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FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2010
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Contents
Financial Highlights 3
Governors’ Report 4-14
Corporate Governance Statement 15-21
Responsibilities of the University’s Board of Governors 22-23
Independent Auditor’s Report 24-25
Statement of Principal Accounting Policies 26-27
Consolidated Income and Expenditure Account 28
Consolidated Statement of Historical Cost Surpluses and Deficits 28
Balance Sheet 29
Consolidated Cash Flow Statement 30
Statement of Total Recognised Gains and Losses 30
Notes to the Accounts 31-45
Principal Address & Advisors 46
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Financial Highlights
2010 2009
Results, Cash Flows, Assets and Reserves £000 £000
Funding Council Grants 40,248 37,320
Academic Fees and Support Grants 41,309 36,972
Research Grants and Contracts 423 81
Other Operating Income 15,168 14,028
Endowment and Investment Income 436 633
Total Income 97,584 89,034
Historical Cost Surplus for the Year After Tax 4,883 4,782
Net Cash Flow from Operating Activities 11,774 11,799
Net Outflow on Investments and Servicing of Finance (2,160 ) (1,962 )
Net Cash Flow before Investing 9,614 9,837
Fixed Assets 68,919 68,178
Endowment Asset Investments 622 588
Debtors 2,945 2,461
Investments 26,527 10,153
Cash 9,660 19,353
Creditors: amounts falling due within one year 15,974 15,100
Total Assets less Current Liabilities 92,699 85,633
Total Reserves excluding FRS 17 Pension Liability 49,402 43,048
Total Reserves including FRS 17 Pension Liability 25,202 13,208
Other Key Statistics 2009-10 2008-09
Number of Higher Education Full-Time Equivalents 11,042 10,752
Total Number of Higher Education Students 12,537 11,769
Number of Employees 1,213 1,163
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Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Governors‟ Report
SCOPE OF THE FINANCIAL STATEMENTS The University recruited in excess of 500 overseas
(non-EU) students to year 0 and year 1 course years
The Financial Statements comprise the consolidated in 2009-10, showing a minor reduction on the
results of the University and its fully owned trading previous year. The leading source areas for these
subsidiary undertaking: Southampton Solent were the Middle East, Norway, India and Nigeria. An
University Limited (SSUL). audit visit in July 2009 by the UK Border Agency
(UKBA) confirmed that the University‟s processes
The main activities of this undertaking is to provide were fully aligned with the requirements of its UKBA
short courses, training and facilities, consultancy licence.
services, meals and accommodation for employees of
other organisations using the companies‟ facilities Applications from EU nations are rising - in
for their own training programmes and miscellaneous particular, from Eastern Europe and through an
commercial activities. articulation agreement in Germany.
OPERATING & FINANCIAL REVIEW 2009-10 Financial position
Situated in the heart of Southampton, the University Financially, the University has never been stronger.
is a vibrant and enterprising modern university which Income for 2009-10 was £97.6m and an historic cost
places the student experience and a commitment to surplus of £4.9m was achieved (5.0% of income).
preparing graduates for successful careers at the The University plans for a surplus of 3% of income.
heart of our mission. We currently have four This has been achieved (or exceeded) for four
faculties: the Faculty of Business, Sport and successive years and is expected to continue for
Enterprise; the Faculty of Media, Arts and Society; 2010-11.
the Faculty of Technology; and the Warsash Maritime
Academy. Three of the four faculties have been New Strategic Plan
successfully reviewed and refocused in the past five
years, the most recent being the Faculty of Business, In July 2008 we launched our new Strategic Plan
Sport and Enterprise. It is now pursuing a more (2008-2013). This seeks to forge greater
externally facing role whilst refocusing the distinctiveness and strengthen the University‟s
undergraduate curriculum to incorporate an explicit position as a provider of education, learning and
social enterprise dimension. skills, characterised by the effective integration of
theory and practice. Distinctiveness, development
With more than 19,500 students (11,500 FTEs) and sustainability will constitute the key priorities
applications have almost doubled since 2006, largely for the future. In early 2010, the University‟s senior
as a result of timely, innovative curriculum management reviewed the Plan and found it to be
development and skilful marketing. still fit for purpose.
We have a strong widening participation record and The University‟s Strategic Plan 2008-13 is set out
welcome all who are able to benefit from the type of below.
higher education we offer. We like to think that this
is an open, friendly, accessible university where Southampton Solent University‟s Vision is:
ordinary people can achieve extraordinary things. A vibrant, inclusive and successful University
that is well known for the excellence of its
A third of students come from Hampshire and the work with students and employers and the
Isle of Wight, 97% of whom are from state schools, effective integration of theory and practice;
the highest for universities on the south coast.
A stimulating student experience
International reputation characterised by intellectual rigour, personal
fulfilment and excellent career prospects;
The University has particular strengths in the
Imaginative external partnerships which
creative industries, media and the maritime sector
develop the University and make a
(where, through the Warsash Maritime Academy,
significant contribution to social justice and
with its own campus beside Southampton Water, we
economic competitiveness.
have a genuinely international reputation).
Southampton Solent University‟s Mission is:
The pursuit of inclusive and flexible forms of
Higher Education that meet the needs of
employers and prepare students to succeed
in a fast-changing competitive world.
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Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Governors‟ Report
Southampton Solent University‟s Strategic Plan 2008- Employment outcomes
13 includes eight strategic objectives:
An emphasis on „real world‟ learning has spawned
Inclusive and flexible forms of Higher some exciting new courses (notably Media and
Education that meet market needs; Fashion Styling) and unique work experience
Imaginative working partnerships with opportunities (for example, at Glastonbury and
Further Education and employers; Glade popular music festivals, and in providing live
network broadcasts for the BBC). All this is
A significant contribution to social justice reflected in an enhanced reputation and above-
and economic competitiveness for benchmark employment statistics. However, in
Southampton and its region; recognition of the current economic climate, our
Knowledge creation and exchange that fuse careers staff and Graduate Jobs South (created and
academic rigour and professional practice; run by Southampton Solent on behalf of three other
local universities) have redoubled their efforts to
Excellent student employability; help students find that vital first job.
Entrepreneurship and diversified income
Making a real difference
streams;
Changed employment arrangements that We have created a one-year intern programme, to
support high performance; which (in 2009 and 2010) we recruited 25
Southampton Solent graduates in roles that make a
Sustainable growth and investment in the real difference, both to them and to us. A bid to
estate. HEFCE for additional funds to support the creation of
The Higher Education Funding Council (HEFCE) has more interns, on a short placement basis, with small
recognised the sense and merit of the University‟s and medium-sized employers in the region was
strategic objectives by investing £7.8m to enable us successful (80 graduates have been placed with local
to accelerate attainment of those objectives through companies).
our Strategic Development Programme, over the
period 2009-12. Student experience
Quality provision The University has made real strides in enhancing
the learning experience of students. Our National
The University is committed to teaching excellence. Student Survey (NSS) scores have improved
Our lecturers are all experienced in their field and significantly in two successive years. Benchmarked
their academic achievements are supported by against similar universities in the Million+ Group, we
professional knowledge and ongoing collaborative have since 2008 risen from bottom place to positions
work with external agencies, businesses and within the top ten for „Overall satisfaction‟,
academics from other institutions, to ensure that „Teaching quality‟ and „Organisation and
teaching and supervision is up to date, relevant and Management‟. Last year we were shortlisted by the
progressive. Times Higher Education for most improved student
experience and this year we have improved again.
Recent external reviews of internal processes have
been positive. Independent audits by the Quality In this year‟s Sunday Times League Tables, the
Assurance Agency and Ofsted awarded us their University has risen six places to 116th. Our position
highest rating for the quality and standards of our was helped considerably by our improved NSS scores.
Higher Education (HE) and Further Education (FE) Nonetheless, The Sunday Times‟ measures fail to
provision. Independent audit of non-completion reflect what is now a highly diverse and complex
data by HEFCE in 2009 resulted in a revision of the higher education system. It does not value our
reported rate but no financial adjustment. In two emphasis on widening participation, the fusion of
subject areas submitted for the 2008 Research theory and practice, social justice, or the breadth of
Assessment Exercise, some aspects of the work were our graduate employability, which are core to our
placed in the top, „world leading‟ category. On a distinctiveness as a university.
relatively small submission, the University secured
£299k per year research funding, a modest amount Enhancing the student experience, not least in terms
but a significant improvement on its past of employability, is likely to remain a top priority for
performance. Separately from this, the Warsash the future, especially in light of changes in the
Maritime Academy, leading a consortium of European higher education funding and policy framework.
partners, has secured €2.8m in funding for research
into the effects of fatigue on ships‟ bridge crews, of
which €1.3m is for work carried out by the
University.
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Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Governors‟ Report
The following Key Performance Indicators which derive from the University‟s Strategic Plan for 2008-2013 relate
to student satisfaction and achievement:
Performance Indicator Criteria Outcome for 2009-2010
Student satisfaction 76% of students were satisfied (2008-
(as measured by the National 2009 72%)
Student Survey)
Employment rate Above 80.1% - national average 68.3%
[figures produced one year in benchmark (2008-2009 78.4% - national average
arrears therefore 2008-2009 70.0%)
relates to 2007-2008 leavers]
Estates
The main focus on the University‟s estate during 2009-10 has been the strategic acquisition of land adjacent to
the city campus at East Park Terrace, which has been a long-term aspiration for the University, and which will
facilitate the next phase of estate development to create modern, higher performing, and flexible learning and
teaching accommodation. Following protracted negotiations with the previous owner, the site of just under an
acre was finally acquired in 2009, with physical possession agreed for October 2011.
The challenge this year for the University has been to invest in the estate in a way that provides impact and
value for money, but that does not compromise future estate development plans. With this in mind, investment
has been strategically targeted to enhance the student experience through upgrading of teaching and learning
facilities, and through the refurbishment of social spaces.
Future estates development during the year has focused on two major projects:
Test Park, a £3.2m football facility at Millbrook in Southampton, of which £0.7m will be funded by the
Football Foundation and £0.3m from Southampton City Council. This facility will provide teaching
facilities for sports coaching courses, recreational facilities, and community use. It is anticipated to be
complete in 2011.
Manned Model Centre, a £2.8m facility to provide a new home for the Warsash Maritime Academy‟s world-
class Manned Model Training Centre.
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Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Governors‟ Report
The following Key Performance Indicators which derive from the University‟s Strategic Plan for 2008-2013 relate
to the University‟s financial position:
Performance Indicator Criteria Outcome for 2009-2010
Annual historic cost surplus At least 3% of 5.00% (2008-2009 5.37%)
(after tax and FRS 17 pension income over
costs) the period of
the Plan
Net cash inflow from operating At least 6% of 12.07% (2008-2009 13.25%)
activities income
Cash reserves Available cash £9.7m (2008-2009 £19.4m)*
reserves of
£6m
*See Investments and Cash Reserves section below for further details
Results for the Year Staff costs rose by £4.7 million (10.4%) to £49.7
million. Incremental salary scale increases account
The University‟s results are summarised in the for 2.1% of the increase. Staff numbers have also
Financial Highlights on page 3. risen by 4.3% primarily as a result of the Strategic
Development Programme and filling vacancies from
Total income increased by £8.6 million (9.6%) to 2008-2009. The national pay award increase for all
£97.6 million. staff was 0.5% in October 2009.
Funding body grants increased by £2.9 million (7.8%) Other operating expenses rose by £3.3 million
to £40.2 million, with £39.2 million (97.6%) being (10.4%) to £35.1 million. Increases in repairs and
received from HEFCE and the remaining £1m (or maintenance, as well as refurbishment projects
2.4%) from the FE funding bodies. across the University have contributed to higher
operating expenses.
The HEFCE recurrent grant for 2009-2010 totalled
£33.9 million, representing an increase of £0.9 Minor equipment has also increased by £1.0 million
million (2.6%) from 2008-2009, which was related to as a result of additional spend aimed to improve the
the teaching element of the grant. Widening student experience.
participation funding, received for the additional
costs associated with recruiting and teaching The historical cost surplus for 2009-2010 was £4.9
students from under-represented social groups and million, in line with the 2008-2009 surplus and £2.2
communities, increased to £4.8 million. million higher than the budgeted surplus of £2.7
million. This increase over budgeted surplus was
Tuition fee income increased by £4.3 million (11.7%) achieved through higher than budgeted student
to £41.3 million. The majority of this increase was numbers combined with controlled pay costs,
in respect of the increase in fees and the number of partially offset by targeted additional non pay
students as most of the home students are now spend.
paying variable fees.
Investments and Cash Reserves
Other operating income increased by £1.2 million
(8.1%) to £15.2 million, primarily as a result of Overall investments and cash reserves have
higher residences rental income. increased by £6.7m. As financial markets have
stabilised the University has started investing a
Endowment and investment income decreased by proportion of its funds for up to 12 months rather
£0.2 million (31.1%) to £0.4 million due to lower than hold them in instant access accounts. This has
interest rates and a higher proportion of cash being lead to the decline in cash reserves of £9.7m and
held in instant access deposit accounts during the increase in investments of £16.4m.
year.
Total expenditure has increased by £8.5 million
(10.0%) to £92.8 million.
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Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Governors‟ Report
Cash flow amounts outstanding as at 31 July 2010 are £3.7
million and £7.9 million and will be repaid in 2018
The Financial Highlights on page 3 show that the and 2019 respectively.
University generated a net cash inflow from
operating activities of £11.8 million, which is in line Post Balance Sheet Events
with the previous year. The factors contributing to
the level of net cash inflow include: The Governors are not aware of any post balance
sheet events that they feel attention should be
a surplus of £4.9m was achieved in 2009- drawn to.
2010.
an increase in creditors this year of £0.9 Financial Strategy
million, compared to an increase last year
of £0.1 million, is largely due to trade The financial strategy is one of the supporting
creditors being higher. The University strategies to the University‟s Strategic Plan 2008-
continues to pay creditors in line with the 2013. It sits alongside other service strategies and
current creditor payment policy. is inextricably woven through all strategies of the
University. It has an enabling role to ensure that
an increase in debtors this year of £0.5 the appropriate resources are provided to support
million, compared to a decrease last year of the University‟s strategic objectives and academic
£1.1 million. Although debtors have development.
increased slightly, the percentage of
student debt compared to income has fallen The University will aim to:
to 3.25% (2008-2009 4.65%). The University
continues to focus on debt management. Achieve and maintain a historic cost surplus
of at least 3% of income;
Capital Projects Generate a net cash flow from operating
activities of at least 6% of income;
During 2009-2010 the University has continued to
Maintain a minimum cash balance of £6
invest in the estate at the East Park Terrace and
million;
Warsash campuses. The University was allocated
£7.8m under the HEFCE Capital Investment Minimise the use of working capital (i.e.
Framework for 2008-2011. debtors);
Amounts capitalised as land and buildings during the Optimise investment returns of liquid
year totalled £1.9 million and additions to assets, whilst safeguarding the assets;
equipment were £2.2 million. Optimise the cost of financing the student
residences;
Increasingly constrained by space limitations, the
University has purchased a piece of land during the Make available borrowing capability to
year, as well as continuing with the phased develop the enabling infrastructure;
refurbishment of its teaching and residential Develop existing and new funding
buildings. relationships.
Equipment has been purchased across the University The Director of Finance, together with the finance
in order to enhance the student experience and senior management team, is responsible for the
adapt to the changing nature of student learning. delivery of the strategy. A set of key performance
indicators has been developed as part of the
Long-Term Borrowing Facility strategic plan process; three key financial indicators
are included on page 7.
The University has a standard commercial loan with
the Allied Irish Bank, secured on individual halls of Treasury Management
residences. The amount outstanding as at 31 July
2010 is £20.5 million and will be repaid by July Treasury management encompasses the
2026. management of the University‟s cash flows,
banking, money and capital market transactions and
The outstanding loan with Barclays Bank was repaid the effective control of the risk associated with
in full in December 2009. those activities.
The University also has two finance leases with the
Co-operative Bank and the Bank of Scotland. The
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Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Governors‟ Report
The policy of the University is to safeguard its assets unable to identify its share of the underlying
whilst at the same time aiming to achieve the best liabilities of the scheme. The University has taken
possible return on its investment. The over-riding advantage of the exemption of FRS 17 and has
principle however must be to minimise risk rather accounted for it as if it were a defined contribution
than maximise return. scheme.
The financing and liquidity of the University and its The disclosure notes on pages 38 to 40 relate only
exposure to financial risk are managed by the to the HCCLGSS and unfunded obligations. The
central Finance Service. The University‟s financial latest actuarial valuation of the fund took place as
strategy sets out the minimum liquidity levels at 31 March 2007 and was updated by Hewitt
needed to ensure that financial and operational Associates Limited, as actuaries appointed by
control is maintained. A rolling five year forecast is Hampshire County Council, in order to assess the
prepared each year, which incorporates a review of University‟s share of assets and liabilities of the
capital expenditure, cash generated and any future scheme as at 31 July 2010.
borrowing requirements.
The University‟s share of deficit in the scheme has
During the year, the University‟s Treasury decreased by 18.9% to £24.2 million as at 31 July
Management Policy was amended in line with the 2010 (2008-2009: £29.8 million). Following the
revised guidance contained in the CIFPA Treasury Government announcement on 8th July 2010 there
Management in the Public Services: Code of has been a change in the way pension increases are
Practice and Cross-Sectoral Guidance Notes (Fully measured with payments and deferments being
revised second edition 2009). measured using CPI rather than RPI. This change
has had a material effect on the University‟s
Changes to the limits included in the policy have pension liability and resulted in a gain of £7.1m.
also been made in order to allow greater flexibility The University has treated this gain as a change in
and the use of longer term deposit accounts. The actuarial assumptions and taken it through the
policy was reviewed by an independent Treasury Statement of Recognised Gain and Losses (see page
Specialist. 30).
The University‟s deposit with Heritable Bank This reduction in gross liabilities has been partly
became at risk following the collapse of the banking offset by a change in discount rate from 6% to 5.4%.
sector in Iceland during 2008-2009. To date the Also a contributory factor in the reduction in net
University has received £0.8 million in dividends, liabilities is the strong recovery over the past year
which represents 42% of the original investment. of the pension fund‟s assets.
Accounting Policies Risk and Risk Management
The University‟s Financial Statements have been The University has an established risk management
prepared in accordance with the Statement of policy which identifies management of risk as a
Principal Accounting Policies set out on pages 26 to responsibility of all management post holders, as
27. appropriate to their level of accountability, led by
the Vice-Chancellor. The Risk Management Group
In accordance with Financial Reporting Standard 18, (RMG) has evolved an annual analysis process which
Accounting Policies, the University has reviewed its identifies risk as perceived by the management
accounting policies to ensure that they remain team of each faculty and service, using a common
appropriate. There have been no changes to the scoring system to rank risks against which
accounting policies in the year. appropriate management actions are then set.
These are plotted by RMG to aggregate commonly
Pensions perceived risks across the organisation and to
identify the top ten residual risks. The aggregate
The University has two defined benefit pension departmental output is then reviewed alongside the
schemes for staff, which are the Teachers‟ Pension top ten institutional risks identified by the Vice
Scheme (TPS) and the Hampshire County Council Chancellor‟s Group (VCG) to ensure that the
Local Government Superannuation Scheme management team as a whole have a shared view of
(HCCLGSS). risk and the required actions to control these. VCG
reviews its listing several times a year and adjusts
The Teachers‟ Pension Scheme is defined as a multi- the institutional level risk management measures as
employer pension scheme under Financial Reporting necessary to reflect this.
Standard 17 Retirement Benefits. The University is
9
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Governors‟ Report
As a largely teaching orientated institution these Equality Scheme
processes revolve mainly around the planning,
marketing, budgeting and student support measures The University launched an equality scheme in
necessary to recruit and retain students and protect January 2010. The scheme, devised from the
funding, student and hall of residence fee income. findings of wide consultation amongst staff,
Conventional business recovery, financial employees and external stakeholders, anticipated
management and health and safety action plans are many of the changes that were enacted in October
also in place. Latterly Government decision making 2010 by the Equality Act 2010. The equality scheme
and funding factors and institutional reputational bought together and simplified a wide range of pre-
issues have been tracked closely as well because of existing policies, procedures and action-plans into a
the current volatility in the HE Sector environment. single scheme.
The Audit Committee (AC) of the Board of The launch of the scheme was highly successful and
Governors is briefed at each of its meetings on the described as „ahead of the game‟ by the Equality
latest VCG risk analysis update and progress on the Challenge Unit. During 2009-10 the innovative
larger cycle of analysis and action planning. This events programme has drawn higher levels of
provides AC members with reassurance that engagement than previous approaches and the
executive action is underway and an opportunity to programme is scheduled to continue through 2010-
seek clarification where appropriate. The final 11.
annual action plan is agreed with the University
Senior Management Team as part of this process to A further distinctive feature of the scheme is the
ensure their ownership and then endorsed by Audit inclusion of equality objectives within the
Committee. University‟s planning processes. Each faculty and
service has been asked to indicate how its planning
In readiness for the 2010-11 cycle, some for 2010-11 addresses up to three (of the ten)
developments have been agreed in consultation equality objectives and a summary of these will be
with the internal auditors. RMG membership has published during October 2010.
been extended to include additional senior
managers from faculties and services who are not The ten objectives include the completion of the
members of the University‟s Management Board. University‟s first equal pay review. This will be
This will ensure that additional senior staff are done during October 2010 with publication planned
actively involved in the detailed review and analysis for November 2010. The University‟s approach has
of risk at University level which will, in turn, been to use proprietary equal pay audit software
influence their own management approach. As operated by an independent external provider,
Chair of RMG, the Director of Finance and Resources complemented by analysis and commentary
provides a direct link with VCG in reviewing all provided by an independent external expert
levels of risk across the University. reviewer.
During 2009-2010 a start was made in mapping key Employee Engagement
University project risk analyses onto the University
matrix in addition to the departmental picture. The A major employee consultation is planned for March
full University risk register will comprise this 2011. The purpose of the employee consultation is
aggregated picture, copies of all the faculty and to support forward planning by the University. This
service risk analysis tables, the VCG‟s Top Ten risk will include an emphasis on helping to inform
listing and an associated plan for managing these strategic planning, over a 3-5 year cycle that will
institutional risks. become a sensible and practical frequency for
future employee consultations.
The aim is to provide a more transparent record of
top down and bottom up risk assessment. The Top The University, following a formal competitive
Ten risks continue to reflect the volatility in the tendering exercise, will be working with Positive
undergraduate recruitment markets as well as the People at the University of Bristol to devise,
broader political environment and government conduct and analyse the consultations. The
financial constraints. selection criteria, by which Positive People were
appointed, specifically included an assessment of
Creditor Payment Policy the degree to which suppliers had understood the
Solent brief, confidence about the use of innovative
It is the University‟s policy to pay suppliers 30 days modern employee engagement approaches, and the
from the end of the month in which invoices are potential for award recognition/published work.
received, unless special terms have been
negotiated.
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Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Governors‟ Report
It is envisaged that the consultations will enable The Governors have no financial interest in the
each employee to contribute ideas beyond the Corporation and receive no remuneration from the
traditional employment domain. For example, it University in respect of their duties as Governors
may include seeking ideas about services to other than reimbursement of reasonable expenses
students, service developments, quality and value- for travelling and subsistence.
for-money, together with specialist activities e.g.,
new employee learning needs, Health and Safety, The majority of Governors are voluntary
Solent Green and Equality and Diversity. independent members, drawn from business or from
the wider educational world. They bring to the
Training Board a blend of commercial, professional and life
experience. There are also internal members,
2009-10 saw some important developments in the including the Vice-Chancellor, staff and the
approach taken by the University to training and President of the Students‟ Union.
support for its employees. In line with the public
commitment to equality and social justice, the The University‟s corporate governance
principle of training open to all employees has been arrangements are described on pages 15 to 21 and
adopted. Clear priorities were established, the members of the University Board of Governors
including support for the Solent Enterprise Centres, during the year ended 31 July 2010 are listed on
implementing the Skills Pledge, improved customer page 16.
and student-facing services, and the Solent
apprenticeship scheme. The University is regulated principally by HEFCE
under a Financial Memorandum. The University
Individual training needs are identified and complies with conditions of grant set out in funding
progressed through the University‟s new appraisal agreements with the relevant grantor.
scheme, which was in its second year of operation
during 2009-10. The new Solent Scholarship Scheme The University‟s principal advisors are listed on
and Career Review Centre are also accessed through page 46.
appraisal discussions.
PUBLIC BENEFIT
Additionally during 2009-10 the Centre for Real-
world Learning, based at the University of Under the Education Reform Act 1988, the
Winchester, was commissioned to undertake a University obtained charitable status. The
learning needs analysis for the University. The University is an exempt charity within the meaning
commission will help to support the multi-faceted of the Charities Act 1960.
initiatives of the Strategic Development Programme
(2009-12). The Governors, as charity trustees of an exempt
charity, are aware of the guidance issued by the
Constitution, Governance and Regulation Charity Commission on public benefit. Given the
activities of the University and the student
The institution was incorporated under the population that it services, the Governors consider
Education Reform Act 1988 as a Higher Education that the University meets its statutory requirements
Corporation with effect from 1 February 1989. in all respects.
Despite its educational designation as a University,
granted by the Privy Council in July 2005, its legal Supporting economic growth
status as a Higher Education Corporation determines
aspects of the University‟s governance The University is characterised by close engagement
arrangements, in particular the requirement to have with its local and regional communities, a broad
a Board of Governors for which provision is made in curriculum for the professions, applied research and
the Education Reform Act 1988 (Section 2iii). knowledge transfer activities. Based on a principled
commitment to social justice and economic
Under the Education Reform Act of 1988, the Board competitiveness for Southampton and its region, we
of Governors is generally responsible for looking engage strongly with our civic community. We have
after the public investment and the public interest been, for example, the main driving force behind
at the University. The Governors are charged with the Southampton Skills Development Zone (SSDZ).
determining the educational character and mission The SSDZ is an innovative partnership between
of the University; overseeing its activities; education, the public sector and government
monitoring effective and efficient use of resources; agencies to meet employers‟ workforce
safeguarding the solvency and assets of the development needs and address wider objectives
University; approving annual estimates of income relating to regional economic growth, worklessness
and expenditure; and overseeing matters concerning and social inequality.
the employment of staff.
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Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Governors‟ Report
The University is acting as broker, alongside Business Southampton and the City Council, in various regional
initiatives to articulate and promote the interests of the Solent maritime sector, in its widest sense. In terms of
creative employer partnerships, we have also championed the concept of HE involvement in future regional
news gathering arrangements, mainly through a high level dialogue with ITV and Newsquest.
Supporting the local community
At local community level, the University is keen to ensure that it provides genuine, added value benefit to the
many voluntary and community groups seeking to address deprivation, hardship, and better social and
healthcare provision. Through the £6.2 million HEFCE-supported and match-funded South East Coastal
Communities project (SECC), the University seeks, for example, to work with disadvantaged groups in developing
sport coaching and mentoring activities, health and well-being initiatives and employment awareness-raising
campaigns through partnership projects.
The University works closely with organisations, such as Business in the Community, in a wide range of initiatives
seeking to engage with and support disadvantaged community groups; and is a founder member of LEADER (Local
Employers Acting on Equality, Diversity and Race), a partnership scheme to eradicate barriers to employment
and build career success for disadvantaged and under-represented people.
Widening Participation
The University is proud of its record in widening participation and remains committed to promoting equality of
opportunity. Our mission and related objectives as stated in our Strategic Plan 2008-2013 are testament to this
(see page 4 to 5).
The University has the highest proportion of entrants from the lower social classes, entrants from state schools
and entrants from low participation neighbourhoods when compared to other universities on the south coast;
and we are within the top forty institutions in England for the proportion of 2008-09 entrants from state schools,
lower social classes and low participation neighbourhoods.
The University is better than or equal to eleven of the fourteen location-adjusted benchmarks (compared with
nine last year) in the widening participation categories.
A scheme of bursaries and scholarships has been introduced to reflect the University mission and to influence
the composition of the student body. Further information can be found in our Access Agreement available at
www.offa.org.uk. Our Access Agreement also shows the range of additional outreach activities to inform
prospective students of the costs of higher education, the financial and academic support available and the
benefits in terms of career opportunities and future earnings.
The four performance indicators in the table below are key measures in the performance monitoring of the
University. They provide measures of participation from under-represented groups and are based on the annual
performance indicators produced by HEFCE.
Performance Indicators Criteria 2008-2009 Baseline Target
(2003 - 2004) groups
Young (under 21) full-time At or above SSU : 11.0% SSU : 11.7% Lower socio-
undergraduate entrants from low benchmark Benchmark: 10.3%* Benchmark: 10.6%* economic
participation neighbourhoods level for year groups
Young (under 21) full-time At or above SSU : 96.2% SSU : 95% Lower socio-
undergraduate entrants from benchmark Benchmark: 95.6% Benchmark: 90% economic
state schools level for year groups
Young full-time first degree At or above SSU : 38.5% SSU : 32% Lower socio-
entrants from social classes benchmark Benchmark: 39.5% Benchmark: 34% economic
IIIM,IV,V level for year groups
Mature (over 21) full-time At or above SSU : 13.6% SSU : 11% Lower socio-
undergraduate entrants from no benchmark Benchmark: 13.3% Benchmark: 17% economic
previous HE experience and low level for year groups
participation neighbourhoods
* Indicates locally adjusted benchmark
12
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Governors‟ Report
We will seek to maintain or improve our signed with FE providers to develop progression
performance by consistently performing better than opportunities for particularly disadvantaged
the benchmark in the measures above. In addition, students. The SDP is underpinned by the
through the work of our Research and Information development of new business systems, such as
Unit we will continue to monitor, evaluate and student attendance monitoring, and by the provision
modify our approach to ensure that all those with of specialist guidance through a Flexible
the potential to benefit from higher education at Development and Delivery Support Team and the
the University have the opportunity to do so. Head of Employer Led Learning. Capacity-building
is crucial to the success of the SDP and it is
Environmental sustainability policy therefore important to note that over 35% of
academic and support staff have been directly
The University is committed to ensuring that its engaged in projects, workshops and staff
operations and activities are conducted with proper development in the first year of the programme.
regard for the environment. In April 2009, it joined
the Carbon Trust‟s Higher Education Carbon Strategic priorities for 2010-11
Management Programme. Since joining the
programme, the University has undertaken a Strategic priorities for 2010-11 have been developed
systematic analysis of its carbon footprint and by senior management from the objectives set out
evaluated a wide range of opportunities for in the University‟s Strategic Plan 2008-13. The
managing its carbon emissions. As the main institution will place emphasis on:
outcome of the work, a Carbon Management Plan
i) a renewed focus on student recruitment,
has been produced. The plan was approved in
including both part-time and international
March 2010 and a copy is available on the
students;
University‟s website.
ii) the implementation of its Strategic
The plan targets a 25% reduction in carbon Development Programme, including a
emissions between 2010 and 2014, and sets out a heightened emphasis on organisational
direction of travel consistent with HEFCE‟s „Carbon development and capacity-building for a
Reduction Target and Strategy for Higher Education sustainable future;
in England‟ published in January 2010.
iii) working in partnership, particularly with the
maritime, media and public sectors, to create
The University also joined the EcoCampus Project
new forms of employer engagement and
this year. Its membership will be used to drive the
enhance student employability.
University‟s environmental and sustainability
agenda over the next few years.
Student Recruitment
FUTURE DEVELOPMENTS Recruitment remains a top priority, especially with
the challenges presented by increased
The HEFCE-funded Strategic Development „marketisation‟ and the rise of private providers of
Programme (SDP) aims to enhance the higher education. Although the limitations of the
distinctiveness and sustainability of the University Government-imposed student number control are a
through the acceleration of the current Strategic constraint on the development of new programmes,
Plan. More flexible forms of delivery, deeper the University will create headroom through the
engagement with employers, and new forms of adjustment of the existing academic portfolio in
progression are the central objectives of the SDP. 2010-11. Analysis of the strengths and weaknesses
At the time of writing, in anticipation of funding of the portfolio will create capacity for the
cuts resulting from the Comprehensive Spending expansion of more successful programmes and the
Review (CSR) and radical changes in HE policy and introduction of a limited number of new
funding, the University believes that both tempo developments through the contraction or
and objectives continue to be highly relevant. withdrawal of a number of courses. New
developments will be closely linked to patterns of
Work commenced in July 2009 with four major student demand in preparation for the post-Browne
faculty projects primarily focused on the fees regime and to the potential offered by the
development of employer-responsive provision. international market.
During 2009-10, key quality assurance systems have
been amended to support the SDP objective of In developing the international dimensions of its
delivering more flexible provision: for example, the activities, the University will focus on four areas:
introduction of a two-tier system of Examination exchange schemes; recruitment; student support
Boards allows faculties to respond more effectively and internationalisation of the curriculum.
to the needs of both non-standard and standard
learners. Three Partnership Accords have been
13
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Governors‟ Report
New academic developments
The achievement of distinctiveness and sustainability continues to determine the direction of academic
developments at the University. Portfolio development will focus on the needs of employers and the provision
of work-related experience for students. Strengthening student employability remains crucial: the creation of a
team of placement co-ordinators will help to achieve the University‟s objective of giving every student a form of
work-related experience during their programme of study.
The University will continue to explore the market for part-time and employer-based provision. A significant
number of professional development units, geared to the needs of specific employers, were validated in 2009-
10, for introduction in 2010-11. Co-location with employers and closer relationships with key areas such as
media, maritime and the public sector will continue to inform portfolio priorities.
CONCLUSION
The University faces the future from a relatively strong position, certainly in terms of financial strength, a good
record of cost control, and a proven ability to attract and manage responsibly optimal student numbers. The
Browne Review and the imminent (at the time of writing) CSR will undoubtedly bring major challenges. Much
will depend on the fine details of implementation – details which are still to be defined. We are confident that
the changes, improvements and initiatives that we are now vigorously implementing will put us in the best
possible position to meet those challenges and secure a successful, sustainable future.
Grahame Sewell Professor Van Gore
Chairman of the Board of Governors Vice-Chancellor
17 November 2010
14
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Corporate Governance Statement
Corporate Governance and Accountability The Board of Governors met four times during 2009-
Arrangements 2010. It has five key committees which report to it:
Audit (formerly Audit & Governance); Resources;
The University is committed to exhibiting best Governance (which from February 2010 onwards has
practice in all aspects of corporate governance. assumed the governance aspects of the Board‟s
This summary describes the manner in which the business formerly assigned to the Audit &
University has applied the principles set out in Governance Committee, and the responsibilities of
Section 1 of the Combined Code on Corporate the former Nominations Committee); Remuneration
Governance issued by the London Stock Exchange in and the Student Liaison Committee. All of these
June 1998 and the Higgs Report issued by the committees are formally constituted with terms of
Financial Reporting Council in July 2003 in so far as reference and, with the exception of the Student
they relate to universities. Its purpose is to help Liaison Committee, comprise mainly external
the reader of the Financial Statements understand
members of the Board of Governors, one of whom is
how the principles have been applied. The
the Chairman of the Committee. Their membership
University has put systems in place for identifying,
and remit is given on page 16. All attendance
evaluating and managing its significant risks. The
figures are calculated based on meetings Governors
processes are reviewed regularly by the University
under the guidance of a Risk Management Group, were eligible to attend during the period of their
which reports to the Audit and Governance tenure. The Board approves the University‟s
Committee. Strategic Plan. An annual evaluation of the business
conducted by the Board and each of its committees
In February 2009 the Committee of University concluded that each committee‟s Terms of
Chairmen issued a Guide for Members of Higher Reference had been covered during the year.
Education Governing Bodies in the UK which
incorporates a Governance Code of Practice. This
code is voluntary and is intended to reflect good
practice in the sector. The Board has regard to the
Governance Code of Practice in its governance
arrangements and has adopted the Statement of
Primary Responsibilities contained in the Guide.
The Board of Governors
The University‟s Governors comprise external and
internal persons appointed under the Instrument
and Articles of Government of the University, the
majority of whom are non-executive. The roles of
Chairman and Vice-Chairman of the Board of
Governors are separated from the role of the
University‟s Vice-Chancellor. The matters
specifically reserved to the Governors for decision
are set out in the Articles of the University, by
custom and under the Financial Memorandum with
HEFCE. The Board of Governors holds to itself the
responsibilities for the ongoing strategic direction of
the University, approval of major developments and
the receipt of regular reports from executive
officers on the operations of its business and of its
subsidiary companies.
15
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Corporate Governance Statement
Governors Attendance at
Board Meetings
%
Professor P Bush Independent Governor 75
Ms R Cassy Independent Governor To February 2010 100
Mr J Cheshire Independent Governor 100
Ms A Colley Independent Governor From August 2010 N/A
Dr R Drabu Co-opted External Governor To October 2009 N/A
Professor V Gore Vice-Chancellor, Ex-officio Governor 100
Mr A Kent Independent Governor To February 2010 100
Mr K King Independent Governor, Vice-Chairman 100
Mr G Holland Independent Governor From August 2010 N/A
Rear Admiral J Lang Independent Governor To March 2010 100
Dr L Lee Independent Governor From August 2009 100
Dr R Marasini Staff Governor From August 2009 75
Ms C Millward Staff Governor From August 2009 100
Dr Jo Mountfield Independent Governor From November 2009 100
Mr A Parker Student Governor To June 2010 67
Mrs P Powell Independent Governor 75
Mr D Prendergast Student Governor From July 2010 100
Mr J Prest Independent Governor 75
Mr S Rose Staff Governor From August 2009 100
Mr G Sewell Independent Governor, Chairman 100
Dr J Sexton Independent Governor To February 2010 100
Councillor R Smith Co-opted External Governor 75
Dr J Stopp Independent Governor From August 2010 N/A
Professor G Tonge Independent Governor To December 2009 0
Captain A Winbow Independent Governor To February 2010 100
Clerk to the Governors
Dr A Earwaker To November 2009 100
Ms B Woolven From June 2010 100
16
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Corporate Governance Statement
Resources Committee
The Resources Committee considers and keeps under review such strategic aspects of finance and resource
management as are required for the fulfilment of the Strategic Plan. These include: the recommendation to the
Board of Governors of an annual budget, both revenue and capital; regular monitoring of management accounts
and progress of the capital programme against approval; review and recommendation to the Board of Governors
of annual Financial Statements; advice to the Board of Governors on employment policy; approval of a
framework for the pay and conditions of staff other than senior post-holders.
The Resources Committee met three times during 2009-2010. All meetings were quorate. Membership of the
Resources Committee during the year is given below, with all members eligible to attend all meetings during the
period of their tenure as committee members. Each member‟s attendance at the Committee meetings during
the year is given as a percentage figure.
Membership of Resources Committee
Membership: Attendance %
Mr J Cheshire Independent Governor 67
Ms A Colley Independent Governor From August 2010 N/A
Dr R Drabu Co-opted External Governor To October 2009 N/A
Mr G Holland Independent Governor From August 2010 N/A
Mr K King - Chairman Independent Governor 100
Dr L Lee Independent Governor 100
Ms C Millward Staff Governor From March 2010 100
Mrs P Powell Independent Governor To February 2010 100
Dr J Sexton Independent Governor To February 2010 100
Captain A Winbow Independent Governor To February 2010 100
Officers normally in attendance:
Mr S Bloor Director of Human Resources
Mr S Carter Director of Finance
Mr D Corless Director of Estates & Facilities
Dr A Earwaker Clerk to the Governors To November 2009
Professor V Gore Vice-Chancellor, Ex-officio Governor
Mrs K Janagal Head of Accounts
Professor J Latham Deputy Vice-Chancellor To December 2009
Ms B Woolven Clerk to the Governors From June 2010
17
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Corporate Governance Statement
Audit Committee
The Audit Committee‟s remit includes advising the Board of Governors on the appointment of both external and
internal auditors. It also considers and agrees audit plans and scope for the internal auditors in the context of
key risks faced by the University, and reviews both the internal and external auditors‟ respective
recommendations for improvement of the University‟s systems of internal control, together with management‟s
responses and implementation plans. It considers arrangements that are in place to promote economy,
efficiency and effectiveness, and receives and considers reports from HEFCE as they affect the University‟s
business and monitors compliance with the regulatory requirements. Whilst senior executives attend the
meetings of the Audit Committee as necessary, they are not members of the Committee. The Committee meets
with the external and internal auditors on their own prior to the start of the meeting which considers the
University‟s annual Financial Statements.
The Audit Committee keeps under review recommended best practice with regard to institutional governance
and practice in other institutions.
The Audit Committee met four times during 2009-2010. All meetings were quorate. Membership of the Audit
Committee during the year is given below, with all members eligible to attend all meetings during the period of
their tenure as Committee members. Each member‟s attendance at the Committee meetings during the year is
given as a percentage figure.
Membership of Audit Committee
Membership: Attendance %
Mr A Kent Independent Governor To February 2010 100
Rear Admiral J Lang – Independent Governor To March 2010 100
Chairman
Mr J McGibbon Co-opted external member 100
Dr J Mountfield Independent Governor From March 2010 100
Mrs P Powell Independent Governor From March 2010 50
Mr J Prest – Chairman Independent Governor Chairman from April 100
2010
Councillor R Smith Co-opted external Governor To February 2010 0
Officers normally in attendance:
Mr S Carter Director of Finance
Mrs K Clark Head of Accounts
Dr A Earwaker Clerk to the Governors To November 2009
Professor V Gore Vice-Chancellor, Ex-officio Governor From March 2010
Professor J Latham Deputy Vice-Chancellor To December 2009
Ms B Woolven Clerk to the Governors From June 2010
18
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Corporate Governance Statement
Governance Committee
The Governance Committee (which from February 2010 assumed the governance aspects of the Board‟s business
formerly assigned to the former Audit & Governance, and the responsibilities of the former Nominations
Committees) keeps under review the membership of the Board of Governors and its Committees and makes
recommendations to the Board for new, independent, and co-opted external members. It oversees the
induction, training and development of the members of the Board, and ensures that the Board and its
Committees evaluate their performance on a regular basis.
The Governance Committee also reviews the University‟s governing instruments on a regular basis, and considers
the effectiveness of the arrangements to select and recruit the Chairman and Vice-Chairman of the Board, the
Clerk to Governors, and the University Chancellor and Vice-Chancellor.
The Governance Committee met twice during 2009-2010. All meetings were quorate. Membership of the
Governance Committee during the year is given below, with all members eligible to attend all meetings during
the period of their tenure as committee members. Each member‟s attendance at the Committee meetings
during the year is given as a percentage figure.
Membership of Governance Committee
Membership: Attendance %
Ms R Cassy Independent Governor To February 2010 N/A
Professor V Gore Governor ex-officio 100
Mr K King Independent Governor 100
Rear Admiral J Lang Independent Governor To April 2010 N/A
Dr R Marasini Staff Governor From March 2010 100
Professor G Sewell - Independent Governor 100
Chairman
Councillor R Smith Co-opted External Governor From March 2010 0
Professor D Watkins Vice-Chancellor‟s nominee from 100
Professoriate
Officers normally in attendance:
Dr A Earwaker Clerk to the Governors To November 2009
Ms B Woolven Clerk to the Governors From June 2010
19
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Corporate Governance Statement
Student Liaison Committee
The Student Liaison Committee operates as a channel of communication between the Board of Governors and
the Students‟ Union. It also endorses the appointment of the Union‟s General Manager and his or her terms of
employment and advises in relation to the appointment of auditors to the Union.
The Student Liaison Committee met three times during 2009-2010. All meetings were quorate. Membership of
the Student Liaison Committee during the year is given below, with all members eligible to attend all meetings
during the period of their tenure as committee members. Each member‟s attendance at the Committee
meetings during the year is given as a percentage figure.
Membership of Student Liaison Committee
Membership: Attendance %
Ms R Cassy – Chairman Independent Governor 100
to February 2010
Mr L Hasler SSU Vice-President, Development From November 2009 100
to June 2010
Miss S Hobbs SSU Vice-President, Development From July 2010 N/A
Miss T Jeynes Academic Affairs Officer From November 2009 0
to June 2010
Professor J Latham Vice-Chancellor‟s Nominee To December 2009 100
Professor J Longmore Vice-Chancellor‟s Nominee From January 2010 100
Dr R Marasini Staff Governor To February 2010 100
Ms C Millward Staff Governor To February 2010 100
Dr J Mountfield Independent Governor From December 2009 100
Miss A Okada SSU Vice-President, Student Support From July 2010 N/A
Mr A Parker SSU Vice-President, Communications To June 2010 100
and Student Governor
Mr D Prendergast SSU President and Student Governor From July 2010 N/A
Mr S Rose – Chairman Staff Governor 100
from March 2010
Dr J Sexton Independent Governor From December 2009 100
to February 2010
Miss L Smith SSU Vice-President, Communications From July 2010 N/A
Dr J Stopp Independent Governor From August 2010 N/A
Mr S Ward SSU Vice-President, Student Support To June 2010 100
Officers normally in attendance:
Ms A Clodfelter SSU General Manager
Dr A Earwaker Clerk to the Governors To November 2009
Ms B Woolven Clerk to the Governors From June 2010
20
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Corporate Governance Statement
Remuneration Committee
The Remuneration Committee determines the annual remuneration of the University‟s Vice-Chancellor and
senior post-holders, the scheme for remuneration of staff on management contracts, and individual severance
arrangements.
The Remuneration Committee met four times during 2009-2010. All meetings were quorate. Membership of the
Remuneration Committee during the year is given below, with all members eligible to attend all meetings during
the period of their tenure as committee members. Each member‟s attendance at the Committee meetings
during the year is given as a percentage figure.
Membership of Remuneration Committee
Membership: Attendance %
Professor P Bush Independent Governor 75
Ms A Colley Independent Governor From August 2010 N/A
Dr L Lee Independent Governor From March 2010 100
Mrs P Powell Independent Governor To February 2010 50
Mr G Sewell – Chairman Independent Governor 100
Captain A Winbow Independent Governor To February 2010 100
Officers normally in attendance:
Mr S Bloor Director of Human Resources
Professor V Gore Vice-Chancellor, Ex-officio Governor
Professor J Latham Deputy Vice-Chancellor To December 2009
Approved by the Board of Governors on 17 November 2010
and signed on its behalf by:
Grahame Sewell Professor V Gore
Chairman of the Board of Governors Vice-Chancellor
21
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Responsibilities of the University‟s Board of Governors
In accordance with the Education Reform Act 1988 in the Instrument and Articles and the Financial
and the Instrument and Articles of Government, the Memorandum with HEFCE.
Board of Governors is responsible for the
administration and management of the affairs of the The system of internal control is designed to
University, including ensuring an effective system of manage rather than eliminate the risk of failure to
internal control and is required to present audited achieve policies, aims and objectives; it can
Financial Statements for each financial year. therefore only provide reasonable and not absolute
assurance of effectiveness.
The Board of Governors is responsible for keeping
proper accounting records which disclose with The system of internal control is based on an
reasonable accuracy, at any time, the financial ongoing process designed to identify the principal
position of the University and to enable it to ensure risks to the achievement of policies, aims and
that the Financial Statements are prepared in objectives, to evaluate the nature and extent of
accordance with the Education Reform Act 1988, those risks and to manage them efficiently,
the Statement of Recommended Practice: effectively and economically. This process has been
Accounting for Further and Higher Education and in place throughout the year and up to the date of
other relevant accounting standards. In addition, approval of the Financial Statements and accords
within the terms and conditions of the Financial with the HEFCE guidance.
Memorandum agreed between HEFCE and the Board
of Governors of the University, the Board of As the Board of Governors, we have responsibility
Governors, through its designated office holder, is for reviewing the effectiveness of the system of
required to prepare Financial Statements for each internal control. The University has established the
financial year which give a true and fair view of the following processes:
state of affairs of the University and of the surplus
or deficit and cash flows for that year. the Board of Governors annually monitors the
delivery of the University‟s Strategic Plan and
Financial Statements considers the corporate planning proposals for
the following year. As part of its monitoring
In causing the Financial Statements to be prepared, process, the Board determines the annual risk
the Board of Governors has ensured that: matrix for the University as well as approving
suitable accounting policies are selected and the Corporate Planning Statements, Annual
applied consistently; Monitoring Statements and Financial Forecasts
which are sent to HEFCE;
judgements and estimates are made that are the Board of Governors has requested the Audit
reasonable and prudent; Committee to provide oversight of risk
applicable accounting standards have been management and a Risk Management Group has
followed, subject to any material departures been established with Governor representation
disclosed and explained in the Financial and the Audit Committee receives a report at
Statements; each of its meetings on any movement in the
ten major risks for the University identified for
Financial Statements are prepared on the going that year. Any matters of concern would be
concern basis unless it is inappropriate to reported to the Board of Governors;
presume that the University will continue in the Board of Governors has requested the Audit
operation. The Board of Governors is satisfied Committee to provide an opinion on the quality
that it has adequate resources to continue in assurance of data provided to HEFCE, HESA and
operation for the foreseeable future: for this other public bodies. In order to provide the
reason the going concern basis continues to be opinion, the Committee seeks and assesses
adopted in the preparation of the Financial information and evidence from management
Statements. and auditors during the course of the year;
the Board of Governors receives regular reports
Internal Controls from the chair of the Audit Committee
concerning internal control;
As the Board of Governors of Southampton Solent the Audit Committee receives regular reports
University, we have responsibility for maintaining a from Internal Audit (IA) which includes the IA‟s
sound system of internal control that supports the independent opinion on the adequacy and
achievement of policies, aims and objectives, whilst effectiveness of the University‟s system of
safeguarding the public and other funds and assets internal control together with recommendations
for which we are responsible, in accordance with for improvement;
the responsibilities assigned to the governing body
22
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Responsibilities of the University‟s Board of Governors
a regular process of meetings, workshops and reviewed: governance, audit arrangements and
discussions is used at both University level and financial, strategic and risk management.
cascaded through individual faculties and Subsequent to the visit HEFCE issued their Audit
services to identify and keep up to date the Report in January 2007, which confirmed a
record of risks facing the University; satisfactory level of assurance in each of the areas
a programme of risk awareness training is that were assessed and advised that the University
ongoing; was not at higher risk, the most positive judgement
a system of key performance and risk indicators that HEFCE could bestow. The HEFCE has confirmed
has been developed; that it will be undertaking its next periodic
the Board of Governors sets the policy where assurance visit on 17 November 2010.
the University does not seek to recover the full
cost of its activities. A robust risk prioritisation As part of its 2008-2009 audit plan, the HEFCE
methodology based on risk ranking and cost- Assurance Services undertook an audit of the
benefit analysis has been established; University‟s HE Students Early Statistics Survey
a University-wide risk register is maintained; 2007-2008 (HESES07) return in September 2008.
reports are received from budget holders, HEFCE‟s subsequent Report concluded that they had
department heads and project managers on gained assurance over the systems and protocols
internal control activities. used in deriving the return and over the accuracy of
the return in terms of the funding position.
Our review of the effectiveness of the system of
internal control is informed by the work of the Guidance issued by the Committee of University
internal auditors and the executive managers within Chairmen (CUC) recommends that a governing body
the University who have responsibility for the should keep its effectiveness under regular review.
development and maintenance of the internal According to the CUC this should include a “formal
control framework and comments made by the and rigorous evaluation of its own effectiveness and
external auditors in their management letter and that of its committees … not less than every five
other reports. years”. The last major review of the University‟s
governance arrangements was undertaken during
The University uses a third party audit firm to 2006-2007. The report of that review was
provide internal audit services. During the year the considered by the Board of Governors in November
University retendered the internal audit contract 2007.
and appointed Kingston City Group. The consortium
operates to standards defined in the Accountability The main focus of the review was the role to be
and Audit: HEFCE Code of Practice which was last played by the Board in overseeing the strategic
reviewed for effectiveness by the HEFCE Audit development of the University and the structure of
Service in 2007. The internal auditors submit the Board most appropriate to discharge that
regular reports which include the IA‟s independent responsibility.
opinion on the adequacy and effectiveness of the
University‟s system of internal control together with The conclusions of the review recommended a
recommendations for improvement. reduction in the size and changes in the composition
of the Board of Governors and a different form of
Through its Assurance Services, HEFCE visits higher engagement in strategic planning on the part of
education institutions every three to five years with Governors compared with previous strategic
the objective of evaluating each University‟s risk planning reviews as the University developed its
management, control and governance and its new strategic plan for the period 2008-2013.
arrangements to achieve value for money. An
auditor from HEFCE visited the University in October Planning for the next major review is scheduled for
2006. The following core aspects of operation were July 2011.
Approved by the Board of Governors on 17 November 2010 and signed on its behalf by:
Grahame Sewell
Chairman of the Board of Governors
23
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Independent Auditor‟s Report
We have audited the Financial Statements of Memorandum with the Higher Education Funding
Southampton Solent University for the year ended Council for England. We read the other information
31st July 2010 which comprise the Consolidated contained in the Governors‟ Report and consider
Income and Expenditure Account,7 the Balance whether it is consistent with the audited Financial
Sheets for the Group and the University, the Statements. The other information comprises only
Consolidated Cash Flow Statement, the Statement the Corporate Governance Statement and the
of Total Recognised Gains and Losses, Statement of Statement of the Responsibilities of the Board of
Historical Costs Surpluses and Deficits and the Governors. We consider the implications for our
related notes. These Financial Statements have report if we become aware of any apparent
been prepared under the accounting policies set out misstatements or material inconsistencies with the
on therein. Financial Statements. Our responsibilities do not
extend to any other information.
Respective responsibilities of the Board of
Governors and Auditors Our report has been prepared pursuant to the
requirements of the University‟s statutes and for no
As described in the Statement of Board of Governors other purpose. No person is entitled to rely on this
responsibilities the University‟s Board is responsible report unless such a person is a person entitled to
for preparing the annual report and the Financial rely upon this report by virtue of and for the
Statements in accordance with applicable law and purpose of the University‟s statutes or has been
United Kingdom Accounting Standards (United expressly authorised to do so by our prior written
Kingdom Generally Accepted Accounting Practice) consent. Save as above, we do not accept
and the Statement of Recommended Practice on responsibility for this report to any other person or
Accounting in Further and Higher Education for any other purpose and we hereby expressly
Institutions. disclaim any and all such liability.
Our responsibility is to audit the Financial Basis of audit opinion
Statements in accordance with relevant legal
and regulatory requirements and International We conducted our audit in accordance with
Standards on Auditing (UK and Ireland) and the International Standards on Auditing (UK and Ireland)
Audit Code of Practice issued by the Higher issued by the Auditing Practices Board and the Audit
Education Funding Council for England. Code of Practice issued by the Higher Education
Funding Council for England. An audit includes
We report to you our opinion as to whether the examination, on a test basis, of evidence relevant
Financial Statements give a true and fair view and to the amounts and disclosures in the Financial
are properly prepared in accordance with the Statements. It also includes an assessment of the
Statement of Recommended Practice on Accounting significant estimates and judgements made by the
in Further and Higher Education Institutions. We University in the preparation of the Financial
also report to you if, in our opinion, the information Statements and of whether the accounting policies
given in the Governors‟ Report is not consistent with are appropriate to the circumstances of the
the Financial Statements, the Board has not kept University and the group, consistently applied and
proper accounting records, if we have not received adequately disclosed.
all the information and explanations we require for
our audit, or if information specified by law We planned and performed our audit so as to obtain
regarding the remuneration of the Board of all the information and explanations which we
Governors or other transactions is not disclosed. considered necessary in order to provide us with
sufficient evidence to give reasonable assurance
We also report to you whether income from funding that the Financial Statements are free from
bodies, grants and income for specific purposes and material misstatement, whether caused by fraud or
from other restricted funds administered by the other irregularity or error. In forming our opinion,
University have been properly applied only for the we also evaluated the overall adequacy of the
purposes for which they were received and whether presentation of information in the Financial
income has been applied in accordance with the Statements.
Statutes and, where appropriate, with the Financial
24
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Independent Auditor‟s Report
OPINION
In our opinion:
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 Group as at 31 July 2010 and of its surplus of income over
expenditure for the year then ended;
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 University as at 31 July 2010;
the Financial Statements have been properly prepared in accordance with the Statement of Recommended
Practice: „Accounting for Further and Higher Education Institutions‟;
income from the Higher Education Funding Council for England, grants and income for specific purposes and
from other restricted funds administered by the University have been applied for the purposes for which
they were received; and
the information given in the Governors‟ Report is consistent with the financial statements;
income has been applied in accordance with the University‟s statutes and where appropriate with the
applicable Financial Memorandum with the Higher Education Funding Council for England.
BDO LLP
Chartered Accountants and Registered Auditors
Southampton
United Kingdom
17 November 2010
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
25
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Statement of Principal Accounting Policies
The following accounting policies have been applied Freehold buildings - over 50 years
consistently in dealing with items which are Long Leasehold buildings - over the life of the
considered material in relation to the Financial lease up to 50
Statements. years. For leases
longer than 50
Basis of preparation years, over the
These Financial Statements have been prepared greater of 50 years
under the historical cost convention (modified by or 75% of the life
the revaluation of certain land and buildings), in of the lease
accordance with the Statement of Recommended Computer equipment - over 3 years
Practice (SORP): Accounting for Further and Higher Other equipment - over 5 to 15 years
Education July 2007 and in compliance with
applicable Accounting Standards.
Vehicles - over 5 years
Vessels - over 7 years
Fixed Assets
i. Inherited Assets – land and buildings
As a consequence of the Education Reform Act Stocks
1988, the freehold interest in the land and buildings Stocks are mainly departmental and have limited
occupied by the University was transferred from realisable value. They are written off in the year,
Hampshire County Council with effect from 1 April as their value is not material to the accounts of the
1989. These were not valued prior to transfer. On University. Expenditure on consumables is charged
31 July 1998 a valuation of the open market for fully to revenue in the year of purchase.
existing use was made by Chesterton International
Limited, a firm of international property advisors, Revenue Recognition
using the depreciated replacement cost basis. The Grants from HEFCE and similar bodies are included
property is recorded in the Financial Statements at in income in the year, except for grants received for
this value, as adjusted for subsequent disposals. It specific initiatives which span more than one year.
is the University‟s policy to recognise a related In such cases grant income is deferred to the extent
revaluation reserve in respect of this property. it is not matched by qualifying expenditure.
Under the transitional arrangements of FRS 15, this
1998 valuation is retained as the carrying amount All income from short-term deposits, tuition fees
for those assets within that valuation, subject to and other operating income is credited to the
annual testing for indicators of impairment under Income & Expenditure Account on a receivable
FRS 11. basis.
ii. Assets acquired after incorporation Building Maintenance
Tangible asset additions whose cost of acquisition Expenditure on building maintenance is charged to
exceeds £10,000 are capitalised. Items costing less the Income and Expenditure Account in the year in
than this are written off in the year of purchase. which it is incurred. The University maintains a
rolling ten-year long-term maintenance plan, which
iii. Assets under construction is reviewed on a regular basis. Only to the extent
Assets under construction represent the costs of that the costs arise under dilapidation clauses
assets under development. As these assets become within operating leases is a regular charge made to
complete and operational they are transferred to the Income and Expenditure Account on the basis
the appropriate asset category and depreciated over that the dilapidating event is deemed to be the
their useful lives. passage of time, subject to periodic valuation.
Capital Grants Taxation
Capital grants are released to revenue over the The University is an exempt charity within the
useful life of relevant assets, or where permitted meaning of schedule 2 of the Charities Act 1993
applications to non-capitalised expenditure occur, and, as such, is a charity within the meaning of
to match that expenditure in the year of section 506(1) of the Taxes Act 1988. Accordingly
application. the University is potentially exempt from taxation in
respect of income or capital gains received within
Depreciation categories covered by section 505 of the Taxes Act
Depreciation is provided on all tangible assets other 1988 or section 256 of the Taxation and Chargeable
than freehold or long leasehold land and assets Gains Act 1992 to the extent that such income or
under construction, at rates calculated to write off gains are applied to exclusively charitable purposes.
the cost or valuation, less estimated residual value, The University receives no similar exemption in
of each asset systematically over its expected useful respect of Value Added Tax.
life, as follows:
26
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Statement of Principal Accounting Policies
Provisions Pension costs in respect of the TPS charged to the
A provision is recognised in the Financial Statements income and expenditure are equal to the
when a present legal or constructive obligation contributions paid to this arrangement. The
arising from past events exists and it is probable contribution rate is calculated in such a way that it
that an outflow of economic benefits will be is a substantially level percentage of current and
required to settle the obligation. future pensionable payroll. Not less than every four
years, with a supporting interim valuation in
Basis of Consolidation between, the Government Actuary conducts a
The University has one wholly owned subsidiary formal actuarial review of the TPS in order to
undertaking, Southampton Solent University Limited specify the level of future contributions.
(SSUL). The activities of SSUL are consolidated
within the University‟s accounts in accordance with Cash Flows and Liquid Resources
FRS 2. Cash flows comprise increases or decreases in cash.
Cash includes cash in hand, deposits repayable on
The consolidated Financial Statements do not demand and overdrafts. Deposits are repayable on
include those of the Solent Students‟ Union as it is a demand if they are in practice available within 24
separate unincorporated association in which the hours without penalty. No investments, however
University has no financial interest and no control or liquid, are included in cash.
significant influence over policy decisions.
Liquid resources comprise assets held as a readily
Listed Investments disposable store of value. They include term
Listed investments are shown at market value. deposits, government securities and bank
certificates of deposit held as part of the
Research and Development University‟s treasury management activities. They
Research and development expenditure is written exclude any such assets held as endowment asset
off in the year incurred. investments.
Pensions Foreign Currencies
The University has 2 principal pension schemes for Transactions denominated in foreign currencies are
staff, the Teachers' Pension Scheme (TPS) and the recorded at the rate of exchange ruling at the dates
Hampshire County Council Local Government of the transactions. Monetary assets and liabilities
Superannuation Scheme (HCCLGSS). The schemes denominated in foreign currencies are translated
are defined benefit schemes, which are externally into sterling either at year-end rates or, where
funded and contracted out of the State Second there are related forward foreign exchange
Pension. contracts, at contract rates. The resulting
exchange differences are dealt with in the
The HCCLGSS has been accounted for in accordance determination of income and expenditure for the
with FRS 17 Retirement Benefits, which requires the year.
difference between the assets held in the scheme
and the scheme‟s liabilities measured on an Leased Assets
actuarial basis using the projected unit method to Assets held under finance leases, which are leases
be recognised in the University‟s balance sheet as a where substantially all the risks and rewards of
pension scheme asset or liability as appropriate. ownership of the asset have passed to the University
The carrying value of any resulting pension scheme and hire purchase contracts are capitalised in the
asset is restricted to the extent that the University Balance Sheet and are depreciated over their useful
is able to recover the surplus either through lives. The capital elements of future obligations
reduced contributions in the future or through under the leases and hire purchase contracts are
refunds from the scheme. The pension scheme included as liabilities in the Balance Sheet.
balance is recognised net of any related deferred
tax balance. The interest elements of the rental obligations are
charged in the Income and Expenditure Account
Changes in the defined benefit pension scheme over the periods of the leases and hire purchase
asset or liability arising from factors other than cash contracts and represent a constant proportion of
contribution by the University are charged to the the balance of capital repayments outstanding.
Income and Expenditure Account or as appropriate
the Statement of Total Recognised Gains and Losses Rentals payable under operating leases are charged
in accordance with FRS 17 Retirement Benefits. in the Income and Expenditure Account on a payable
basis.
27
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Consolidated Income & Expenditure Account for the
Year Ended 31 July 2010
Notes 2010 2009
£000 £000
INCOME
Funding Body Grants 1 40,248 37,320
Tuition Fees and Education Contracts 2 41,309 36,972
Research Grants and Contracts 3 423 81
Other Operating Income 4 15,168 14,028
Endowment and Investment Income 5 436 633
97,584 89,034
EXPENDITURE
Staff Costs 6 49,734 45,030
Other Operating Expenses 35,111 31,809
Depreciation 10 3,721 3,829
Interest Payable 8 4,226 3,675
7 92,792 84,343
Surplus after depreciation of assets and before tax 4,792 4,691
Taxation 9 - -
Surplus after depreciation of assets and tax 4,792 4,691
Surplus/(deficit) for the year transferred to accumulated
12 8 (7 )
income in endowment funds
Surplus for the year retained within general reserves 4,784 4,698
All amounts relate to continuing activities.
Consolidated Statement of Historical Cost Surpluses and
Deficits for the Year Ended 31 July 2010
Notes 2010 2009
£000 £000
Surplus after depreciation of assets and before tax 4,792 4,691
Difference between the Historical Cost Depreciation
Charge and the Actual Depreciation Charge for the Year 20 91 91
calculated on the relevant amount
Historical Cost Surplus before Tax 4,883 4,782
Historical Cost Surplus after Tax 4,883 4,782
28
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Balance Sheet as at 31 July
Notes Consolidated University
2010 2009 2010 2009
£000 £000 £000 £000
Restated
Fixed Assets
Tangible Assets 10 68,869 68,128 68,218 67,660
Investments 11 50 50 1,650 1,650
68,919 68,178 69,868 69,310
Endowment Asset Investments 12 622 588 622 588
Current Assets
Debtors 13 2,945 2,461 3,124 2,587
Investments 14 26,527 10,153 26,527 10,153
Cash at Bank and in Hand 30 9,660 19,353 9,473 19,250
39,132 31,967 39,124 31,990
Creditors: amounts falling due within one year 15 15,974 15,100 16,833 16,141
Net Current Assets 23,158 16,867 22,291 15,849
Total Assets less Current Liabilities 92,699 85,633 92,781 85,747
Creditors: amounts falling due after more than one year 16 31,032 32,113 31,032 32,113
Provisions for liabilities and charges 17 2,671 2,001 2,671 2,001
Net Assets Excluding Pension Liabilities 58,996 51,519 59,078 51,633
Net Pension Liability 17 24,200 29,840 24,200 29,840
TOTAL ASSETS LESS LIABILITIES 34,796 21,679 34,878 21,793
Deferred Capital Grants 18 8,972 7,883 8,972 7,883
Expendable Endowments 19 622 588 622 588
Reserves
Income and Expenditure Account excluding Pension Reserve 41,872 35,427 41,954 35,541
Pension Reserve 17 (24,200 ) (29,840 ) (24,200 ) (29,840 )
Income and Expenditure Account including Pension Reserve 21 17,672 5,587 17,754 5,701
Revaluation Reserve 20 7,530 7,621 7,530 7,621
Total Reserves 25,202 13,208 25,284 13,322
TOTAL FUNDS 34,796 21,679 34,878 21,793
These Financial Statements were approved and authorised for issue by the Board of Governors on 17 November
2010.
Grahame Sewell Professor V Gore
Chairman of the Board of Governors Vice-Chancellor
29
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Consolidated Cash Flow Statement for the Year Ended
31 July 2010
Notes 2010 2009
£000 £000
Net Cash Inflow from Operating Activities 26 11,774 11,799
Returns on investments and servicing of finance 27 (2,160 ) (1,962 )
Taxation - -
Capital expenditure and financial investment 28 (1,781 ) (441 )
Management of liquid resources 30 (16,374 ) 3,503
Financing 29 (1,122 ) (1,268 )
(Decrease)/Increase in Cash (9,663 ) 11,631
Reconciliation of Net Cashflow to Movement in Net
Funds/(Debt)
Notes 2010 2009
£000 £000
(Decrease)/Increase in Cash (9,663 ) 11,631
Repayment of Long Term Loans 793 966
Repayment of Capital Elements of Finance Leases 329 302
Change in Short Term Deposits 16,374 (3,503 )
Movement in Net Debt/Funds 7,833 9,396
Net Debt at 1 August 30 (3,727 ) (13,123 )
Net Funds/(Debt) at 31 July 30 4,106 (3,727 )
Statement of Total Recognised Gains and Losses for the
Year Ended 31 July 2010
Notes 2010 2009
£000 £000
Surplus after Depreciation of Assets at Valuation and Tax 4,784 4,698
Unrealised Gain on Endowment Asset Investments 12 26 -
Endowment Surplus/(Deficit) Retained in the Year 12 8 (7 )
Actuarial Gain/(Loss) on Pension Scheme 17 7,210 (12,440 )
Total Recognised Gains and Losses Relating to the Year 12,028 (7,749 )
Reconciliation
Opening Reserves and Endowments 13,796
Total Recognised Gain for the Year 12,028
Closing Reserves and Endowments 25,824
30
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Notes to the Accounts for the Year Ended 31 July 2010
1. FUNDING BODY GRANTS 2010 2009
£000 £000
Recurrent Grant
HEFCE 33,872 33,011
FE Funding Bodies 978 753
Specific HEFCE Grants
Special Initiatives 3,815 2,320
Deferred Capital Grants Released in Year
Buildings (Note 18) 576 253
Equipment (Note 18) 1,007 983
40,248 37,320
2. TUITION FEES AND EDUCATION CONTRACTS 2010 2009
£000 £000
Full time undergraduate and postgraduate fees home and EC 27,518 23,927
Part time undergraduate and postgraduate fees home and EC 1,158 1,354
Overseas (Non-EU) domicile students 7,096 6,294
Non credit bearing course fees 5,230 5,144
Other 307 253
41,309 36,972
3. RESEARCH GRANTS AND CONTRACTS 2010 2009
£000 £000
EU Grants 384 -
Research Councils 11 64
Other Sources 28 17
423 81
4. OTHER OPERATING INCOME 2010 2009
£000 £000
Residences, Catering and Conferences 11,944 11,103
Other Services Rendered 614 594
Profit on Disposal of Fixed Assets 3 60
Other Income 2,607 2,271
15,168 14,028
5. ENDOWMENT AND INVESTMENT INCOME 2010 2009
£000 £000
Income from Expendable Endowments (Trust Funds) (Note 19) 30 29
Income from Short Term Investments 404 604
Income from Long Term Investments 2 -
436 633
31
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Notes to the Accounts for the Year Ended 31 July 2010
6. STAFF COSTS 2010 2009
£000 £000
Wages and Salaries 40,165 36,937
Social Security Costs 3,259 2,924
Other Pension Costs 5,480 5,033
Redundancy Costs 830 136
49,734 45,030
Average staff numbers by major category: Number Number
Academic Departments 794 756
Academic Services 117 142
Research Grants and Contracts 4 3
Residences, Catering and Conferences 32 23
Premises 35 40
Administration 231 199
1,213 1,163
Members of the Senior Management Team 17 19
Emoluments of Vice-Chancellor and remuneration of senior staff: £ £
Emoluments of Vice-Chancellor 202,062 191,278
Employers‟ pension contributions (Teachers‟ Pension Scheme) 28,491 26,970
Other benefits 5,117 -
235,670 218,248
Other higher paid staff (excluding employers‟ pension contributions), Number Number
but including payment for compensation for loss of office Restated
£100,000 to £109,999 2 -
£110,000 to £119,999 - 1
The Governors received no remuneration for services provided during the current or prior year.
7. ANALYSIS OF TOTAL EXPENDITURE 2010 2009
£000 £000
Analysed by Activity:
Academic Departments 39,733 37,731
Academic Services 8,446 7,935
Administration and Central Services 19,070 16,572
Premises 11,374 9,604
Research Grants and Contracts 381 49
Residences, Catering and Conferences 12,218 11,902
Other Expenditure 1,570 550
92,792 84,343
Other Operating Expenses include:
External Auditors‟ Remuneration – Audit Fees * 36 38
External Auditors‟ Remuneration – Other Fees 11 8
Governors Expenses ** 5 4
Internal Auditors‟ Remuneration – Audit Fees 42 33
Operating Lease Rentals Land/Buildings 4,284 4,149
Operating Lease Rentals Plant/Machinery 54 47
* £27,500 relates to net fee payable by the University (2009: £27,000).
**Governors have been reimbursed for travel and subsistence expenses relating to attendance at Board and
Committee meetings and other events attended in their official capacity. A total of £5,272 was paid to 11
Governors for reimbursement of expenses (2009: £3,857 paid to 13 Governors).
32
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Notes to the Accounts for the Year Ended 31 July 2010
8. INTEREST PAYABLE 2010 2009
£000 £000
Loans wholly repayable within five years 4 32
Loans not wholly repayable within five years 1,536 1,580
Finance Leases 1,016 1,043
Pension finance costs 1,670 1,020
4,226 3,675
9. TAXATION
No corporation tax charge (2009: no charge) arises on consolidation as a result of taxable profits in a subsidiary
undertaking.
Under the Education Reform Act 1998 the University obtained charitable status, consequently it is not liable to
corporation tax on its income and gains. No deferred taxation has been provided in the accounts on the basis
that future taxable profits of all subsidiary companies will be paid to the University by way of Deed of
Covenant.
10. TANGIBLE ASSETS
Freehold and Leasehold Assets under Equipment Total
Land Buildings Construction
£000 £000 £000 £000 £000
Consolidated
At 1 August 2009
At valuation 31 July 1998 6,454 15,182 - - 21,636
At cost 4,275 53,164 457 14,568 72,464
Additions - - 2,304 2,159 4,463
Disposals (1 ) - - - (1 )
Transfers 580 1,370 (1,992 ) 42 -
At 31 July 2010 11,308 69,716 769 16,769 98,562
Depreciation
At 1 August 2009 - 15,476 - 10,496 25,972
Disposals - - - - -
Provided during period - 1,745 - 1,976 3,721
At 31 July 2010 - 17,221 - 12,472 29,693
Net Book value at 31 July 2010 11,308 52,495 769 4,297 68,869
Net Book value at 31 July 2009 10,729 52,870 457 4,072 68,128
University
At 1 August 2009
At valuation 31 July 1998 6,454 15,182 - - 21,636
At cost 3,955 53,164 407 14,323 71,849
Additions - - 2,071 2,159 4,230
Disposals (1 ) - - - (1 )
Transfers 580 1,344 (1,966 ) 42 -
At 31 July 2010 10,988 69,690 512 16,524 97,714
Depreciation
At 1 August 2009 - 15,476 - 10,349 25,825
Disposals - - - - -
Provided during period - 1,745 - 1,926 3,671
At 31 July 2010 - 17,221 - 12,275 29,496
Net Book value at 31 July 2010 10,988 52,469 512 4,249 68,218
Net Book value at 31 July 2009 10,409 52,870 407 3,974 67,660
33
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Notes to the Accounts for the Year Ended 31 July 2010
10. TANGIBLE ASSETS (CONTINUED)
Included in Land and Buildings are two assets with a combined net book value of £10.3 million
(2009: £10.5 million) held under finance leases. Depreciation for the year on these leased assets was £0.2
million (2009: £0.2 million).
The University commissioned a revaluation of its land and buildings held at valuation, undertaken by Chesterton
International Ltd as at 31 July 1998. The valuation was undertaken in accordance with the Statements of Asset
Valuation Practice and Guidance Notes issued by the Royal Institution of Chartered Surveyors. The basis of the
valuation was open market value for existing use. Those properties for which no open market value was readily
ascertainable were valued on the depreciated replacement cost basis. Other assets continue to be shown at
historic cost.
Under the transitional arrangements of FRS 15 this valuation (after impairment charges) has been retained as
the carrying amount for those assets within the valuation.
11. INVESTMENTS Consolidated University
2010 2009 2010 2009
£000 £000 £000 £000
Restated
Subsidiaries - - 1,600 1,600
Other Investments 50 50 50 50
50 50 1,650 1,650
Prior year balances in respect of the University have been restated to show the total share capital issued to
Southampton Solent University, previously the Investments showed only those shares that were fully paid up.
This has resulted in an £1,223,000 increase to investments and amounts due to subsidiary undertakings. The
unpaid share capital will be paid up in line with expenditure incurred on the development of the Manned Model
Centre.
Subsidiary Undertakings
The University owns 100% of the issued ordinary share capital of £1.6 million (2009: £1.6 million) of
Southampton Solent University Limited, a company registered in England.
The main activities of this undertaking is to provide short courses, training and facilities, consultancy services
and meals and accommodation for employees of other organisations using the companies‟ facilities for their
own training programmes.
Other Investments
The University has an investment of £50,000 representing an 11% share of the capital of Learning Network South
East (LNSE), a company formed by the collaboration of a number of Institutions in order to provide internet
access.
34
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Notes to the Accounts for the Year Ended 31 July 2010
12. ENDOWMENT ASSET INVESTMENTS Consolidated and University
2010 2009
£000 £000
Balance at 1 August 588 595
Appreciation on Revaluation 26 -
Disposals (24 ) -
Increase/(Decrease) in Net Current Assets excluding cash 2 (2 )
Increase/(Decrease) in cash balances 30 (5 )
Balance at 31 July 622 588
MIM Britannia Maximum Income Fund 590 564
Shares and securities not incorporated in above funds - 24
Net Current Liabilities excluding Cash - (2 )
Cash balances 32 2
Balance at 31 July 622 588
13. DEBTORS Consolidated University
2010 2009 2010 2009
£000 £000 £000 £000
Trade Debtors 1,579 1,351 1,333 1,127
Other Debtors 1,366 1,110 1,314 1,104
Amount owed by subsidiary undertaking - - 477 356
2,945 2,461 3,124 2,587
14. CURRENT ASSET INVESTMENTS Consolidated and University
2010 2009
£000 £000
Deposits Maturing:
In one year or less 22,711 6,675
In more than one year 3,816 3,478
26,527 10,153
15. CREDITORS: amounts falling due within one year Consolidated University
2010 2009 2010 2009
£000 £000 £000 £000
Restated
Trade Creditors 7,257 6,623 7,112 6,508
Taxation and social security 1,082 1,023 1,082 1,023
Salary and wages creditor 1,089 1,003 1,089 1,003
Other Creditors 3,380 3,222 3,312 3,155
HEFCE Capital Investment Fund (Note 18) 2,085 2,107 2,085 2,107
Amounts due to subsidiary companies - - 1,072 1,223
Bank Loan (Note 22b) 722 793 722 793
Obligations under finance leases (Note 22a) 359 329 359 329
15,974 15,100 16,833 16,141
Amounts due to subsidiary companies include £1.0 million in respect of unpaid share capital (2009: £1.2 million).
35
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Notes to the Accounts for the Year Ended 31 July 2010
16. CREDITORS: amounts falling due after one year Consolidated University
2010 2009 2010 2009
£000 £000 £000 £000
Long Term Bank loan (Note 22b) 19,804 20,526 19,804 20,526
Obligations under finance leases (Note 22a) 11,228 11,587 11,228 11,587
31,032 32,113 31,032 32,113
17. PROVISIONS FOR LIABILITIES AND CHARGES Consolidated and University
Heritable Dilapidation Reorganisation Total
£000 £000 £000 £000
At 1 August 2009 900 884 217 2,001
Charge to Income & Expenditure account - 324 830 1,154
Payments made in the year - - (484 ) (484 )
At 31 July 2010 900 1,208 563 2,671
The Heritable provision relates to the at risk element of an investment of £2 million in Heritable Bank, which is
at risk due to the Heritable Bank being placed into administration following the collapse of the Icelandic
banking sector.
The Dilapidation provision relates to a contractual obligation under certain of the operating leases and is based
on professional valuations carried out at 12 March 2010 and 26 July 2010. Management are not aware of any
events since that date which would indicate any material change to that provision.
The Reorganisation provision is made to cover the cost of redundancy and severance payments for changes to
the University‟s staff structures.
PENSIONS
Retirement benefits for employees of Southampton Solent University are provided by defined benefit schemes,
which are funded by contributions from the University and employees. Payments are made to the Teachers‟
Pension Scheme for academic staff and to the Hampshire County Council Superannuation Scheme for non-
academic staff. These are both independently administered schemes. Both of these are defined benefit
schemes.
Teachers’ Pension Scheme
Under the definitions set out in Financial Reporting Standard 17 - Retirement benefits, the Teacher's pension
scheme (TPS) is a multi-employer pension scheme. As the TPS is underwritten by central government and the
University has no future obligation to make contributions to the scheme, this is effectively a defined
contribution scheme in so far as it affects the University. As a result, contributions to this scheme are
accounted for as if the scheme was a defined contribution scheme.
The University has set out below the information available on the Scheme and the implications for the
University in terms of the anticipated contribution rates.
The employers' contribution rates for the University's academic staff were 14.1% of pensionable salaries from 1
August 2009 to 31 July 2010.
The total pension contributions for the University in respect of current employers were:
2010 2009
£000 £000
Contributions to Teachers‟ Pension Scheme 2,650 2,509
The Teachers‟ Pension Scheme is a statutory, contributory, unfunded, defined benefit scheme. The regulations
under which the TPS operates are the Teachers' Pensions Regulations 1997, as amended. Contributions are
credited to the Exchequer on a "pay as you go" basis under arrangements governed by the Superannuation Act
1972. A notional asset value is ascribed to the Scheme for the purposes of determining contribution rates.
36
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Notes to the Accounts for the Year Ended 31 July 2010
17. PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)
The last valuation of the TPS related to the period 1 April 2001 to 31 March 2004. The Government Actuary's
report of October 2006 revealed that the total liabilities of the Scheme (pensions currently in payment and the
estimated cost of future benefits) amounted to £166,500 million. The value of the assets (estimated future
contributions together with the proceeds from the notional investments held at the valuation date) was
£163,240 million. The assumed real rate of return is 3.5% in excess of prices and 2% in excess of earnings. The
rate of real earnings growth is assumed to be 1.5%. The assumed gross rate of return is 6.5%.
As from 1 January 2008 and as part of the cost-sharing agreement between employers' and teachers'
representatives, the standard contribution has been assessed at 19.75%, plus a supplementary contribution rate
of 0.75% (to balance assets and liabilities as required by the regulations within 15 years); a Standard
Contribution Rate (SCR) of 20.5%. This translates into an employee contribution rate of 6.4% and employer
contribution rate of 14.1% payable. The cost-sharing agreement has also introduced, effective for the first time
from the 2008 valuation, a 14% cap on employer contributions payable, although this agreement has not yet
come into effect.
The 2006 interim actuarial review, published in June 2007, did not recommend any changes to the SCR and
concluded, as at 31 March 2006 and using the above assumptions, that the Scheme's total liabilities amounted to
£176,600 million.
A copy of the Government Actuary's 2004 valuation report and 2006 interim valuation report can be found on
the TeacherNet website at www.teachernet.gov.uk/pensions.
Hampshire County Council Superannuation Scheme
The Hampshire County Council Superannuation Scheme (HCC) is valued every three years by a professionally
qualified independent actuary using the Projected Unit method, the rates of contribution being determined by
the actuary. The latest actuarial assessment of the Hampshire County Council Superannuation Scheme was at
31 March 2007. Level of employers‟ contributions are set out below:
At 31 March At 31 March At 31 March At 31 March
2009 2010 2011 2012
Non teaching staff – HCC 18.1% 18.6% 19.1% 19.1%
The University also has unfunded obligations in respect of enhanced pension entitlements to staff who took
early retirement under a reorganisation programme in 1993.
Where the University ceases to trade and there is no successor establishment, the Secretary of State for
Education and Employment becomes the compensating authority.
37
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Notes to the Accounts for the Year Ended 31 July 2010
17. PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)
FRS 17
Details in respect of the pension liabilities are provided in accordance with FRS 17. As noted earlier it is not
possible to identify the University‟s share of the underlying assets and liabilities of the Teachers‟
Superannuation Scheme and therefore the following disclosure relate to the Hampshire County Council
Superannuation Scheme and unfunded obligations.
The regular contributions to the Fund for the accounting period ending 31 July 2011 are estimated to be £2.97
million.
In the budget of 22 June 2010 the Government announced that the Consumer Price Index (CPI) will be used for
the price indexation of pensions from April 2011, rather than the Retail Price Index (RPI). This statutory change
to pensions increases has been reflected as a change to actuarial assumptions and included as an actuarial gain
on liabilities.
The valuation used for FRS 17 disclosures has been based on the most recent actuarial valuation at 31 March
2007. The major assumptions used by the actuary for the purposes of FRS 17 were:
31 July 31 July 31 July
2010 2009 2008
Discount Rate 5.4% pa 6.0% pa 6.5% pa
Rate of increase in salaries 5.0% pa 5.3% pa 5.3% pa
Rate of increase in pensions in payment 2.8% pa 3.8% pa 3.8% pa
Rate of inflation (RPI) 3.5% pa 3.8% pa 3.8% pa
Rate of inflation (CPI) 2.8% pa N/A N/A
Mortality Assumptions At 31 July 2010
Retiring Retiring in
Today 20 years
Male 22.3 24.7
Female 24.3 26.5
The University‟s share of the assets in the scheme and the expected rate of return were:
At 31 July 2010 At 31 July 2009 At 31 July 2008
Rate of Value Rate of Value Rate of Value
Return Return Return
Equities 8.2% 23,341 8.0% 18,698 7.8% 19,338
Government bonds 4.2% 9,452 4.5% 1,723 4.8% 8,702
Corporate bonds 4.9% 926 5.9% 8,049 6.5% -
Property 7.7% 2,546 7.0% 752 6.8% 2,256
Cash 1.4% 2,315 0.9% 2,067 5.9% 1,934
Other assets 8.2% - 0.9% 31 5.9% -
38,580 31,320 32,230
Average rate of return 6.7% 6.5% 6.8%
The scheme actuaries employ 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.
38
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Notes to the Accounts for the Year Ended 31 July 2010
17. PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)
The following amounts were measured in accordance with the requirements of FRS 17:
Reconciliation to Balance Sheet Value at 31 Value at 31
July 2010 July 2009
£000 £000
Funded Benefits
Fair Value of Fund Assets 38,580 31,320
Present Value of Liabilities 62,360 60,700
Funded Net Pension Liability (23,780 ) (29,380 )
Unfunded Benefits
Present Value of Liabilities 420 460
Unfunded Net Pension Liability (420 ) (460 )
Total Net Pension Liability (24,200 ) (29,840 )
Analysis of Charge to Income & Expenditure Account 2010 2009
£000 £000
Current Service Cost (included in Other Pension Costs – Note 6) 2,730 2,030
Past Service Cost (included in Other Pension Costs – Note 6) 100 70
Interest Cost (included in Pension Finance Costs – Note 8) 3,740 3,240
Expected Return on Assets (included in Pension Finance Costs – Note 8) (2,070 ) (2,220 )
Expense Recognised 4,500 3,120
The expense recognised includes £30,000 (2009: £30,000) in respect of unfunded benefits.
Changes to the present value of liabilities during the year 2010 2009
£000 £000
Opening Value of Liabilities 61,160 49,080
Current Service Cost 2,730 2,030
Interest Cost 3,740 3,240
Contributions by Participants 1,050 940
Actuarial (Gains)/Losses (4,330 ) 7,250
Net Benefits Paid Out (1,670 ) (1,450 )
Past Service Cost 100 70
Closing Value of Liabilities 62,780 61,160
The closing liability includes £420,000 (2009: £460,000) in respect of unfunded benefits.
39
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Notes to the Accounts for the Year Ended 31 July 2010
17. PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)
Changes to the Fair Value of Assets during the year 2010 2009
£000 £000
Opening Value of Assets 31,320 32,230
Expected Return on Assets 2,070 2,220
Actuarial Gain/(Loss) on Assets 2,880 (5,190 )
Contributions by the Employer 2,890 2,540
Contributions by Participants 1,050 940
Net Benefits Paid Out (1,630 ) (1,420 )
Closing Value of Assets 38,580 31,320
Actual Return on Assets 2010 2009
£000 £000
Expected Return on Assets 2,070 2,220
Actuarial Gain/(Loss) on Assets 2,880 (5,190 )
Actual Return on Assets 4,950 (2,970 )
Analysis of Amount Recognised in Statement of Total Recognised Gains and Losses 2010 2009
£000 £000
Actuarial Gain/(Loss) on Assets 2,880 (5,190 )
Actuarial Gain/(Loss) on Liabilities 4,330 (7,250 )
Total Actuarial Gain/(Loss) 7,210 (12,440 )
The actuarial gain includes a gain of £30,000 (2009: gain of £10,000) in respect of unfunded benefits.
An actuarial gain on liabilities of £7.1 million has been included due to the change in inflation rate used to
calculate pension increases from RPI to CPI.
5 Year History 2010 2009 2008 2007 2006
£000 £000 £000 £000 £000
Present Value of Liabilities 62,780 61,160 49,080 49,930 47,650
Fair Value of Assets 38,580 31,320 32,230 35,600 31,150
Deficit on the Scheme 24,200 29,840 16,850 14,330 16,500
Experience Gains/(Losses) on Assets 2,880 (5,190 ) (7,380 ) 560 1,640
Experience Gains/(Losses) on Liabilities 490 (90 ) 3,380 (70 ) (80 )
40
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Notes to the Accounts for the Year Ended 31 July 2010
18. DEFERRED CAPITAL GRANTS Consolidated and University
Buildings Equipment Total
£000 £000 £000
At 1 August 2009 5,224 2,659 7,883
Cash Received 1,511 1,139 2,650
Decrease/(Increase) in HEFCE Capital Investment Fund Creditor 37 (15 ) 22
(Note 15)
Released to Income and Expenditure (576 ) (1,007 ) (1,583 )
At 31 July 2010 6,196 2,776 8,972
19. EXPENDABLE ENDOWMENTS Consolidated and University
2010 2009
£000 £000
Capital Value 588 590
Accumulated Income - 5
At 1 August 588 595
Appreciation of Endowment Asset Investments 26 -
Income for the Year 30 29
Expenditure for the Year (22 ) (36 )
At 31 July 622 588
Represented by:
Capital Value 618 588
Accumulated Income* 4 -
622 588
*£4,000 of income relates to a surplus on disposal of shares and has not been included in accumulated income as it
is being held for reinvestment.
All endowments are classified as restricted expendable endowments.
20. REVALUATION RESERVE Consolidated and University
2010 2009
£000 £000
At 1 August 7,621 7,712
Transfer to the Income and Expenditure Account (Note 21) – Depreciation for the (91 ) (91 )
period on revalued inherited assets
At 31 July 7,530 7,621
21. INCOME AND EXPENDITURE ACCOUNT Consolidated University
2010 2009 2010 2009
£000 £000 £000 £000
At 1 August 5,587 13,238 5,701 13,329
Retained Surplus for the Period 4,784 4,698 4,752 4,721
Gain/(Loss) on Pension Liability 7,210 (12,440 ) 7,210 (12,440 )
Transfers from Revaluation Reserve (Note 20) 91 91 91 91
At 31 July 17,672 5,587 17,754 5,701
The University has taken advantage of the exemption within section 408 of the Companies Act 2006 and only
presented a Consolidated Income and Expenditure Account for the group, the unconsolidated surplus for the year
relating to Southampton Solent University is shown above.
41
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Notes to the Accounts for the Year Ended 31 July 2010
22. OBLIGATIONS UNDER LEASES AND LOANS Consolidated and University
a) Finance Leases 2010 2009
£000 £000
Amounts Payable:
Within one year 1,347 1,347
In more than one year and less than two years 1,347 1,347
In more than two and less than five years 4,041 4,041
After more than five years 12,331 13,678
19,066 20,413
Less: finance charges allocated to future periods (7,479 ) (8,497 )
11,587 11,916
Analysed as:
Amounts due in less than one year 359 329
Amounts due after more than one year 11,228 11,587
11,587 11,916
The above balances are comprised of two finance leases due for repayment in 2018 and 2019. All long term
borrowing is at applicable market determined rates (fixed) from the commencement of the borrowing.
b) Loans 2010 2009
£000 £000
Instalments due within one year 722 793
Instalments due in more than one and less than two years 773 722
Instalments due in more than two and less than five years 2,694 2,498
Instalments not due within five years 16,337 17,306
20,526 21,319
Analysed as:
Amounts due within one year 722 793
Amounts due after more than one year 19,804 20,526
20,526 21,319
The above balance is comprised of one loan due for repayment in 2026. All long term borrowing is at applicable
market determined rates (fixed) from the commencement of the borrowing.
c) The current annual commitment under non-cancellable operating leases 2010 2009
for land and building is as follows: £000 £000
Amounts payable under leases expiring after more than five years 4,245 4,101
23. CAPITAL COMMITMENTS Consolidated University
2010 2009 2010 2009
£000 £000 £000 £000
Restated Restated
Authorised and Contracted 1,912 1,361 1,579 1,267
Authorised but not Contracted 20,602 9,238 18,803 8,212
42
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Notes to the Accounts for the Year Ended 31 July 2010
24. CONTINGENT LIABILITIES
At 31 July 2010 the Governors were not aware of any liabilities for which full provision has not been made.
25. POST BALANCE SHEET EVENTS
The Governors are not aware of any post balance sheet events that they feel attention should be drawn to.
26. RECONCILIATION OF CONSOLIDATED OPERATING SURPLUS TO NET CASH
INFLOW FROM OPERATING ACTIVITIES 2010 2009
£000 £000
Surplus before taxation 4,792 4,691
Less: investment income (436 ) (633 )
4,356 4,058
Add back interest payable 4,226 3,675
Surplus from Operating Activities 8,582 7,733
Surplus on Disposal of Fixed Assets (3 ) (50 )
Release of Capital Grant (1,583 ) (1,236 )
Depreciation 3,721 3,829
Pension contribution less amounts charged to operating surplus (100 ) (470 )
(Increase)/Decrease in debtors (453 ) 1,076
Increase in creditors 942 61
Increase in provisions 670 854
(Increase)/Decrease in Endowment net current assets (2 ) 2
11,774 11,799
27. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 2010 2009
£000 £000
Income from Endowments 26 29
Interest Received 376 676
Interest Paid under Finance Leases (1,018 ) (1,045 )
Other Interest Paid (1,544 ) (1,622 )
Returns on Investments and Servicing of Finance (2,160 ) (1,962 )
43
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Notes to the Accounts for the Year Ended 31 July 2010
28. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 2010 2009
£000 £000
Purchase of Fixed Assets (4,463 ) (3,346 )
Deferred Capital Grants Received 2,650 2,845
Endowment Investment Disposal 28 -
Receipts on Disposal of Fixed Assets 4 60
(1,781 ) (441 )
29. ANALYSIS OF CHANGES IN CONSOLIDATED FINANCING Capital
DURING THE YEAR At 1 August Repayments At 31 July
2009 In the year 2010
£000 £000 £000
Barclays Bank Loan 118 (118 ) -
Kimber College Finance Lease 3,999 (308 ) 3,691
Sir James Matthews Building Finance Lease 7,918 (21 ) 7,897
Deanery College Loan 11,472 (365 ) 11,107
Chantry College Loan 6,556 (209 ) 6,347
David Moxon Annex Loan 3,172 (101 ) 3,071
33,235 (1,122 ) 32,113
Changes in financing as disclosed in the Cashflow Statement may be analysed as follows:
2010 2009
£000 £000
Repayment of Loans (793 ) (966 )
Repayment of Capital Element of Finance Leases (329 ) (302 )
(1,122 ) (1,268 )
30. ANALYSIS OF CHANGES IN NET DEBT At 1 August Cash Flow Non Cash At 31 July
2009 Movement 2010
£000 £000 £000 £000
Cash at Bank and in Hand:
Endowment Assets 2 30 - 32
Cash 19,353 (9,693 ) - 9,660
19,355 (9,663 ) - 9,692
Short Term Deposit 10,153 16,374 - 26,527
Debt Due within one year (1,122 ) 1,122 (1,081 ) (1,081 )
Debt Due after one year (32,113 ) - 1,081 (31,032 )
(3,727 ) 7,833 - 4,106
Non-Cash Movement relates to the portion of long-term borrowings due within one year.
44
Southampton Solent University|Financial Statements for the Year Ended 31 July 2010
Notes to the Accounts for the Year Ended 31 July 2010
31. ACCESS FUNDS 2010 2009
£000 £000
Balance Brought Forward - -
Funding Council Grants 273 296
Interest Earned - 1
273 297
Disbursed to Students (264 ) (287 )
Administration Costs (8 ) (10 )
Balance Unspent at 31 July 1 -
32. RELATED PARTY TRANSACTIONS
Governors receive no payments in respect of their duties as Governors other than for the reimbursement of travel
and subsistence expenses incurred in the course of those duties.
During the year ended 31 July 2010 the University had transactions with a number of organisations which fell
within the definition of Related Parties under FRS 8. Transactions are disclosed where members of the Board of
Governors and senior members of staff disclose an interest in a body with whom the University undertakes
transactions which are considered material to the University‟s financial statements and/or the other party. Due
to the nature of the University‟s operations and the composition of the Board of Governors, being drawn largely
from local public and private sector organisations, it is inevitable that transactions will take place with
organisation in which a member of the Board of Governors may have an interest. All transactions involving
organisations in which a member of the Board of Governors may have an interest are conducted at arm‟s length
and in accordance with the University‟s Financial Regulations and usual procurement procedures.
The University has taken advantage of the exemption within FRS 8 and has not disclosed transactions with wholly
owned subsidiary companies.
Solent Synergy Limited has been included as a related party due to a senior managers position on its board.
Southampton Solent University Sales to Purchases Amounts Amounts Grants and
related from owed by owed to loans
party related related related made to
party party party related
party
£000 £000 £000 £000 £000
Solent Students Union
Trade 9 29 1 2 -
Grant - - - 27 321
Solent Synergy Limited - 20 - - -
45
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University
Principal Address & Advisors
CORPORATE OFFICE
Southampton Solent University
East Park Terrace
Southampton
SO14 0YN
AUDITORS
External BDO LLP
Arcadia House
Maritime Walk
Ocean Village
Southampton
SO14 3TL
Internal For 2009-10:
Mazars LLP
Regency House
3 Grosvenor Square
Southampton
SO15 2BE
For 2010-13:
Kingston City Group
Head Office
Millennium House
21 Eden Street
Kingston upon Thames
Surry
KT1 1BL
BANKERS
Barclays Bank PLC
Apex Plaza
Reading
Berkshire
RG1 1AX
SOLICITORS
Bond Pearce LLP
Oceana House
39 – 49 Commercial Road
Southampton
SO15 1GA
Eversheds LLP
115 Colmore Row
Birmingham
B3 3AL
46
