Statement of Accounts 2020 / 21
Statement of Accounting Policies For the year ended 31 July 2021
1 . General information Keele University is registered with the Office for Students in England . The address of the registered office is Keele , Staffordshire , ST5 5BG .
2 . Accounting convention
The Consolidated and University financial statements have been prepared in accordance with United Kingdom Accounting Standards , including Financial Reporting Standard 102 ( FRS 102 ) and the Statement of Recommended Practice ( SORP ): Accounting for Further and Higher Education ( 2019 edition ). They have also been prepared in accordance with the ‘ carried forward ’ powers and duties of previous legislation ( Further and Higher Education Act 1992 and the Higher Education Act 2004 ) and the new powers of the Higher Education and Research Act 2017 during the transition period to 31 July 2019 , the Royal Charter , the Accounts Direction issued by the Office for Students ( OfS ), the Terms and conditions of funding for higher education institutions issued by the Office for Students and the Terms and conditions of funding for higher education institutions issued by the Office for Students and the Terms and conditions of Research England Grant .
The University is a public benefit entity and therefore has applied the relevant public benefit requirement of the applicable UK laws and accounting standards .
3 . Basis of preparation
The Consolidated and University financial statements have been prepared under the historical cost convention , with the exception of certain investment properties which have been revalued to fair value as at the year ended 31 July 2021 .
The Group and University ’ s activities , together with the factors likely to affect its future development , performance and position are set out in the Strategic Report which forms part of the Council ’ s Report . The Council ’ s Report also describes the financial position of the University , its cash flows , liquidity position and borrowing facilities . The financial statements have been prepared on a going concern basis which Council consider to be appropriate for the following reasons .
The Council has prepared cash flow forecasts for a period of 13 months from the date of approval of these financial statements ( the going concern period ) which indicate that , taking account of severe but plausible downsides , including the anticipated impact of the Covid-19 pandemic , the Group and parent University will have sufficient funds to meet their liabilities as they fall for that period . In reaching this conclusion , the Council has considered the following factors :
• In response to Covid-19 , the University reduced non-pay expenditure and minimised any new capital projects that required University funds to mitigate the impact of lost income from accommodation and on-campus activities ( including catering , retail , sports centre and conferences ). The University made a surplus for the year to 31 July 2021 and improved both net cash inflow from operating activities and cash and cash equivalents . The University utilised the Government ’ s Job Retention Scheme for staff on furlough but did not utilise any other Government assistance . Additionally , we were able to accommodate students in our Halls of Residence in line with central Government advice and staff at the University are making a great effort to welcome students into a safe and caring environment .
• For the year ended 31 July 2022 , the University has recruited in line with the budget for home undergraduate students , our primary source of income .
• The 2021 / 22 onwards Budgets build on the experiences of the impact of Covid-19 but equally provide a level of “ normality ” in terms of oncampus income and expenditure . The University has reduced budgeted surplus for contributions from Commercial areas such as Conferences and Events . During the budget process , assumptions are based on the best knowledge of the University and are prudent for both income and expenditure . The University has budgeted to produce an overall surplus in each year and to generate cash for capital expenditure and investments .
• The University has a £ 10m revolving credit facility with National Westminster Bank until October 2024 to assist with liquidity . There is no requirement for any new or additional lending facilities during the going concern assessment period .
• No banking covenants have been breached or are expected to be breached during the going concern assessment period .
• The University is a member of the Universities Superannuation Scheme ( USS ), which is currently undergoing a valuation as at 31 March 2020 . The Joint Negotiating Committee ’ s ( JNC ) have agreed to progress the 2020 valuation , and this is currently under consultation until 17 January 2022 . Under this proposal , Employer pension costs will increase from 21.1 % to 21.4 % from 1 October 2021 . Under the current 2018 valuation , if the consultation is unsuccessful , Employer pension costs will increase from 21.1 % to 23.7 % from 1 April 2022 . Using the increased 23.7 % rate the University is still able to continue as a going concern .
The Council believe the Group and parent University have sufficient funding in place and expect the Group to be in compliance with its debt covenants even in severe but plausible downside scenarios .
Consequently , the Council is confident that the Group and parent University will have sufficient funds to continue to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis .
These financial statements are presented in sterling ( rounded to £’ 000 ), which is the functional currency of the group .
4 . Exemptions under FRS 102
The University has taken the exemption under section 3.3 of the SORP ( 1.12 ( b ) of FRS 102 ) to not produce a cash flow statement for the University in its separate financial statements .
5 . Basis of Consolidation
The consolidated financial statements include the financial statements of the University and all its subsidiaries for the financial year to 31 July 2021 . Details of these companies are provided in note 14 ( b ).