EDINBURGH TENANTS FEDERATION SCIO
Report and Financial Statements
Year ended 31 March2020
Scottish Charity Number: SC048236 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
CONTENTS
Page
Legal and Administrative Information 3
Report of the Trustees 4-12
lndependent Audito/s Report 13 -15
Stiatement of Financial Activities 16
Balance Sheet 17
Notes to the Financial Statements 18-27
2 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 3l March 2020
LEGAL AND ADMINISTRATIVE INFORMATTON
Edinburgh Tenants Federation SCIO was incorporated as a Scottish Charitable lncorporated Organisation on 22 March 2018, charity number SC048236. All assets and liabilities from Edinburgh Tenants Federation, an unincorporated organisation, were transferred to Edinburgh Tenants Federation SCIO on 1 April2019.
Trustees
Principal Office
Norton Park 57 Albion Road Edinburgh EH7 sQY
Auditor
BDO LLP Citypoint 65 Haymarket Terrace Edinburgh EHI2 sHD
Bankerc
Unity Trust Bank PO Box 7193 Planetary Road Willenhall VW1 gDG
3 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
Report ofthe Trustees for the year ended 31 March 2020
The trustees are pleased to present their annual trustees' report together with the financial statements of the charity for the year ending 31 March 2020.
The financial statements comply with the Charities and Trustee lnvestment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2005 (as amended), the Constitution, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of lreland (FRS 102).
The Trustees can confirm they have taken into regard the Charity Commission's guidance on public benefit.
ETF Objectives and Activities
Edinburgh Tenants Federation (ETF) was established in 1990 and represents over 19,000 tenants in the social rented sector in Edinburgh. lt is the longest established Federation of its kind in Scotland and works in partnership with the City of Edinburgh Council (CEC)to represent tenants' views across the city.
The organisation is run by a voluntary Executive Committee (EC)of tenant representatives who are elected to serve for three years by members at the Annual General Meeting (AGM). ETF was successfully registered as a Scottish Chartable lncorporated Organisation (SCIO) in 2019 and commenced activities on 1 April 2019 following the transfer from the previous unincorporated organisation.
The organisation's main objectives are
a To advance citizenship and community development in order to safeguard and promote the rights of tenants of rented accommodation (local authority, co-operative, housing associations and private) and in particular of those at risk of discrimination or social exclusion in Edinburgh.
a To promote the rights of individuals and associations by providing opportunities for advice and information about the maintenance and improvement of their housing conditions, environment and communities.
a To provide opportunities for individuals and associations to influence and participate fully in decisions that affect their housing conditions, environment and communities. a To support the development of associations and providing opportunities for them to work together on matters of common interest for the benefit of their members.
a Promoting the improvement of the quality of life of residents and the housing conditions of all tenants of rented accommodation.
a To empower and give tenants throughout Edinburgh their voice. We work in partnership with the City of Edinburgh Council to improve housing services across the City.
4 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 3l March 2020
Report of the Trustees for the year ended 31 March 2020 (continued)
ETF has an excellent partnership relationship with the City of Edinburgh Council to represent the views of tenants across the city at a strategic and local level. ETF provides a range of bespoke training and development opportunities to support local tenants' and residents' groups to participate fully. ETF is funded by the City of Edinburgh Council through an annual Service LevelAgreement (SLA) and a detailed annualwork plan is produced to outline key activities:
o Provide independent advice, information and learning opportunities for tenants.
o Provide information, advice and support to tenants' and residents' organisations to assist them develop and achieve their goals.
o Networking opportunities bringing local organisations together to work on issues of collective interest.
r Events to assist people to participate individually and through their groups in decision making about their homes, locality and environment.
o Work in partnership with CEC to implement the Tenant Participation Strategy.
o A regular training programme is provided to increase tenants' skills and knowledge to participate fully.
o Outreach support to existing and new tenants' groups to participate fully.
. Support to get involved digitally.
ETF directly employs staff to support the development of ETF and local tenant and resident groups to have the skills, training and information to participate fully. The staff team are based at Norton Park Business Centre.
ETF continues to be committed to working in partnership with statutory agencies and other voluntary organisations throughout Edinburgh.
ETF Achievements and Performance
ETF have had a successful year in providing information, training and support to empower and give tenants throughout Edinburgh their voice. Our work has a positive and lasting impact on the lives of tenants in Edinburgh. ln particular:
o ETF services support over 19,000 tenants in the social rented sector in Edinburgh.
o ETF outreach service has supported over 20 tenants'and residents'groups to work in partnership with CEC to improve housing services.
o ETF has supported localtenants' and residents' groups to participate online during Covid-19 safety restrictions.
5 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
Report of the Trustees for the year ended 31 March 2020 (continuedl
Building our Organisation
We have undertaken an independent Governance Review to ensure our constitution, policies, procedures and practices are fit for purpose and will assist us develop and thrive in the coming years.
Our members meetings, both in person and on-line have ensured tenants are at the heart of everything we do. This year we have hosted members' meetings and events to find out our members'views to enable ETF to review, develop and respond to proposals including: r Homelessness;
o Rent affordability and ensuring tenants struggling to pay their rent have support measures in place;
o Ensuring tenants feel supported in terms of accessing digital information. ETF have also worked in partnership with the following organisations to develop effective
tenant participation practice :
o The Poverty Alliance
o Scottish Housing Regulator
o Shelter Scotland
o Scottish Government Regional Networks.
Supporting Tenant lnfluence acoss the City
ETF have been working in partnership with CEC Senior Managers to discuss key issues and ensure tenants have a say on service delivery and standards. Our representatives played a key role in influencing:
r Rent consultation
o CEC's Housing Service lmprovement Plan
o Anti-Social Behaviour Strategy
o Community Planning and the new Neighbourhood Networks
. Support to tenants during lockdown.
The ETF High Flats Sub-Group have worked with CEC to ensure Fire Safety in High Flats is a priority, even more so now as a result of the tragic fire at Grenfell Tower in London a few years ago.
The ETF Repairs Sub-Group has worked in partnership with CEC to monitor the Council's Responsive Repairs Budget, the performance targets for Housing Property and tenant satisfaction levels.
6 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
Report of the Trustees for the year ended 31 March 2020 (continued)
It has been a productive year for the Housing Revenue Account (HRA) Scrutiny Group which has scrutinised CEC's Standard of Let and made 11 recommendations for improvement including:
o CEC to ensure all houses meet the Standard of Let when they are allocated to new tenants;
o CEC to complete outstanding repairs within 28 days of the new tenant moving in;
r CEC to provide training to Housing Officers on the Standard of LeU
o CEC to find out why repair costs are high, but tenant satisfaction is low, including looking at what other councils do;
r CEC to listen to the experiences of tenants housed in temporary accommodation and make required changes.
ETF's Sheltered Housing Liaison Group continues to advocate on behalf of tenants living in this much needed type of housing and influenced CEC's Sheltered Housing Review.
FinancialReview
ETF acknowledges the assistance of continued funding from The City of Edinburgh Council to fund the full project costs. We would also like to acknowledge grants and funding received from: o Grant from the City of Edinburgh Council; o Scottish Government's Community Jobs Scotland Scheme; o Donation from Edinburgh Registered Social Landlords Residents Network.
The Trustees are satisfied with the financial performance of ETF for the year ended 31 March 2020.
The Federation currently has total available funds of f25,847 which is made up of f509 restricted funds and f99,299 unrestricted funds, of which f76,263 is allocated to the pension reserve.
We continue to monitor our cost base closely - although total costs decreased slightly on last year (whose results were included in the unincorporated entity which transferred into the SCIO on 1 April 2OI9l, much of this was simply timing, and exacerbated by the Coronavirus pandemic towards the end of the financial year. Staff costs are by far our largest single cost representing around 46% of total revenue.
Reserves policy
The Executive Committee of ETF has ultimate responsibility for the charity, its assets and activities. Allfunds of the organisation are held for the purpose of carrying out its mission and charitable activities.
7 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
Report of the Trustees for the year ended 31 March 2020 (continued)
Reserves are held for four main purposes:
. To meet the financial obligations arising in the event of ETF ceasing to operate and allow the organisation to wind up in an orderly manner;
. To fund working capital;
. To ensure adequate liquidity;
. To manage potential risks and contingencies that may arise from time to time.
To meet these objectives, it is considered necessary to have general reserves of approximately three months running costs which equates to approximately f63,416 based on expenditure levels and pension deficit payment requirements at the time of approving this report.
When non-current liabilities relating to the pension deficit are excluded, ETF currently has unrestricted reserves of f99,299 which is equivalent to c4 months running costs. On this basis ETF has sufficient reserves in order to meet its objectives.
Coronavirus and going concern
The Trustees have considered going concern in the context of economic uncertainty caused by COVID-19. ln December 2OL9, the disease COVID-19 began circulating across the World, and was declared a pandemic in March 2020. On 13 March 2020, the UK Government advised against all non-essential travel and for individuals to stay at home. On 23 March 2020, the Prime Minister told people they "must" stay at home and required some businesses to close. The Federation commenced working from home from this date and continues to operate during the Coronavirus (COVID-19) outbreak. Whilst the office base is closed, staff continue to work from home and can still be contacted in the usual ways,
Ultimately, due to COVID-19 the priority for the Federation is digital working, participation and training. We held our first Federation Meeting online last month and feedback from the event was very positive. We are looking at holding other ETF events such as High Flats and Repairs Group meetings online as well in the coming months.
Funding has been guaranteed by the City of Edinburgh Council to 31 March 2022 for f24L,O83 per year and the Federation received the first tranche for 2O/2L of ft2o,542 on 23 April 2020. This is the primary source of funds for the Federation and facilitates the organisation's charitable activities. The Trustees ensure that the Federation's costs each year do not exceed this funding in order to ensure that the Federation is sustainable.
The Trustees remains confident that there are no reasonably foreseeable circumstances under which the Federation cannot continue to operate on a going concern basis. Accordingly, the financial statements have been prepared on a going concern basis.
8 Edinburgh Tenants Federation SGIO Report and Financial Statements Yearended 31 March 2020
Report of the Trustees for the year ended 31 March 2020 (continued)
Plans for the Future
As the government has announced the route map for easing lockdown restrictions, we are now preparing our own recovery plan. ETF will continue to design and delivery its support services digitally to ensure tenants' groups are empowered to participate during Covid- restrictions. Our recovery plan will place particular emphasis on access to information, support and training. ln a challenging climate and with an increasing demand for our service, we must ensure continued focus on delivering and extending the reach of our service so that we can continue to fulfilthe critical role and impact we have in the life of tenants throughout Edinburgh. ln the year ahead we also focus on the following objectives and deliverables in our strategic plan for 2O2O/2O27.
r Grow and expand our digital presence by creating an accessible website and appropriate social media channels.
a Build upon the recommendations of our independent Governance Review.
a Continue to build a well-structured, fit for purpose operational infrastructure which fulfils the current and future needs of our service, where workers are valued, empowered and motivated to deliver services for tenants.
. ldentify a range of opportunities to work in partnership with statutory and voluntary agencies.
. We willwork in partnership with the City of Edinburgh Council, the Scottish Government and other agencies to inform and shape the strategic direction for tenant participation and scrutiny in Edinburgh.
Reference and Administrative Details
Edinburgh Tenants Federation is a Scottish Charitable lncorporated Organisation (SCIO) SC048236 regulated by the Scottish Charity Regulator (OSCR).
Our advisors include:
. BDO LLP;
. Law At Work;
r Tenants lnformation Service;
. Scottish Council for Voluntary Organisations;
. Edinburgh Voluntary Organisations Council.
9 Edinburgh Tenants Federation SCIO Report and Financial Statements Year ended 3l March 2020
Report of the Trustees for the year ended 31 March 2020 (continued)
Executive Committee
The Executive Committee of the SCIO are its trustees for the purpose of charity law. The trustees serving during the year and since the year end were as follows:
North Sighthill Residents Association Moredun Multis and Maisonettes Residents Association Laichfield Community Association Magdalene Residents Association Edinburgh RSL Residents Network Ratho Station Residents Association Birnies Court Tenants Association Willowbrae and Duddingston Residents Red braes Residents Association Hailesland Park Neiehbourhood Council
Structure, Governance and Management
ETF is registered as a Scottish Charitable lncorporated Organisation (SCIO)with the Office of Scottish Charities Regulator. There are four classes of membership of the SCIO as follows: Ordinary Membership, Corporate Membership, Non-Voting lndividual Membership and Non- Voting Associate Membership.
The constitution states the minimum number of EC members to be five and the maximum to be thirteen.
Ordinary members elect an Executive Committee annually to run the business of ETF to meet its Service Level Agreement with CEC.
The SCIO has ten EC members at the year end lnduction for EC
All new EC members receive a full induction to the organisation and the governance role which includes obligations under charity law and an introduction to ETF's structure and services, our plans and financial status.
10 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
Report of the Trustees for the year ended 31 March 2020 (continuedf
Organisational structure
The EC can have a minimum of five and a maximum of thirteen members, administers the SCIO. The EC meets every month and there are sub-committees covering:
. Budget Subgroup
. StaffSubgroup
. Complaints Subgroup
. Appeals Subgroup
ETF currently employs the Tenants lnformation Service (TlS) to provide the Co-ordinator and Outreach Officer roles to manage the day-to-day operations of the charity. To facilitate effective operations, the Co-ordinator has delegated authority, within terms of delegation approved by the EC for operational matters including finance, employment and service delivery.
The EC elect the offices of Convenor, Vice-Convenor, Treasurer, Secretary and such other office bearers (if any) as they consider appropriate. These appointments are made by the EC following the AGM. All office bearers shall cease to hold office at the conclusion of each AGM but shall then be eligible for re-election.
Related parties
None of our EC receive remuneration or other benefit from their work with the SCIO. ln the current year no related party transactions were reported.
Pay policy for senior staff
The pay of staff is based on the local authority national pay awards. All EC members give their time freely and do not receive any remuneration in the year. The practice of the SCIO is that EC members are reimbursed for work related expenses.
Risk management
The EC have a risk management strategy which comprises: r A quarterly and annual review of the principal risks the SCIO may face;
. The establishment of policies, systems and procedures to mitigate those risks identified, and
. The implementation of procedures designed to manage any potential impact on the SCIO should any of these risks materialise.
This work has identified that sustaining core funding is the major risk for the SCIO.
11 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
Report of the Trustees for the year ended 31 March 2020 (continuedf
Statement of Trustee Responsibilities
The EC (who are also the Trustees of the SCIO) are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice.
ln preparing financial statements, the Trustees are required to:
. Select suitable accounting policies and then apply them consistently.
. Observe the methods and principles in the Charity SORP.
. Make judgements and estimates that are reasonable and prudent.
. Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.
The Trustees are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the financial position of the SCIO. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Provision of information to auditors
The trustees at the date of approval of this trustees' report confirm that, so far as they are individually aware, there is no relevant audit information of which the auditors are unaware; and each trustee has taken all the steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information
Convenor Edinburgh Tenants Federation
20 November 2020
12 Edinburgh Tenants Federation SCIO Report and Financial Statements Year ended 31 March 2020
INDEPENDENT AUDITOR'S REPORT TO TRUSTEES OF EDINBURGH TENANTS FEDERATION SCIO
Opinion
We have audited the financial statements of Edinburgh Tenants Federation SCIO ("the Charity") for the year ended 31 March 2020 which comprise the statement of financial activities, the batance sheet, and notes to the financiaI statements, inctuding a summary of significant accounting poticies. The financial reporting framework that has been apptied in their preparation is applicabte law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Stondard applicable in the UK ond Republic of lrelond (United Kingdom Generatty Accepted Accounting Practice).
ln our opinion, the financiaI statements:
a give a true and fair view of the state of the Charity's affairs as at 31 March 2020 and of its incoming resources and apptication of resources for the year then ended;
a have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
a have been prepared in accordance with the requirements of the Charities and Trustee lnvestment (Scottand) Act 2005 and regutation 8 of the Charities Accounts (Scottand) Regutations 2006.
Basis for opinion
We conducted our audit in accordance with lnternational Standards on Auditing (UK) (lSAs (UK)) and applicabte taw. Our responsibilities under those standards are further described in the Auditor's responsibitities for the audit of the financial statements section of our report. We are independent of the Charity in accordance with the ethical requirements retevant to our audit of the financial statements in the UK, inctuding the FRC's Ethical Standard, and we have futfitted our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions related to going concern
We have nothing to report in respect of the fotlowing matters in retation to which the lSAs (UK) require us to report to you where: a the Trustees' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or a the Trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Charity's abitity to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
13 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
INDEPENDENT AUDITOR'S REPORT TO TRUSTEES OF EDINBURGH TENANTS FEDERATION SCIO (coNTTNUED)
Other information
The other information comprises the information inctuded other than the financial statements and our auditor's report thereon. The other information comprises: the Trustees' report. The Trustees are responsible for the other information.
Our opinion on the financial statements does not cover the other information and, except to the extent othenryise expticitty stated in our report, we do not express any form of assurance conctusion thereon. ln connection with our audit of the financial statements, our responsibitity is to read the other information and, in doing so, consider whether the other information is materiatty inconsistent with the financiat statements or our knowtedge obtained in the audit or otherwise appears to be materially misstated. lf we identify such material inconsistencies or apparent materiaI misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. lf, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the fottowing matters in retation to which the Charities Accounts (Scottand) Regutations 2006 require us to report to you if, in our opinion;
. the information contained in the financiat statements is inconsistent in any material respect with the Trustees' Annual Report; or
. proper accounting records have not been kept; or r the financiat statements are not in agreement with the accounting records and returns; or
. we have not received atl the information and exptanations we require for our audit.
Responsibilities of Trustees
As exptained more futty in the Trustees' responsibitities statement, the Trustees are responsibte for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal controt as the Trustees determines is necessary to enabte the preparation of financial statements that are free from materiat misstatement, whether due to fraud or error. ln preparing the financiaI statements, the Trustees are responsible for assessing the Charity's abitity to continue as a going concern, disclosing, as appticabte, matters retated to going concern and using the going concern basis of accounting untess the Trustees either intend to liquidate the Charity or to cease operations, or have no reatistic alternative but to do so.
14 Edinburgh Tenants Federation SCIO Report and Financial Statements Year ended 31 March 2020
INDEPENDENT AUDITOR'S REPORT TO TRUSTEES OF EDINBURGH TENANTS FEDERATION SCIO (coNTINUED)
Auditor's responsibilities for the audit of the financial statements
We have been appointed as auditor under section 44(11(c) of the Charities and Trustee lnvestment (Scotland) Act 2005 and report in accordance with the Acts and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that inctudes our opinion. Reasonabte assurance is a high [eve[ of assurance, but is not a guarantee that an audit conducted in accordance with lSAs (UK) wit[ atways detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individuatly or in the aggregate, they coutd reasonabty be expected to inftuence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibitities for the audit of the financiaI statements is located at the FinanciaI Reporting Council's ("FRC's") website at: https://www.frc.orq.uk/auditorsresponsibitities. This description forms part of our auditor's report.
Use of our report
This report is made solety to the Charity's Trustees, as a body, in accordance with the Charities and Trustee lnvestment (Scottand) Act 2005. Our audit work has been undertaken so that we might state to the Charity's Trustees those matters we are required to state to them in an auditor's report and for no other purpose. To the futlest extent permitted by [aw, we do not accept or assume responsibility to anyone other than the Charity and the Charity's Trustees as a body, for our audit work, for this report, or for the opinions we have formed.
Edinburgh, UK Dare: /{ AAo.* b"[ %t-'
BDO LLP is etigibte for appointment as auditor of the charity by virtue of its etigibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
BDO LLP is a limited tiabitity partnership registered in England and Wales (with registered number oc3051 27).
15 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 3t MARCH 2O2O
Total Total Year Ended Period Ended Unrestricted Restricted 31 March 31 March Funds Funds 2020 2019 Note e e I € lncome from: 3 Transfer from Edinburgh Tenants Federation 18,384 529 18,913 Donations 2,121 2,121 Charitable activities 244,030 244,030 Total 264,535 529 265,064
Expenditure on: 4 Charitable activities (241,935) (20) (241,e55) Total (241,935) (20) (241,es5)
Net income 22,600 509 23,109 Actuarial gain on pension 11 2,739 scheme 2,738 Net movement in funds 25,338 509 25,847
Reconciliation of funds: 12,13
Total Funds at 31 March 2019
Total Funds at 31 March 2020 25,338 509 25,847
The statement of financial activities includes all gains and losses in the year. The notes on pages 16 to 25 form part of these financial statements.
The prior period covers the period lrom 22 March 201 8 (the date of registration of the charity) until 31 March 2019.
16 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
BALANCE SHEET AS AT 31 MARCH 2O2O
Notes 2020 2019 t f Fixed assets Tangible assets 7 5,071
Current assets Debtors I 754 Cash at bank and in hand 105,688 106,442
Current liabilities Creditors due within one year I (21,130)
Net current assets 85,312 Creditors due greater than one year 10 (64,536) Net assets 25,847
Represented by
Unrestricted funds Restricted funds 12 509 Unrestricted funds: 13 Generalfunds 99,299 Pension reserve (76,263) Designated funds 2,302 Total funds 25,847
Approved by the Trustees and signed on their behalf
Trustee
Date:20 November2020
The notes on pages 16 to 25 form part of these financialstatements.
17 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 3l March 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 3I MARCH 2O2O
1. ACCOUNTING POLICIES
1.1 Basis of accounting
The Edinburgh Tenants Federation SCIO ("The Federation") is a Scoitish Charitable lncorporated Organisation limited by guaranlee. The Federation (#SC048236) was registered in Scotland on 22 March 2018 and commenced operations on 1 April 2019 when the assets and liabilities of the Edinburgh Tenants Federation were transferred. For details of the transfer see note 3.
The address of the registered office is Norton Park, 57 Albion Road, Edinburgh EH7 5QY.
The financial statements have been prepared in accordance with the Charities and Trustee lnvestment (Scotland) Act 2005 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with Financial Reporting Standards applicable in the UK and Republic of lreland (FRS 102)".
The preparation of financial statements in compliance with FRS 102 requires lhe use of certain critical accounting estimates. lt also requires management to exercise judgement in applying the accounling policies as detailed in note 2.
The Federation is a public benefit entity as defined by FRS102.
The presentation currency of these financial statements is GBP wilh rounding to the nearest GBP
Going concern
The Trustees have considered going concern in the context of economic uncertainty caused by COVID-19. ln December 2019, the disease COVID-19 began circulating across the World, and was declared a pandemic in March 202O. On 13 March 2020, the UK Government advised against all non-essential travel and for individuals to stay at home. On 23 March 2020, the Prime Minister told people they "must" stay at home and required some businesses to close. The Federation commenced working from home from this date and continues to operate during the Coronavirus (COVID-19) outbreak. Whilst the offlce base is closed, staff continue to work from home and can still be contacted in the usual ways,
Ultimately, due to COVID-19 the priority for the Federation is digitalworking, participation and training. We held our first Federation Meeting online last month and feedback from the event was very positive. We are looking at holding other ETF events such as High Flats and Repairs Group meetings online as well in the coming months.
Funding has been guaranteed by the City of Edinburgh Council to 31 March 2022lor €241,083 per year and the Federation received the first tranche for 20121 ol t120,542 on 23 April 2020. This is the primary source of funds for the Federation and facilitates the organisation's charitable activities. The Trustees ensure that the Federation's costs each year do not exceed this funding in order to ensure that the Federation is sustainable.
The Trustees remains confident that there are no reasonably foreseeable circumstances under which the Federation cannot continue to operate on a going concern basis. Accordingly, the financial statements have been prepared on a going concern basis.
1.2 Depreciation
Depreciation is provided using the following rates to reduce by annual instalments the cost, less estimated residual value, of the tangible assets over their estimated useful lives:-
Computer equipment 33.3% reducing balance Office equipment 25% reducing balance
1.3. Operating leases
Operating lease rentals are charged in the income and expenditure account on a straight line basis over the lease term.
18 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 3'l MARCH 2020 (continued)
1. PRINCIPAL ACCOUNTING POLICIES (continued)
1.4. Pension
The Federation participates in a multi-employer defined benefit pension scheme. The information on the assets and liabilities attributable to individual employers within this scheme are not able to be independently identified by the scheme actuary and so lhe costs of the scheme are recognised as and when they arise. The assets of the scheme are held separately from those of the Federation in an independently administrated fund. The Federation has agreed to a deficit funding agreemenl and recognises a liability for this obligation.
The amount recognised the net present value of the deficit reduction contributions payable under the agreement and is calculated using the discount rate of 2.57o/o (2019: 1 .460/0). More details are contained in note 11.
Contributions to the Federation's defined contribution pension scheme are charged to the income and expenditure account in the year in which they become payable.
1.5. lncome lncome is accounted for in the income and expenditure account in full in the year in which it is receivable.
1.6. Expenditure
All expenditure is included on an accruals basis and is recognised where there is a legal or constructive obligation to pay for expenditure.
With funding originating from the City of Edinburgh Council, all expenditure is allocated to charitable activities under support costs.
1.7. Financial instruments
The Federation's cash at bank and in hand and trade and other debtors and its trade and other creditors and bank overdrafts are measured initially at the transaction price, including transaction costs, and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year are measured at the undiscounted amount of the cash or other consideration expected to be paid or received.
1.8. Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand and highly liquid interest-bearing securities with maturities of three months or less subject to insignificant risk of changes in value.
2. Judgements in applying accounting policies and key sources of estimation uncertainty ln preparing these financial statements, the executive committee have had to make the following judgements:
a Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors.
The actuarial assumptions used in calculating the present value of deficit funding on the pension scheme requires judgement on the part of the Trustees. ln making these assumptions, advice has been taken from an independent qualified actuary. The assumptions are all shown in note 11.
19 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 3l March 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 3l MARCH 2020 (continued)
3. INCOME
Transfer from Edinburgh Tenants Federation
Unrestricted Funds Restricted Total General Pension Designated Funds 2020 € f€ f e Transfer from Edinburgh Tenants 98,103 (89,000) 9,281 529 18,913 Federation 98,103 (89,000) 9,281 529 18,913
Edinburgh Tenants Federation transferred all of its assets to Edinburgh Tenants Federation SCIO on 1 April 2019. Edinburgh Tenants Federation ceased operations on 1 April 2019 and all staff and operations transferred to Edinburgh Tenants Federation SCIO on 1 April 2019. The transfer from Edinburgh Tenants Federation consisted of the following: t Total fixed assets 2,146
Debtors 3,850
Cash in bank and hand 1 13,984 Total current assets 117,834
Creditors: amounts falling due within one year (23,067)
Net current assets 94,767 Creditors: amounts falling due greater than 1 year (78,000) Net assets 18,913
Total Total Donations Unrestricted Restricted 2020 2019 e f € f Donations 2,121 2,12',1 2r',21 2,121
Total Total Charitable Activities Unrestricted Restricted 2020 2019 € s f e City of Edinburgh Council SLA 241,083 241,083 CJS income 2,947 2,947 244,030 244,03O
20 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 3l March 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 (continued)
4. EXPENDITURE
Support Total Total Direct costs costs (note 5) 2020 2019 E e c e Charitable activities 193,631 48,324 241,955 193,631 48,324 241,955
5. SUPPORT COSTS
Total Total Unrestricted Restricted 2020 2019 Support Costs € € t e Office running costs 21,670 21,670 Admin costs 2,980 2,980 Other costs 19,646 19,646 Governance costs 4,029 4,028 48,324 48,324
Governance costs consist of audit fees of e3,950 (2019: NIL) and Trustee expenses (note 6).
The auditors were not remunerated for any non-audit services (2019: NIL).
6. STAFF NUMBERS AND COSTS
2020 2019 s e Wages and salaries 78,1 38 Social security costs 9,416 Pension contributions - defined contribution 7,892 Pension interest expense - defined benefit (note 1 1) 1,386 Termination costs 26,000 122,832
Termination costs totalled 926,000 for one employee. This was paid in November 20't9 and no amount was outstanding at year-end. The Trustees, on a case-by-case, basis consider termination payments in adherence to applicable laws and regulations.
The average number of employees (excluding trustees) during the year was 3 (2019: 0). The average number of Trustees for the year was 10 (2019: NIL) No employee received salary and benefits of more than e60,000 per annum (2019: NIL). No remuneration was paid to any Trustee (2019: NIL). A total of 4 Trustees (2019: 0)were reimbursed expenses of e78 (2019: NIL).
21 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 3t March 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 (continued)
7. TANGIBLE FIXED ASSETS
Computer Office Equipment Equipment Total I t e Cost At 31 March 2019 Transfer from Edinburgh Tenants Federation 1,992 154 2,146 Additions 3,627 3,627 At31 March 2020 5,619 154 5,773
Depreciatlon At 31 March 2019 Charge for the year 663 39 702 At 31 March 2020 663 39 702
NBV At 31 March 2020 4,956 115 5,071
At 31 March 2019
8. DEBTORS
2020 2019 e e Prepayments and accrued income 754 754
9. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2020 2019 f e Accruals and deferred income 6,237 Taxation and social security 2,506 Other creditors 660 Pension deficit (note 1'l) ''1,727 21,130
10. GREDITORS: AMOUNTS FALLING DUE lN MORE THAN ONE YEAR
2020 2019 f, t Pension deficit (note 11) 64,536 64,536
22 Edinburgh Tenants Federation SCIO Report and Financial Statements Year ended 31 March 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 (continued)
11. PENSION
Edinburgh Tenants Federation participates in Scottish Voluntary Sector Pension Scheme. The Pension Scheme is a multi-employer defined benefit scheme. The scheme is funded and is contracted out of the state scheme. The Trustees closed the pension scheme for future accrual with effect from 3't March 2010. The Executive Commiftee has decided to pay an annual amount to the scheme as calculated by the scheme actuary to meet their share of the deficit.
The Scheme operated a single benefit structure, final salary with a 1/60th accrual rate, to September 2007. From October 2007 there were two benefit structures available. These were a final salary with a 1/60th accrual rate and final salary with a 1/80th accrual rate. Participating employers chose which benefit structure that they wished to offer their employees.
Edinburgh Tenants Federation decided to continue to offer the 1/60th accrual benefit structure to employees from October 2007.
The Trustee commissions an actuarial valuation of the Scheme every 3 years. The main purpose of the valuation is to determine the financial position of the Scheme in order to determine the level of future contributions required so that the Scheme can meet its pension obligations as they fall due. The actuarial valuation assesses whether the Scheme's assets at the valuation date are likely to be sufficient to pay the pension benefits accrued by members as at the valuation date. Asset values are calculated by reference to market levels. Accrued pension benefits are valued by discounting expected future investment returns.
At the balance sheet date there were no active members of the Scheme employed by the Federation. It is not possible in the normal course of events to identify the share of underlying assets and liabilities belonging to individual participating employers. Accordingly, due to the nature of the Plan, the accounting charge for the period under FRS102 Section 28 represents the employer contribution payable. Employer contributions to the deficit in the year were f 11,385 (2019: NIL).
The last formal valuation of the Scheme was performed as at 30 September 2017 by a professionally qualified actuary using the "projected unit credit" method.
The market value of the Scheme's assets at the valuation date was f 120.0 million, liabilities of e 145.9 million and a deficit of f25.9 million.
To eliminate this funding deficit, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows:
f.7,323,LL6 per annum From 1 April 2016 to 31 October 2029: (payable monthly and increasing by 3% each on lst April)
From 1 April 2015 to 30 September 2031: f292,376 per annum (payable monthly and increasing by 3% each on lst April)
From 1 April 2016 to 30 September 2031: f37 ,475 per annum (payable monthly)
The recovery plan contributions are allocated to each participating employer in line with their estimated share of the scheme liabilities.
23 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 (continued)
11. PENSTON (CONTTNUED)
Where the scheme is in deficit and where the entity has agreed to a deficit funding arrangement the entity recognises a liability for this obligation. The amount recognised is the net present value of the deficit reduction contributions payable under the agreement that relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures.
Following a change in legislation in September 2005 there is a potential debt on the employer that could be levied by the Trustee of the Scheme. The debt is due in the event of the employer ceasing to participate in the Scheme or the Scheme winding up.
The debt for the Scheme as a whole is calculated by comparing the liabilities for the Scheme (calculated on a buyout basis i.e. the cost of securing benefits by purchasing annuity policies from an insurer, plus an allowance for expenses) with the assets of the Scheme. lf the liabilities exceed assets there is a buy- out debt.
The leaving employer's share of the buy-out debt is the proportion of the Scheme's liability attributable to employment with the leaving employer compared to the total amount of the Scheme's liabilities (relating to employment with allthe currently participating employers). The leaving employer's debt therefore includes a share of any 'orphan' liabilities in respect of previously participating employers. The amount of the debt therefore depends on many factors including total Scheme liabilities, Scheme investment performance, the liabilities in respect of current and former employees of the employer, financial conditions at the time of the cessation event and the insurance buy-out market. The amounts of debt can therefore be volatile over time.
Edinburgh Tenants Federation has been notified by the Pensions Trust of the estimated employer debt on withdrawal from the Plan based on the financial position of the Scheme as at 30 September 2017. As of this date the estimated employer debt for the Federation was f566,1 03. lt is not provided for in these financial statements because it is contingent on a future event which is in the control of the entity.
RECONCILIATION OF OPENING AND CLOSING PROVISIONS
Year Ended Period Ended 31 March 2020 31 March 2019 (f) (f)
Provision at start of year/period Ntr
Transfer from Edinburgh Tenants Federation 89,000
Unwinding of the discount factor (interest expense) 1,386
Deficit contribution paid (11,385)
Remeasurements - impact of any change in assumptions (2,7381
Provision at start of year/period 76,263
24 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 (continued)
I 1. PENSION (CONTTNUED)
INCOME AND EXPENDITURE IMPACT
Year Ended Period Ended 31 March 2020 31 March 2019 (f) (f)
lnterest expense 1,386
Remeasurements - impact of any change in assumptions (2,738)
ASSUMPTIONS
31 March 2020 % per annum
Rate of discount 2.57
The discount rates shown above are the equivalent single discount rates which, when used to discountthe future recovery plan contributions due, would give the same results as using a full AA corporate bond yield curve to discount the same recovery plan contributions.
DEFlCIT CONTRIBUTIONS SCH EDU LE
31 March 2020 Year ended lf)
Year 1 77,727
Year 2 72,079
Year 3 L2,44t
Year 4 L2,814
Year 5 13,199
Year 5 13,595
Year 7 7,007
The Federation must recognise a liability measured as the present value of the contributions payable that arise from the deficit recovery agreement and the resulting expense in the income and expenditure account i.e. the unwinding of the discount rate as a finance cost in the period in which it arises.
It is these contributions that have been used to derive the Federation's balance sheet liability.
The Executive Committee has also set up a new defined contribution scheme to provide future benefits from 1 April 2010. During the accounting period the Federation paid contributions to this scheme at the rate of 10%. At the balance sheet date there were 3 (2019: NIL) active members of the scheme employed by the Federation.
25 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 31 March 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 (continued)
12. RESTRICTED FUNDS
Transfer from Edinburgh Tenants At 31 March Federation lncome Expenditure 2020 € € f € Start-up grants 529 (20) 509 529 (20) 509
Start-up grants are for new Residents and Tenants groups to fund their set-up costs.
13. UNRESTRICTED FUNDS
General Funds Transfer from Edinburgh Transfers At 31 March Tenants Actuarial between 2020 Federation lncome Expenditure gains funds € t € € f e General Funds 98,1 03 246,151 (233,570) (11,385) 99,299 Pension reserve (89,000) (1 ,386) 2,738 11,385 (76,263) 9,103 246,151 (234,956) 2,738 23,036
Designated Funds Transfer from Edinburgh Tenants At 3l March Federation lncome Expenditure 2020 f € e s lT replacement 6,979 (6,e7s) upgrades ETF Development 2,302 2,302 9,281 (6,979) 2,302
The ETF Development fund is to assist in the transfer to becoming a SCIO and for further organisational development work. With the transfer to a SCIO complete, the funds will be used in 20121 or released.
14, ANALYSIS OF ASSETS BETWEEN FUNDS
Unrestricted funds Total Designated General Pension Restricted Funds Funds Funds Reserve Funds 2020 e e e I e
Fixed assets 5,071 5,071 Net current assets 2,302 94,228 (11,727) 509 85,312 Creditors falling due (64,536) (64,536) greater than one year 2,302 99,299 (76,263) 509 25,847
26 Edinburgh Tenants Federation SCIO Report and Financial Statements Yearended 3l March 2020
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 (continued)
I5. OTHERCOMM|TMENTS
At 31 March 2020 the SCIO had total commitments under operating leases as follow:
2020 2019 t Due within 1 year 8,758 : Due within 2-5 years 7,042 15,800
16. RELATED PARTIES
There were no related party transactions in the reporting period.
Key management personnel included employees who are involved in planning, directing and controlling the activities of the charity. The total compensation paid to key management for services in the year was 870,856 (2019: NIL)
..7. FINANCIALINSTRUMENTS
2020 € Financial assets Financial assets measured at amortised cost 106,442
Financial liabilities Financial liabilities measured at amortised cost 83,160
Financial assets measured at amortised cost include cash at bank and accrued income. Financial liabilities measured at amortised cost comprise accruals, other creditors, and pension deficit.
27