ANNUAL Report 2016

Trustees’ Report and Accounts for the year end 31 December 2016 Principals, Trustees and Senior Management Team

His Royal Patron Trustees Highness Her Majesty The Queen Chairman the Duke of Mr Lawrie Haynes D Eng BA (Hons) FCILTR FRSA Edinburgh unveils a President Honorary Treasurer memorial to HRH The Duke of Kent KG GCMG GCVO ADC(P) Mr Anthony Lea BA (Hons) (retired September 2016) The Guinea Pigs Dr Stephen Critchley MA (Hons) D Phil FCA (appointed at the National September 2016) Life Vice-Presidents Arboretum in Marshal of the The Lord Craig of Radley GCB Members Staffordshire. OBE MA DSc FRAeS Ms Kathryn Adamson (appointed September 2016) Marshal of the Royal Air Force Sir GCB AFC ADC Ms Frances Brindle MSc BSc (Hons) Sir GCB CBE ADC FRAeS Mr David Cheyne MA (Cantab) Air Chief Marshal Sir KCB CBE DFC ADC MA RAF Mr Graeme Craig (appointed September 2016) Air Chief Marshal Sir GCB KCVO CBE FRAeS Air Vice-Marshal Simon Dougherty MSc MBBS FRCP FFOM Air Chief Marshal Sir Roger Palin KCB OBE MA FRAeS FIPD DAvMed DObstRCOG FCMI FRAeS Air Chief Marshal Sir GCB DFC AFC DSc FRAeS Air Commodore Simon Harper OBE MA RAF (appointed September 2016) Lady Hillier Mrs Arabella Hastie MA (Hons) (retired September 2016) Lady Humphrey OBE Mr Richard Ingham (appointed September 2016) Sir Adrian Swire AE DL MA Mr Alastair Irvine BA (Hons) MCSI Air Commodore Alan Opie MDA MA BSc FCIPD RAF (retired Vice-Presidents September 2016) Mr John Isabel Marie-Noelle Orzel OBE QVRM MSc PGDE RGN RSCN Mr Graeme Shankland (appointed September 2016) Council Air Commodore Allan Vaughan OBE BA (retired September 2016) Chairman Air Vice-Marshal Elaine West CBE (appointed September 2016) Mr Lawrie Haynes D Eng BA (Hons) FCILTR FRSA

Deputy Chairman Senior Management Team The Viscount Trenchard of Wolfeton DL (for the year ended 31 December 2016) Honorary Treasurer Controller Mr Anthony Lea BA (Hons) (retired September 2016) Contents Chris Nickols CB CBE MA FRAeS (left August 2016) Dr Stephen Critchley MA (Hons) D Phil FCA (appointed September 2016) Air Vice-Marshal The Honourable David Murray CVO OBE (appointed September 2016) Trustees’ Report Members Director of Strategy and Fundraising Air Chief Marshal Sir Stephen Hillier KCB CBE DFC ADC MA RAF Forewords 4 (appointed July 2016) Michael Neville CBE BSc (Hons) Air Chief Marshal Sir GCB CBE ADC RAF Director of Finance, IT and Facilities Charitable objects 6 (retired July 2016) Ms Victoria Fakehinde BSc (Hons) ACMA CGMA Air Marshal Sir Baz North KCB OBE MA FRAeS RAF (retired May 2016) Charitable activities: welfare 8 Director of Welfare and Policy Air Marshal Sean Reynolds CBE DFC (appointed May 2016) Air Commodore Paul Hughesdon MA FIoD Air Vice-Marshal Nigel Bairsto CB MBE (retired May 2016) Providing support where it is needed most 10 Air Vice-Marshal John Cliffe CB OBE (appointed May 2016) Air Vice-Marshal Simon Dougherty MSc MBBS FRCP FFOM RAF Benevolent Fund Principal Fundraising 14 DAvMed DObstRCOG FCMI FRAeS and Registered Office Air Commodore Andrew Neal AFC FCMI Financial highlights 16 67 Portland Place, London W1B 1AR Ms Frances Brindle MSc BSc (Hons) (appointed September 2016) Governance 20 Mr David Cheyne MA (Cantab) (appointed September 2016) Dr Stephen Critchley MA (Hons) DPhil FCA Independent Auditor’s Report 24 (appointed September 2016) Mrs Arabella Hastie MA (Hons) (retired September 2016) Financial Statements 26

4 Trustees’ Report Trustees’ Report 5

Expanding Making a our welfare difference to in tough times the RAF family

The Royal Air Force Benevolent Fund has a long and proud tradition of looking In my first year as Controller of the Royal Air Force Benevolent Fund, I have seen after our own and during 2016 we were proud and privileged to support more much that has made me proud to work for the RAF’s leading welfare charity. than 65,000 members of the RAF family in need. Visiting RAF stations across the country, I have seen first-hand the impact that our The last 12 months have seen progressive change in a number of areas, from an welfare support is having on serving personnel and their families. expansion in our welfare services to new and exciting corporate partnerships. In I have also met veterans who tell me that without our support their lives would be so addition, we have seen significant change in the leadership of the Fund with the much harder. We make a difference – it is what we do, day in day out – and we will introduction of six new Trustees and a new Controller. continue to do so for as long as the Royal Air Force exists and RAF veterans need us. We have come a long way over the last few years, much of which has been due to the However, what has become clear to me is that we must never sit on our laurels. extraordinary efforts of those Trustees who have retired over the last 12 months and The Trustee Board and executive are absolutely focused on expanding what we do to whom we owe a huge debt of gratitude. for the RAF family and are actively looking to broaden the provision of welfare, for I have also been extremely heartened by the close collaboration between the Board both the veteran RAF community and those who are currently serving. of Trustees and executive team which has allowed us to increase and accelerate the Our job is to not only look after those in need today but also to anticipate what services and help that we give to beneficiaries, when and where they need it most. those needs will be tomorrow. Consequently, we are undertaking significant work As the welfare needs of our beneficiaries change, so does the way in which we deliver to look forward beyond 2030, so that we are well positioned to anticipate and meet assistance and 2016 saw a further expansion in the range of our welfare provision. that challenge.

Amongst other initiatives, we launched a partnership with Anxiety UK to support Like all charities, we will be tested and will face a harsh fundraising environment which those experiencing anxiety or depression while our new Lunch Clubs at Princess will mean that we must work even harder in order to raise the funds needed to support Marina House are helping to alleviate isolation and give veterans an opportunity to get our ageing veterans and our serving men and women. together over lunch. But we are building on our successes, seeking new and exciting corporate partnerships, In relation to the older veteran community, it is quite clear from our research looking including new relationships with companies, such as the one with Aston Martin out to 2030 and beyond that there is a real and pressing need to focus on this group by Cambridge, to ensure that we can develop new welfare initiatives to meet the needs of providing enhanced support now. the RAF family.

We have also taken the decision to further assist the currently serving RAF during these Next year we celebrate the RAF’s centenary and the following year we will mark our difficult times, especially given that the Service continues to be employed on active duty own 100th milestone. And while the challenges will no doubt continue for our former in many theatres of operations worldwide. and current RAF men and women, the RAF Benevolent Fund stands ready to support them now, and well into the future. No one likes to ask for help, least of all someone with an RAF background. But even the strongest, most resilient people need a helping hand at times. Your generosity has meant the RAF Benevolent Fund has been able to be there for them.

Our supporters continue to be amazing, generating more than £17m of the total £23m income to help us change lives for the better. We thank them and the staff at the Fund who work tirelessly to support the RAF family. Air Vice-Marshal David Murray CVO OBE

Controller, Royal Air Force Benevolent Fund

Lawrie Haynes

Chairman, Royal Air Force Benevolent Fund 6 Trustees’ Report Trustees’ Report 7

Charitable Objects 98% Every member of the RAF family of serving personnel who received support from us rated it as should have access to support ‘very good’ or whenever they need it. ‘quite good’

Our Mission

We are the RAF’s leading welfare charity, providing financial, practical and emotional support to all members of the RAF family. We are here to help serving and former members of the RAF, as well as their partners and dependants, whenever they need us.

Objects and Activities

Since its formation, the Charity’s objects have been to provide relief and assistance to past and present members of the Royal Air Force and their dependants who are in need as a result of poverty, disability, sickness, infirmity or otherwise, and to maintain the RAF War Memorial on the Victoria Embankment, London.

In October 2008, the Charity’s objects were expanded to enable it also to promote the efficiency of the Royal Air Force by providing support and assistance to Service personnel and their dependants with a view to enhancing their morale and well-being.

Public Benefit Statement

When reviewing the Fund’s aims and objectives and in planning future activities and policies, the Trustees have given careful consideration to the Charity Commission’s general guidance on public benefit and to its supplementary guidance on public benefit and fee charging. Where a contribution is invited, for example towards the costs of a respite break or occupying a residential property, the beneficiary’s means are always taken into account when assessing an appropriate contribution, so that no member of the RAF family is prevented from accessing the services of the Fund because they cannot afford the full cost. The Fund also provides a public benefit as it promotes efficiency in the RAF, thereby underpinning esprit de corps and contributing to the defence of the and its interests. Through its External Grants programme, the Fund also enables other charities to maximise their public benefit, where applicable to and in support of the RAF family. v

...... 8 Trustees’ Report ...... Trustees’ Report 9 ...... Charitable activities:...... Our suppo...... rt for ...... In 2016 ...... welfare ...... we spent ...... the RAF fa...... mily ...... £17.6m ...... The welfare of RAF personnel, past and present, New welfare initiati...... ves ...... supporting more than ...... and their families has always been at the heart to support the ...... RAF family ...... of everything that we do. We exist to support our ...... 7,713 4,310...... 53,070 ...... individuals individuals...... individuals 65,000 ...... personnel, whether veterans or those still serving, • Mediation support for serving...... personnel ...... directly supported...... supported through members of the ...... as well as their families. through Relate ...... supported through Fund...... grants to RAF RAF family ...... In 2016, we spent £17.6m delivering a complete spectrum • New partnership with Anxiety...... UK to support by the Fund programmes...... stations and ...... of care to more than 65,000 members of the RAF family, veterans experiencing anxiety...... or depression ...... other charities ...... from the youngest child to the oldest veteran, in the ...... • Daily Lunch Clubs for RAF...... veterans ...... areas it was needed the most: providing financial security ...... for those experiencing hardship, supporting veterans to • Respite at Home service,...... providing ...... live independently, providing housing and adaptations companionship and support...... for RAF veterans...... serving ...... veterans ...... for those wounded, injured and sick, and enhancing the ...... morale and well-being of our serving personnel...... £3m ...... £6m ...... supporting serving ...... 96% on individual ...... personnel and ...... grants supporting ...... How we helped...... Ann their families ...... RAF veterans ...... Ann Hughes’s RAF career...... was cut short when she ...... said their quality of ...... was diagnosed with multiple...... sclerosis in 2007 ...... life had improved ‘a ...... aged just 36...... £1.6m ...... lot’ or ‘quite a bit’ 729 ...... Ann was serving in the...... RAF Police but the ...... following our support veterans received ...... spent on the ...... debilitating condition left...... her struggling to walk ...... regular financial ...... unaided and as her condition...... worsened, her Airplay programme...... assistance ...... husband, Mick, was forced...... to give up his job to ...... care for her...... As Ann’s condition deteriorated...... further, she ...... found it more difficult...... to use the kitchen 3,407 ...... without help or tend her...... beloved garden; so, children took part ...... £772K ...... awarded for ...... we reworked the kitchen,...... installing adjustable in the Airplay ...... 93% ...... units, and created a wet...... room and an easily ...... mobility aids ...... programme ...... accessible garden...... This support has made...... a huge difference to ...... Ann’s life, allowing her...... to be independent and ...... rated the quality ...... comfortable in her own...... home...... of our service as ...... £219k ...... either ‘excellent’ £426K ...... “I don’t know what...... I would have ...... grants to support ...... or ‘very good’ awarded for care ...... done without the...... Fund. Their RAF stations ...... home top-up fees ...... support kicked...... in straight away ...... and they make...... you feel like you ...... are not alone –...... you are always a ...... part of the RAF...... family.” ...... 10 Trustees’ Report ...... Trustees’ Report 11 ...... Providing support ...... Providing Financial Support ...... Our aim When members of the RAF family experience ...... where it is needed most...... financial hardship, we are there, providing peace of mind to ...... increase financial security...... Our Welfare team regularly deals with complex applications £6m...... spent on ...... individual ...... for assistance from those struggling to meet day-to-day ...... grants supporting...... RAF ...... living costs. Our individual grants provide immediate support veterans...... for those needing financial assistance for anything from ...... Enabling ...... emergency transport costs to see a loved one in hospital or ...... Independent Living ...... money to buy new school shoes...... Our aim When an RAF veteran is struggling to ...... live at home or get out of the house, we’re there ...... ready to provide them with the means to live ...... of people who...... reported ...... independently, with the dignity they deserve...... a need with meeting...... day- ...... £88k to-day living costs...... said their ...... Many of our RAF veterans want to remain ...... minor financial assistance 78% ...... to serving personnel need had been...... fully met by ...... independent and stay in their homes but injury, ...... us or helped a...... lot ...... disability and advancing years often cause issues ...... which make this more difficult. We support £2.5m...... veterans, both young and old, with adaptations, spent on disability...... mobility equipment and care in the home...... needs in 2016...... To assist veterans who can no longer stay at home, ...... we support with care home top-up fees, spending ...... more than £400,000 on this area in 2016...... Improving ...... emotional ...... 1,343 ...... well-being ...... mobility awards made in £55k ...... spent on ...... 2016 with 82% reporting ...... Our aim We want to support RAF ...... 91% ...... domiciliary care ...... their equipment was used 81%...... 79% veterans who are struggling with mental ...... every day or most days ...... Princess Marina House (PMH) health problems to lead healthy and ...... guests said their emotional fulfilling lives...... well-being was improved ...... of people who ...... According to recent research, one in ...... by their stay ...... used our Anxiety ...... five veterans is likely to be living with a ...... 68% ...... UK service said it ...... of veterans said of our beneficiaries...... common mental illness but many do not ...... £772k ...... reliably improved ...... spent on mobility aids with our support reported that...... all seek the help they need...... their levels of ...... and 73% of veterans said they were better or most of...... their ...... needs had...... been We are working with Anxiety UK ...... anxiety, stress ...... these had fully resolved equipped to look ...... to support RAF veterans and their ...... met by...... us ...... and anxiety-based ...... their mobility issues after themselves ...... 80% dependants affected by anxiety or ...... depression ...... outside the home at home ...... of people accessing relationship depression. In 2016, 219 interventions ...... counselling reported their were provided via the dedicated ...... worries had reduced helpline, email support, therapy ...... sessions and Anxiety UK membership...... 12 Trustees’ Report ...... Trustees’ Report 13 ...... Supporting the serving RAF ...... Securing...... Suitable Housing ...... Deployment, frequent moves and separation add to the pressures ...... Our aim To...... improve housing and housing conditions ...... faced by serving personnel and their families, and the Fund plays a ...... key role supporting them and their families during difficult times...... for RAF veterans...... who are living in accommodation which ...... doesn’t support...... their needs...... In 2016, we spent £3m supporting serving members of the RAF with ...... £3m ...... everything from relationship support, financial assistance, support ...... supporting serving Many RAF veterans...... who have been medically discharged, due ...... £5.3m ...... for families with children and providing breaks from the pressures of ...... personnel and their to injury or illness,...... find their homes are no longer suitable spent on housing ...... service life. We also gave more than 70 grants to 34 RAF stations for ...... families for their needs...... We are there to ensure no RAF veteran ...... and adaptations ...... projects that improved well-being and morale...... is struggling and...... living in inappropriate housing. We also ...... support those...... who become frail and need domiciliary care...... RAF Lossiemouth: £436,000 ...... RAF Boulmer: £94,000 ...... rated the ...... RAF Scampton: £104,000 ...... RAF Leeming: £99,000 97%...... of veterans...... said quality of £587k ...... our service ...... RAF Waddington: £100,000 ...... repairs or adaptations...... 93% spent on ...... RAF Linton-on-Ouse: £73,000 ...... as either ...... improved ...... the quality property ...... ‘excellent’ ...... of their day-to-day...... maintenance ...... RAF Cranwell: £77,000 ...... living...... or ‘good’ ...... RAF Digby: £85,000 ...... RAF Shawbury: £63,000 ...... RAF Coningsby: £104,000 ...... RAF Valley: £98,000 ...... RAF Wittering: £429,000 ...... RAF Cosford: £101,000 ...... Enhancing...... social networks ...... RAF Honington: £110,000 ...... Our aim We want to build social networks, reducing ...... RAF Wyton: £94,000 ...... loneliness and isolation for members of the RAF family...... RAF Marham: £122,000 ...... Loneliness and isolation affect many of our veterans so ...... RAF Halton: £71,000 ...... we have launched a number of new initiatives to help ...... combat the problem including a daily Lunch Club at ...... RAF Henlow: £70,000 ...... Princess Marina House, in Rustington, which has been ...... RAF Brize Norton: £123,000 ...... 71% accessed by 1026 people in 2016...... of PMH...... guests said their ...... RAF High Wycombe: £129,000 psychological...... well-being Working with Community Network, we launched new ...... RAF St Athan: £17,000 ...... was...... positively affected ...... weekly telephone friendship groups and the Respite ...... by their stay at Home service, which supports veterans and their ...... RAF Northolt: £87,000 ...... RAF Benson: £75,000 ...... partners living in the community around Princess ...... Marina House...... RAF St Mawgan: £6,000 ...... RAF Odiham: £96,000 ...... 1,247 of guests reported ...... a benefit to their ...... 273 768 ...... £88k guests...... enjoyed 70% ...... a ...... stay at PMH relationships following ...... individuals received grants individuals received ...... spent on minor financial ...... their stay at PMH ...... to assist with emergencies relationship support through...... assistance, a 52% ...... and family difficulties our partnership with Relate ...... increase on 2015 ...... 14 Trustees’ Report Trustees’ Report 15

FUNDRAISING We are accessible Relationships with Agencies and Commercial Providers We have made it easy for anyone to get in touch with We could not annually assist more than 65,000 our fundraising team. Whether they want to update We have a small in-house fundraising team and employ members of the RAF family without our wonderful their contact preferences, ask a question about external agencies to add additional expertise supporters. Donations they give to the RAF our work or how we spend their donation, we or capacity. This is more cost effective than Benevolent account for 75% of our total income and welcome their call, email or letter. trying to do everything ourselves. These agencies have been appointed through we are extremely grateful to each and every person Despite being a relatively small charity with a competitive tendering process. When and organisation who make this possible. limited fundraising resources, we always strive We are open, honest we employ a third party to raise money on for the highest possible standards and continually our behalf, we ensure the following is in and transparent adhere to best practice. We have a complaints place; a signed contract; a Non-Disclosure Supporter Promise procedure should a supporter be unhappy or We promise to be open, honest and transparent Agreement, a Vulnerable Persons have concerns about any of our fundraising We believe in being transparent in how we raise money through providing information about how we use Policy. In addition, our Finance team activity. This is available on the website or and spend donations and we take our duty to be donations and what impact they have on the RAF completes a due-diligence check on by contacting the fundraising team and responsible fundraisers very seriously. family. We will also provide honest answers about our their financial position. includes reassurance that if they feel we fundraising activity as well as accurately representing have not responded suitably, we will support the experiences of the veterans and serving personnel them in raising their complaint to the we have helped by seeking their approval. We Adhere To The Highest Fundraising Regulator as an additional route Fundraising Standards to resolution.

In 2016 a new Fundraising Regulator was established We are respectful with the aim of strengthening fundraising regulation and to increase the general public’s confidence In our fundraising materials or in conversation, we show in charities. We are committed to the Fundraising respect and we promise never to pressure anyone to Regulator’s Code of Fundraising Practice to ensure make a donation. We want the decision to give to be we meet the highest standards, so supporters and completely voluntary and we are particularly sensitive volunteers can give and fundraise when engaging with vulnerable people, including those with confidence and trust. In line who are elderly. with the Charities Act 2016, the Importantly, we do not and never have shared our Board of Trustees closely monitors supporters’ details with any other charity or business. our fundraising activity and We take reasonable steps to ensure that we comply performance alongside the fundraising with the Data Protection Act, carrying out self- management team. assessments during the year to assure our compliance. We keep supporters up to date with our work in a way and at times that suit them. If any supporter prefers a reduced level of contact, they only have to let us know and we will respond to their wishes...... 16 Trustees’ Report ...... Trustees’ Report 17 ...... Financial ...... Where our ...... money ...... Other income (15%) ...... came from ...... £3.5m ...... highlights ...... (2015: £6.8m) ...... £23.4m ...... (2015: £24.2m) ...... Donations,...... events ...... and legacies...... (75%) ...... Investment income (10%) ...... £17.6m...... (2015: £16.0m)...... £2.3m ...... (2015: £1.4m) ...... How we ...... spent our ...... Direct fundraising (15%) ...... money ...... £3.2m ...... (2015: £2.6m) ...... Investment fees (1%) ...... £22.5m £0.3m ...... (2015: £22.6m) (2015: £0.4m) ...... Charitable...... activities...... (78%) Other costs (6%) ...... £17.6m...... £1.4m ...... (2015: £1.4m) ...... (2015: ...... £18.2m) ...... How we ...... supported ...... Direct support to individuals (49%) ...... the RAF ...... £8.6m ...... (2015: £8.4m) ...... family ...... Housing...... Trust ...... support...... (15%) £17.6m ...... £2.6m...... (2015:£18.2m) External grants (5%) ...... (2015: ...... £2.7m) ...... £1.0m ...... (2015: £1.0m) ...... “My daughter, Lilly, was my motivation...... to get ...... up and get going. My specialist...... asked me what I ...... Welfare programmes & grants (14%) ...... Residential...... & respite ...... wanted to get out of life and I said...... ‘I want to be ...... care (17%) £2.4m ...... (2015: £2.1m) ...... able to walk my daughter to school’.”...... £3.0m ...... (2015: £4.0m) ...... Duncan Slater lost both legs following a bomb...... blast in Afghanistan...... We assisted with extending his home and adapting...... the bathroom...... 18 Trustees’ Report Trustees’ Report 19

Investment Policy methodology has determined that we need to hold a been established to mitigate those risks. The cycle of 2017 promises to be another challenging year for the minimum of £34.3m (2015: £40m) in free reserves to reviews forms an integral part of the risk management RAF family, serving and veteran communities alike. We Following an investment policy review, we moved our be able to sustain the support we provide to the RAF processes adopted by the Charity and its subsidiaries. will continue to support the serving RAF by focusing on long-term portfolio from Newton Investment Management family in the long term. The Trustees will continue to Once again, the highest-level strategic risk facing the our mainstay provision of Airplay and Ben Clubs, as well Ltd to BlackRock Investment Management (UK) Ltd and review the level of reserves required to ensure that RAF Benevolent Fund is that of its reputation, which as our relationship support programme with Relate and, CCLA Investment Management Ltd in June 2016. organisational strategy and long-term financial planning represents both a threat and an opportunity. The Citizens Advice Bureau, low-level assistance to individual are adequately supported by financial resources major risks identified as having the potential to affect servicemen and servicewomen and our respite break The investments of the Dependants Fund were also available to the Fund. our reputation and the subsequent performance of facility at Princess Marina House. moved from Aberdeen Asset Management plc to CCLA the Charity in 2016, along with associated mitigating Investment Management Ltd at the end of 2016. After taking account of those assets directly contributing Our key objectives for 2017 are: to our charitable outputs, free reserves at the end of actions, were: The Fund’s investment policy is to enhance the value of • Continuing to provide essential welfare support to December 2016 stood at £67.4m (2015: £65.8m). • Failure to identify the welfare needs of its its investments and earn an appropriate return through the RAF and support activities that enhance social beneficiaries: mitigated by putting in place a the adoption of a managed, diversified portfolio taking The Trustees have started to review the Fund’s networks and family life, and improve programme of new welfare initiatives across the a medium level of risk. The main objectives of the charitable activities in conjunction with the availability emotional well-being. spectrum of care, underpinned by research and policy are: of current and projected free reserves with a view to • Encouraging new applications through our Reaching setting out the strategic direction for the next five years, maintaining close engagement with the RAF and the • To hold investments in a manner that will assist the Out Campaigns. and beyond that, to 2030. This review is underpinned RAF family as well as other military welfare charities Fund in delivering its objectives in the short, medium by research findings and other evidence about the size, (through Confederation of British Service and Ex- • Increasing the financial security of those experiencing and long terms. demographic composition and key welfare needs of Service Organisations (COBSEO)). hardship in the RAF family through the provision of • To earn a rate of total return above inflation, so that the RAF family. The continuation and development of • Loss of relevance to key audiences: mitigated by an grants and benefits advice and advocacy. real capital value is preserved while also generating Welfare programmes will mean there will be substantial effective communication strategy including Reaching • Delivering a range of care services and other work to income to be used for welfare activities. additional expenditure over the next five years to meet Out Campaigns designed to inform and attract enable greater independence of beneficiaries such as the needs of the RAF family, both veterans and serving, potential beneficiaries and interested supporters. • To measure overall performance against an agreed those living with dementia or with mobility needs. while ensuring that the work of the Fund is sustainable market-derived benchmark and use an industry- • Failure to meet its charitable objects due to a lack in the long term. • Working on increasing access to suitable housing. wide peer group benchmark to assess performance of financial resources: mitigated by strong financial against the average. Performance against the reserves policy is monitored planning processes which include Trustee-approved • Enhancing the engagement of beneficiaries with during the year as part of regular financial management budgets and five-year planning, long-term financial employment and vocational activities. • To employ investment managers who deliver stable and is reflected as a key performance indicator at projections, monthly monitoring and scrutinising portfolios meeting the Fund’s objectives with low • Identifying current and emerging needs within Board level. of management accounts, maintaining continuous management fees. the RAF family and developing appropriate Restricted funds (funds held against a specific purpose) oversight of investment performance and the welfare provision. The return on investments in the year comprises the held at the end of 2016 stood at £5m (2015: £4.6m). This appraisal/development of a fundraising strategy. investment income generated and the capital gains or • Continuing preparations for the RAF Centenary represents the unexpended balance of funds received losses on the underlying investments. During 2016, the in 2018. for specific charitable activities. investments achieved a total return of 13% (2015: 1%). Plans for Future Periods • Developing plans and initiatives for the RAF Endowment funds were £5.4m (2015: £ 5.1m) and Benevolent Fund Centenary in 2019. include both permanent and expendable funds. The Fund’s research continues to provide the bedrock Reserves Policy Following a review, £12,832 previously classified as of our thinking and future developments. 2016 saw the expendable endowments were released. Income bedding in of a number of new welfare initiatives which Free reserves are the resources the Fund has to make earned on endowed funds has been applied to were introduced as a result of our welfare research available for any or all of the Fund’s purposes once it charitable activities. entitled ‘Meeting the Needs of the RAF family’. To date, has met its commitments and covered other planned all have proved themselves to be useful additions to the expenditure. Free reserves exclude restricted funds, increasingly broad spectrum of care that we offer to the endowed funds, fixed assets and loans to beneficiaries. Major Risks and Uncertainties RAF family. The Fund holds a level of free reserves to ensure that Trustees undertake a regular assessment of business In 2016, we established the RAF100 Appeal, a joint it is able to meet the needs of its current and future risks and risk management procedures. venture with the Royal Air Force, the RAF Association, beneficiaries given potential future risks. We take a the RAF Charitable Trust and the RAF Museum. The risk-based approach to determine our free reserves The major risks to which the Charity group is exposed, RAF100 Appeal was set up to commemorate and requirement by evaluating an equivalent cost associated as identified by the Senior Management Team, have celebrate the RAF’s centenary in 2018. with each of the major risks on our risk register. This been reviewed by the Trustees and systems have 20 Trustees’ Report Trustees’ Report 21

The Fund’s Remuneration Policy centres on the • Select suitable accounting policies and then apply Governance following principles: them consistently; • Reward employees using processes that are fair • Observe the methods and principles in the and equitable; Charities SORP;

The Board of Trustees consists of up to 15 Trustees, • Aim to pay competitively against our relevant • Make judgements and estimates that are Structure, Governance comparators in the voluntary sector; reasonable and prudent; and Management reflecting a mixture of those who are serving or have served in the Royal Air Force and those who have a • Enhance the organisation’s competitive positioning • State whether applicable UK accounting standards Reference and Administrative Details background in industry, commerce or the charitable by promoting a total reward approach, recognising have been followed, subject to any material sector. The Board is assisted by committees overseeing The Royal Air Force Benevolent Fund has the registration that other aspects of the employment package (e.g. departures disclosed and explained in the financial welfare, finance, fundraising and communications plus number 1081009. As the Fund owns land in Scotland it benefits and development opportunities as well as statements; remuneration activities, and is aided by a number of the intrinsic moral value of working for a charity) are is also registered with the Office of the Scottish Charity • Prepare the financial statements on the going advisory bodies. also valuable to employees. Regulator in order to comply with the Charities and concern basis unless it is inappropriate to presume Trustee Investment (Scotland) Act 2005; the registration The Board is responsible for the strategic direction of that the Charity will continue in business. number is SCO38109. The restricted and endowed the Charity and, through its committees, for monitoring The Trustees are responsible for keeping proper funds of the Charity have a separate registration the activities of the executive staff. It reviews the Remuneration Review and Annual accounting records that disclose with reasonable number which is 207327. position of the Charity and receives regular reports from Pay Award accuracy at any time the financial position of the Charity the committees and the Senior Management Team. The The Fund has a Remuneration Committee, composed of In accordance with the provisions of Section 96 of the and which enable them to ensure that the financial Board also conducts regular performance reviews of Trustees, which reviews the Fund’s remuneration policy Charities Act 1993, the Charity Commission has directed statements comply with the Charities Act 2011, the the Fund’s senior management and undergoes its own annually in order to ensure the principles listed above that for all or any of the purposes of the Act, the Royal Charities and Trustee Investment (Scotland) Act 2005 Board appraisal. It met five times in 2016. are adhered to and remain appropriate. At the review Air Force Benevolent Fund (Charity Number 1081009) meeting, the Committee will also consider an annual and the Charities Accounts (Scotland) Regulations 2006 and the Royal Air Force Benevolent Fund (Restricted The Board is responsible for approving the business pay award, the purpose of which is to take account of and the provisions of its Royal Charter. and Endowed Funds – Charity Number 207327), having plan and a range of supporting strategies. The Controller changes in pay movement externally and to reward They are also responsible for safeguarding the assets the same Board of Trustees, are to be treated as and Directors review strategic and policy matters and sustained contribution in the role. of the Charity and, hence, for taking reasonable steps a single charity. make recommendations to the Board as appropriate. for the prevention and detection of fraud and other The Controller, as Chief Executive of the Charity, is In order to support pay decisions, the Remuneration The RAF Benevolent Fund group also encompasses irregularities. responsible for the day-to-day management of the Committee is provided with external market information other entities, details of which can be found at the Charity’s affairs and for implementing the strategies and through the XPert HR annual voluntary-sector salary In so far as the Trustees are aware: back of this report. policies agreed by the Board. survey. All recommendations are then submitted to • There is no relevant audit information of which the The Charity, which was set up in 1919, was incorporated the Board of Trustees end of year meeting for final The Charity provides support for the RAF family through Charity’s auditor is unaware; by Royal Charter in 1999. Trustees are appointed by the approval. In 2016, Trustees awarded a 1.25% uplift in a range of agencies and other charities, as shown on Council for a four-year term, after which they are eligible salary for all staff. • They have taken all steps that they ought to have pages 52–53. The Trustees are grateful to these bodies, for re-election for a further four-year term. Trustees may taken to make themselves aware of any relevant and especially the unpaid caseworkers and other In accordance with the SORP the Fund discloses: all not hold office for a continuous period exceeding eight audit information and to establish that the auditor is volunteers that act on behalf of the Charity, without payments to Trustees (our Trustees do not receive years or, without the consent of the Board, after their aware of that information. whom the Charity would be unable to meet the needs of ‘pay’ but are recompensed for valid transport and 75th birthday. its beneficiaries. subsistence expenses); the number of staff in receipt of The information on pages 2 - 23 forms part of the New Trustees are selected with a view to ensuring that more than £60,000 in salary and other benefits. Trustees’ Report. the Board has an appropriate balance of experience relevant to the Fund’s strategic and operational STAFF requirements. Trustees are recruited through Statement of Trustees’ Approved by the Board of Trustees on 13 June 2017 advertisements in the media and a range of networks, Remuneration Policy Responsibilities and signed on its behalf by and are considered by a Nominations Committee on The Fund is committed to recruiting, retaining and behalf of the Board of Trustees and the Council. Each developing people with the necessary skills and The Trustees are responsible for preparing the Trustees’ Trustee is provided with a briefing pack and an individual knowledge to deliver the organisation’s objectives and Report and the financial statements in accordance induction programme is agreed and implemented the ability to make a positive contribution. Making with applicable law and United Kingdom Accounting covering all aspects of the role and the work of the effective decisions in relation to remuneration and Standards (United Kingdom Generally Accepted Lawrie Haynes Charity. The Board, either as a whole or through its sub- reward is considered both central and crucial to the Accounting Practice). committees, also receives on-going briefings and training continued success of the Fund’s overall aims. The law applicable to charities in England and Wales Chairman, Royal Air Force Benevolent Fund from senior management and external advisors in critical requires the Trustees to prepare financial statements Signed on 27 July 2017 areas such as risk management, reserves, fundraising for each financial year which give a true and fair view of practices and data protection. the state of the affairs of the Charity and the group, and of the incoming resources and application of resources of the group for that period. In preparing these financial statements, the Trustees are required to: 22 Trustees’ Report Trustees’ Report 23

Principal PROFESSIONAL ADVISERS

Independent Auditor Custodian Trustees

Kingston Smith LLP The Northern Trust Corporation (until September 2016) (until June 2016) Devonshire House 155 Bishopsgate 60 Goswell Road London London EC2M 3XS EC1M 7AD

BNY Mellon Centre Saffery Champness LLP 160 Queen Victoria Street (from September 2016) London 71 Queen Victoria Street EC4V 4LA London EC4V 4BE

Investment Managers Bankers Newton Investment Management Ltd (until June 2016) Barclays Bank plc BNY Mellon Centre 1 Churchill Place 160 Queen Victoria Street London London E14 5HP EC4V 4LA

Lloyds Bank plc Sarasin & Partners LLP Cox’s and King’s Branch Juxon House 7 Pall Mall 100 St Paul’s Churchyard London London SW1Y 5NA EC4M 8BU

Aberdeen Asset Management plc (until December 2016) Actuary Bow Bells House Broadstone Corporate Benefits Ltd 1 Bread Street London 55 Baker Street EC4M 9HH London W1U 7EU BlackRock Investment “The scooter is marvellous, I go Management (UK) Limited (from June 2016) everywhere on it. It’s so nice to Solicitors 12 Throgmorton Avenue London just jump on and go out and see Charles Russell Speechlys LLP EC2N 2DL 5 Fleet Place my friends. I couldn’t be without it. London EC4H 7RD CCLA Investment Management It’s the best present I’ve ever had!” Limited (from June 2016) RAF veteran Sam Lavender, 90, who was supported Senator House by the RAF Benevolent Fund 85 Queen Victoria Street London EC4V 4ET 24 Independent Auditor’s Report to the Trustees 25

Matters on which we are required to report Independent Auditor’s by exception

We have nothing to report in respect of the following Report to the Trustees matters where the Charities Act 2011 and the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:

• the information given in the Trustees’ Report is We have audited the financial statements of The Royal Scope of the audit of the inconsistent in any material respect with the financial Air Force Benevolent Fund for the year ended 31 financial statements statements; or December 2016 set out on pages 26–57. The financial reporting framework that has been applied in their An audit involves obtaining evidence about the • the Charity has not kept proper and sufficient preparation is applicable law and United Kingdom amounts and disclosures in the financial statements accounting records; or Accounting Standards (United Kingdom Generally sufficient to give reasonable assurance that • the financial statements are not in agreement with Accepted Accounting Practice), including Financial the financial statements are free from material the accounting records and returns; or Reporting Standard 102. misstatement, whether caused by fraud or error. This • we have not received all the information and Our audit work has been undertaken so that we might includes an assessment of: whether the accounting explanations we require for our audit. state to the Trustees those matters we are required policies are appropriate to the group’s and the parent to state to them in an auditors’ report and for no charity’s circumstances and have been consistently other purpose. To the fullest extent permitted by law, applied and adequately disclosed; the reasonableness we do not accept or assume responsibility to anyone of significant accounting estimates made by the other than the Charity and the Trustees as a body, for Trustees; and the overall presentation of the financial statements. In addition, we read all the financial and our audit work, for this report, or for the opinions we Saffery Champness LLP non-financial information in the Trustees’ Report to have formed. Chartered Accountants identify material inconsistencies with the audited Statutory Auditors financial statements and to identify any information 71 Queen Victoria Street that is apparently materially incorrect based on, or London EC4V 4BE materially inconsistent with, the knowledge acquired Respective responsibilities by us in the course of performing the audit. If we Date: 2 August 2017 of Trustees and auditors become aware of any apparent material misstatements Saffery Champness LLP is eligible to act as an auditor in or inconsistencies we consider the implications for As explained more fully in the Statement of Trustees’ terms of section 1212 of the Companies Act 2006. our report. Responsibilities, the Trustees are responsible for the The Trustees are responsible for the maintenance and preparation of the financial statements and for being integrity of the corporate and financial information satisfied that they give a true and fair view. Opinion on the included on the charity’s website. We have been appointed as auditors under the financial statements Legislation in the United Kingdom governing the Charities Act 2011 and the Charities and Trustee preparation and dissemination of financial statements Investment (Scotland) Act 2005 and report in In our opinion the financial statements: may differ from legislation in other jurisdictions. accordance with regulations made under those Acts. • give a true and fair view of the state of the group’s Our responsibility is to audit and express an opinion on and the parent charity’s affairs as at 31 December the financial statements in accordance with applicable 2016 and of the group’s incoming resources and law and International Standards on Auditing (UK application of resources for the year then ended; and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards • have been properly prepared in accordance with for Auditors. United Kingdom Generally Accepted Accounting Practice;

• have been prepared in accordance with the requirements of the Charities Act 2011; and

• have been prepared in accordance with the requirements of the Charities and Trustee Investment (Scotland) Act 2005 and regulations 6 and 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended). 26 27 financial statements Consolidated Statement of Financial Activities For the year ended 31 December 2016

Note Unrestricted Restricted Endowed 2016 Unrestricted Restricted Endowed 2015 Funds Funds Funds Total Funds Funds Funds Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Income and endowments from: Income and endowments from: Donations and legacies 15,512 1,600 - 17,112 Donations and legacies 13,415 1,938 - 15,353 Charitable activities 1,790 17 - 1,807 Charitable activities 1,707 16 - 1,723 Other trading activities 427 12 - 439 Other trading activities 754 11 - 765 Investments 2,130 146 - 2,276 Investments 1,299 124 4 1,427 Other income 1,718 - - 1,718 Other income 4,946 - - 4,946 Total income 2 21,577 1,775 - 23,352 Total income 22,121 2,089 4 24,214 Expenditure on raising funds: Expenditure on raising funds: Donations and Legacies 4,295 - - 4,295 Donations and Legacies 3,556 - - 3,556 Other Trading Activities 273 9 - 282 Other Trading Activities 520 13 - 533 Investments 329 - - 329 Investments 369 - - 369 4,897 9 - 4,906 4,445 13 - 4,458 Expenditure on charitable activities: Expenditure on charitable activities: Direct support to individuals 7,935 634 10 8,579 Direct support to individuals 8,172 236 - 8,408 Welfare programmes 2,296 101 - 2,397 Welfare programmes 1,899 169 - 2,068 Residential and respite care 2,757 282 - 3,039 Residential and respite care 3,313 656 - 3,969 Housing Trust support 2,409 192 - 2,601 Housing Trust support 2,560 127 - 2,687 External grants 733 277 - 1,010 External grants 1,048 - - 1,048 16,130 1,486 10 17,626 16,992 1,188 - 18,180

Total expenditure 3 21,027 1,495 10 22,532 Total expenditure 21,437 1,201 - 22,638

550 280 (10) 820 684 888 4 1,576 Net gains/(losses) on investments 11 6,910 45 360 7,315 Net gains/(losses) on investments (710) (18) (4) (732)

Net income/(loss) 7,460 325 350 8,135 Net income/(loss) (26) 870 - 844

Other recognised gains and losses: Other recognised gains and losses: Actuarial losses on defined benefit pension 15 (8,653) - - (8,653) Actuarial losses on defined benefit (146) - - (146) scheme pension scheme Net movement in funds (1,193) 325 350 (518) Net movement in funds (172) 870 - 698

Total funds brought forward 113,816 4,655 5,077 123,548 Total funds brought forward 113,988 3,785 5,077 122,850 Total funds carried forward 19 112,623 4,980 5,427 123,030 Total funds carried forward 113,816 4,655 5,077 123,548

The notes on pages 26 to 58 form part of the financial statements. All amounts relate to continuing operations. All gains and losses recognised in the year are included in the statement of financial activities. 28 29

Consolidated and Charity Balance Sheets Consolidated Statement of Cash Flows As at 31 December 2016 For the year ended 31 December 2016

2016 2015 Note Group Group Charity Charity 2016 2015 2016 2015 £’000 £’000 £’000 £’000 £’000 £’000 Cash flows from operating activities: Net cash used in operating activities (5,148) (1,663) Fixed assets Intangible assets 9 22 543 22 543 Cash flows from investing activities: Tangible assets 10 33,389 34,311 10,868 11,272 Dividends and interest from investments 2,276 1,427 Investments 11 71,219 66,680 66,491 62,881 Proceeds from the sale of property 2,284 6,157 Loans to beneficiaries 12 11,817 13,039 11,817 13,039 Purchase of property plant and equipment (1,047) (1,287) 116,447 114,573 89,198 87,735 Net proceeds from sale of investments 2,777 (42) Current assets Net cash provided by investing activities 6,290 6,255 Stock 5 28 - 2 Debtors and prepayments 13 6,176 2,483 19,076 17,901 Cash flows from financing activities: Loans awarded (1,017) (577) Cash at bank and in hand 16,510 14,185 16,106 12,366 Loan repayments 2,200 1,642 22,691 16,696 35,182 30,269 Net cash provided by financing activities 1,183 1,065 Current liabilities Creditors and accrued charges: amounts 14 (1,662) (1,655) (1,623) (1,579) Change in cash and cash equivalents in the year 2,325 5,657 falling due within one year Cash and cash equivalents as at 1 January 14,185 8,528 Net current assets 21,029 15,041 33,559 28,690 Cash and cash equivalents as at 31 December 16,510 14,185

Net assets excluding long-term liabilities 137,476 129,614 122,757 116,425 Reconciliation of net income to net cash flow from operating activities/ and pension liability outgoing resources Defined benefit pensions liability 15 (14,446) (6,066) (14,446) (6,066) Net income for the year ended 31 December 8,135 844 Total net assets 123,030 123,548 108,311 110,359 Adjustments for: Depreciation charges 1,664 1,776 Funds (Gains)/losses on investments (7,315) 732 Endowed 5,427 5,077 5,427 5,076 Dividends and interest from investments (2,276) (1,427) Restricted 4,980 4,655 4,980 4,655 (Profit) on the sale of fixed assets (1,459) (4,682) Unrestricted – designated funds - - - - Provision for loan conversions (20) (43) Unrestricted – general funds 127,069 119,882 112,350 106,694 Loan interest (97) (122) Pension reserve (14,446) (6,066) (14,446) (6,066) Loans converted to grants 84 173 19 123,030 123,548 108,311 110,359 Loans written off 72 278 Decrease in stock 23 51 Approved by the Board of Trustees on 13 June 2017 and signed on its behalf by (Increase)/decrease in debtors (3,693) 1,194 Increase/(decrease) in creditors 7 (349) Pension interest income 227 212 Pension fund costs (500) (300) Net cash used in operating activities (5,148) (1,663) Lawrie Haynes

Chairman, Board of Trustees Analysis of cash and cash equivalents Signed on 27 July 2017 Current accounts 5,121 11,810 Deposit account 32 day notice 11,389 2,375 Total cash and cash equivalents 16,510 14,185 30 31

Notes to the Financial Statements for the year ended 31 December 2016 Recognition of income Tangible fixed assets and endowments and depreciation 1 Principal Accounting Policies Income is recognised in the statement of financial Tangible fixed assets costing more than £1,000 (£5,000 activities (SOFA) when the Charity becomes entitled to in the Housing Trust) are capitalised and included at These are the financial statements of the Royal Air Force going concern. The Trustees have made this assessment it, it is more likely than not that the gift will be received, cost, including any incidental expense of acquisition. Benevolent Fund and its related entities. The Charity for a period of at least one year from the date of the and the monetary value of the income can be estimated Depreciation is provided on all tangible fixed assets was incorporated by Royal Charter in England and Wales approval of the financial statements considering in with sufficient accuracy. Entitlement to legacy income at rates calculated to write off the cost on a straight-line on 29 December 1999. The Trustees of the Charity are particular the level of reserves held by the Charity and is assumed when there is sufficient evidence that a basis over their expected useful economic lives named on page 2. The registered office is 67 Portland future financial plans and forecasts. The Trustees are gift has been left to the Charity, usually through the as follows: Place, London W1B 1AR. assured that there are adequate resources to continue notification of a will. Receipt of legacy income is deemed to operate for the foreseeable future. The Charity probable when there has been a grant of probate, and it • freehold land nil therefore continues to adopt the going concern basis in has been established that there are sufficient assets in • freehold buildings over 50 years Accounting convention preparing its financial statements. the estate to pay the legacy and there are no conditions attached to the legacy that are outside the control of the • leasehold buildings over the life of the lease These financial statements have been prepared Charity or uncertainty around receipt of this gift. Income • leasehold improvements over 30 years on a going concern basis under the historical cost Fund accounting from pecuniary legacies is recognised upon notification convention, with the exception of investments which • project and office equipment over five years or receipt if earlier. are included at market value, and in accordance with General funds are unrestricted funds that are available • computer equipment over three years applicable accounting standards. for use at the discretion of the Trustees in furtherance Gifts donated for resale are included as income when of the general objects of the Charity and that have not they are sold. No amounts are included in the financial • motor vehicles over five years The financial statements have been prepared in been designated for other purposes. statements for services donated by volunteers. accordance with the Financial Reporting Standard • equipment held applicable in the UK and Republic of Ireland (FRS 102). Designated funds comprise unrestricted funds that have under finance leases over the life of the lease The Charity and its subsidiaries are public benefit been set aside by the Trustees for particular purposes. Recognition of expenditure entities for the purposes of FRS 102 and therefore The aim and use of the designated funds will be set out A full year’s depreciation is provided in the year of asset the financial statements have been prepared in in the notes to the financial statements when applicable. Expenditure is recognised in the SOFA on an accrual acquisition, and none in the year of disposal. accordance with the Statement of Recommended No funds were designated as at 31 December 2016. basis when an obligation that can be measured or Practice applicable to charities preparing their accounts Restricted funds are funds that are to be used in reliably estimated exists at the reporting date and it is in accordance with the Financial Reporting Standard accordance with specific restrictions imposed by donors more than likely that payment will be paid in settlement. applicable in the UK and Republic of Ireland (Charities Intangible fixed assets or that have been raised by the Charity for particular Two main categories of expenditure shown in the SOFA SORP (FRS102)), the Charities Act 2011 and the Charities and amortisation purposes. The costs of raising and administering such are expenditure on raising funds and expenditure Accounts (Scotland) Regulations 2006 as amended by on charitable activities. Expenditure on raising funds funds are charged against specific funds. The aim and Software is classified as an intangible fixed asset and the Charities Accounts (Scotland) Amendment (No. 2) includes all expenditure incurred to raise voluntary use of the larger restricted funds is set out in the notes is capitalised where the cost plus incidental expenses Regulations 2014. income to spend on charitable purposes. Expenditure to the financial statements. incurred in acquisition is more than £1,000. The statement of financial activities (SOFA) and balance on charitable activities includes all costs incurred by the Endowment funds are either permanent or expendable. sheet consolidate the financial statements of the Charity Charity in carrying out its charitable aims to support the Amortisation is provided on intangible fixed assets to Permanent funds are normally held indefinitely, while and its subsidiary undertakings. The results of the beneficiaries of the RAF Benevolent Fund. write off the capitalised value on a straight-line basis Trustees have the power to convert expendable funds subsidiary entities are consolidated on a line by line over three years. A full year’s amortisation is provided into income. These funds are shown separately in basis. A summary of the results of the subsidiary entities in the year of asset acquisition, and none in the year of the accounts on page 54. The return on endowment is shown in Note 20. Support costs disposal. investments is made up of income earned and gains or losses in the market value of the investments. Support costs have been classified as: Information Going concern Income generated from endowment funds are spent on Technology and Facilities, Depreciation, General Foreign currencies charitable activities. Management and Administration, Finance, HR, Payroll Transactions in foreign currencies are recorded at the The Trustees have assessed whether the use of the Investment income and gains are allocated to the and Governance. These costs have been allocated rate ruling at the date of the transaction. Monetary going concern basis is appropriate and have concluded appropriate fund. to activities on a basis consistent with the use of that there are no likely events or conditions that might resources, and in direct costs have been apportioned assets and liabilities are retranslated at the exchange cast doubt on the ability of the Charity to continue as a on a headcount basis or in proportion to direct costs rate ruling at the balance sheet date. All differences are or income. taken to the SOFA. 32 Notes to the Financial Statements for the year ended 31 December 2016 33

Related party disclosures Finance and Operating Leases Judgements and Key Sources of Estimation Uncertainty The Charity has made the required disclosures The RAFBF does not have any finance leases. Rentals in accordance with the Charities SORP (FRS 102). payable under operating leases are charged to the In the application of the Charity’s accounting policies, Transactions with group undertakings are eliminated Statement of Financial Activities over the period in the trustees are required to make judgements, on consolidation. which the cost is incurred on a straight-line basis. estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated Grant commitments Loans assumptions are based on historical experience and other factors that are considered to be relevant. Grants awarded are provided in the SOFA in the year in Loans are awarded to beneficiaries in furtherance of which they are approved by the Trustees and the offer charitable activities. The particular circumstances of Actual results may differ from these estimates. is conveyed to the recipient. Grants awarded but not each case will determine whether or not the loan is The estimates and underlying assumptions are reviewed paid are recorded as a liability within the balance sheet. awarded free of interest. When interest is charged on an ongoing basis. Revisions to accounting estimates the rate is considerably lower than prevailing market are recognised in the period in which the estimate is rates. Loans are recognised as assets at the value of revised where the revision affects only that period, or in Investments the award and accrued interest where applicable, is the period of the revision and future periods where the added to the balance of the loan and credited to the revision affects both current and future periods. Investments are stated at market value at the Statement of Financial Activities. Repayments are made The most significant estimates and assumptions which balance sheet date. The SOFA includes the net gains as provided in the Loan agreement. To facilitate the affect the carrying amount of assets and liabilities in the and losses arising on revaluation and disposals relief of hardship and distress, the commencement of accounts relate to: throughout the year. repayments can be deferred. Useful economic lives - The annual depreciation charge for property, plant and equipment is sensitive Stock Financial Instruments to change in the estimated useful economic lives and residual value of assets. These are reassessed Stock consists of purchased goods for resale. Stocks The Charity has elected to apply the provisions of annually and amended where necessary to reflect are valued at the lower of cost and net realisable Section 11 ‘Basic Financial Instruments’ and Section current circumstances. value. Items donated for resale or distribution are not 12 ‘Other Financial Instruments Issues’ of FRS 102 to Unsecured loans - A small proportion of loans to included in the financial statements until they are sold all of its financial instruments. Financial instruments beneficiaries are not secured and therefore a general or distributed. are recognised in the Charity’s balance sheet when the provision for non-repayment is made. Charity becomes party to the contractual provisions of the instrument. Financial assets and liabilities are The calculation of this provision is based on the Pension costs offset, with the net amounts presented in the financial historical average rate of default and equates to statements, when there is a legally enforceable right 10% of the total value of unsecured loans at the Pensions are accounted for in accordance with to set off the recognised amounts and there is an balance sheet date. FRS102 section 28, with a valuation undertaken by an intention to settle on a net basis or to realise the asset independent actuary for the defined benefit scheme, and settle the liability simultaneously. The Royal Air Force Benevolent Fund Staff Pension Fund, which is closed to future accrual. Net pension With the exceptions of prepayments and deferred finance income or costs are included immediately income all other debtor and creditor balances are in other income or employee costs as appropriate. considered to be basic financial instruments under FRS Actuarial gains and losses are recognised immediately 102. See notes 13 and 14 to the accounts. on the face of the Statement of Financial Activities. The scheme deficit is included as a liability in the balance sheet. Details of the pension scheme are included in note 15 to the accounts. The amounts charged to the Statement of Financial Activities for defined contribution schemes represent the contributions payable in the period. 34 Notes to the Financial Statements for the year ended 31 December 2016 35

2 Income and Endowments

Unrestricted Restricted Endowed Total 2016 Unrestricted Restricted Endowed Total 2015 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Donations and legacies Donations and legacies Royal Air Force service personnel 1,592 - - 1,592 Royal Air Force service personnel 1,615 - - 1,615 General donations 2,111 1,255 - 3,366 General donations 2,728 1,032 - 3,760 Gifts in kind 40 - - 40 Gifts in kind - - - - LIBOR funding - - - - LIBOR funding - 500 - 500 Legacy income 11,769 345 - 12,114 Legacy income 9,072 406 - 9,478 15,512 1,600 - 17,112 13,415 1,938 - 15,353

Charitable activities Charitable activities Housing 1,040 17 - 1,057 Housing 1,033 16 - 1,049 Residential and respite care 653 - - 653 Residential and respite care 552 - - 552 Loan interest 97 - - 97 Loan interest 122 - - 122 1,790 17 - 1,807 1,707 16 - 1,723

Other trading activities Other trading activities Income from fundraising events 334 12 - 346 Income from fundraising events 612 11 - 623 Trading income 79 - - 79 Trading income 126 - - 126 Rental income 14 - - 14 Rental income 16 - - 16 427 12 - 439 754 11 - 765

Investment income Investment income Dividends from pooled funds 2,096 137 - 2,233 Dividends from pooled funds 834 108 4 946 Dividends from fixed interest securities - - - - Dividends from fixed interest securities 445 - - 445 Interest earned 34 9 - 43 Interest earned 20 16 - 36 2,130 146 - 2,276 1,299 124 4 1,427

Other income Other income Profit on the sale of fixed assets 1,459 - - 1,459 Profit on the sale of fixed assets 4,682 - - 4,682 Pension interest income 248 - - 248 Pension interest income - - - - Administration fee 11 - - 11 Administration fee 254 - - 254 Administration recovery - - - - Administration recovery 10 - - 10 1,718 - - 1,718 4,946 - - 4,946

Total income 21,577 1,775 - 23,352 Total income 22,121 2,089 4 24,214 36 Notes to the Financial Statements for the year ended 31 December 2016 37

3 Analysis of Expenditure 4 Analysis of Support Costs

Direct costs External grants Support costs Total 2016 Raising Direct Welfare Residential Housing External Total 2016 £’000 £’000 £’000 £’000 funds support to programmes and respite support grants individuals care Raising funds £’000 £’000 £’000 £’000 £’000 £’000 £’000 Donations and legacies 1,570 - 1,659 3,229 Regional engagement 1,066 - - 1,066 Information technology 405 283 83 77 94 38 980 Other trading activities 282 - - 282 and facilities Investments 329 - - 329 Depreciation and 373 536 155 146 178 72 1,460 3,247 - 1,659 4,906 amortisation General management 370 301 88 82 101 41 983 and administration Charitable activities Finance 239 199 58 54 66 27 643 Direct support to individuals 7,087 - 1,492 8,579 HR and Payroll 145 92 27 25 31 12 332 Welfare programmes 122 1,840 435 2,397 Governance 127 81 24 22 27 11 292 Residential and respite care 2,503 130 406 3,039 Total 1,659 1,492 435 406 497 201 4,690 Housing Trust support 2,104 - 497 2,601 External grants 271 538 201 1,010 12,087 2,508 3,031 17,626 Raising Direct Welfare Residential Housing External Total 2015 funds support to programmes and respite support grants individuals care Total 15,334 2,508 4,690 22,532 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Direct costs External grants Support costs Total 2015 Information technology 441 332 96 124 127 49 1,169 £’000 £’000 £’000 £’000 and facilities Raising funds Depreciation and 351 428 124 160 163 63 1,289 amortisation Donations and legacies 1,326 - 1,242 2,568 General management 240 181 52 68 69 26 636 Regional engagement 989 - - 989 and administration Other trading activities 348 - 186 534 Finance 247 186 54 70 71 27 655 Investments 369 - - 369 HR and Payroll 76 57 17 21 22 8 201 3,032 - 1,428 4,460 Governance 73 55 16 21 21 8 194 Total 1,428 1,239 359 464 473 181 4,144 Charitable activities Direct support to individuals 7,168 - 1,239 8,407 Welfare programmes 100 1,608 359 2,067 Residential and respite care 3,305 200 464 3,969 Housing Trust support 2,214 - 473 2,687 External grants 37 830 181 1,048 12,824 2,638 2,716 18,178

Total 15,856 2,638 4,144 22,638 38 Notes to the Financial Statements for the year ended 31 December 2016 39

5 Staff Costs 7 Net Income

2016 2015 2016 2015 £’000 £’000 £’000 £’000 Wages and salaries 4,715 4,335 Net income for the year is stated after charging: Social security costs 477 426 Audit fees – current auditor 35 - Pension costs 430 400 Audit fees – previous auditor 5 35 Termination & redundancy costs 158 20 Internal audit fees 44 49 5,780 5,181 Custodian trustee - 11 Investment management fees 329 444 The number of employees whose pay and benefits (excluding pension contributions) amounted to more Amortisation of intangible assets 521 520 than £60,000 in the year was as follows: Depreciation 1,143 1,256

£60,001 – £70,000 3 3 8 Trustees’ Remuneration £70,001 – £80,000 - 1 £90,001 – £100,000 2 1 The Trustees neither received nor waived any emoluments during the year 2016 (2015: £NIL). £100,001 – £110,000 1 1 Out-of-pocket expenses were reimbursed to Trustees as follows: £140,001 – £150,000 - 1 2016 2015 2016 2015 £210,000 – £220,000 *1 - Number Number £ £ 7 7 Travel 2 2 2,129 2,158 *This employee is no longer employed by the RAFBF. Six employees whose pay and benefits amounted to more than £60,000 in the year were members of the Group Personal Pension Plan, a money purchase scheme. 9 Intangible Assets The RAFBF benchmarks salaries against the XpertHR voluntary sector salary survey. Group Charity The average number of employees, calculated on a full-time equivalent basis, analysed by function was: 2016 2016 2016 2015 £’000 £’000 Charitable activities 113 109 Software costs Cost of raising funds 42 38 Cost on 1 January 3,728 3,728 Governance, administration and support 18 16 Additions during the year - - 173 163 Disposals during the year (802) (802) Cost at 31 December 2,926 2,926 6 Key Management Personnel Amortisation at 1 January (3,185) (3,185) Amortisation for the year (521) (521) The key management personnel of the RAF Benevolent Fund are the trustees and the Senior Management Amortisation on disposals during the year 802 802 Team. In 2016, the latter included the Controller, the Director of Welfare and Policy, the Director of Strategy and Fundraising and the Director of Finance and IT. Total employee benefits received by SMT for services to Accumulated amortisation at 31 December (2,904) (2,904) the RAFBF in 2016 were £564,000 (2015: £478,000). Trustees received no remuneration.

Net book value 31 December 2016 22 22

Net book value 31 December 2015 543 543 40 Notes to the Financial Statements for the year ended 31 December 2016 41

10 Tangible Fixed Assets 11 Fixed Asset Investments

Group Group Charity Charity Group Charity 2016 2015 2016 2015 Property Equipment Total Property Equipment Total £’000 £’000 £’000 £’000 2016 2016 2016 2016 2016 2016 Market value as at 1 January 66,680 67,370 62,881 63,359 £’000 £’000 £’000 £’000 £’000 £’000 Additions 69,829 - 65,064 - Cost on 1 January 42,210 2,280 44,490 13,479 2,280 15,759 Withdrawals (72,605) 42 (68,490) 42 Additions during the year 864 183 1,047 - 183 183 Net investment gains/(losses) 7,315 (732) 7,036 (520) Disposals during the year (1,146) - (1,146) - - - Market value at 31 December 71,219 66,680 66,491 62,881 Cost at 31 December 41,928 2,463 44,391 13,479 2,463 15,942 Net assets at historical cost at 31 December 66,498 65,439 61,733 62,878 Depreciation at 1 January (8,395) (1,785) (10,180) (2,703) (1,785) (4,488) Depreciation for the year (914) (229) (1,143) (357) (229) (586) UK listed investments are represented by: Disposals during the year 321 - 321 - - - Fixed interest securities - 22,355 - 21,085 Accumulated depreciation (8,988) (2,014) (11,002) (3,060) (2,014) (5,074) Pooled funds & unit trusts 70,645 43,811 65,917 41,283 at 31 December RAF Disabled Holiday Trust Bonds 549 469 549 469 Investment properties - 3 - 3 Net book value 31 December 32,940 449 33,389 10,419 449 10,868 Investment in joint venture 25 - 25 - 2016 Cash - 42 - 41 Total 71,219 66,680 66,491 62,881 Net book value 31 December 2015 33,815 495 34,310 10,776 495 11,271

RAFBF is the sole trustee of the RAF Disabled Holiday Trust whose net assets to the value of £549k are included within Net book value 31 December investments. Also included is the Charity’s share capital in the RAFBF Trading Co Ltd, the results of this subsidiary analysed as follows: entity are shown in Note 20.

Gulf Trust Fund 154 - 154 154 - 154 In 2016 RAFBF provided a £25k short-term loan facility to the RAF100 Appeal to help with working capital Princess Marina House 4,009 417 4,426 4,009 417 4,426 requirements. All the other joint venture partners did the same. The RAF100 Appeal was established in January 2016 RAFBF/RAFA residential and 828 - 828 828 - 828 and there was limited activity throughout the year. The principal activity is to agree and coordinate the charitable respite homes company’s plans for the centenary year and its associated fundraising activities. Headquarters – London 5,428 32 5,460 5,428 32 5,460 Charity 10,419 449 10,868 10,419 449 10,868 RAFBF Housing Trust Ltd 22,521 - 22,521 - - - Group 32,940 449 33,389 10,419 449 10,868

The net book value of properties comprises: Freehold 31,912 - 31,912 10,419 - 10,419 Long leasehold 1,028 - 1,028 - - - 32,940 - 32,940 10,419 - 10,419

Properties held by the Housing Trust are held to support charitable activities. Properties are held so that beneficiaries including wounded, injured or sick personnel who have been medically discharged from the RAF, can live in suitable, usually heavily adapted accommodation. Properties are stated at historical cost and depreciated as per the policy stated in Note 1. 42 Notes to the Financial Statements for the year ended 31 December 2016 43

12 Loans to Beneficiaries 15 Pension Commitments

Group Group Charity Charity 2016 2015 2016 2015 The Royal Air Force Benevolent Fund pension arrangements are as follows: £’000 £’000 £’000 £’000 A Group Personal Pension Scheme made up of a collection of individual pension plans arranged by the Fund and is provided an Insurance provider. This was provided by Friends Life Limited up to October 2016, from Balance as at 1 January 13,039 14,390 13,039 14,390 November 2016 this service as been provided by Royal London. The liability of the employer is limited to New loans 1,017 577 1,017 577 the contributions it makes which amounted to £430K (2015: £400k) of which £44k remained payable at the Interest charged 97 122 97 122 year end. 14,153 15,089 14,153 15,089 The Royal Air Force Benevolent Fund Staff Pension Fund is a defined benefit scheme. The scheme was closed to new members on 31 August 2005 and was closed to future accrual on 1 April 2014. The most recent actuarial valuation was carried out as at 31 December 2014. The results of this valuation have been updated to Repayments (2,200) (1,642) (2,200) (1,642) 31 December 2016 by a qualified actuary. Under the Schedule of Contributions agreed as part of the actuarial valuation as at 31 December 2014, the employer paid £100,000 during 2016 (2015: £700,000), to be followed Loans converted to grants (84) (173) (84) (173) by £41,667 per calendar month until 31 January 2020. Based on the current Schedule of Contributions, it is Bad debts written off (72) (278) (72) (278) expected that the employer’s contributions to the Scheme over the accounting year to 31 December 2017 will Provision for loan conversion 20 43 20 43 be £500,000. Balance at 31 December 11,817 13,039 11,817 13,039 2016 2015 £’000 £’000 Loans are awarded to beneficiaries to support charitable activities. Loans are usually provided so that Reconciliation of funded status to Balance Sheet beneficiaries who are unable to carry out essential repairs can continue to live in their own homes. Loan interest is charged depending on the nature of the case and where applicable. When interest is charged, the rate is Defined benefit obligation (37,650) (29,250) substantially below commercial rates and is designed to cover administrative costs. The outstanding loans include Fair value of plan assets 23,204 23,184 balances totalling £11.5m (2015: £12.6m), the majority of which are secured by legal charges on the assets of Net defined benefit (liability)/asset (14,446) (6,066) the beneficiaries. Unrecognised surplus - - 13 Debtors Net defined benefit liability/(asset) after allowance for surplus restriction (14,446) (6,066) The amounts recognised in the Statement of Financial Activities are as follows: Group 2016 Group 2015 Charity 2016 Charity 2015 Current service cost - - £’000 £’000 £’000 £’000 Net interest expense/(income) on net defined benefit liability 227 211 Legacies 5,125 1,216 5,125 1,216 (Gains)/losses on curtailment - - Inter-company balance - - 12,963 15,423 Total pension expense recognised in the SOFA 227 211 Other debtors 967 770 904 765 Prepayments 84 497 84 497 Reconciliation of defined benefit obligation over the year 6,176 2,483 19,076 17,901 Defined benefit obligation as at 1 January 2016 (29,250) (30,127) Current service cost - - Contributions by members - - 14 Creditors: Amounts Falling Due Within One Year Interest expenses on defined benefit obligation (1,113) (1,058) Remeasurement – effect of experience adjustments gain/(loss) - (1,081) Group 2016 Group 2015 Charity 2016 Charity 2015 Remeasurement – effect of changes in assumptions gain/(loss) (8,735) 1,538 £’000 £’000 £’000 £’000 Benefits paid 1,448 1,478 Trade creditors 356 321 342 299 Curtailments - - Taxation and social security costs 132 123 132 123 Defined benefit obligation as at 31 December 2016 (37,650) (29,250) Other creditors 1,174 1,211 1,149 1,157 1,662 1,655 1,623 1,579 44 Notes to the Financial Statements for the year ended 31 December 2016 45

15 Pension Commitments (cont)

2016 2015 2016 2015 Changes in the fair value of plan assets over the year: Principal actuarial assumptions at the balance sheet date: Fair value of plan assets as at 1 January 2016 23,184 24,118 Discount rate 2.6% 3.9% Interest income on plan assets 886 847 RPI inflation rate 3.3% 3.0% Remeasurement – return on plan assets excluding interest income gain/(loss) 82 (603) CPI inflation rate 2.3% 2.0% Contributions by employer 500 300 Increases to pensions in deferment (CPI max 5%) 2.3% 2.0% Contributions by members - - Increases to pensions in payment (CPI max 5%) 2.3% 2.0% Benefits paid (1,448) (1,478) Commutation (% of pension) 20% 20% Fair value of plan assets as at 31 December 2016 23,204 23,184 Return on plan assets 968 244 Mortality – base table S2PXA S2PXA Mortality – allowance for future improvements CMI 2014 CMI 2014 Remeasurements recognised in SOFA 0.5% LTR 0.5% LTR Remeasurement – effect of experience adjustments gain/(loss) - (1,081) Life expectancies from age 63: Remeasurement – effect of changes in assumptions gain/(loss) (8,735) 1,538 Male currently aged 63 86.4 86.3 Remeasurement – return on plan assets excluding interest income gain/(loss) 82 (603) Female currently aged 63 88.4 88.4 Total remeasurement loss recognised in SOFA (8,653) (146) Male currently aged 43 87.0 86.9 Female currently aged 43 89.2 89.0

The Charity is expected to contribute £500,000 to the scheme in 2017. Amounts for current and previous four periods are as follows: 2016 2015 £’000 % £’000 % 2016 2015 2014 2013 2012 Assets £’000 £’000 £’000 £’000 £’000 Target return fund 22,715 97.9% 22,823 98.5% Defined benefit obligation (37,650) (29,250) (30,127) (29,607) (29,935) Cash - 0.0% 1 0.0% Fair value of plan assets 23,204 23,184 24,118 24,420 23,620 Bank account balance 262 1.1% 567 2.4% Net current assets 227 1.0% (207) -0.9% Deficit (14,446) (6,066) (6,009) (5,187) (6,315) 23,204 100% 23,184 100% 46 Notes to the Financial Statements for the year ended 31 December 2016 47

16 Related Party Disclosure 19 Statement of Funds

During the year payments of £120,606 (2015: £49,902) were made by the group to Charles Russell Speechlys At 1 Other At 31 Solicitors for professional services. No amount was owed to this firm as at 31 December 2016. Mr Michael January recognised December Scott, a partner in the firm, is a Director and Trustee of the RAFBF Housing Trust Ltd. A payment of £821 was 2016 Income Expenditure gains/(losses) Transfers 2016 made to ISS Mediclean for catering services. No amount was owed to this company as at 31 December 2016. Air £’000 £’000 £’000 £’000 £’000 £’000 Commodore Allan Vaughan, a Director of this company was a Trustee of RAFBF during the year. General reserve 119,882 21,577 (20,800) 6,910 (500) 127,069 Donations to the value of £810 (2015: £800) were received from individual Trustees in the year. Designated funds ------Donations of £10,000 (2015: £30,000) were received from Rolls Royce, £21,663 (2015: nil) from Shepherd Total unrestricted funds 119,882 21,577 (20,800) 6,910 (500) 127,069 Neame and £2,050 from ISS Mediclean. Trustees of the Royal Air Force Benevolent Fund are members of senior management at Rolls Royce, Shepherd Neame and ISS Mediclean during the year. Restricted income funds 4,655 1,775 (1,495) 45 - 4,980 – see schedule on page 56 Endowment funds - see 5,077 - (10) 360 - 5,427 17 Capital Commitments schedule on page 54 Pension reserve (6,066) - (227) (8,653) 500 (14,446) Total funds 123,548 23,352 (22,532) (1,338) - 123,030 There were no capital commitments at the end of the year (2015:Nil).

At 1 Other At 31 January recognised December 2015 Income Expenditure gains/(losses) Transfers 2015 18 Analysis of Group Net Assets Between Funds £’000 £’000 £’000 £’000 £’000 £’000 General reserve 116,997 22,120 (21,226) (709) 2,700 119,882 Designated funds 3,000 - - (3,000) - Total unrestricted funds 119,997 22,120 (21,226) (709) (300) 119,882 Unrestricted funds Restricted funds Endowment funds Total funds 2016 2015 2016 2015 2016 2015 2016 2015 Restricted income funds 3,785 2,089 (1,201) (18) - 4,655 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Endowment funds 5,077 4 - (4) - 5,077 Fund balances at Pension reserve (6,009) - (211) (146) 300 (6,066) 31 December are Total funds 122,850 24,213 (22,638) (877) - 123,548 represented by:

Tangible fixed assets 33,257 34,695 154 159 - - 33,411 34,854 Unrestricted funds Afghan Brain Injury – supports Afghan veterans who have Loans to beneficiaries 11,679 12,901 138 138 - - 11,817 13,039 The transfer of £500K (2015: £300k) from general sustained a brain injury. Investments 65,241 61,133 552 470 5,426 5,077 71,219 66,680 reserves to the pension reserve represents the Charity’s Afghan LIBOR – LIBOR fund which supports and provides contribution paid into the pension scheme in the year. assistance to Afghan veterans. Current assets 18,235 12,809 4,136 3,887 320 - 22,691 16,696 Current liabilities (1,343) (1,655) - - (319) - (1,662) (1,655) Restricted income funds – Over £100,000 Endowment funds – over £100,000 E H Jubb Fund – for the benefit of aircrew, their widows Pension liability (14,446) (6,066) - - - - (14,446) (6,066) Bomber Command Memorial – maintenance of the Bomber Command Memorial in Green Park, Piccadilly. and dependants. Fulmer Fund – these funds are held for those of the serving Newton Driver Memorial Fund – for the general purposes Total net assets 112,623 113,817 4,980 4,654 5,427 5,077 123,030 123,548 RAF in need of maternity services, post-natal services or the of the Fund and the upkeep of the property at Rustington. provision of childcare facilities on RAF bases. Viscount Nuffield Endowment – income used for Gulf Trust – the funds are held in a ring-fenced fund for general purposes. the benefit of RAF veterans. Hector Pilling Memorial Fund – to provide financial Lowe Trust – supports Battle of Britain veterans and their assistance for foundationers at the Duke of Kent School. descendants. RAF Prize Trust – to help with the education of dependants LIBOR Fund – this is the element of LIBOR funding received of deceased members of the RAF killed on duty or that will be used to refurbish Princess Marina House, carry attributable to Service. out property adaptations and repairs, and fund family Douglas Turner Benefaction – to be used for the support services. assistance or benefit, including education of former or RAF Disabled Holiday Trust – provides holidays future pilots and navigators and their dependants. to disabled serving and ex RAF personnel and their RAFBF Educational Endowment Fund – to promote the immediate dependants. education of the children of members of the Royal Air Force. DefLog VQ Trust Ltd – to advance education, training, RAFBF Educational Expendable Fund – to promote the relieve unemployment and financial hardship of serving education of the children of members of the Royal Air Force. and former RAF personnel. Peter Henry Slater-Eiggert Memorial Fund – for the benefit of ex-members and dependants of 83 Squadron. 48 Notes to the Financial Statements for the year ended 31 December 2016 49

20 Subsidiary Entities

The results of the Fund’s wholly-owned subsidiary entities are included within the Consolidated Statement of Financial Activities as follows:

RAF Dependants RAF Dependants RAFBF Trading Ltd Fund Income Trust RAFBF Housing Trust Ltd RAF Disabled Holiday Trust Total Subsidiary Entities 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Income from: Donations ------41 37 41 37 Investments - - 138 127 - - 4 - - - 142 127 Other trading activities 79 126 ------79 126 Charitable activities ------1,023 1,016 - - 1,023 1,016 Profit on sale of properties ------1,459 1,841 - - 1,459 1,841 Commission - - 189 190 60 64 - - - - 249 254 79 126 327 317 60 64 2,486 2,857 41 37 2,993 3,401

Expenditure on: Charitable activities 17 46 195 150 35 41 1,304 1,448 37 4 1,588 1,689 Raising funds ------Other trading activities 53 61 ------53 61 Management and administration 9 13 28 25 25 24 - - - - 62 62 79 120 223 175 60 65 1,304 1,448 37 4 1,703 1,812

Net gains/(loss) on investment assets - - 279 (213) - - - - 45 (18) 324 (231)

Per statement of financial activities - 6 383 (71) - (1) 1,182 1,409 49 15 1,614 1,358

RAFBF Trading Ltd RAF Benevolent Fund Housing Trust Ltd

Company Number 07768120 Company Number 1058896 Charity Number 264636 Scottish Registered Number SCO38218 A company set up for the RAFBF to conduct trading in support of its charitable objectives. The company donated £16,638 to the A wholly-owned subsidiary of the RAF Benevolent Fund. Its sole activity is to hold and operate properties of beneficiaries charity in 2016. (2015: £45,901) of the RAF Benevolent Fund.

RAF Dependants Fund RAF Disabled Holiday Trust

Charity Number 253492 Charity Number 286019 A charity with the RAF Benevolent Fund as custodian trustee. Set up to promote the efficiency of the Royal Air Force through relieving A wholly-owned subsidiary of the RAF Benevolent Fund. Its sole activity is to provide holidays to disabled serving and dependants of deceased serving personnel from financial distress. There were 13 deaths in 2016 (2015:10) and the dependants were former members of the RAF and their dependants. The Trust purchases holiday bonds which entitles it to book holidays paid £15,000 in each case. in the UK and Europe for its beneficiaries.

RAF Dependants Income Trust Limited RAFBF Property Company Limited

Company Number 01285364 Company Number 10456754 A company set up for RAFBF Dependants Fund subscribers to make further financial provision for their dependants in the event of A wholly-owned subsidiary of the RAF Benevolent Fund, incorporated on 1st November 2016. The company is dormant. their death in service.There were 13 deaths in 2016 (2015:10) and consequently beneficiaries received £1.1m (2015: £1.2m) through this scheme. The company donated £35,067 to the charity in 2016 (2015: £40,585). 50 Notes to the Financial Statements for the year ended 31 December 2016 51

2016 2015 21 External Grants and Welfare Programmes for the £ £ year ended 31 December RAF families day funding programme RAF Benson 2,000 - MOD Boscombe Down 750 - Support to the serving Royal Air Force RAF Boulmer 1,500 - 2016 2015 RAF Brize Norton 4,000 - £ £ RAF Coningsby 3,000 - General welfare: Citizens Advice Station Outreach Clinic MOD Corsham 500 - Mid Lincolnshire CAB (RAF Digby, Coningsby, Cranwell) - 10,000 DSAE Cosford 1,500 - Dacorum CAB (RAF Halton) - 2,300 RAF Cranwell 1,500 - Hillingdon & Ealing CAB (RAF Northolt) - 7,200 JSSU Digby 1,000 - Lincoln and District CAB (RAF Waddington) - 7,500 RAF Fylingdales 500 - Norfolk CAB (RAF Marham) 13,143 11,500 RAF Henlow 1,250 - Rutland CAB (RAF Wittering) 5,000 8,300 RAF High Wycombe 2,000 - West Oxfordshire CAB (RAF Brize Norton) 11,000 10,200 RAF Honington 2,000 - Oxfordshire South and Vale CAB (RAF Benson) 3,000 - RAF Leeming 2,500 - 32,143 57,000 RAF Linton-on-Ouse 500 - RAF Lossiemouth 2,500 - Station grants MOD Manston (DFRMO) 500 - RAF Benson – youth club refurbishment and junior ranks’ mess refurbishment - 15,000 RAF Marham 3,000 - RAF Boulmer – childcare centre - 20,000 RAF Odiham 2,500 - RAF Brize Norton – youth club refurbishment - 10,000 RAF Scampton 1,000 - RAF Coningsby – community centre furniture - 3,280 RAF Shawbury 1,000 - RAF Cosford – low ropes course, trim trail and mental health first aid course 240 26,000 RAF Spadeadam 500 - RAF Cranwell – trim trail and families’ day 299 21,150 RAF St Athan 500 - RAF Honington – buggy park and trim trail - 23,410 MOD Stafford 500 - RAF Honington – all ranks’ facility, SSVC cinelink movie streaming box, toddler 30,046 - RAF(U) Swanwick 500 - yoga class and bouldering wall RAF Valley 1,000 - RAF Leeming – play hanger refurbishment, sensory room and mental health 480 30,000 RAF Waddington 3,000 - first aid course RAF Wittering 2,000 - RAF Lossiemouth – soft play area, trim trail, mental health first aid course 5,362 46,333 and circle renovation project RAF Wyton 750 - RAF Marham – widen nursery footpath and rainbow nursery buggy park 7,932 2,977 Defence CBRN Winterborne Gunner 500 - RAF Northolt – mental health first aid course 240 - 44,250 - RAF Odiham – junior ranks’ Henderson room project 1,000 - RAF Scampton – refurbishment for new youth hub 25,000 - Relationship support RAF St Athan – SLA communal living area improvements 14,185 - Relate – relationship counselling/mediation 102,677 81,116 RAF Valley – community activities enhancement project 21,724 - Relate – Building Stronger Families 6,075 71,925 RAF Waddington – contact house and families household equipment and junior 2,200 - 108,752 153,041 ranks’ welfare facility RAF Watton – families club - 1,000 Airplay programme RAF Wittering – youth club drop–in centre - 15,000 RAF stations – youth support programme 1,280,744 1,190,198 RAF Wyton – childcare centre - 40,000 RAF stations – Ben play parenting and play parks 341,044 264,767 RAF Wyton – before and after school club refurbishment 18,691 - 1,621,788 1,454,965 RAF Families Federation 15,000 15,000 142,399 269,150 Total support to the serving Royal Air Force 1,949,332 1,934,156 52 Notes to the Financial Statements for the year ended 31 December 2016 53

21 External Grants and Welfare Programmes for the 2016 2015 £ £ year ended 31 December (cont) Employment support High Ground 8,000 6,000 Regular Forces Employment Association 55,430 54,680 2016 2015 Salute My Job! 15,000 12,750 £ £ The Warrior Programme 10,000 - Support to the veterans community 88,430 73,430 Age Concern Spain – ACASA 17,500 17,500 Alzheimer’s Society 20,000 20,000 Residential, nursing and therapy centres Band of RAF College - 2,500 Alabre Christian Care Centres 15,000 15,000 British Forces Foundation 3,150 - Broughton House - 18,000 COBSEO 9,000 9,000 Home Farm Trust - 10,000 Combat Stress (in addition to individual support) - 93,140 Queen Alexandra Hospital Home 20,000 20,000 Czech Veterans 4,851 4,440 Royal Star and Garter Homes - 12,000 East Midlands Veteran and Pensions Committee 400 400 Scottish Veterans’ Residences - 10,000 First Light Trust 6,000 - Sue Ryder (Prague) 5,550 5,000 Families’ Activity Breaks - 10,000 The Curphey Home 9,000 12,000 Military Wives Choir Foundation 4,993 - ZANE 25,000 20,000 National Association of Swimming Clubs for the Handicapped 500 500 74,550 122,000 National Gulf Veterans & Families Association 11,200 14,000 On Course Foundation 10,500 13,500 Support for disabled/disadvantaged Polish Air Force Memorial Committee 1,000 - Dundee Therapy Garden 1,500 - Polish Veterans 4,400 4,200 Lord Kitchener Memorial Holiday Centre 6,560 8,000 Poppy Scotland – ASAP - 20,000 Mutual Support - 7,500 Queen Elizabeth Hospital Birmingham Hospital Charity - Fisher House 10,000 - Revitalise 14,000 18,000 RAF Widows’ Association 25,000 12,700 Royal Air Force Disabled Holiday Trust 22,411 34,379 Royal Commonwealth Ex-Services League 22,819 17,100 Stoll 10,000 10,000 Rutland CAB (running costs with station outreach) 3,300 - The Gwenneli Trust 500 500 Slovak Veterans 14,230 6,600 54,971 78,379 South Kestevan CAB 1,000 1,000

Spinal Injury Association 8,500 8,500 Well-being partnerships SSAFA 80,000 100,000 Anxiety UK 24,792 - Step Together Volunteering 7,000 - Community Network 8,562 - The Not Forgotten Association 15,000 20,000 33,354 - The Poppy Factory - 10,000 ` Veterans Aid 15,000 25,000 Total support to the veterans’ community 559,148 704,389 Veterans Outreach Support 8,000 8,000 Veterans Scotland - 5,000 Total external grants to third parties 2,508,480 2,638,545 Voluntary Community Services (Wales) Ltd 4,000 - WWV (Formerly known as Worldwide Volunteering) - 7,500 2137 (Lymm) ATC Sqn 500 - 307,843 430,580 54 Notes to the Financial Statements for the year ended 31 December 2016 55

22 Endowment Funds

The purpose of funds exceeding £100,000 is set out under note 19.

As at 1 As at 31 Permanent endowment January Net Transferred Unrealised December funds where the use of the 2016 income out Disposals gain 2016 income is restricted £ £ £ £ Newton Driver Memorial Fund 1,822,911 61,600 (60,646) - 129,290 1,953,155 Permanent endowment funds Group Captain W E Purdin 2,325 78 (77) - 165 2,491 with unrestricted income Memorial Fund Pilot J P L Branson 41,263 1,395 (1,374) - 2,928 44,212 RAFBF Educational Endowment Fund 461,363 15,993 (15,751) - 32,740 494,345 Memorial Fund Douglas Turner Benefaction 109,820 3,714 (3,656) - 7,793 117,671 James Erskine Cunning 38,834 1,313 (1,293) - 2,756 41,610 Memorial Fund 2,396,419 81,385 (80,130) - 169,988 2,567,662 L S Delaney Trust 11,280 381 (375) - 800 12,086 Paddy Finucane Memorial Fund 16,805 568 (559) - 1,192 18,006 Expendable endowment Louise Alice Kay Memorial Fund 34,716 1,174 (1,156) - 2,464 37,198 funds where the use of the income is restricted Mosquito Memorial Fund 9,754 330 (325) - 692 10,451 Mrs H M Jereham Memorial Fund 25,314 856 (843) - 1,796 27,123 Flying Officer Douglas Frank 30,995 1,048 (1,032) - 2,200 33,211 Newsham Memorial Fund Lord Knollys Holiday Fund 9,623 325 (320) (10,222) 594 - Viscount Nuffield Endowment 897,278 30,338 (29,868) - 63,674 961,422 Hector Pilling Memorial Fund 536,284 18,132 (17,851) - 38,057 574,622 Helen Mary Renton Fund 36,626 1,238 (1,219) - 2,599 39,244 Lord Portal Fund 2,457 83 (82) (2,610) 152 - RAF Rugby Union Fund 43,073 1,457 (1,434) - 3,056 46,152 RAF Prize Trust 204,944 6,929 (6,822) - 14,544 219,595 Peter Henry Slater-Eiggert Memorial 123,594 4,179 (4,114) - 8,771 132,430 RAFBF Educational Expendable Fund 121,064 4,093 (4,030) - 8,591 129,718 Fund 899,686 30,418 (29,948) (12,832) 63,734 951,058 The Revd James Edmund Strickland 89,024 3,010 (2,963) - 6,318 95,389 Memorial Fund 1,373,242 46,431 (45,712) - 97,450 1,471,411 Total endowment funds 5,077,042 172,018 (169,361) (12,832) 360,103 5,426,970

Expendable endowment funds with unrestricted income Flying Officer William Dron 2,081 70 (69) - 148 2,230 Memorial Fund Frederick Eley Fund 4,013 136 (134) - 285 4,300 Wing Commander J Higginson Fund 8,193 277 (273) - 581 8,778 Peter Grattan Holt Memorial Fund 42,693 1,443 (1,421) - 3,030 45,745 E H Jubb Fund 284,372 9,615 (9,466) - 20,180 304,701 Middle East Relief Fund 36,319 1,228 (1,209) - 2,577 38,915 Morley Fund 5,954 201 (198) - 422 6,379 Orlebar Memorial Fund 6,737 228 (224) - 478 7,219 Shattock Memorial Scholarship Fund 10,115 342 (337) - 718 10,838 Wooding Memorial Fund 7,218 244 (240) - 512 7,734 407,695 13,784 (13,571) - 28,931 436,839 56 Notes to the Financial Statements for the year ended 31 December 2016 57

23 Restricted Funds

Other purposes As at 31 Afghan Brain Injury 200,000 24,845 - 224,845 As at 1 December January 2016 Income Expenditure 2016 Afghan: LIBOR 495,179 974 138,474 357,679 £ £ £ £ Aged Veteran Fund - 37,343 36,794 549 Education Aged Veteran Lunch Club - 35,670 35,591 79 Airplay 200,000 19,731 190,379 29,352 Aged Veteran Respite at Home - 68,760 55,565 13,195 Air Vice-Marshal Frank Felgate Memorial Prize 496 1 - 497 Aged Veteran Refurbishment - 216,750 128,262 88,488 Lord Knollys Holiday Fund - 399 399 - Care of the RAF Veteran Community - 5,000 5,000 - Hector Pilling - 22,242 22,242 - Beneficiaries in Scotland - 126,846 126,846 - RAF Prize Trust - 8,500 8,500 - Bomber Command Memorial 1,570,071 163,896 43,087 1,690,880 RAFBF Education - 1,381 1,381 - Building Stronger Families, LIBOR 3,830 2,517 4,947 1,400 RAFBF Educational Endowment Fund - 19,529 19,529 - CAB Outreach Projects - 50,000 32,143 17,857 RAFBF Educational Expendable Fund - 5,051 5,051 - Cambridge restricted - 1,500 1,500 - Douglas Turner Benefaction - 4,555 4,555 - Fulmer Fund 240,083 472 - 240,555 200,496 81,389 252,036 29,849 Group Captain W E Purdain Memorial Fund 570 98 - 668 Gulf Trust 386,242 17,325 9,492 394,075

RAFBF – Funds General Welfare (Individual) - 19,534 19,534 - Newton Driver Memorial Fund - 75,564 75,564 - Mrs H M Jerham Memorial Fund 1,644 1,053 - 2,697 Princess Marina House Amenities Fund 55,076 38,521 41,574 52,023 Kent Restricted - 500 500 - Princess Marina House Shencot/Seacot House - 1,650 1,650 - Lord Portal Fund 622 103 725 - Princess Marina House Other - 101,932 101,932 - Lowe Trust 586,513 1,153 8,402 579,264 Princess Marina House Seaside Apartments 51,524 - 51,524 - Nottinghamshire Restricted - 4,500 4,500 - 106,600 217,667 272,244 52,023 RAF Memorial - 1,097 1,097 - Barclays Transitional Grants Funding - 16,000 8,418 7,582 WW2 Veterans - 610 610 - Housing Adaptations: LIBOR 344,144 677 236,450 108,371 Wounded, injured, sick - 95 95 - Forge House Windows: LIBOR 10,289 20 9,753 556 DefLog VQ Trust Ltd - 500,000 - 500,000 HT Gardening – Project ROBIL - 2,250 1,125 1,125 RAF Disabled Holiday Trust 502,352 62,112 4,325 560,139 HT Property Adaptations – Project ROBIL - 44,700 15,697 29,003 RAF Stations - 5,000 5,000 - HT Shifnal (HT705) – Project ROBIL - 3,000 3,000 - Restricted to Mobility Aids - 2,500 2,500 - Earley Property - 5,000 5,000 - Restricted Befriending Welfare 7,000 14 2,854 4,160 Restricted to Air Crew - 75,000 - 75,000 354,433 55,647 271,025 139,055 3,994,106 1,441,267 676,261 4,759,112

Total restricted funds 4,655,635 1,795,970 1,471,566 4,980,039 58 Trustees’ Report 59 Subsidiary Organisations

The RAF Benevolent Fund Housing Trust Limited Air Commodore Paul Hughesdon Air Vice-Marshal David Murray (appointed September 2016) Companies House: 01058896 Air Marshal Chris Nickols (until August 2016) Charity Commission: 264636 Mr John Michael Elsworth Scott OSCR: SC038218 Ms Alison Wyman (until June 2016) Directors / Trustees: Air Vice-Marshal Simon Dougherty The RAF Dependants Fund Ms Victoria Fakehinde Charity Commission: 253492 Mr Duncan Forde (appointed June 2016) Air Commodore Paul Hughesdon Trustee: Air Vice-Marshal David Murray (appointed September 2016) RAF Benevolent Fund (Reg Charity: 1081009) Air Marshal Chris Nickols (until August 2016) Management Committee Members: Mr John Michael Elsworth Scott Ms Alison Wyman (until June 2016) Group Captain Gordon Bettington Ms Frances Brindle (appointed October 2016) Ms Victoria Fakehinde RAFBF Trading Limited Ms Arabella Hastie (until October 2016) Companies House: 07768120 Air Commodore Paul Hughesdon

Directors: Air Vice-Marshal David Murray (appointed September 2016) Air Marshal Chris Nickols (until August 2016) Mr Graeme Craig (appointed September 2016) Mr Graeme Shankland (appointed October 2016) Mr James Dooley Mr Allan Vaughan (until October 2016) Ms Victoria Fakehinde Mr Stephen John Gallico Scheme Manager: Air Vice-Marshal David Murray (appointed September 2016) Mr Stuart Turnbull Air Marshal Chris Nickols (until August 2016) Mr Graeme Shankland (appointed October 2016) Mr Allan Vaughan (until September 2016) RAFBF Property Company Limited Companies House: 10456754

The RAF Dependants Income Trust Limited Directors: Companies House: 01285364 Air Commodore Paul Hughesdon Mr Richard Ingham Directors: Air Vice-Marshal David Murray Group Captain Gordon Bettington Air Vice-Marshal Elaine West Ms Frances Brindle (appointed October 2016) Ms Victoria Fakehinde Ms Arabella Hastie (until October 2016) The RAF Disabled Holiday Trust Air Commodore Paul Hughesdon Charity Commission: 286019 Air Vice-Marshal David Murray (appointed September 2016) Trustee: Air Marshal Chris Nickols (until August 2016) Mr Graeme Shankland (appointed October 2016) RAF Benevolent Fund (Reg Charity: 1081009) Mr Allan Vaughan (until October 2016) Management Committee Members: Mr Al Bennett The RAF Benevolent Fund Trustees Limited Ms Victoria Fakehinde Companies House: 00945083 Ms Rosalind Hall Air Commodore Paul Hughesdon Directors: Air Vice-Marshal David Murray Air Vice-Marshal Simon Dougherty Wing Commander Marie-Noelle Orzel Ms Victoria Fakehinde Mr Frank Sykes Mr Duncan Forde (appointed June 2016) Mr Anthony Terrett Our patron, Her Majesty’s official 90th birthday celebrations ended with an impressive display of 15 different types of aircraft, five of which were provided by squadrons celebrating their own 100th birthday.

Young people from our Airplay programme marked the occasion with parties at RAF stations across the country.

For more information on the RAF Benevolent Fund, visit www.rafbf.org

Royal Air Force Benevolent Fund, 67 Portland Place, London, W1B 1AR

Helpline 0800 169 2942 Email [email protected]

Cobseo The Confederation The RAFBF is a registered charity in England and Wales (1081009) and Scotland (SCO38109) of Service Charities PHOTO: Contains public sector information licensed under the Open Government Licence v3.0.