormskirk College worked with

over 300 employers both in Lancashire and the

surrounding district. In April 2010, it introduced

the Continuing Development of Young People

Programme. This is for young people in

employment who are not receiving training. The

programme provides them with an opportunity

to gain qualifications which will help them to

progress in their chosen career.

Skelmersdale and Ormskirk College continued

to extend its links with local employers, Sector

Skills Councils, Job Centre Plus and the Young

People’s Service to develop opportunities to give

young learners the best chance of gaining real

work experience and qualifications that allow

them to progress into employment or higher

level qualifications.

33


34


Corporate SocialResponsibilityNCG’s impact on society and the community arises naturally from operating as an excellent provider of education and training. During 2009-10 NCG adopted two main themes which contributed to our overall approach to corporate accountability:

supportInGcommunItIes/volunteerInGThrough its Community Task Force programme,

which provides volunteering and community

placement activities for young people aged

18-24, Intraining has contributed to the social,

environmental, economic and emotional well

being of the many communities in which it serves.

The Tertia Trust project was initiated to regenerate

and modernise a holiday facility in Cleethorpes that

provides short holiday breaks for disadvantaged

children throughout Europe and the UK.

Through its European Social Fund (ESF)

funded Range of Projects programme for

disadvantaged, economically inactive adults

which is run across Cumbria and Lancashire,

Intraining had 820 learners participate on a

range of programmes resulting in many people

gaining sustainable employment.

Learners from Blackpool, Carlisle and Lancaster

on ESF funded programmes were also filmed by

ESF Works for use on the ESF Works website to

showcase and highlight the positive impact the

various ESF funded schemes have on the lives

of individuals.

Newcastle College Media Production students

made a film entitled “What do you see?”

promoting age awareness. It was submitted to

Age Concern which is distributing it across the UK.

The English for Speakers of Other Languages

(ESOL) team worked with a number of community

groups assisting in Newcastle’s cohesion agenda.

This included work with the Migrant Families

Community Inclusion Project for which it delivered

a successful class for Roma adults who had never

been involved in education in the UK.

Staff and students at Newcastle College also took

part in a significant range of volunteering projects

including setting up a charity to raise money to

help build a school in Kenya. Over 300 student

volunteering days were organised throughout 2009-

10. This included, work with terminally ill patients in

hospices as well as working with “Crisis” to teach

homeless people how to cook for themselves.

Skelmersdale & Ormskirk College is now actively

represented on and contributes to all of West

Lancashire Local Strategic Partnership’s main

thematic groups which include: safer communities,

35


improved health for all and quality and accessible

services. The college is also committed to working

with the Community Volunteering Service and

Young People’s Service. As a result the college has

committed to a staff volunteering day on 11 July 2011.

In 2009-10 students completed 2,329 hours of

voluntary service. Throughout the year students

and staff engaged in various fundraising

activities to support local and national charities.

addressInGenvIronmentalImpact

During 2009-10 NCG further developed its

Environmental Policy. Of particular focus has been:

• Sustainable Buildings

• Climate Change

• Recycling

Sustainability is one of the core themes for all new

buildings and facilities that are provided by NCG.

The new Skelmersdale building achieved the

Breeam Excellent Standard for the design stage

of the development.

During 2009-10, NCG developed plans to join

the EcoCampus 2010 cohort. EcoCampus is an

Environmental System and award scheme for

the higher and further education sector. The

scheme allows universities and colleges to

be recognised for addressing key issues of

environmental sustainability.

In 2009-10 NCG registered on the Environmental

Carbon Reduction scheme and the Group is

moving towards single supplier energy contracts

across the Divisions and increasing the volume of

our electricity produced from renewable sources.

A bio-mass boiler was also installed in the

Leicester Construction Academy which is a

sustainable heating solution.

In addition, the Estates team have been

active across NCG in promoting environmentally

friendly initiatives which have resulted in

Skelmersdale & Ormskirk College recycling

approximately 80-90% of waste and the

recycling of printer toner cartridges, old

computer equipment and old furniture

across NCG.

36


Board of GovernorsOur Governors are members of Newcastle College Corporation. The Corporation and its committees oversee all business matters. Our Governors are drawn from a wide range of backgrounds and bring extensive experience to the management of our business.

audItcommItteeALAN GROVES

PETER MICHELL

ALEX TURNER

JOHN TURNER (CO-OPTED)

searchcommItteeDAVID FAULKNER

JACKIE FISHER

JAMIE MARTIN

remuneratIoncommItteeCAROLE HOWELLS

JOANNE SYRETT

ALEX TURNER

NIGEL MILLS

skelmersdale&ormskIrkadvIsorycommIttee

Key stakeholders in the activities of Skelmersdale

& Ormskirk College have been co-opted to

this committee. The committee nominated

LES ABERNETHY to serve as a Governor.

ourGovernorsCHAIR, MR JAMIE MARTIN OBE

Managing Partner, Ward Hadaway

DAME JACKIE FISHER DBE

Chief Executive Officer of NCG

MR LES ABERNETHY

Former Deputy Chief Executive of

West Lancashire District Council

MR SHAUN CHAPMAN

Staff Member

COUNCILLOR DAVID FAULKNER OBE

Leader of Newcastle City Council

MR SAMUEL FOREMAN

Student Member

MR ALAN GROVES

Former Finance Director of Northern Electric PLC

MS CAROLE HOWELLS MBE

Former Director of Newcastle Council for

Voluntary Service

37


MR PETER MICHELL

Former General Manager in a variety of roles

at IBM UK Ltd

MR NIGEL MILLS

Management Consultant

MR MARK SQUIRES

Chief Executive of Benfield Motor Group

MS JOANNE SYRETT

Human Resources Consultant

MR JAMES TELFER

Student Member

MRS ALEX TURNER

Environmental Consultant

The following also served as a Governor during

the year ended 31 July 2010

MR STEVEN BROOMHEAD

Chief Executive of the Northwest Regional

Development Agency (RDA)

MISS ALLIE HESLOP

Student Member

MISS KAYLEIGH WILSON

Student Member

38


NCG locations

ACCRINGTON

AINTREE

ANTRIM

BALLYMENA

BALLYMONEY

BANGOR

BARROW-IN-FURNESS

BEDFORD

BELFAST

BIRMINGHAM

BLACKBURN

BLACKPOOL

BLETCHLEY

BOLTON

BRIDLINGTON

BURNLEY

BURTON ON TRENT

CANNOCK

CARDIFF

CARLISLE

CARRICKFERGUS

CHESTER

CHESTERFIELD

CHORLEY

COALVILLE

CREWE

CROSBY

DERBY

FLEETWOOD

GLASGOW

GLOSSOP

GRIMSBY

HARLOW

HARROGATE

HAYES

HEANOR

HEXHAM

HULL

KINGSTON UPON THAMES

LANCASTER

LARNE

LEEDS

LEICESTER

LIVERPOOL

LONDON - ELEPHANT & CASTLE

LOUGHBOROUGH

LUTON

MACCLESFIELD

MANSFIELD

NELSON

NEWARK

NEWCASTLE

NOTTINGHAM

ORMSKIRK

OXFORD

PETERBOROUGH

PRESTON

RAWTENSTALL

REDHILL

RUNCORN

SALE

SCUNTHORPE

SELBY

SHEFFIELD

SKELMERSDALE

SKIPTON

SOUTHAMPTON

TADCASTER

TAMWORTH

TUNBRIDGE WELLS

WARRINGTON

WHITBY

WOKING

WORKINGTON

WORKSOP

WREXHAM

YORK

39


Equality and DiversityWe welcome diversity amongst our staff and students – valuing differences in race, gender, sexual orientation, disability, religion or belief, class and age. We actively oppose discrimination, aim to remove all conditions that put people at a disadvantage, strive to improve access and to provide outstanding support. We are committed to providing an inclusive learning environment.

Female 58%

Female 50%

GroupstaFFGenderbalance

Grouplearner/customerGenderbalance

Male 42%

Male 50%


40

41


Ages 45to 54

Ages 35to 44

Ages 25to 34

Other 95%

Ages 35to 44

Ages 19to 24

GroupstaFFaGes

Grouplearner/customeraGes

GroupstaFFethnIcIty

Over 65

Ages 13to 15

Ages 55to 64

Ages 45to 54

Over 55

BME 5%

Under 25

Ages 16to 18

Ages 25to 34


42

Other 87%

No Disability 83%

No Disability 95%

Grouplearner/customerethnIcIty

Grouplearner/customerdIsabIlIty

GroupstaFFdIsabIlIty

Further information about Equality and Diversity is available on request

BME 13%

Disabled 17%

Disabled 5%

43


Newcastle College Report and Financial Statements 31 July 2010

reGIsteredoFFIceandadvIsers 44operatInGandFInancIalrevIew 45revIewoF2009/10 46currentperFormance 48resources 49FutureperFormance2010/11 49corporatesocIalresponsIbIlIty 51FInancIalhIGhlIGhts 54statementoFcorporateGovernanceandInternalcontrol 55statementoFtheresponsIbIlItIesoFthemembersoFthecorporatIon 60IndependentaudItors’reporttothemembersoFthecorporatIonoFnewcastlecolleGe 61GroupIncomeandexpendItureaccountFortheyearended31July2010 63GroupstatementoFhIstorIcalcostsurplusesanddeFIcItsFortheyearended31July2010 64GroupstatementoFtotalrecoGnIsedGaInsandlossesFortheyearended31July2010 65Groupbalancesheetat31July2010 66colleGebalancesheetat31July2010 67GroupcashFlowstatementFortheyearended31July2010 68notestotheFInancIalstatementsat31July2010 69IndependentaudItors’reportonreGularItytothemembersoFthecorporatIonoFnewcastlecolleGe(‘thecorporatIon’)andtheskIllsFundInGaGency(‘thesFa’) 95

44


addressNewcastle College

Rye Hill Campus

Scotswood Road

Newcastle upon Tyne

NE4 7SA

externalaudItorsErnst & Young LLP

Citygate

St James’ Boulevard

Newcastle upon Tyne

NE1 4JD

bankersHSBC Bank plc

City Branch

110 Grey Street

Newcastle upon Tyne

NE1 6JG

solIcItorsWatson Burton LLP

1 St James’ Gate

Newcastle upon Tyne

NE99 1YQ

otherproFessIonaladvIsersInternal auditors: PricewaterhouseCoopers LLP

Insurance and pensions: Heath Lambert

45


operatInGandFInancIalrevIewThe members present their report and the

audited financial statements for the year ended

31 July 2010.

leGalstatusThe Corporation was established under the

Further and Higher Education Act 1992 for the

purpose of conducting Newcastle College. It

is an exempt charity for the purposes of the

Charities Act 1993 as amended by the Charities

Act 2006.

It operates through the Newcastle

College Group (NCG) which comprises

the following divisions:

• Newcastle College

• Skelmersdale & Ormskirk College (SOC)

• The Intraining Group Limited (Intraining)

• Newcastle College Construction Limited

(NCCL)

newcastlecollege is a Further and Higher

Education college based in Newcastle upon

Tyne. It comprises several academic schools, a

national Academy of Learning for Justice, and

substantial provision in higher education (HE).

skelmersdale&ormskirkcollege is a Further

Education college based in West Lancashire.

Newcastle College merged with Skelmersdale &

Ormskirk College in August 2007.

theIntrainingGrouplimited is a wholly owned

subsidiary of the Corporation. It operates a wide

range of skills and employability programmes.

Intraining was formed from parts of the former

Carter and Carter plc acquired in March 2008. It

acquired the business of TWL Training Limited,

formerly a separate subsidiary, on 31 July 2009.

newcastlecollegeconstructionlimited is a

wholly owned subsidiary of the Corporation. It

was formed from parts of the former Carter &

Carter plc acquired in March 2008. It offers

apprenticeships and training in a wide range of

construction occupations and crafts.

mIssIonThe mission of NCG is to develop people through

learning and achievement for the benefit of

themselves, society and the economy. The

mission is delivered through our core business

objectives and operational processes that:

• put the needs of the learner and customer first

• innovate and support excellence in learning

and employability

• promote diversity and social mobility

• value, involve and invest in our staff

• foster strong partnerships with employers,

partners and communities

• secure our future through strategic investment

and profitability

Report of the members of the corporationFor the year ended 31 July 2010

46


revIewoF2009/10ImplementationoftheoperationalplanThe Operational Plan 2009/10 set out a

detailed breakdown of the divisional and group

objectives identified in the annual Development

Plan. This covered all of the group’s funding

streams and all of the group’s activity across the

regions to deliver a budgeted income of £151m

for the year. A year end position of £151m was

achieved against a background of significant

change in the external environment. Year end

operating surplus before FRS17 pension costs

improved on budget, increasing from £6.5m to

£7m due to maximisation of funding contracts

and rigorous action to control costs.

Income targets were realised through strong

organic growth in core Learner Responsive

Further Education (FE) and Higher Education (HE)

through the two colleges; careful management

of contracts for employer facing activity funded

by the Skills Funding Agency (SFA) through

Train to Gain and Apprenticeships; the delivery

of employability provision funded through the

Department for Work and Pensions (DWP) and

European Social Fund (ESF) by The Intraining

Group Ltd and the continued development of the

National Construction Academy using the sites in

the Midlands and Liverpool.

The businesses had significant successes over

the year a few examples of which are:

• Ranked as the best performing general FE

college in England for full time 16-18 provision

for 2009

• The acquisition of significant (£31m)

Community Task Force (CTF) contracts

for Intraining

• The commencement of the £39m new build

in Skelmersdale

• Regional Development Agency (RDA) funding

for the Renewables Academy in Newcastle

• Significant strengthening of management

throughout Intraining

• The achievement of Beacon status for the

whole of NCG

• Accredited schools provider status

The changes in the Machinery of Government

(MOG) have continued to impact on FE learning

with the abolition of the Learning and Skills

Council (LSC) into the Skills Funding Agency

(SFA) and Young People’s Learning Agency

(YPLA) increasing the complexity of the

landscape. Latterly the new Coalition Government

has introduced some flexibilities, but these are

considered to be mechanisms for us to potentially

realise cost savings rather than real financial

bonuses. Newcastle College and Skelmersdale &

Ormskirk College (the Colleges) performed well

and exceeded both their 16-18 and adult learner

responsive targets for all measures. Employer

Responsive learning generally met budget

expectations; however performance across age

groups and divisions was mixed. In general the

recruitment of adult apprentices, particularly

in Intraining, was buoyant but recruitment of

16-18 apprentices remained difficult across all

divisions. Significant work is underway to address

shortfalls for 2010/11. Mainstream HE including

Additional Student Numbers targets were met

and engagement in co-funded HE activity through

employers improved though fell just short of target.

Over the year we have experienced significant

external change and the political and economic

environment in which we now operate is much

less certain. The likelihood of significant financial

constraint is high and our capital programmes

have been set-back. However our reputation

as a high performing organisation has been

reinforced over the year and should maintain the

group in a financially strong position.

Excellence in teaching, learning and skills

continues to improve and performance was

further validated by Ofsted in June 2009 as The

Report of the members of the corporation (continued)For the year ended 31 July 2010

47


Intraining Group Ltd achieved an outstanding

Ofsted Inspection for its Employer Responsive

skills work. This led to the whole of NCG being

awarded ‘Beacon’ status in March 2010 and

Intraining being featured in a report of ten

outstanding training providers in June 2010.

FinancialobjectivesNCG’s financial objectives for the year were:

• to generate a surplus after interest and

depreciation of 5%

• to maintain cash balances or facilities at least

equivalent to 30 days

• to provide a level of capital equipment

to meet curriculum needs and ensure the

effective operation of College support and

management function

• annualised servicing costs for borrowing

should not exceed 4% of total income

The surplus of £6,009,000 is 4% of group

income due to FRS17 charges of £1,280,000 and

group restructuring costs of £1,376,000 totalling

1.7% of income.

Cash generation remains strong and the

facilities in place are sufficient to meet

immediate cash needs.

£16,713,000 (2008/09 – £14,600,000) was

spent on capital to meet students’ and business

support needs.

Annual servicing costs for borrowing were

significantly below the limit above.

The LSC and its successor organisations have a

series of performance indicators to assess the

financial health of colleges. A financially sound

college is scored as Outstanding, whilst Good

and Satisfactory describe increasingly less

financially robust colleges. The financial

health of NCG is checked when we prepare the

three year budgeting forecast and again when

actual results for the year are reported to the

Corporation and to the SFA. The strategies and

financial policies implemented by NCG have

allowed it to maintain Good financial health

status and should allow it to regain Outstanding

in the medium term. The change is due to the

culmination of capital projects which would

increase available funds.

The SFA is also moving towards a new system

of performance measures for colleges, the

“Framework for Excellence”. This framework was

intended to be implemented across all providers

in 2008/09. NCG was monitored against the

draft measures alongside the existing measures.

The Framework has three dimensions:

• Responsiveness

• Effectiveness

• Finance

Each of the above dimensions has two or three

Key Performance Areas. These Areas are further

broken down into Performance Indicators

supported by Performance Measures which are

absolute measures of performance such as the

outcome from a learner survey or a qualification

success rate. In deriving the overall performance

rating, the Framework gives equal weighting to

each of the three dimensions.

NCG is committed to observing the importance

of the measures and indicators within the

Framework and is monitoring these through the

completion of the annual Finance Record for the

Skills Funding Agency. As benchmarks develop

so NCG will be better placed to take appropriate

action in the light of the overall performance

rating. The current rating of “Good” is considered

an acceptable outcome.


48


FInancIalposItIonFinancialresultsNCG consists of Newcastle College including

Skelmersdale & Ormskirk College and owns

two trading subsidiaries: The Intraining Group

Limited and Newcastle College Construction

Limited. The principal business activity of

the subsidiaries is carrying out training of

employees on behalf of employers and

delivering employability programmes.

NCG generated an operating surplus in the year

of £6,009,000 (2008/09 – £781,000).

NCG has accumulated income and expenditure

reserves of £44,985,000 (2008/09 –

£31,529,000) and cash balances of £7,334,000

(2008/09 – £8,172,000). No further bank loans

were taken out in the period, net debt being

£7,752,000 (2008/09 – net debt £7,507,000).

Tangible fixed asset additions during the

year amounted to £16,713,000 (2008/09 –

£14,557,000). This was split between land and

buildings acquired of £13,610,000 (2008/09

– £11,119,000) and equipment, information

technology and motor vehicles purchased of

£3,103,000 (2008/09 – £3,438,000).

NCG has significant reliance on the LSC and its

successor organisations for its principal funding

source, largely from recurrent grants. In 2009/10

the LSC and its successor organisations provided

53% of NCG’s total income (51% in 2008/09).

treasurypoliciesandobjectivesTreasury management is the management of

NCG’s cash flows, its banking, money market and

capital market transactions; the effective control

of the risks associated with those activities; and

the pursuit of optimum performance consistent

with those risks.

NCG has a separate treasury management policy

in place.

Short-term borrowing for temporary revenue

purposes is authorised by the Chief Executive.

Such arrangements are restricted by limits in

the Financial Memorandum with the LSC and

its successor organisations. All other borrowing

requires the authorisation of the Corporation

and shall comply with the requirements of

the Financial Memorandum of the LSC and its

successor organisations.

cashflowsAt £14,025,000 (2008/09 – £19,452,000),

operating cash inflow was reasonably strong.

liquidityNCG did not take out any further loans in the

year. Repayments of existing loans were made

on time and all bank covenants have been met.

The size of NCG’s total borrowing and its

approach to interest rates has been calculated

to ensure a reasonable cushion between the

total cost of servicing debt and operating

cash flow. During the year this margin was

comfortably achieved.

currentperFormancestudentnumbersThe Colleges are funded for their further

education provision according to the level of

activity that is generated each year. In respect of

LSC and its successor organisation’s funding, in

2009/10 the Colleges attracted 20,602 students,

of which 7,564 where 16-18 years (now YPLA

funded) and 13,038 adults (now SFA funded)

(2008/09: 25,890 students). Other students

include apprentices and those funded by

European Social Funds on roll-on-roll-off courses.

The Colleges are funded for much of their HE

provision by the Higher Education Funding

Council. In 2009/10 the College recruited 2,868

students (2008/09: 2,186 students).


49


studentachievementsThe overall success rate for Newcastle College

students is 84% placing the performance in

the top 10% of all General Further Education

Colleges (GFEC) nationally.

Skelmersdale & Ormskirk College achieved an

overall success rate of 83%, a 3% improvement

on the previous year, which will position the

college in the top 25% of GFECs.

resourcesNCG has various resources that it can deploy in

pursuit of its strategic objectives.

FinancialNCG has net current assets of £2,123,000, a net

pension liability of £17,342,000 and long term

debt of £14,467,000 (2008/09: net current

liabilities £5,285,000; net pension liability

£22,802,000; long-term debt £15,086,000).

peopleNCG employs 2,729 people (expressed as

full time equivalents). NCG employs 2,200

teaching staff. The number of staff includes

those delivering training and employability

throughout Intraining.

reputationThe Colleges, Newcastle College Construction

Limited and The Intraining Group Limited

have a good reputation locally and nationally.

Maintaining a quality brand is essential for NCG’s

success at attracting students, customers and

external relationships.

FutureperFormance2010/11Each division has agreed its business plan for the

year ahead through the NCG’s business planning

and budget setting processes. A summary of the

ambitions of each division is expressed in annual

Development Plans, risk is managed through

Risk Plans, and financial targets set out

in the Budget agreed by the Corporation. This

is summarised in the NCG Operational Plan for

2010/11.

This plan sets out the activities which will

allow the divisions to make progress towards

their funding and activity targets for 2010/11. It

provides a detailed breakdown of the objectives

identified in the Development Plans and covers

all of NCG’s major funding streams and activity

across the UK.

Budgeted income for 2010/11 is £157,000,000,

compared with a year-end position of

£151,055,000 for 2009/10 excluding any new

business won in the year.

The external landscape for the year ahead is

expected to be overshadowed by the outcomes

of the comprehensive spending review which will

lead to significant government led reductions in

public spending. This will result in both funding

rate and participation reductions for the sector.

Over the coming year, the local authority

responsibility for 16-18 provision will be clarified

and some simplification of the funding agencies

is possible.

The introduction of the Work Programme in April

2011 will be a major event for NCG with intensive

bidding activity taking place between November

2010 and February 2011 to secure contracts

or subcontracts. Capital for college building

projects will continue to be severely constrained.

The operating structures of the Colleges

are working well through the Principals and

associated management. NCCL is operating

under the leadership of Newcastle College.

The operating structures of Intraining continue to

be consolidated and are split into three areas of

activity; workforce development, employability

and commercial. In workforce development,


50


significant activity is underway to grow the

number of 16-18 apprentices, following a large

increase in contract by the SFA. Management

information in Intraining has been migrated to a

single system and significant work undertaken on

expanding the reporting infrastructure.

The commercial arm of Intraining now has

three distinct areas of activity; the delivery

of bespoke training solutions to employers,

the managed services function which attracts

considerable contracts with English employers

and the brokerage service. The brokerage

service delivers a range of services to employers

and reputable training providers on behalf of

Government to ensure that public funding is

effectively and efficiently deployed in line with

the national priorities. This service currently

operates in Scotland and Wales. The introduction

of minimum contracting levels by the SFA will

offer a considerable opportunity to introduce

brokerage within England.

In delivering our mission, the focus of NCG is

on meeting the skills needs of individuals and

employers in line with government priorities and

funding. These needs and priorities define our

market and shape the activity of our divisions.

The following strategic objectives, which were

identified from the outcomes of business

planning, quality and performance review over

the last 12 months, have been set by NCG for

the year ahead to enable the divisions to meet

government priorities and address national and

local skills needs:

• Creating management capacity for long term

sustainability and growth

• Managing the outcomes of the comprehensive

spending review and associated changes to

funding arrangements and funding bodies.

• Becoming a prime contractor under the

Work Programme and securing sufficient

subcontracts to maintain and grow the

employability provision

• Completing the development of Skelmersdale

& Ormskirk College with the opening of the

new build in September 2011

• Ensuring Newcastle College retains its

position as one of the leading Colleges in

the North of England

• Developing the renewables academy on

the North Bank of the Tyne to open in

September 2011

• Creating an English Brokerage to compliment

those already operating in Scotland and Wales

• Ensuring rapid growth of 16-18

Apprenticeship delivery

• Developing a coherent Group Employer

Engagement offer

• Developing e-learning across the group

to realise improved learner and customer

experience and cost efficiencies through

blended learning

• Grow the contracting and sub-contracting

function within Intraining

• Developing a group performance hub

to streamline business reporting and

ensure transparency

• Continue to invest in Shared Services to drive

efficiencies and support expansion

• Developing group marketing

and communications

• Developing a 14-19 strategy

• Secure and utilise Foundation Degree

Awarding Powers (FDAP)

• Developing fit for purpose quality

and business improvement processes,

encompassing delivery and contract

outcomes, that drives the Group forward

• Creating an ‘Apprenticeship Training Agency’

(ATA) for the Colleges and Intraining


51


We remain committed to keeping self-imposed

bureaucracy to a minimum and ensure that our

administrative functions operate as efficiently

as possibly, whilst achieving legislative and

funding compliance.

The financial objectives for 2010/11 are

to generate a surplus after interest and

depreciation whilst providing sufficient capital

resources to support the effective operation

of NCG. We intend to maintain prudent cash

balances or facilities and to ensure our debt

servicing costs are affordable.

corporatesocIalresponsIbIlItyNCG’s impact on society and the community

arises naturally from operating as an excellent

provider of education and training.

During 2009/10 NCG adopted two main themes

which contributed to our overall approach to

corporate accountability:

• Supporting communities/volunteering

• Addressing environmental impact

supportingcommunities/volunteeringThrough its Community Task Force programme,

which provides volunteering and community

placement activities for young people aged

18-24 Intraining has contributed to the social,

environmental, economic and emotional well

being of the many communities in which it serves.

The Tertia Trust project was initiated to

regenerate and modernise a holiday facility in

Cleethorpes that provides short holiday breaks

for disadvantaged children throughout Europe

and the UK.

Through its ESF funded Range of Projects

programme for disadvantaged economically

inactive adults which is run across Cumbria

and Lancashire, Intraining had 820 learners

participate on a range of programmes resulting

in many people gaining sustainable employment.

Newcastle College Media Production students

made a film entitled “What do you see?”

promoting age awareness. It was submitted to

Age Concern which is distributing it across the UK.

A staff team worked with a number of

community groups assisting in Newcastle’s

cohesion agenda. This included work with the

Migrant Families Community Inclusion Project

for which it delivered a successful class for Roma

adults who had never been involved in education

in the UK.

Staff and students at Newcastle College have

also taken part in significant volunteering

projects including setting up a charity to raise

money to help build a school in Kenya.

Over 300 student volunteering days were

organised throughout 2009/10. This included,

work with terminally ill patients in hospices as

well as working with “Crisis” to teach homeless

people how to cook for themselves.

Skelmersdale & Ormskirk College is now

actively represented on and contributes to all of

West Lancashire Local Strategic Partnership’s

main thematic groups which include: safer

communities, improved health for all and quality

and accessible services. The College is also

committed to working with the Community

Volunteering Service and Young People’s

Service. As a result the College has committed to

a staff volunteering day on 11 July 2011.

In 2009/10 students completed 2,329 hours of

voluntary service. Throughout the year students

and staff engaged in various fundraising

activities to support local and national charities.


52


addressingenvironmentalimpactDuring 2009/10 NCG developed its

Environmental Policy. Of particular focus

has been:

• Sustainable Buildings

• Climate Change

• Recycling

Sustainability is one of the core themes for all

new buildings and facilities that are provided

by NCG.

The new Skelmersdale building achieved the

BREEAM Excellent Standard for the design stage

of the development.

During 2009/10, NCG developed plans to join

the EcoCampus 2010 cohort. EcoCampus is an

Environmental System and award scheme for

the higher and further education sector. The

scheme allows universities and colleges to

be recognised for addressing key issues of

environmental sustainability.

In 2009/10 NCG registered on the

Environmental Carbon Reduction scheme

and the Group is moving towards single

supplier energy contracts across the Divisions

and increasing the volume of our electricity

produced from renewable sources.

A bio-mass boiler was also installed in the

Leicester Construction Academy which is a

sustainable heating solution.

In addition, the Estates team have been active

across NCG in promoting environmentally

friendly initiatives which have resulted in

Skelmersdale & Ormskirk College recycling 80-

90% of waste and the recycling of printer toner

cartridges, old computer equipment and old

furniture across NCG.

promotingequalityandvaluingdiversityNCG is committed to ensuring equality of

opportunity for all students, clients and

employees. We respect and value positively

differences in race, gender, sexual orientation,

able-bodiedness, class and age. We strive

vigorously to remove conditions which place

people at a disadvantage and we will actively

combat bigotry. NCG’s Valuing Diversity Policy, is

made available under NCG’s Publication Scheme

and includes its statement on Race Equality,

Disability Equality Scheme, Gender Equality

Scheme and Equality Action Plan. The policy

is resourced, implemented and monitored on a

planned basis. NCG is committed to eliminating

bias and discrimination from the way it operates,

and incorporates this fundamental fairness in its

mission. The Group Director, HR and Corporate

Services, is responsible for Equality and Diversity

across NCG. Each Division has a nominated

senior manager who leads on Equality and

Diversity issues and oversees Divisional

developments in this area.

equalopportunitiesandemploymentofdisabledpersonsNCG considers all applications for employment

from disabled persons. Where an existing

employee becomes disabled, every effort is

made to ensure that employment with NCG

continues. NCG’s policy is to promote equality

in recruitment, training, career development and

opportunities for promotion.

disabilitystatementNCG is fully conversant with its obligations under

the Disability Discrimination Act 2005, and has

developed and pursued a comprehensive action

plan to ensure that we fulfil the requirements

of the Act. We continue to make arrangements

to support students and clients with learning

difficulties and disabilities to ensure that they

are able to access the full range of services and

provision. The Colleges continue to produce and


53


publish an annual Disability Statement “Access

to Learning” which outlines the nature of the

offer to disabled learners.

staff,studentandcustomerinvolvementAs an accredited Investor in People we believe

good communication with staff, students

and clients to be very important. We have

established a network of PR/Communications

Managers across the three Divisions to underpin

and promote Divisional communication

strategies across NCG. Formal representation of

Colleges’ staff is through the recognised Trade

Unions. Intraining has a Staff Forum which brings

together representatives of the Employability

and Skills divisions from around the country and

informs senior management decision making.

Students’ and customers’ views continue to be

sought regularly via online student evaluation

surveys. Additionally, there are Learner Forums

across NCG to enhance communications

between learners and NCG. Students are

encouraged to participate in local activities and

nationally in the National Union of Students by

supporting, administering and subsidising the

Students’ Union in Newcastle.

riskmanagementpolicyNCG makes prudent recognition and disclosure

of the financial and non-financial implications

of risk.

NCG is committed to an inclusive approach

to the identification and management of risk

throughout NCG and that the key risks should be

closely monitored and wherever possible actions

taken to mitigate these risks.

The Corporation reviews the risk management

policy each year and reviews strategic risks on a

rolling basis within each year.


54


FInancIalhIGhlIGhtsresultsfortheyearThe detailed financial statements are set out on pages 63 to 94. A summary of the results for the last

5 years is given below.

2009/10 2008/09 2007/08 2006/07 2005/06 £000 £000 £000 £000 £000 Income 151,055 162,411 117,538 73,023 65,735

Expenditure 145,046 159,785 112,591 66,774 59,270

Surplus on continuing operations

after depreciation of assets at

valuation, before tax 6,009 2,626 4,947 6,249 6,465

Loss on disposal of fixed assets - (1,845) (232) (799) (584)

Surplus on continuing operations after

depreciation of assets at valuation and

disposal of assets and after tax 6,009 781 4,715 5,450 5,881

Transfer from revaluation reserve 707 707 708 707 732

Historic cost surplus 6,716 1,488 5,423 6,157 6,613

capitalexpenditureNCG invested £16,713,000 in 2009/10, the principal schemes were:

£000 Acquisition of land around main campus 8,634

Skelmersdale new build 4,073

Intraining Group IT equipment

and infrastructure 1,075

nJmartin(Chair of the Corporation)

16 December 2010


55


NCG is committed to exhibiting best practice

in all aspects of corporate governance. This

summary describes the manner in which we

have applied the principles set out in Section 1 of

the Combined Code on Corporate Governance,

issued by the London Stock Exchange in June

1998. Its purpose is to help the reader of the

financial statements to understand how the

principles have been applied.

In the opinion of the members of the

Corporation, NCG complies with all the provisions

of the Combined Code in so far as they apply to

the further education sector, and it has complied

throughout the year ended 31 July 2010.

thecorporatIonThe composition of the Corporation is set out

on page 56. It is the Corporation’s responsibility

to bring independent judgement to bear on

issues of strategy, performance, resources and

standards of conduct.

The Corporation is provided with regular and

timely information on the overall financial

performance of NCG, together with other

information such as performance against funding

targets, proposed capital expenditure, quality

matters and personnel-related matters such as

health and safety and environmental issues. The

Corporation met nine times during the year.

The Corporation conducts its business through

a number of committees. Each committee has

terms of reference which have been approved

by the Corporation. These committees

are: Remuneration, Search and Audit. The

Skelmersdale and Ormskirk College Advisory

Committee meets six times a year and its

minutes are received by the Corporation. Full

minutes of all meetings, except those deemed to

be confidential by the Corporation, are available

from the Clerk to the Corporation at:

Newcastle College

Rye Hill Campus

Scotswood Road

Newcastle upon Tyne

NE4 7SA

The Clerk to the Corporation maintains a

register of financial and personal interests of the

Governors. The register is available for inspection

at the above address.

All Governors are able to obtain independent

professional advice in furtherance of their

duties at NCG’s expense via the Clerk to the

Corporation, who is responsible to the Board

for ensuring compliance with all applicable

procedures and regulations. The appointment,

evaluation and removal of the Clerk are matters

for the Corporation as a whole.

Formal agendas, papers and reports are supplied

to members of the Corporation in a timely

manner, prior to Board meetings. Briefings

are also provided on an ad hoc basis and

development sessions for Governors are held

three times a year.

The Corporation has a strong and independent

non-executive element and no individual or

group dominates its decision making process.

The Corporation considers that each of its

non-executive members is independent of

management, and free from any business or other

relationship which could materially interfere with

the exercise of their independent judgement.

There is a clear division of responsibility in that

the roles of the Chair of the Corporation and

Chief Executive of NCG are separate.

Statement of corporate governance and internal control

56


The members who served on the Corporation during the year and up to the date of signature of this

report were:

name appointment/ resignation term statusof committees reappointment appointment servedMr L Abernethy App: May 10 1 yr Skelmersdale and Ormskirk AdvisoryMr S Broomhead App: Sep 07 Resigned: Skelmersdale Reapp: Jul 08 Apr 10 and Ormskirk AdvisoryMr S Chapman App: Apr 06 To: Staff Reapp: May 10 Dec 10 Cllr D Faulkner App: Sep 07 4 yrs Search Reapp: Jul 08 Dame J Fisher App: Jun 00 Chief Executive SearchMr S Foreman App: Jul 10 1 yr Student Mr A Groves App: Nov 01 4 yrs Audit Reapp: Dec 02 Reapp: Sep 06 Reapp: Jun 10 Miss A Heslop App: Jul 09 Retired: Student Jun 10 Ms C Howells App: Dec 01 4 yrs Remuneration Reapp: Dec 02 Reapp: Jun 06 Reapp: Jun 10 Mr N J Martin App: Mar 00 4 yrs Chair Search Reapp: Feb 03 Reapp: Jan 07 Mr P Michell App: Jan 04 4 yrs Audit Reapp: Dec 04 Reapp: Jan 09 Mr N Mills App: Oct 09 4 yrs Remuneration Reapp: Jun 10 Mr M Squires App: Oct 09 4 yrs Reapp: Jun 10 Mrs J Syrett App: Dec 01 4 yrs Vice Chair Remuneration Reapp: Dec 02 Reapp: Nov 06 Reapp: Jun 10 Mr J Telfer App: Jul 10 1 yr Student Mrs A Turner App: Nov 97 4 yrs Remuneration Reapp: Nov 01 Audit Reapp: Oct 05 Reapp: Nov 09 Ms K Wilson App: Jul 08 Retired: Student Reapp: Jul 09 Jun 10

Further information about members of the Corporation is available in the Guide to Information on Newcastle College Group’s website athttp://www.ncgrp.co.uk/Main_Site/GuideToInformation.aspx

Statement of corporate governance and internal control (continued)

57


appoIntmentstothecorporatIonAny new appointments to the Corporation are a

matter for consideration of the Corporation as a

whole. The Corporation has a Search Committee

comprised of the Chair, Chief Executive and

a third member of the Corporation, which is

responsible for advising on the appointment of

all members except staff and student members

who are nominated by election. The Search

Committee is responsible for ensuring that

appropriate training is provided as required.

Members of the Corporation are appointed

for a term of office not exceeding four years,

excepting the Chief Executive who will remain a

member throughout her term of office.

remuneratIoncommItteeThroughout the year ended 31 July 2010, NCG’s

Remuneration Committee comprised three

members of the Corporation. The Committee’s

responsibilities are to make recommendations

to the Board on the remuneration and benefits

of the Chief Executive and other senior post

holders and the Clerk to the Corporation. Details

of remuneration for the year ended 31 July 2010

are set out in note 7 to the financial statements.

audItcommItteeThroughout the year ended 31 July 2010, the Audit

Committee comprised three eligible members of

the Corporation and one co-opted member. The

Committee operates in accordance with written

terms of reference approved by the Corporation.

The Audit Committee meets at least three times

a year and provides a forum for reporting by

NCG’s internal and financial statements auditors,

who can have access to the Committee for

independent discussion, without the presence

of management. The Committee met four times

during the year ended 31 July 2010 and its terms

of reference encompass reports from the LSC

and its successor organisations as they affect

NCG’s business.

NCG’s internal auditors monitor the systems of

internal control, risk management controls and

governance processes in accordance with an

agreed plan of input and report their findings to

management and the Audit Committee.

Management is responsible for the

implementation of agreed audit recommendations

and internal audit undertake periodic follow-up

reviews to ensure such recommendations have

been implemented.

The Audit Committee also advises the

Corporation on the appointment of internal

and financial statements auditors and their

remuneration for both audit and non-audit work.

InternalcontrolscopeofresponsibilityThe Corporation is ultimately responsible

for NCG’s system of internal control and for

reviewing its effectiveness. However, such a

system is designed to manage, rather than

eliminate, the risk of failure to achieve business

objectives and can provide only reasonable

and not absolute assurance against material

misstatement or loss.

The Corporation has delegated the day-to-

day responsibility to the Chief Executive, as

Accounting Officer, for maintaining a sound

system of internal control. This supports the

achievement of NCG’s policies, aims and

objectives, while safeguarding the public funds

and assets for which the Chief Executive is

personally responsible, in accordance with the

responsibilities assigned to her in the Financial

Memorandum between the College and the

Skills Funding Agency. The Chief Executive is

also responsible for reporting to the Corporation

any material weaknesses or breakdowns in

internal control.


58


thepurposeofthesystemofinternalcontrolThe system of internal control is designed

to manage risk to a reasonable level rather

than to eliminate all risk of failure to achieve

policies, aims and objectives; it can therefore

only provide reasonable and not absolute

assurance of effectiveness. The system of

internal control is based on an ongoing process

designed to identify and prioritise the risks to

the achievement of Group policies, aims and

objectives, to evaluate the likelihood of those

risks being realised and the impact should they

be realised, and to manage them efficiently,

effectively and economically. The system of

internal control has been in place in NCG for

the year ended 31 July 2010 and up to the

date of approval of the annual report and

financial statements.

capacitytohandleriskThe Corporation has reviewed the key risks

to which NCG is exposed, together with the

operating, financial and compliance controls

that have been implemented to mitigate those

risks. The Corporation is of the view that there

is a formal ongoing process for identifying,

evaluating and managing NCG’s significant

risks that has been in place for the year ended

31 July 2010 and up to the date of approval of

the annual report and financial statements. This

process is regularly reviewed by the Corporation.

theriskandcontrolframeworkThe system of internal control is based on a

framework of regular management information,

administrative procedures including the

segregation of duties and a system of delegation

and accountability. In particular, it includes:

• regular review of all business risks by

the Corporation

• quarterly review of non-financial key

performance indicators of the business to

the Corporation

• comprehensive budgeting systems with an

annual budget which is reviewed and agreed

by the Corporation

• regular reviews by the Corporation of periodic

and annual financial reports which indicate

financial performance against forecasts

• setting targets to measure financial and

other performance

• clearly defined capital investment

control procedures

• the adoption of formal project management

disciplines, where appropriate.

NCG has an internal audit service, which operates

in accordance with the requirements of the Skills

Funding Agency Audit Code of Practice. The

work of the internal audit service is informed by

an analysis of the risks to which NCG is exposed

and annual internal audit plans are based on this

analysis. The analysis of risks and the internal audit

plans are approved by the Corporation on the

recommendation of the Audit Committee. At least

annually the head of internal audit provides the

Corporation with a report on internal audit activity

in NCG. The report includes the head of internal

audit’s independent opinion on the adequacy

and effectiveness of NCG’s system of risk

management, controls, and governance processes.

reviewofeffectivenessAs Accounting Officer, the Chief Executive has

responsibility for reviewing the effectiveness

of the system of internal control. The Chief

Executive’s review of effectiveness of the system

of internal control is informed by:

• the work of the internal auditors

• the work of the executive managers within

NCG who have responsibility for the

development and maintenance of the internal

control framework

• comments made by NCG’s financial

statements auditors


59


The Chief Executive has been advised on the

implications of the result of her review of the

effectiveness of the system of internal control by

the Audit Committee which oversees the work

of the internal auditor, and a plan to address

weaknesses and ensure continuous improvement

of the system is in place.

The senior management team receives reports

setting out key performance and risk indicators,

and considers possible control issues brought

to their attention by early warning mechanisms

which are embedded within the departments and

reinforced by risk awareness training. The senior

management team and the Audit Committee also

receive regular reports from internal audit, which

include recommendations for improvement. The

Audit Committee’s role in this area is confined to a

high-level review of the arrangements for internal

control. The Corporation’s agenda includes a

regular item for consideration of risk and control

and it receives reports thereon from the senior

management team and the Audit Committee. The

emphasis is on obtaining the relevant degree of

assurance, not merely reporting by exception. At

its 16 December 2010 meeting, the Corporation

carried out the annual assessment for the year

ended 31 July 2010 by considering documentation

from the Audit Committee, financial statements

and internal audit, and taking account of events

since 31 July 2010.

GoInGconcernAfter making appropriate enquiries, the

Corporation considers that NCG has adequate

resources to continue in operational existence

for the foreseeable future. For this reason it

continues to adopt the going concern basis in

preparing the financial statements.

During the year repayments of existing loans

were made on time and all bank covenants were

met and gearing remains low. NCG operating

cash flow is reasonably strong.


dameJFisher(Chief Executive)

16 December 2010


60


The members of the Corporation are required

to present audited financial statements for each

financial year in accordance with applicable

United Kingdom law and United Kingdom

Generally Accepted Accounting Practice.

Within the terms and conditions of the

Financial Memorandum agreed between the

Learning and Skills Council (the LSC) and its

successor organisations and the Corporation

of the College, the Corporation, through its

Chief Executive, is required to prepare financial

statements for each financial year in accordance

with the 2007 Statement of Recommended

Practice – Accounting for Further and Higher

Education Institutions and which give a true and

fair view of the state of affairs of the College and

the Group and the result of NCG for that year.

In preparing the financial statements, the

Corporation is required to:

a) Select suitable accounting policies and apply

them consistently

b) Make judgements and estimates that are

reasonable and prudent

c) State whether applicable accounting

standards have been followed, subject to any

material departures disclosed and explained

in the financial statements

d) Prepare financial statements on the going

concern basis unless it is inappropriate to

assume that NCG will continue in operation

The Corporation is also required to prepare a

Members Report which describes what it is

trying to do and how it is going to about it,

including the legal and administrative status

of NCG.

The Corporation is responsible for keeping

proper accounting records, which disclose with

reasonable accuracy, at any time, the financial

position of NCG and enable it to ensure that the

financial statements are prepared in accordance

with the relevant legislation of incorporation

and other relevant accounting standards. It is

responsible for taking steps that are reasonably

open to it to safeguard the assets of NCG and to

prevent and detect fraud and other irregularities.

In addition, members of the Corporation are

responsible for ensuring that funds from the LSC

and its successor organisations are used only

in accordance with the Financial Memorandum

and any other conditions which the LSC and

its successor organisations may from time to

time prescribe. Members of the Corporation

must ensure that there are appropriate

financial and management controls in place to

safeguard public and other funds, and ensure

they are used properly. In addition, members

of the Corporation are responsible for securing

economical, efficient and effective management

of the College’s resources and expenditure, so

that the benefits that should be derived from the

application of public funds by the LSC and its

successor organisations are not put at risk.

The Corporation are responsible for the

maintenance and integrity of the corporate and

financial information included on NCG’s website.

Legislation in the United Kingdom governing

the preparation and dissemination of financial

statements may differ from legislation in

other jurisdictions.

Signed on behalf of the Corporation


16 December 2010

Statement of the responsibilities of the members of the Corporation

61


We have audited the Group and College financial

statements (the “financial statements”) of

Newcastle College for the year ended 31 July

2010, which comprise the Group Income and

Expenditure Account, the Group Statement of

Historical Cost Surpluses and Deficits, the Group

Statement of Total Recognised Gains and Losses,

the Group Balance Sheet, the College Balance

Sheet, the Group Cash Flow Statement, and the

related notes 1 to 27. These financial statements

have been prepared under the historical cost

convention as modified by the revaluation of

certain fixed assets and the accounting policies

set out therein.

This report is made solely to the

Corporation, as a body, in accordance

with statutory requirements. Our audit

work has been undertaken so that we might

state to the Corporation, as a body, those

matters we are required to state to them in

an auditors’ report and for no other purpose.

To the fullest extent permitted by law, we do

not accept or assume responsibility to anyone

other than the Corporation, as a body, for our

audit work, for this report, or for the opinions

we have formed.

respectIveresponsIbIlItIesoFthemembersoFthecorporatIonoFnewcastlecolleGeandaudItorsAs described in the Statement of Responsibilities

the Members of the Corporation are responsible

for preparing the Report of the Members

of the Corporation and financial statements

in accordance with the Accounts Direction

issued by the Skills Funding Agency, the

2007 Statement of Recommended Practice –

Accounting for Further and Higher Education,

applicable law, and United Kingdom Accounting

Standards (United Kingdom Generally Accepted

Accounting Practice).

Our responsibility is to audit the financial

statements in accordance with relevant legal

and regulatory requirements and International

Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the

financial statements give a true and fair view

and are properly prepared in accordance with

the 2007 Statement of Recommended Practice

– Accounting for Further and Higher Education.

We also report to you if, in our opinion, the

Report of the Members of the Corporation is not

consistent with the financial statements, if the

College has not kept proper accounting records,

or if we have not received all the information and

explanations we require for our audit.

We read the Report of the Members of the

Corporation and consider the implications for

our report if we become aware of any apparent

misstatement within it.

We read other information contained in the

financial statements, and consider whether it is

consistent with the audited financial statements.

This information comprises only the Statement

of Corporate Governance and Internal Control

and the Statement of the Responsibilities of the

Members of the Corporation. We consider the

implications for our report if we become aware

of any apparent misstatements or material

inconsistencies with the financial statements.

Our responsibilities do not extend to any

other information.

basIsoFaudItopInIonWe conducted our audit in accordance with

International Standards on Auditing (UK and

Ireland) issued by the Auditing Practices Board

and the Audit Code of Practice issued by

the Skills Funding Agency. An audit includes

examination, on a test basis, of evidence relevant

to amounts and disclosures in the financial

statements. It also includes an assessment of

the significant estimates and judgements made

by the Members of the Corporation in the

preparation of the financial statements, and of

Independent auditors’ report to the members of the Corporation of Newcastle College

62


whether the accounting policies are appropriate

to the Group’s and College’s circumstances,

consistently applied and adequately disclosed.

We planned and performed our audit so as to

obtain all the information and explanations which

we considered necessary in order to provide us

with sufficient evidence to give us reasonable

assurance that the financial statements are free

from material misstatement, whether caused by

fraud or other irregularity or error. In forming

our opinion we also evaluated the overall

adequacy of the presentation of information

in the financial statements.

opInIonInouropinion:• the financial statements give a true and fair

view, in accordance with United Kingdom

Generally Accepted Accounting Practice, of

the state of affairs of the College and Group

as at 31 July 2010 and of the Group’s surplus

of income over expenditure for the year then

ended; and

• the financial statements have been properly

prepared in accordance with the 2009/10

Accounts Direction issued by the Skills

Funding Agency and the 2007 Statement

of Recommended Practice – Accounting for

Further and Higher Education.

ernst&youngllpRegistered auditor

Newcastle upon Tyne

16 December 2010

Independent auditors’ report to the members of the Corporation of Newcastle College (continued)

63


2010 2009 Notes £000 £000 restated Income Funding council income 2 94,674 94,890

Tuition fees and education contracts 3 17,477 28,538

Other income 4 38,896 38,770

Investment income 5 8 213

Total income 151,055 162,411

expenditure Staff costs 6 80,323 92,043

Other operating expenses 8 50,990 54,260

Amortisation 11(a) 3,773 3,755

Depreciation 12 7,912 8,277

Interest payable 9 2,048 1,450

Total expenditure 145,046 159,785

Surplus on continuing operations after depreciation

of assets at valuation and before tax 6,009 2,626

Loss on disposal of assets - (1,845)


of assets at valuation and disposal of assets but before tax 6,009 781

Taxation 10 - -


of assets at valuation, disposal of assets and tax 20 6,009 781

The income and expenditure account is in respect of continuing activities.

Group income and expenditure accountfor the year ended 31 July 2010

64


2010 2009 Notes £000 £000 Surplus on continuing operations after depreciation

of assets at valuation, disposal of assets and tax 6,009 781

Difference between historical cost depreciation and the actual

charge for the year calculated on the revalued amount 19 707 707

historicalcostsurplusfortheyear 6,716 1,488

Group statement of historical cost surpluses and deficitsfor the year ended 31 July 2010

65


2010 2009 Notes £000 £000 Surplus on continuing operations after

depreciation of assets at valuation, disposal of assets and tax 6,009 781

Actuarial gain on pension scheme impact of RPI to CPI change

for future pension increases 21 5,970 –

Actuarial gain/(loss) in respect of pension scheme 21 770 (10,940)

totalrecognisedgains/(losses)relatingtotheyear 12,749 (10,159)

reconciliationofreserves £000 £000

Reserves at 1 August 43,431 53,590

Total recognised gains/(losses) for the year 12,749 (10,159)

Reserves at 31 July 56,180 43,431

Group statement of total recognised gains and lossesfor the year ended 31 July 2010

66


Group balance sheetat 31 July 2010

2010 2009 Notes £000 £000 Fixedassets Intangible assets 11(a) 9,619 13,320 Tangible assets 12 109,868 101,067

119,487 114,387 currentassets Stock 31 32 Debtors 13 21,862 13,648 Cash at bank and in hand 7,334 8,172 29,227 21,852 less:creditors – amounts falling due within one year 14 27,104 27,137

netcurrentassets/(liabilities) 2,123 (5,285)

totalassetslesscurrentliabilities 121,610 109,102 less:creditors – amounts falling due after more than one year 15 14,467 15,086 less:provisionsforliabilities 17 3,446 3,395

netassetsexcludingpensionliability 103,697 90,621 Net pension liability 21 17,342 22,802

netassetsincludingpensionliability 86,355 67,819

deferredcapitalgrants 18 30,175 24,388

reserves Revaluation reserve 19 11,195 11,902 Income and expenditure account 20 44,985 31,529

56,180 43,431 86,355 67,819 The financial statements were approved by the members of the Corporation and were signed on their behalf by:

N J Martin Dame J Fisher

(Chair of the Corporation) (Chief Executive)

16 December 2010

67


College balance sheetat 31 July 2010

2010 2009 Notes £000 £000 Fixedassets Intangible assets 11(a) 1,243 1,865 Tangible assets 12 105,903 97,961

107,146 99,826 currentassets Stock 31 32 Debtors 13 32,462 23,146 Cash at bank and in hand 4,763 6,764

37,256 29,942 less:creditors– amounts falling due within one year 14 12,106 14,185

netcurrentassets 25,150 15,757 totalassetslesscurrentliabilities 132,296 115,583 less:creditors– amounts falling due after more than one year 15 14,467 15,086 less:provisionsforliabilities 17 3,446 3,395

netassetsexcludingpensionliability 114,383 97,102 Net pension liability 21 17,342 22,802

netassetsincludingpensionliability 97,041 74,300 deferredcapitalgrants 18 30,175 24,327

reserves Revaluation reserve 19 11,195 11,902 Income and expenditure account 20 55,671 38,071

66,866 49,973

97,041 74,300

The financial statements were approved by the members of the Corporation and were signed on their

behalf by:

N J Martin Dame J Fisher

(Chair of the Corporation) (Chief Executive)

16 December 2010

68


Group cash flow statementfor the year ended 31 July 2010

2010 2009 Notes £000 £000 netcashinflowfromoperatingactivities 22 14,025 19,452

returnoninvestmentsandservicingoffinance Interest received 5 8 213

Interest paid 9 (2,048) (1,450)

netcashoutflowfromreturnoninvestments andservicingoffinance (2,040) (1,237)

capitalexpenditureandfinancialinvestment Payments to acquire tangible fixed assets (15,562) (16,732)

Capital grants received 3,332 2,394

netcashoutflowfrominvestingactivities (12,230) (14,338)

Financing Repayment of loans (593) (564)

netcashoutflowfromfinancing 23 (593) (564)

(decrease)/increaseincashintheyear 23 (838) 3,313

movementsinnetfunds (Decrease)/increase in cash (838) 3,313

Repayment of loans 23 593 564

Movement in net funds in the year (245) 3,877

netdebtat1august 23 (7,507) (11,384)

netdebtat31July 23 (7,752) (7,507)

69


Notes to the financial statementsat 31 July 2010

1.accountInGpolIcIesbasisofpreparationThese financial statements have been

prepared in accordance with the Statement

of Recommended Practice: Accounting for

Further and Higher Education 2007 (the SORP)

and in accordance with applicable Accounting

Standards. They conform to guidance published

by the SFA, in the Accounts Direction Handbook.

The group financial statements consolidate

those of the College and its subsidiaries

(together referred to as “the group”). The

College financial statements present information

about the College as a separate entity and not

about its Group.

FundamentalaccountingconceptThe Group has net current assets of £2,123,000,

this includes a deferred capital grant debtor of

£5,145,000, which does not fall due until 1 April

2011. The members of the corporation have

prepared and approved financial forecasts and

expect to maintain suitable financial facilities

from their bankers and funders to provide

adequate ongoing finance consistent with these

forecast requirements. Accordingly they have

concluded that the Group remains a going

concern and have prepared these financial

statements on the going concern basis.

The Group considers it appropriate to reclassify

certain elements of income and expenditure to

give a more appropriate reflection of the nature

of activities, and ensure consistency with the

Finance Record and model financial statements

issues by the Skills Funding Agency.

These reclassifications have no overall effect

on total income, total expenditure or the

Group’s surplus.

recognitionofincomeThe recurrent grant from the LSC and its

successor organisations is that receivable as

determined by the results of the funding audit

undertaken. The recurrent grant from HEFCE

represents the funding allocation attributable to

the current financial year and is credited direct

to the income and expenditure account.

LSC and its successor organisations recurrent

grants are recognised in line with best estimates

for the period of what is receivable and depend

on the particular income stream involved.

Any under or over achievement for the adult

learner responsive funding element is adjusted

for and reflected in the level of recurrent grant

recognised in the income and expenditure

account. The final grant income is normally

determined with the conclusion of the year end

reconciliation process with the SFA at the end

of November following the year end. Employer

responsive grant income is recognised based

on a year end reconciliation of income claimed

and actual delivery with the SFA. 16-18 learner-

responsive funding is not normally subject to

reconciliation and is therefore not subject to

contract adjustments.

Income from tuition fees is recognised in the

period for which it is receivable and includes fees

payable by students or their sponsors.

Income from grants, contracts and other services

rendered is recognised when the Group has

complied with all terms and conditions, including

any independent review.

All income from short-term deposits is credited

to the income and expenditure account in the

year in which it is earned.

70



1.accountInGpolIcIes(contInued)pensionsRetirement benefits to employees of the College

are provided by the Teachers’ Pension Scheme

(TPS) and the Local Government Pension

Scheme (LGPS). These are defined benefit

schemes which are externally funded and

contracted out of the State Earnings Related

Pension Scheme.

Under the definitions set out in Financial

Reporting Standard (FRS 17) Retirement

Benefits, the TPS is a multi-employer pension

scheme. The College is unable to identify its

share of the underlying assets and liabilities of

the scheme.

Contributions to the LGPS are charged to the

income and expenditure account so as to spread

the cost of the pensions over employees’ working

lives with the College in such a way that the

pension cost is approximately a level percentage

of current and future pensionable payroll. The

contributions are determined by qualified

actuaries on the basis of triennial valuations,

using the projected unit method for the LGPS.

Staff employed by the subsidiary companies

are eligible to be members of the Intraining

Group Personal Pension Scheme. It is a defined

contribution scheme and is independently

administered by Heath Lambert.

enhancedpensionsThe actual cost of any enhanced ongoing

pension to a former member of staff is paid

by the College annually. An estimate of the

expected future cost of any enhancement to the

ongoing pension of a former member of staff

is charged in full to the College’s income and

expenditure account in the year that the member

of staff retires. In subsequent years a charge

is made to provisions in the balance sheet to

reflect the interest accrued using the enhanced

pension spreadsheet provided by the SFA.

IntangiblefixedassetsOn acquisition of a subsidiary, the fair value

of the consideration is allocated between the

identifiable net tangible and intangible assets

and liabilities on a fair value basis, with any

excess consideration representing goodwill.

Goodwill in respect of subsidiaries is included

within intangible fixed assets.

Goodwill arising on acquisitions is capitalised as

an asset on the balance sheet. Where goodwill

is regarded as having a finite useful economic

life it is amortised on a straight line basis over

its estimated life, up to a maximum of 5 years.

Impairment reviews are carried out at the end of

the first full year of ownership and at other times

if there are indications that the carrying value

may not be supportable.

tangiblefixedassetsLand and buildingsThe Group’s buildings are specialised buildings

and therefore it is not appropriate to value them

on the basis of open market value. The Group’s

policy is to carry all assets at historic cost,

except for inherited assets which are included

on the balance sheet at a valuation existing

when the Group implemented FRS15 for the

first time. These values are retained subject to

the requirement to test assets for impairment

in accordance with FRS11. Finance costs are not

capitalised as part of the cost of those assets.

Freehold land is not depreciated. Freehold

buildings are depreciated over their expected

useful economic life to the Group.

71



1.accountInGpolIcIes(contInued)Land and buildings (continued)Where land and buildings are acquired with the

aid of specific grants they are capitalised and

depreciated as above. The related grants are

credited to a deferred capital grant account

and are released to the income and expenditure

account over the expected useful economic life

of the related asset on a basis consistent with the

depreciation policy. A review for impairment of a

fixed asset is carried out if events or changes in

circumstances indicate that the carrying amount

of the fixed asset may not be recoverable.

EquipmentEquipment costing less than £1,000 per

individual item is written off to the income and

expenditure account in the year of acquisition

(except IT equipment). All other equipment is

capitalised at cost. Equipment inherited from

the Local Education Authority was included in

the balance sheet at a valuation of the net book

value at the date of inheritance.

Where equipment is acquired with the aid of

specific grants it is capitalised and depreciated

as above. The related grant is credited to a

deferred capital grant account and is released

to the income and expenditure account over

the expected useful economic life of the

related asset on a basis consistent with the

depreciation policy.

DepreciationDepreciation is provided on all tangible fixed

assets, except for freehold land. Depreciation

rates are calculated to write off the cost or

valuation of each asset evenly over its expected

useful life as follows:

Freehold buildings – remaining life of each

building between 5 and 50 years

Leasehold building – remaining lease term

Equipment and information technology

assets – 3 to 5 years

The carrying values of tangible fixed assets

are reviewed for impairment when events or

changes in circumstances indicate the carrying

value may not be recoverable.

leasedassetsCosts in respect of operating leases are charged

on a straight line basis over the lease term.

Leasing agreements which transfer to the

Group substantially all the benefits and risks

of ownership of an asset are included in fixed

assets and the capital elements of the leasing

commitments are shown as obligations under

finance leases. The lease rentals are treated

as consisting of capital and interest elements.

The interest element is charged to the income

and expenditure account in proportion to the

reducing capital element outstanding. Assets

held under finance leases are depreciated over

the shorter of the lease term or the useful

economic lives of equivalent owned assets.

Assets which are held under hire purchase

contracts which have the characteristics of

finance leases are depreciated over their

economic useful lives.

InvestmentsFixed asset investments in subsidiary

undertakings are recorded at cost.

stocksStocks are stated at the lower of their cost or net

realisable value.

revenuegrantsRevenue grants are taken to the income and

expenditure account in the period to which

they relate.

capitalgrantsCapital grants are credited to a deferred capital

grant account and released to income in line

with the depreciation of the relevant assets.

72



1.accountInGpolIcIes(contInued)maintenanceofpremisesThe cost of routine corrective maintenance is

charged to the income and expenditure account

in the period it is incurred.

taxationThe College is an exempt charity for taxation

purposes within the meaning of Schedule 2

of the Charities Act 1993 as amended by the

Charities Act 2006.

The College is potentially exempt from

taxation in respect of income or capital gains

received to the extent that such income or gains

are applied to exclusively charitable purposes.

The College’s subsidiary companies are subject

to corporation tax in the same way as any

commercial organisation.

The Group is exempted from levying VAT on

most of the services it provides to students.

The Group uses the partial exemption method

to recover input VAT it suffers on goods and

services purchased. The capital items scheme

applies to large building projects and large one

off items of computer equipment. The scheme

regulates the recovery of input VAT on these

items for ten years after purchase in the case of

buildings and for five years in other cases.

Investments–liquidresourcesLiquid resources comprise sums on short-term

deposit with recognised banks and building

societies in line with the Group Treasury Policy.

provisionsProvisions are recognised when the Group has

a present legal or constructive obligation as

a result of a past event, it is probable that a

transfer of economic benefit will be required to

settle the obligation and a reliable estimate can

be made of the amount of the obligation.

learnersupportFundsThe College acts as an agent in the collection

and payment of learner support funds. Such

funds received from the LSC and its successor

organisations and the Higher Education Funding

Council in England and disbursements to

students are excluded from the income and

expenditure account and are shown separately in

note 27 to the financial statements.

73



2.FundInGcouncIlIncome Learning Higher and Education Skills Funding Council* Council 2010 2009 £000 £000 £000 £000 restated Recurrent grant 50,587 11,246 61,833 59,710

Work based learning – train to gain 7,622 - 7,622 8,131

Work based learning – modern apprenticeships 18,253 - 18,253 21,132

Release of deferred capital grants 1,236 1,108 2,344 3,310

Release of deferred revenue grant 38 - 38 -

Non programmed 2,768 821 3,589 2,230

Centre of Vocational Excellence - - - 27

Excellence Challenge/Aim Higher - 188 188 218

Franchise degrees - 807 807 132

80,504 14,170 94,674 94,890 * Learning and Skills Council and its successor organisations.

3.tuItIonFeesandeducatIoncontracts 2010 2009 £000 £000

restated Higher Education students 5,312 4,812

International students 2,720 3,616

Further Education students 1,451 1,879

Tuition fees payable by or on behalf of students in the above categories 9,483 10,307

Education contracts 7,558 7,930

Offender Learning and Skills contracts 436 10,301

17,477 28,538

Income from education contracts of £7,558,000 includes £2,079,000 custodial care contract

income, £2,089,000 work based learning income and £1,053,000 commercial income from the

Intraining Group.

The primary Offender Learning and Skills contract was transferred to Manchester College on 1

August 2009.

Tuition fees foregone under the College’s own fee waiver policy in the year were £1,210,000

(2008/09: £1,359,000). In 2009/10 all courses were given an assumed fee based on guided learner

hours, whether or not a fee had been charged to the students, to reflect the actual fees foregone.

74



4.otherIncome 2010 2009 £000 £000 restated Other funding bodies and agencies 32,629 28,236

Catering and residence operations 1,193 1,253

Income generating activities and brokerage 3,434 4,252

Other commercial income 1,294 4,659

Releases from deferred capital grants 346 370

38,896 38,770

Income from other funding bodies and agencies of £32,629,000 includes £16,136,000 from

Department of Work and Pensions, £1,833,000 from Welsh Assembly Government and £1,768,000

from Department of Education and Learning Northern Ireland.

5.InvestmentIncome 2010 2009 £000 £000 Bank interest receivable 8 213

6.staFFcosts

The average number of persons (including senior post holders) employed by the group during the

year, expressed as full time equivalents, was as follows:

2010 2009 £000 £000 restated Teaching staff 2,200 2,838

Non teaching staff 529 445

2,729 3,283

Staff costs for the above persons:

2010 2009 £000 £000 restated Teaching staff 62,452 78,030

Non teaching staff 15,675 13,448

Group restructuring 1,376 398

Provision for unfunded pensions of former employees 820 167

80,323 92,043

75



6.staFFcosts(contInued)

2010 2009 £000 £000 Wages and salaries 67,284 78,597

Social security costs 5,548 6,652

Other pension costs 5,295 6,229

Group restructuring 1,376 398

Provision for unfunded pensions of former employees 820 167

80,323 92,043

Total pension costs were £6,115,000 (2008/09 – £6,396,000) (see note 21).

A general pay award of 1.5% was made with effect from 1 January 2010, approved by the Corporation

for all Group staff excluding senior post holders.

The number of staff, including senior post holders, the Clerk to the Governors and the Chief

Executive, who received emoluments in the following ranges was:

Group 2010 2010 2009 2009 Number Number Number Number seniorpost other seniorpost other holders staff holders staff £60,001 to £70,000 1 16 1 16

£70,001 to £80,000 - 9 - 9

£80,001 to £90,000 - 5 - 2

£90,001 to £100,000 - 4 2 6

£100,001 to £110,000 3 - - 1

£110,001 to £120,000 - - 1 -

£120,001 to £130,000 1 3 1 1

£130,001 to £140,000 1 - 1 -

£150,001 to £160,000 1 - - -

£210,001 to £220,000 - - 1 -

£290,001 to £300,000 1 - - -

8 37 7 35

76



7.senIorpostholders’emoluments

Senior post holders are defined as the Chief Executive and holders of the other senior posts whom

the Corporation have selected for the purposes of the articles of governance of the College relating

to the appointment and promotion of staff who are appointed by the Corporation.

2010 2009 No. No. The number of senior post holders including the Chief Executive and

the Clerk to the Governors (and including those who held office,

for only part of the year) was: 8 7

2010 2009 Senior post holders’ emoluments are made up as follows £ £ Salaries 773,809 678,142

Pension contributions 103,132 92,559

Total emoluments 876,941 770,701

The Chief Executive and two other senior post holders were paid a retention payment which had

been accrued over 3 years and a performance related bonus.

The above emoluments include amounts payable to the highest paid senior post holder, the Chief

Executive, of:

2010 2009 £ £ Salary 186,984 186,984

Bonus and retention payment 72,788 9,349

Pension contributions 33,992 26,365

Total emoluments 293,764 222,698

The pension contributions in respect of the Chief Executive and senior post-holders relate to

employer’s contributions to the Teachers’ Pension Scheme or the Local Government Superannuation

Scheme and are paid at the same rate as for other employees.

The members of the Corporation other than the Chief Executive and the above staff members did

not receive any payment from the College other than the reimbursement of travel and subsistence

expenses incurred in the course of their duties.

77



7.senIorpostholders’emoluments(contInued)

overseasactivitiesThe following costs were incurred during 2009/10 in respect of overseas activities which were carried

out in accordance with the strategy approved by the Corporation:

Totalcost toCollege £ College staff 37,331

8.otheroperatInGexpenses

2010 2009 £000 £000 restated Teaching departments 7,876 14,530

Teaching support services 509 1,245

Administration and central services 4,098 3,967

General education expenditure 3,929 4,623

Premises costs 13,838 13,605

Catering and residence operations 571 372

Franchise provision 14,361 9,947

Income generating activities 2,781 3,036

Other 3,027 2,935

50,990 54,260

Operating expenses have been reclassified during the period and there has been an impact on the

allocation of costs due to subcontractor delivery within the Group.

Other operating expenses include:

2010 2009 £000 £000 Auditors’ remuneration - external audit (including Regularity Audit)* 48 48

- internal audit** 44 61

- other services 6 29

Operating lease rentals - land and buildings 5,073 4,914

- other 893 1,220

* Includes £31,000 in respect of the College (2008/09 – £31,000)

** Includes £34,000 in respect of the College (2008/09 – £52,000)

78



9.InterestpayableandsImIlarcharGes

2010 2009 £000 £000 On bank loans 859 908

Other interest - pensions 1,189 542

2,048 1,450

10.taxatIon

The members do not believe the Group was liable for any corporation tax arising out of its activities

during the year.

11(a)IntanGIbleFIxedassets

Group Goodwill £000 cost At 1 August 2009 18,955

Transfer from group undertakings 100

At 31 July 2010 19,055

amortisation At 1 August 2009 5,635

Charge for year 3,773

Transfer from group undertakings 28

At 31 July 2010 9,436

netbookvalue At 31 July 2010 9,619

At 1 August 2009 13,320

79



11(a)IntanGIbleFIxedassets(contInued)

college Goodwill £000 cost At 1 August 2009 3,289

Additions -

At 31 July 2010 3,289

amortisation At 1 August 2009 1,424

Charge for year 622

At 31 July 2010 2,046

netbookvalue At 31 July 2010 1,243

netbookvalue At 1 August 2009 1,865

11(b)Investments

The College owns 100% of the issued ordinary £1 shares of The Intraining Group Limited and

Newcastle College Construction Limited. The principal business activity of the subsidiaries is the

provision of training and apprenticeships.

80



12.tanGIbleFIxedassets

Group Equipment, information Freehold technology landand Leasehold andmotor buildings buildings vehicles Total £000 £000 £000 £000 costorvaluation At 1 August 2009 117,876 181 17,504 135,561 Additions 13,610 - 3,103 16,713 Disposals (450) - (2,406) (2,856)

At 31 July 2010 131,036 181 18,201 149,418

depreciation At 1 August 2009 24,937 181 9,376 34,494 Charge for year 4,082 - 3,830 7,912 Disposals (450) - (2,406) (2,856)

At 31 July 2010 28,569 181 10,800 39,550

netbookvalue At 31 July 2010 102,467 - 7,401 109,868

At 1 August 2009 92,939 - 8,128 101,067

Inherited 11,195 - - 11,195 Other 64,547 - 3,951 68,498 Financed by capital grant 26,725 - 3,450 30,175

102,467 - 7,401 109,868

81



12.tanGIbleFIxedassets(contInued)

college Equipment, information Freehold technology landand Leasehold andmotor buildings buildings vehicles Total £000 £000 £000 £000 costorvaluation At 1 August 2009 116,708 173 14,685 131,566 Additions 13,056 - 1,670 14,726 Disposals (450) - (2,406) (2,856)

At 31 July 2010 129,314 173 13,949 143,436

depreciation At 1 August 2009 24,812 173 8,620 33,605 Charge for year 3,870 - 2,914 6,784 Disposals (450) - (2,406) (2,856)

At 31 July 2010 28,232 173 9,128 37,533

netbookvalue At 31 July 2010 101,082 - 4,821 105,903 At 1 August 2009 91,896 - 6,065 97,961

Inherited 11,195 - - 11,195 Other 63,162 - 1,371 64,533 Financed by capital grant 26,725 - 3,450 30,175

101,082 - 4,821 105,903

The transitional rules set out in FRS 15 Tangible Fixed Assets were applied on implementing FRS 15. Accordingly, the book values at implementation have been retained.

Inherited land and buildings were valued at £25,934,000 on 27 August 1993. Of this, £25,859,000 relates to buildings stated at depreciated replacement cost, and £75,000 relates to a building valued at open market value by Storey Sons & Parker, a firm of chartered surveyors.

Other tangible fixed assets inherited from the local education authority at incorporation were capitalised at depreciated cost at incorporation. Should these assets be sold, the College would have to use the sale proceeds in accordance with the financial memorandum with the LSC and its successor organisations. If inherited land and buildings had not been revalued they would have been included with a net book value of £nil.

Land and buildings with a net book value of £53,642,000 have been partially financed by grants from the LSC and its successor organisations. Should these assets be sold, the College would either have to surrender the sale proceeds to the SFA or use the proceeds in accordance with the Financial Memorandum with the LSC and its successor organisations.

The College has a lease expiring in 2014 over Newcastle West End College (formerly the John Marley Centre) at an annual rent of the cost of insurance and upkeep of the building.

82



13.debtors

Group College Group College 2010 2010 2009 2009 £000 £000 £000 £000 amountsfallingduewithinoneyear Trade debtors 4,912 1,426 4,783 3,074

Capital grant debtor 5,145 5,145 - -

Other debtors 69 56 146 88

Amounts owed by subsidiary undertakings - 22,274 - 17,885

Prepayments and accrued income 7,734 1,737 6,194 946

Amounts owed by the SFA 4,002 1,824 2,525 1,153

21,862 32,462 13,648 23,146

Amounts owed by group undertakings include an Intraining Group loan of £9,782,000 and a

Newcastle College Construction Limited loan of £320,000 which are due after more than one year.

The balance of £12,172,000 relates to working capital payments made by the College on behalf of the

subsidiary companies which is due within one year.

14.credItors:amountsFallInGduewIthInoneyear

Group College Group College 2010 2010 2009 2009 £000 £000 £000 £000 Payments received on account 11,071 3,488 8,242 4,711

Trade creditors 2,057 729 2,445 1,118

Payroll creditor 693 605 611 479

Other taxation and social security 2,373 1,125 2,383 1,276

Accruals 9,786 5,540 11,207 5,307

Bank loans 619 619 593 593

Other creditors 505 - 1,656 701

27,104 12,106 27,137 14,185

15.credItors:amountsFallInGdueaFtermorethanoneyear

Groupand Groupand College College 2010 2009 £000 £000 Loans 14,467 15,086

83



16.analysIsoFborrowInGs

Groupand Groupand College College 2010 2009 £000 £000 bankloansandoverdrafts Bank loans and overdrafts are repayable as follows:

In one year or less 619 593

Between one to two years 640 619

Between two to five years 5,883 6,040

In five years or more 7,944 8,427

15,086 15,679

Bank loans and overdrafts carry interest at rates between 5% and 6.5% for fixed rate loans and LIBOR

+0.3825% for variable. Loans are repayable by instalments falling due between 2011 and 2018.

17.provIsIonsForlIabIlItIes

Groupandcollege

Pension Enhanced provision pensions Total £000 £000 £000 At 1 August 2009 543 2,852 3,395

Expenditure in the year - (679) (679)

Interest charged to other operating expenses - 169 169

Provided in the year 71 508 579

Released in year - (18) (18)

At 31 July 2010 614 2,832 3,446

The enhanced pension provision relates to the cost of staff who have already left the College’s

employment and commitments for reorganisation costs from which the College cannot reasonably

withdraw at the balance sheet date. This provision has been recalculated in accordance with the SFA

Circular 05/02.

84


18.deFerredcapItalGrants

Group Learning andSkills Other Council* grants Total £000 £000 £000 at1august2009 Land and buildings 17,352 3,618 20,970

Equipment 1,497 1,921 3,418

Reclassification of Equipment (76) 76 -

18,773 5,615 24,388

cashreceivedandreceivable Land and buildings 6,493 511 7,004

Equipment 40 1,433 1,473

6,533 1,944 8,477

releasedtoincomeandexpenditureaccount Land and buildings 875 374 1,249

Equipment 361 1,080 1,441

1,236 1,454 2,690

at31July2010 Land and buildings 22,970 3,755 26,725

Equipment 1,100 2,350 3,450

24,070 6,105 30,175


85


18.deFerredcapItalGrants(contInued)

college Learning andSkills Other Council* grants Total £000 £000 £000 at1august2009 Land and buildings 17,352 3,618 20,970

Equipment 1,436 1,921 3,357

Reclassification of Equipment (76) 76 -

18,712 5,615 24,327

cashreceivedandreceivable Land and buildings 6,493 511 7,004

Equipment 90 1,433 1,523

6,583 1,944 8,527

releasedtoincomeandexpenditureaccount Land and buildings 875 374 1,249

Equipment 350 1,080 1,430

1,225 1,454 2,679

at31July2010 Land and buildings 22,970 3,755 26,725

Equipment 1,100 2,350 3,450

24,070 6,105 30,175

*LearningandSkillsCouncilanditssuccessororganisations.

19.revaluatIonreserve

Groupand Groupand College College 2010 2009 £000 £000 At 1 August 11,902 12,609

Transfer from revaluation reserve to general reserve

in respect of depreciation on revalued assets (707) (707)

At 31 July 11,195 11,902


86



20.IncomeandexpendItureaccount

Group College Group College 2010 2010 2009 2009 £000 £000 £000 £000 At 1 August 31,529 38,071 40,981 43,285

Transfer from revaluation reserve 707 707 707 707


of assets at valuation and tax 6,009 10,153 781 5,019

Actuarial gains/(losses) pension costs 6,740 6,740 (10,940) (10,940)

At 31 July 44,985 55,671 31,529 38,071

21.pensIonschemes

The College’s employees belong to two principal pension schemes: the Teachers’ Pension Scheme

England and Wales (TPS) for academic and related staff; and the Local Government Pension Scheme

(LGPS), the Tyne and Wear Pension Fund, for non teaching staff. Both are defined benefit schemes.

Staff employed by subsidiary companies are eligible to be members of the Intraining Group Personal

Pension Scheme. It is a defined contribution scheme and is independently administered by an

insurance company.

totalpensioncostfortheyear

Group College Group College 2010 2010 2009 2009 £000 £000 £000 £000 Teachers’ Pension Scheme 2,636 2,636 3,175 3,175

Local Government Pension Scheme 2,142 2,142 2,383 2,383

Other pension schemes 517 - 670 –

FRS17 charge/(credit) 260 260 (20) (20)

chargetotheincomeandexpenditureaccount (staff costs) 5,555 5,038 6,208 5,538

Enhanced pension charge to income

and expenditure account 489 489 87 87

Deficiency cost provision 71 71 101 101

Total pension cost for year 6,115 5,598 6,396 5,726

The pension costs are assessed in accordance with the advice of independent qualified actuaries. The

latest actuarial valuation of the TPS was as at 31 March 2004 and as at 31 March 2007 for the LGPS.

87



21.pensIonschemes(contInued)

earlyretirementpensionThe pension charge for the year included an amount in respect of enhanced pension entitlements of

staff taking early retirement in earlier years under the reorganisation programme. The calculation of

the cost of early retirement provisions charged to the income and expenditure account in the year

of retirement is based on the total capital cost of providing enhanced pensions with allowance for

future investment returns. Each year, the year end provision is recalculated using updated actual

investment returns and the resulting change in provision is charged or credited to the income and

expenditure account.

Details of the movement in the provision are shown in note 17.

theteachers’pensionscheme(tps)The Teachers’ Pension Scheme is an unfunded defined benefit scheme. Contributions on a “pay as

you go” basis are credited to the Exchequer under arrangements governed by the Superannuation

Act 1972. A notional asset value is ascribed to the scheme for the purpose of determining

contribution rates.

The pensions cost is normally assessed not less than every 4 years in accordance with the advice of

the Government Actuary. The assumptions and other data that have the most significant effect on

the determination of the contribution levels are as follows:

Latest actuarial valuation 31 March 2004

Actuarial method Prospective Benefits

Investment returns per annum 6.5%

Salary scale increases per annum 5.0%

Notional value of assets at date of last valuation £162,650 million

Proportion of members’ accrued benefits

covered by the notional value of the assets 98.88%

Contribution rates with effect from 1 January 2007 Employee 6.4%

Employer 14.1%

Frs17Under the definitions set out in Financial Reporting Standard 17 (Retirement Benefits), the TPS is a

multi employer pension scheme. The College is unable to identify its share of the underlying assets

and liabilities of the scheme.

Accordingly, the College has taken advantage of the exemption in FRS17 and has accounted for its

contributions to the scheme as if it were a defined contribution scheme. The College has set out

above the information available on the scheme and the implications for the College in terms of the

anticipated contribution rates.

88




localGovernmentpensionscheme(lGps)The following disclosures relate to the funded liabilities of the Tyne & Wear Pension Fund which is

part of the Local Government Pension Scheme. Newcastle College participates in the Fund which

provides defined benefits, based on members’ final pensionable salary.

In accordance with FRS 17 disclosure of certain information concerning assets, liabilities, income and

expenditure relating to pension schemes is required.

An approximate allowance for the bulk transfer of members from Skelmersdale College in the

Lancashire Pension Fund to Newcastle College that occurred on 1 August 2007 was made in the

FRS17 figures for 2007/08. This calculated liabilities based on initial membership data received, and

estimated the assets as being equal to 100% of the liabilities valued a funding basis consistent with

that used by the Tyne and Wear Pension Fund as at the date of transfer.

There was also a transfer from New College Durham in the Durham Pension Fund to Newcastle

College that occurred on 1 August 2005. An allowance has been made for the service that these

members have accrued in the Tyne and Wear Pension Fund since 1 August 2005, but the Scheme’s

actuary does not have the information of which members elected to link their previous service in the

Durham Pension Fund or the length of their service. This report therefore does not make allowance

for the impact of this transfer.

In August 2009 there was a bulk transfer out of the Tyne & Wear Pension Fund to Manchester

College. Information regarding this transfer has not been made available to the Scheme’s actuary and

therefore no allowance has been made in the FRS17 figures this year.

Regular employer contributions to the Fund for the year ending 31 July 2011 are estimated to be

£2,520,000. In addition, Strain on Fund Contributions may be required.

Contribution rates from 1 April 2010 are:

Full-timeequivalentsalary contributionrateperyearUp to £12,600 5.50%

£12,601 to £14,700 5.80%

£14,701 to £18,900 5.90%

£18,901 to £31,500 6.50%

£31,501 to £42,000 6.80%

£42,001 to £78,700 7.20%

More than £78,701 7.50%

89




principalactuarialassumptionsThe latest actuarial valuation of the Fund took place as at 31 March 2007. The principal assumptions

used by the independent qualified actuaries in updating the latest valuation of the Fund for FRS17

purposes were:

At31July At31July At31July 2010 2009 2008 RPI Inflation 3.5% 3.8% 3.8%

CPI Inflation 2.8% N/A N/A

Rate of general long-term increase in salaries 5.0% 5.3% 5.3%

Rate of increase for pensions in payment 2.8% 3.8% 3.8%

Rate of increase to deferred pensions 2.8% 3.8% 3.8%

Discount rate 5.4% 6.0% 6.5%

The current mortality assumptions include sufficient allowance for future improvements in mortality

rates. The assumed life expectations on retirement at age 65 are:

At31July At31July 2010 2009 Years Years retiring31July2010

Males 20.0 19.9

Females 22.9 22.8

retiringin20years

Males 22.2 22.1

Females 25.1 25.0

The assets and liabilities in the scheme and the expected rates of return were:

Long-term Long-term rateofreturn rateofreturn expectedat Assetsplitat expectedat Assetsplitat31 31July2010 31July2010 31July2009 July2009 %pa % %pa %Equities 8.2 65.3 8.0 66.2

Property 7.7 8.1 7.0 6.8

Government Bonds 4.2 10.0 4.5 9.4

Corporate Bonds 4.9 12.3 5.9 12.5

Cash 1.4 1.4 0.9 1.9

Other 8.2 2.9 0.9 3.2

Total market value 7.3 100.0 7.0 100.0

90




Newcastle College employs a building block approach in determining the rate of return on Fund

assets. Historical markets are studied and assets with higher volatility are assumed to generate higher

returns consistent with widely accepted capital market principles. The assumed rate of return on each

asset class is set out within this note. The overall expected rate of return on assets is then derived by

aggregating the expected return for each asset class over the actual asset allocation for the Fund as

at 31 July 2010.

reconciliationoffundedstatustobalancesheet

2010 2009 £m £m Notional value of Fund assets 44.69 35.06

Present value of liabilities (62.03) (57.86)

Net pension liability (17.34) (22.80)

analysisoftheamountchargedtoincomeandexpenditureaccount

2010 2009 £m £m Current service cost 2.80 2.40

Past service cost - 0.07

Interest cost 3.36 2.76

Expected return on assets (2.34) (2.27)

Impact of disposals and acquisitions - 0.05

Expense recognised in income and expenditure account 3.82 3.01

changestothepresentvalueofliabilitiesduringtheyear £m Present value of liabilities at 1 August 2009 57.86

Current service cost 2.80

Interest cost 3.36

Contributions by participants 1.06

Actuarial gains on liabilities* 3.19

Net benefits paid out** (0.27)

Past service cost (5.97)

Present value of liabilities at 31 July 2010 62.03

*Includeschangestotheactuarialassumptions.**ConsistsofnetcashflowoutoftheFundinrespectoftheemployer,excludingcontributionsandanydeathinservicelumpsumspaid,andincludinganapproximateallowancefortheexpectedcostofdeathinservicelumpsumsof£63,700fortheyearended31July2010.

91




changestothefairvalueofassetsduringtheyear £m Fair value of assets at 1 August 2009 35.06

Expected return on assets 2.34

Actuarial gains on assets 3.96

Contributions by the employer 2.54

Contributions by participants 1.06

Net benefits paid out (0.27)

Present value of assets at 31 July 2010 44.69

actualreturnonassets

2010 2009 £m £m Expected return on assets 2.34 2.27

Actuarial gain/(loss) on assets 3.96 (4.24)

Actual return on assets 6.30 (1.97)

amountrecognisedinthestatementoftotalrecognisedgainsandlosses(strGl)

2010 2009 £m £m Total actuarial gains/(losses) 6.74 (10.94)

Actuarial gain/(loss) recognised in STRGL 6.74 (10.94)

During the year, the Government announced that future statutory revaluations will be based on CPI,

rather than RPI. The impact of this announcement on the College’s share of the deficit in the Local

Government Pension Scheme is required to be treated as an actuarial gain and has been recorded in

the Statement of Total Recognised Gains and Losses.

historyofassetvalues,presentvalueofliabilitiesanddeficit

2010 2009 2008 £m £m £m Fair value of assets 44.69 35.06 33.11

Present value of liabilities (62.03) (57.86) (44.50)

Deficit (17.34) (22.80) (11.39)

92




historyofexperiencegainsandlosses

2010 2009 2008 £m £m £m Experience losses on assets 3.96 (4.24) (4.98)

Experience losses on liabilities* 0.49 (0.12) (0.24)

* This item consists of losses in respect of liability experience only and excludes any change in

liabilities in respect of changes to the actuarial assumptions used.

22.reconcIlIatIonoFoperatInGsurplustonetcashInFlowFromoperatInGactIvItIes

Group 2010 2009 Notes £000 £000 Surplus on continuing operations after depreciation of assets

at valuation and tax 6,009 781

Amortisation 11 3,773 3,755

Depreciation 12 7,912 8,277

Deferred capital grants released to income 2 and 4 (2,690) (3,738)

Decrease in stocks 1 22

Interest payable 9 2,048 1,450

(Increase)/decrease in debtors (12) 385

(Increase)/decrease in prepayments and accrued income (3,057) 5,561

Decrease in trade creditors 14 (388) (176)

Decrease in other taxation and social security (10) (269)

Increase in payments on account 2,829 76

(Decrease)/increase in accruals and other creditors (3,713) 1,157

Increase in provisions 17 51 69

Increase in net pension liability 1,280 470

Interest receivable 4 (8) (213)

Loss on sale of fixed assets - 1,845

Net cash inflow from operating activities 14,025 19,452

93



23.analysIsoFchanGeInnetFunds/(debt)

Group At1August Cash At31July 2009 flow 2010 £000 £000 £000Cash 8,172 (838) 7,334

Bank loans (15,679) 593 (15,086)

(7,507) (245) (7,752)

24.capItalcommItments

Group College Group College 2010 2010 2009 2009 £000 £000 £000 £000 Commitments contracted for at 31 July 1,953 1,827 731 620

25.FInancIalcommItments

At 31 July there were annual commitments under non-cancellable operating leases as follows:

Group College Group College 2010 2010 2009 2009 £000 £000 £000 £000 landandbuildings Expiring within one year 796 - 352 -

Expiring within two to five years inclusive 1,710 249 2,121 249

Expiring in over five years 1,202 774 768 376

3,708 1,023 3,241 625

Group College Group College 2010 2010 2009 2009 £000 £000 £000 £000 other Expiring within one year 202 - 206 4

Expiring within two to five years inclusive 117 - 117 -

319 - 323 4

94



26.relatedpartytransactIons

Due to the nature of the Group’s operations and the composition of the Corporation (being drawn

from local public and private sector organisations) it is inevitable that transactions will take place with

organisations in which a member of the Corporation may have an interest. All transactions involving

organisations in which a member of the Corporation may have an interest are conducted at arm’s

length and in accordance with the Group’s financial regulations and normal procurement procedures.

No transactions were identified which should be disclosed under Financial Reporting Standard 8

Related Party Disclosures.

27.amountsdIsbursedasaGent

learnersupportfunds

Group Group 2010 2009 £000 £000 SFA grants – hardship funds 920 817

SFA grants – childcare 342 390

Other funding bodies grants 90 94

Interest earned 2 4

1,354 1,305

Disbursed to students (1,168) (1,122)

Administration costs (60) (54)

Balance unspent at 31 July 126 129

SFA grants are available solely for students. In the majority of instances, the College only acts as a

paying agent. In these circumstances, the grants and related disbursements are therefore excluded

from the income and expenditure account. The income and expenditure consolidated in the College’s

financial statements relates to the purchase of some equipment from the access fund and the

payment of accommodation by the College on the student’s behalf.

95


Independent Auditors’ Report on Regularity to the members of the Corporation of Newcastle College (‘the Corporation’) and the Skills Funding Agency (‘the SFA’)

In accordance with the terms of our engagement letter dated 31 October 2006 and further to the

requirements of the SFA, we have carried out a review to obtain assurance about whether, in all

material respects, the expenditure and income of Newcastle College (‘the College’) for the year

ended 31 July 2010 have been applied to the purposes identified by Parliament and the financial

transactions conform to the authorities which govern them.

This report is made solely to the members of the Corporation and the SFA. Our review work has been

undertaken so that we might state to the members of the Corporation and the SFA those matters we

are required to state to them in a report and for no other purpose. To the fullest extent permitted by

law, we do not accept or assume responsibility to anyone other than the members of the Corporation

and the SFA, for our review work, for this report, or for the opinion we have formed.

respectIveresponsIbIlItIesoFthemembersoFthecorporatIonandaudItorsThe members of the Corporation are responsible, under the requirements of the Further & Higher

Education Act 1992, subsequent legislation and related regulations, for ensuring that expenditure and

income are applied for the purposes intended by Parliament and the financial transactions conform

to the authorities which govern them.

Our responsibilities for this review are established in the United Kingdom by our profession’s ethical

guidance and the audit guidance set out in the Audit Code of Practice and the Regularity Audit

Framework issued by the SFA. We report to you whether, in our opinion, in all material respects, the

College’s expenditure and income for the year ended 31 July 2010 has been applied to purposes

intended by Parliament and the financial transactions conform to the authorities which govern them.

basIsoFopInIonWe conducted our review in accordance with the Audit Code of Practice and the Regularity Audit

Framework issued by the SFA. Our review includes examination, on a test basis, of evidence relevant

to the regularity and propriety of the College’s income and expenditure.

opInIonIn our opinion, in all material respects the expenditure and income for the year ended 31 July 2010

has been applied to purposes intended by Parliament and the financial transactions conform to the

authorities which govern them.

Ernst & Young LLP

Registered Auditor

Newcastle upon Tyne

16 December 2010


96


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Intraining722 Prince of Wales RoadSheffieldS9 4EU

Tel: +44 (0) 114 289 8400Fax: +44 (0) 114 289 8401www.intraining.co.uk

newcastlecollegeRye Hill HouseScotswood RoadNewcastle upon TyneNE4 7SA

Tel: +44 (0) 191 200 4000Fax: +44 (0) 191 200 4517www.newcastlecollege.co.uk

skelmersdale&ormskirkcollegeYewdaleSkelmersdaleWN8 6JA

Tel: +44 (0) 1695 52300Fax: + 44 (0) 1695 721682www.skelmersdale.ac.uk

annual report 2009-10 - newcastle college · who visited newcastle college ... company from a local...

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